Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: calgal who wrote (271877)	7/9/2002 2:13:20 PM
From: DuckTapeSunroof	Read Replies (1) \| Respond to of 769670

Bush gives Enron and Worldcom a Legal Argument: It's just an honest disagreement over accounting.... "...Q: Let me ask a question from just before the sale of stock that you mentioned. Could you please explain your role when you were on the board of Harken and the sale of 1999 -- 1989 of its Aloha Petroleum subsidiary, which later caused the SEC to require Harken to restate its earnings. The sale has been described as creating a phantom profit to hide large losses. How did you see it, sir? And do you think that this transaction hurts your credibility on corporate responsibility?" "BUSH: This and all matters that related to Harken were fully looked into by the SEC. And in this case the system worked. There was an honest difference of opinion as to how to account for a complicated transaction. You're going to find that in different corporations. Sometimes the rules aren't as specific as one would expect, and therefore the accountants and the auditors make a decision." >>> (What's so 'complicated' about creating a phony partnership made up of corporate insiders, to transact a sale at a wildly inflated price (money for which 'loaned' by the corporation) to create a phony profit on the parent corporation's books... thereby perpetrating a fraud on the public investors? Harken and Enron used the same technique.) "And then it's the SEC's role to make the determination as to whether or not the accounting procedure used in this particular instance was proper or not. And -- let me finish -- and they made the decision that Harken ought to restate some earnings, which Harken did. And that's how the system is supposed to work." >>> (So the action was improper... even during his father's administration.) Q: Mr. President, if I may ask you, right before the accounting -- the sale itself of the subsidiary, did you favor that? Were you involved ... BUSH: You need to look back on the director's minutes, but all I can tell you is is that in the corporate world sometimes things aren't exactly black and white when it comes to accounting procedures, and the SEC's job is to look and is to determine whether or not the decision by the auditors was the appropriate decision. And they did look, and they decided that earnings ought to be restated, and the company did so immediately upon the SEC's finding. >>> (Note: he didn't answer the question of 'was he involved in the decision'.) ...Q: The accounting procedures ... have been compared to what went on at Enron. Would you agree with that? BUSH: No. Q: Why not, sir? BUSH: Again, this is -- there was no malfeasance involved. This was an honest disagreement about accounting procedures. And the SEC took a good look at it and decided that the procedures used by the auditors and the accounting firm needed to, were not the right procedure in this particular case, or the right ruling, and therefore asked Harken to restate earnings, which it did. I mean that's the way the SEC works. That's the proper role of an oversight group. 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. >>> (Note: his argument doesn't scan. He says that it was just an 'honest disagreement' over accounting rules. But the SEC DID rule against Harken, forcing them to restate earnings... so Harken was 'wrong'. I'm sure that Enron will claim just an 'honest disagreement' over accounting rules - especially since their accountant both suggested the transactions, and approved their books. I see no difference, except that Enron was bigger than Harken.) "...Q: Mr. President, you mentioned that sometimes the accounting laws are just too difficult to calculate ..." "BUSH: No, I said sometimes there's difference -- ability to interpret one way or the other." "Q: There are differences of opinion. But isn't that -- wouldn't that provide a handy excuse to some of the folks who are involved in these scandals today who say ..." >>> (Gee... you think so?) "BUSH: Sure." "Q: ... well, internally we had ..." "BUSH: Sure. This is a handy excuse...." >>> (I believe the President agrees with me: Enron has their excuse.)