Senate Majority Leader Bill Frist (R-Tenn.) has been subpoenaed to turn over personal records and documents as federal authorities step up a probe of his July sales of HCA Inc. stock, according to sources familiar with the investigation.
The Securities and Exchange Commission issued the subpoena within the past two weeks, after initial reports that Frist, the Senate's top Republican official, was under scrutiny by the agency and the Justice Department for possible violations of insider trading laws.
Over a period of four years, Senate Majority Leader Bill Frist accumulated stock in a family founded hospital chain that produced tens of thousands of dollars in income - all outside the blind trusts he created to avoid a conflict of interest, documents show.
Senate Majority Leader Bill Frist has long maintained he avoided a conflict of interest because he had placed the stock in Senate-approved blind trusts.
The stock was held in a family partnership largely controlled by Frist's brother, Thomas, who founded HCA Inc. along with the senator's late father.
While there have been no allegations of impropriety in Frist's having shares outside the voluntary blind trusts, federal prosecutors and the Securities and Exchange Commission are investigating Frist's sale of HCA stock from his blind trusts.
Frist ordered the stock sold June 13, and all sales were completed by July 1. The value of HCA stock peaked on June 22 and then gradually declined. On July 13, it dropped 9 percent.
Reports to the SEC showed insiders sold about 2.3 million shares of HCA stock worth at least $112 million from January through June 2005.
Frist has denied that he had any insider information before the stock sale and pointed out that he has not held any position in the company.
The stock outside Frist's Senate blind trust was accumulated by a family investment partnership started by the senator's late parents and later overseen by his brother. Thomas Frist served as president of the partnership's management company and as a top officer of HCA.
The senator's share of the partnership was placed in a Tennessee blind trust between 1998 and 2002 that was separate from those governed by Senate ethics rules. Frist reported that Bowling Avenue Partners, made up mostly of nonpublic HCA stock, earned him $265,495 in dividends and other income over the four years. (emphasis mine)
No wonder the President's poll numbers are in the crapper. He and his minions are finally starting to be held accountable for their criminal activities over the past several years.
As James Carville once said, "When your opponent is drowning, throw the son of a bitch an anvil."
Crossposted from Booman Tribune