Tuesday, October 11, 2005

The Enron Era Continues

You know, there is market space for a blog just on the legal problems of major Republicans. No one blogger can cover it on top of all the other interesting Wingnuttia news.

Today's example of these legal problems concerns Bill (the catkiller) Frist. Remember that he put his stocks into a blind trust so that his ownership of certain firms' shares wouldn't affect his policy-making? That's the theory about blind trusts, anyway. Then last June Frist sold his shares in HCA Inc., a hospital chain that Frist's brother controls, and soon after the value of these shares dropped significantly. These shares were supposed to have been in the blind trust and Bill Frist wasn't supposed to be able to order their sale. Otherwise it's hard to see what "blind" would mean here.

The June transaction started a federal investigation into Frist's financial holdings. Now it seems that not all Frist's HCA shares were held in a blind trust:

In that case, the HCA stock was accumulated by a family investment partnership started by the senator's late parents and later overseen by his brother, Thomas Frist. The brother served as president of the partnership's management company and as a top officer of HCA. Sen. Frist holds no position with the company.

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 Bowling Avenue Partners, made up mostly of non-public HCA stock, earned him $265,495 in dividends and other income over the four years.

Edmond M. Ianni, a former Wilmington, Del., bank executive who established blind trusts for corporate executives, questioned why the senator's brother was able to manage assets "when the whole purpose of a blind trust is to ensure lack of not only conflict of interest but appearance of conflict of interest?"

Kathleen Clark, a government ethics expert at the Washington University in St. Louis School of Law, said she doesn't believe the Senate trusts or the Tennessee trust insulated Frist from a conflict because the senator or his brother were advised of transactions and could influence decisions.

"What I find most appalling is the Senate calls it a qualified blind trust when it's not blind," Clark said. "Since the Senate says it's OK, the Senate has made it a political question. It's up to the voter. But there's no doubt it's a conflict of interest."

Now I should ask myself if I am criminalizing politics. This is the new wingnut soundbite about all the legal problems of Republicans: that these problems exist means that someone is criminalizing politics. As if anything at all goes if it is called politics. The weakness of this soundbite is the best example I've seen yet of the real trouble Republicans are facing.