WASHINGTON -- The dominant subject at President Bush's rare
press conference Monday evening was not new corporate scandals that threaten
America's capitalist economy. It was a 12-year-old stock sale by private
citizen George W. Bush. That caused a Securities and Exchange Commission
(SEC) official, who long ago gave Bush a clean bill of health, to ponder the
wondrous ways of Washington.
That official was not, as National Public Radio suggested
Tuesday morning, then Republican SEC Chairman Richard Breeden (appointed by
the elder President George Bush). It was SEC enforcement chief William
McLucas, now a partner in one of Washington's most prestigious law firms --
and a Democrat. He recently produced the report that revealed the Enron
scandal. McLucas told me, "I can see no reason" to replay his 1990 Bush
inquiry.
The reason, of course, is partisan politics. Corporate frauds
stretching from Enron to WorldCom, which have destroyed investor confidence
and undermine the economy, do threaten a political opening against the
Republicans and Bush. Nevertheless, Democrats could not resist trying to
exploit the president's personal conduct by resurrecting an obscure stock
transaction.
On CBS's "Face the Nation" Sunday, Senate Majority Leader Tom
Daschle called Bush's handling of his stock transaction "illustrative of the
permissive environment: and this attitude about business that is very
destructive and very disconcerting to many of us." The news media ate it up,
peppering Bush with no fewer than nine questions in Monday's news
conference.
Actually, the story is straightforward -- lacking the mysterious
twists of Whitewater. In 1990, Bush was out of the oil business and raising
money to buy a share of the Texas Rangers baseball team. A board member of
Harken Energy Corp., Bush sold $848,000 of the company's stock two months
before the company reported millions of dollars in losses, which sharply
dropped its stock price after the sale.
Was this insider trading? That's what the SEC set out to
investigate a dozen years ago (probably triggered by media accounts,
according to McLucas's recollection). As a Republican appointee, Breeden
wanted no personal part of this and instructed McLucas to charge ahead
without fear or favor. McLucas does not remember talking to Breeden, but was
well aware that they were investigating the president's son.
That made no difference at the SEC, which had not been impeded
in the investigation of President Jimmy Carter's good friend Bert Lance and
other well-connected targets. A compelling fact was that the Harken stock
actually was selling for more at the time of investigation than it was when
Bush sold it. That's hardly a good case for insider trading, particularly
when no "material non-public information" by Bush was found. The case was
closed. The final sentence in the SEC's order saying that Bush was not
"exonerated" was legalistic "boilerplate" and meaningless, said McLucas.
The major new accusation against Bush has been that he was eight
months late filing a confirming report of the stock sale, though he earlier
had alerted the SEC as required by law. The tardy report was in McLucas's
hand when he ruled. "If you went to court against every late filing with
us," McLucas told me, "we would be in court on 2,000 cases."
Whatever Willie McLucas says is credible. After more than 21
years at the SEC, he joined the big-time Washington firm of Wilmer, Cutler &
Pickering. He was secured by Enron as chief investigator in the internal
inquiry that brought down the energy firm's house of cards. Now, with the
disclosure of hiding $3.9 billion, WorldCom has signed McLucas to conduct an
independent investigation.
When Bush the elder was running for re-election as president in
1992, the venerable Democratic Rep. John Dingell requested a SEC briefing
about the stock sale but did not hit sufficient pay dirt to go public. Texas
Gov. Ann Richards, desperate in resisting the junior Bush's challenge in
1994, raised the issue -- to no avail. The case came up briefly when Bush
ran for re-election for governor in 1998 and for president in 2000.
Despite these failures, Democratic National Chairman Terry
McAuliffe could not resist attacking Bush's personal conduct as payback for
the treatment of his patron, Bill Clinton. The irony is that serious threats
to the economy offer incomparably richer opportunities for the Democratic
opposition.
