Bush told of Harken woe ahead of sale
SEC documents from CPI detail firm's cautious views
By August Cole, CBS.MarketWatch.com
Last Update: 8:47 PM ET July 21, 2002
WASHINGTON (CBS.MW) -- President George W. Bush appears to have received information about Harken's looming financial troubles just months before he sold shares in the energy firm worth almost $850,000 in June 1990, according to recently released documents.
A February 1990 letter from the energy firm's president to company executives, as provided by watchdog group the Center for Public Integrity, explained that Harken (HEC: news, chart, profile) faced "cash constraints" and disappointing profits. Other Securities and Exchange Commission documents released Friday by the CPI point out further information about upcoming financial problems. See the documents. publicintegrity.org
Three months after Bush sold his shares, Harken posted a quarterly loss that surprised many of its investors and analysts.
Bush had previously come under pressure for the late filing of the SEC paperwork that the sale legally required. The $848,560 sale represented the bulk of his Harken stake, obtained after the Houston-based company bought out his own energy venture, called Spectrum 7.
The matter is not new, however, and had been reviewed by the SEC and media alike during Bush's political career before he took office as president. The SEC determined then that Bush did not posses what was considered insider information.
Yet the disclosure comes as the White House seeks to stem massive losses in the U.S. markets. Those declines have been spurred in part by spreading fears of corporate malfeasance. The effect has been severe: the dramatic gains made during the late 1990s on the wings of Wall Street's endorsement of the technology boom have all but disappeared.
With growing attention on Bush's business track record, a key component of his campaign for the White House, proposing further reform on issues that once benefited the commander-in-chief has become difficult. Read David Callaway's take. marketwatch.com
More so with Vice President Dick Cheney in the spotlight for accounting practices and merger strategies that have slammed Halliburton's (HAL: news, chart, profile) stock price and attracted the SEC's attention. Shares ended Friday at $11.55, down from a July 31 52-week high of $36.79.
Harken, for its part, ended the day at 39 cents.
August Cole is spot news editor at CBS.MarketWatch.com in Chicago.
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