- WASHINGTON (Reuters) - President
Bush on Monday said he did not know why his 1990 sale of Harken Energy
Corp stock was disclosed eight months late but denied wrongdoing in a news
conference dominated by questions about the oil company and the wave of
recent accounting scandals.
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- Seeking to distance himself from the scandals and their
potential political liability, Bush began the news conference by urging
Congress to act on his legislative agenda, including his proposals to bring
greater corporate responsibility amid deteriorating financial market confidence
in company accounts.
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- The president is expected to give a speech on Wall Street
on Tuesday laying out a series of tougher actions to crack down on companies
that mislead investors, giving more manpower and money to the Securities
and Exchange Commission (SEC) and proposing new criminal penalties to punish
corporate fraud.
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- But he faced several questions at the news conference
about his sale of $848,560 of Texas-based Harken's stock on June 22, 1990,
a time when he was an outside member of Harken's board of directors, and
why the completed sale was disclosed to the SEC 34 weeks late.
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- "As to why the Form 4 was late, I still haven't
figured it out completely," Bush told reporters. He said he filed
another form reflecting his intention to sell on time and suggested the
matter was being dredged up by his political opponents.
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- "This is old politics ... This has been around for
a long time," Bush said, saying the matter was raised when he ran
for Texas governor in 1994 and for president in 2000. "I mean, this
is recycled stuff."
-
- Democrats have eagerly seized on the issue, hoping to
tar Bush with the public dismay over accounting irregularities at Enron
Corp, WorldCom Inc and other companies that have sent U.S. stock prices
sharply lower in recent weeks.
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- Bush said the SEC had "fully looked into the matter
... and the people that looked into it said there is no case."
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- NOT EXACTLY "BLACK AND WHITE"
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- An SEC document released by the White House last week
showed Bush went to some lengths to ensure that any stock sale was proper,
consulting Harken's in-house counsel, who checked with outside lawyers
and, at Bush's request, with the company's chairman and with another outside
director.
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- "It appears that Bush did not engage in illegal
insider trading because it does not appear that he possessed material nonpublic
information or that he acted with scienter (knowledge) when he sold the
Harken stock," the document said.
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- Bush also fended off questions about Harken's 1989 sale
of its 80 percent stake in Aloha Petroleum Ltd. In a later agreement with
the SEC, Harken changed the way it accounted for the gain from the sale
and restated its financial statements for 1989 and for the first nine months
of 1990.
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- The company's initial treatment of the sale significantly
understated the losses Harken initially reported for 1989. As a result
of accounting change, Harken's 1989 loss widened to $12.57 million from
the $3.33 million loss initially reported.
-
- Bush denied wrongdoing, saying the matter -- which critics
have compared to the accounting irregularities at bankrupt energy trader
Enron Corp -- reflected an honest disagreement over accounting.
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- "There was an honest difference of opinion as to
how to account for a complicated transaction," Bush said. "All
I can tell you is, that in the corporate world, sometimes things aren't
exactly black and white when it comes to accounting procedures."
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- The president added: "There was no malfeasance,
no attempt to hide anything. It was just an accounting firm making a decision,
along with the corporate officers, as to how to account for a complex transaction."
-
- Democrats eagerly sought to exploit the issue.
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- "They hid millions of dollars in losses ... why
didn't he stop them?" said Jennifer Palmieri, a spokeswoman for the
Democratic National Committee and a senior White House official under former
President Bill Clinton.
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