We haven’t checked in with the other leading Republican office holder facing a criminal investigation, Senate Majority Leader Bill Frist, in a while. It turns out his stock scandal is getting more serious, not less.
Outside the blind trusts he created to avoid a conflict of interest, Senate Majority Leader Bill Frist earned tens of thousands of dollars from stock in a family-founded hospital chain largely controlled by his brother, documents show.
The Tennessee Republican, whose sale this summer of HCA Inc. stock is under federal investigation, has long maintained he could own HCA shares and still vote on health care legislation without a conflict because he had placed the stock in blind trusts approved by the Senate.
However, ethics experts say a partnership arrangement shown in documents obtained by The Associated Press raises serious doubts about whether the senator truly avoided a conflict.
This actually looks nearly as bad as the original scandal about Frist’s unusually good timing in selling stock he claimed not to know existed.
In this new, related scandal, Frist owned stock in his family’s company (HCA), which was put in a family investment partnership. But instead of independent and “blind” oversight, the senator’s brother, Thomas Frist, was able to manage the assets. This same brother is, of course, a top officer of HCA.
Kathleen Clark, a government ethics expert at the Washington University in St. Louis School of Law, said she doesn’t believe the Senate trusts or the Tennessee trust insulated Frist from a conflict because the senator or his brother were advised of transactions and could influence decisions.
“What I find most appalling is the Senate calls it a qualified blind trust when it’s not blind,” Clark said. “Since the Senate says it’s OK, the Senate has made it a political question. It’s up to the voter. But there’s no doubt it’s a conflict of interest.”
No doubt, indeed.
This might sound kind of complicated, but it’s a relatively straightforward controversy.
Bill Frist owned stock in his family’s health care company … Frist worked on health care issues that could affect the company … Frist justified this by saying his stock was in a “blind trust” … Frist wasn’t telling the truth and the trust was anything but “blind.”
The Senate Majority Leader not only had the ability to sell the stock he claimed not to manage, but his brother — who knew all the inside information possible about HCA — had control over many of the senator’s investments.
So far, both Frists (Bill and Thomas) haven’t said much in response, but it looks like it’s going to be difficult to spin this story away.