Why am I surprised? Allen was on the board of directors of Xybernaut, the company that was pushing PCs in the late 1990s that you wore like a vest. I called their offices one time to see how legitimate they were.......some flaky chick answered the phone and then screamed for the president to pick up the line. The guy was crazier than a loon and my conversation lasted no more than ten minutes. Its all I could take. And here Allen was on the BOD???? Allen, the guy the GOP was touting as the next president of the US. Do you ever do any research on your candidates? A screening process that might get rid of the losers before the primary? For the sake of the country you might consider it. And I can't believe Allen is a senator. My God what has happened to Congress?!!
Allen failed to report stock options
By SHARON THEIMER and BOB LEWIS, Associated Press Writers
Mon Oct 9, 7:35 PM ET
RICHMOND, Va. - For the past five years, Sen. George Allen (news, bio, voting record), has failed to tell Congress about stock options he got for his work as a director of a high-tech company. The Virginia Republican also asked the Army to help another business that gave him similar options.
Congressional rules require senators to disclose to the Senate all deferred compensation, such as stock options. The rules also urge senators to avoid taking any official action that could benefit them financially or appear to do so.
Those requirements exist so the public can police lawmakers for possible conflicts of interest, especially involving companies with government business that lawmakers can influence.
Allen's stock options date to the period from January 1998 to January 2001 when Allen was between political jobs and had plunged into the corporate world.
An Associated Press review of Allen's financial dealings from that era found that the senator:
_Did not have to look far to find corporate suitors, joining three Virginia high-tech companies he assisted as governor. Allen served on boards of directors for Xybernaut and Commonwealth Biotechnologies and advised a third company called Com-Net Ericsson, all government contractors.
_Twice failed to promptly alert the Securities and Exchange Commission of insider stock transactions as a Xybernaut and Commonwealth director. The SEC requires timely notification and can fine those who file late.
_Kept stock options provided to him for serving as a director of Xybernaut and Commonwealth, but steered other compensation from his board service to his law firm.
Allen, a potential 2008 presidential candidate, rose to prominence as a conservative from Virginia, serving in the U.S. House and as governor. From 1998 through 2000, he worked as a private lawyer and businessman before joining the Senate in 2001.
He now faces a tough re-election campaign against Democrat Jim Webb.
In interviews, Allen and his staff sought to play down his corporate dealings, saying they were a good learning experience but did not lead to extraordinary riches — except for a quarter-million-dollar windfall from Com-Net Ericsson stock.
Allen's office said he sold his Xybernaut stock at a loss and has not cashed in his Commonwealth options because they cost more than the stock is now worth. The senator also said he saw no conflict going to work for companies shortly after assisting them as governor.
"I actually got no money out of Xybernaut. I got paid in stock options which were worthless. Commonwealth Biotech asked me to be on their board. Glad to do it. I learned a lot on their board and enjoyed working with 'em, and they seem to be doing all right, I guess," Allen said.
___
THE DISCLOSURE ISSUE
Allen's office said he did not report his Commonwealth options on his past five Senate disclosure reports because their purchase price was higher than the current market value. Allen viewed them as worthless and believed in "good faith" he did not have to report them, aides said.
Allen disclosed the options once — on an amendment to his 2000 ethics report filed three months after the normal filing period ended. He excluded the options from subsequent reports.
When AP showed Allen's lawyer the Senate ethics manual requirement that such options must be reported each year regardless of value, the lawyer said he was unfamiliar with that provision. Allen has now asked the Senate ethics committee for an opinion on whether he should have disclosed them.
"While we continue to believe that we have disclosed more than is required, we will abide by the formal ruling of the committee," Allen spokesman John Reid said.
The disclosure requirements exist so the public can watch for potential conflicts of interest, and Allen had an obligation to report his Commonwealth stock options to Congress, two ethics experts said.
"As an ethical matter, it's irrelevant whether the exercise price of those stock options is above or below the current market price of the stock," said Kathleen Clark, a Washington University of St. Louis law professor, former prosecutor and former Democratic congressional aide.
"If he owns stock options, he does have such a financial stake, whether the exercise price is above or below current market value."
Lawyer Marc Elias, who represents Democrats in ethics cases, said the conflict issue is even clearer because Commonwealth gets federal contracts.
"Unlike some other controversies that have come up from time to time, this is a situation where the underlying asset is in a company that has business before Congress," Elias said.
Commonwealth granted Allen options on 15,000 shares of company stock at $7.50 a share in May 1999, company chief executive Robert Harris said.
The company's stock has a history of wild fluctuations, typically rising after new government contracts. It hit $9 to $10 a share the month after Allen left the board. It has been closer to $2 recently.
Commonwealth usually gives departing directors just 90 days to exercise stock options, but Allen's were extended until as late as May 2009 because he was entering public service, Harris said.
When Allen left for the Senate, Commonwealth made clear it hoped he would help the company in his new job. "We, of course, wish him much success in Washington and look forward to his pro-business agenda reaping benefits for CBI, the commonwealth and the nation," company chairman Richard Freer said.
news.yahoo.com |
