It may well be easier to preach corporate responsibility than to practice it. At least for George W. Bush. Earlier this month, Bush released a “plan to improve corporate responsibility.” When he unveiled his proposal, during a speech at the Washington Hilton Hotel, he did not refer to Enron. But, clearly, this was part of his ongoing Enron-inoculation campaign. (Remember when he griped that his mother-in-law had lost $8000 in Enron stock?) The ten planks of his plan are each related to the Enron scandal. For instance, Bush noted that every investor in a publicly owned company “should have quarterly access to the information needed to judge a firm’s financial performance, condition and risks” and that “corporate leaders should be required to tell the public promptly whenever they buy or sell company stock for personal gain.” When he proposed the latter point, his hotel audience applauded.
Too bad Bush only has his words, and not his own experience, to offer as inspiration while crusading for corporate responsibility. When he was in the private sector, he and his corporate colleagues violated several of the principles he now champions, including both mentioned above.
In June of 1990, when Bush was a director of Harken Energy, a Texas-based firm that had bailed out his own failing oil company, Bush sold 212,140 shares of Harken for $848,560. This sale came at a time when Harken insiders–perhaps including Bush–had cause to believe the company’s future was not so sunny. Weeks after Bush unloaded this stock, Harken announced it had lost $23 million in the second quarter. (See the previous “Capital Games” dispatch on Bush’s stock dump). Bush has said this transaction was not prompted by inside information he possessed. But he filed notice of this sell-off with the Securities and Exchange Commission 34 weeks late.
This act of corporate tardiness (tawdriness?) has been widely reported. The Wall Street Journal, for instance, revisited it recently. Less known is an SEC report from 1991 that stated Bush had four times been late in filing notice of stock trades with the SEC. That total included the 1990 sale of Harken stock, and it covered Bush’s acquisition of 212,152 shares of Harken in 1986 (17 weeks late), a 1986 exercise of Harken stock options worth $96,000 (15 weeks late), and a 1989 exercise of Harken stock options valued at $84,375 (15 weeks late). This SEC memo, prepared by the agency’s enforcement division, was obtained by the Center on Public Integrity in 2000, as part of a joint project with Talk magazine.