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

To: TigerPaw who wrote (276030)	7/16/2002 1:12:32 PM
From: stockman_scott	Respond to of 769670

No Confidence in Administration's Crackdown Too Many Tainted by Own Behavior 7/15/2002 thedailyenron.com Time for Independent Counsels? This week you can expect to begin hearing the dreaded "I" word: independent counsel. Calls for an independent counsel are always met with mixed emotions in Washington. "There but for the grace of God, go I," is often the first reaction when calls for an independent counsel are first sounded. But, an independent counsel appears to be the only way this administration will be able to contain and cure the Ebola-like spread of fraud and corruption sweeping corporate America. Justifications for the appointment of an independent counsel seem to mount by the day. The most recent revelation involves Deputy Attorney General Lawrence Thompson who now chairs the President's new corporate crime task force. But Thompson has his own checkered past. He was a member of the board and chairman of Providian Financial Corp's audit committed from June 1997 to May 2001. During his tenure Providian was charged with all kinds of fraudulent conduct. Providian has long been criticized by public interest groups for exploiting the poor by charging exorbitant interest rates for credit. In June 2000, Providian agreed to a $300 million settlement with the Office of the Comptroller of the Currency, federal banking regulators, and the San Francisco district attorney's office after being accused of overcharging customers with hidden fees and charges. Thompson has also been named as a defendant in a civil lawsuit that accuses him of behavior identical to that of former Enron officials Ken Lay and Jeffrey Skilling. Thousands of Providian employees have sued claiming that Thompson and other Providian officers falsified company financial records so they could dump their stock while continuing to recommend large purchases of Providian stock for the employees' 401(k) retirement plans. SEC records show that Thompson sold all his stock for a profit of $4.7 million. The sale came a few months before Providian disclosed looming problems with defaults in its credit card portfolio - problems that led to a collapse of its stock price and the layoffs of thousands of employees. When Thompson left to take his post at the Department of Justice, Providian's board voted to accelerate his vesting so he would not lose options that had not yet vested. Providian's habit of targeting poor inner city minorities has been a subject of controversy for many years. The company's founder is on record supporting the targeting of the poor: "Is any bit of food too small to grab when you're starving and when there is nothing else in sight?" Providian founder Andrew Kahr wrote to company executives in a March 1999 memo. "The trick is charging a lot, repeatedly, for small doses of instrumental credit." In March 2002, Providian paid $38 million to settle a class-action lawsuit brought by shareholders in 1999 alleging that the company's unfair marketing strategies resulted in inflated financial results that belied the true health of the company. Deputy Attorney General Lawrence Thompson was also an attorney with the Atlanta law firm King & Spalding which represented Enron. Thompson is not the only administration official with a tainted past: SEC commissioner Harvey Pitt also holds a seat on the President's corporate crime task force. Pitt has come under increasing bipartisan pressure to resign because, while in private practice, he represented many of the accounting firms now facing SEC scrutiny, including Arthur Andersen and KPMG. President Bush himself faces allegations of possible insider trading and accounting irregularities when he served on the board of Harken Energy in 1989. The President says he did nothing wrong, and points to a 1991 SEC investigation into his Harken stock sales that led to no action. But, in recent days questions about the independence and thoroughness of that investigation have grown louder. James A. Doty, Bush's former personal attorney, was the SEC's general counsel at the time, and neither Bush nor any of Harken's directors were interviewed before the probe was closed. President Bush's father was President at the time. Vice President Dick Cheney is also under SEC investigation for accounting fraud during his days at Halliburton (1995-2000). Cheney has also been named as a defendant in a shareholder class action suit claiming accounting changes he ordered artificially inflated Halliburton's earnings by over $460 million. Army Secretary Thomas White is under FBI investigation for possible insider trading for his sale of Enron stock. White had been one of Enron's top executives before joining the administration. The number and depth of involvement of such high-ranking administration officials in alleged corporate malfeasance is unprecedented. Many of those on The Hill who resisted calls for independent counsels in these cases now believe such appointments may be the only way for this administration to convince investors it is serious about stopping these abuses and punishing the abusers. -------------------------------------------------- How To Succeed in Business Without Really Trying The play has become a classic piece of modern comic theater. But, for George W. Bush it has been the script of his life. During the 1980s, Bush was a floundering wanna-be Texas oilman who used to joke to friends that he was "all name and no money." But, with his father now Vice President of the United States, and the heir apparent to Ronald Reagan, that name soon attracted plenty of money. Now, inquiring minds want to know more than Bush appears willing to disclose about his Midas touch. Exactly how did he "earn" all that money? Was this something a guy named "Smith" could have pulled off? Was Bush really the savvy wildcat capitalist he portrays himself, or was George W. Bush a "made" man? Questions continue to swirl around what the New York Times describes as "the basis for his fortune" - a strangely fortuitous sale of his Harken stock back in June 1989. Even though Bush sat on Harken's board and its audit committee, he denies having had any knowledge that the company would soon report multi-million losses before he dumped his stock. But, Harken internal memos show otherwise. Just 16 days before Bush dumped his stock he received a preliminary report on the company's deteriorating financial condition. The "Flash Report" informed Bush that Harken would have to report at least a $9 million loss by August. It would be four times more than the company lost in the last quarter. (It was later learned that the company actually lost something closer to $23 million - something that would not be reported until two months after Bush sold his stock.) It remains unclear whether Bush knew the loss would be that large when he sold. The Harken memo does show that he did know there would be at least a $9 million loss reported that August. (Maybe if Harken would release its board minutes we could clear this up.) But what is known is that Bush sold his stock before any of this was made public and there is now physical proof that he was aware of at least some of the pending bad news. The SEC should reopen its investigations into both this transaction and Harken's fraudulent sale of Aloha Petroleum that occurred around the same time - or at least make those files public so independent investigators can examine the facts for themselves. President Bush suggested just such a course of action. He told journalists they could find answers to their questions in Harken's 1989-1990 board minutes. But, Harken has not released those minutes and the White House has refused to request the company to do so. SEC commissioner Harvey Pitt said on Sunday that he saw no reason to either reopen the Harken probe or to make public the SEC's documents on the case. ___________________________________________ Quote of the Day "I am afraid if he [President Bush] doesn't eliminate it soon by giving full disclosure, [the suspicions] will diminish his moral authority – his presidential authority to lead the critical effort to restore confidence in the [stock] market." -Sen. Joseph Lieberman, (D-CT)