Did you see last night’s 60 Minutes? The first segment was about Sam Waksal, who very stupidly tried to sell a tiny fraction of his holdings in Imclone on the basis of inside information and got a seven-year jail term. The second segment was promo-ed by highlighting George W. Bush, who sold his entire stake in a company called Harken Oil eight days before release of terrible financial news (of which he had to be aware, because he was not only on the board of directors but, also, on the three-man audit committee) – and I thought . . . what an interesting contrast THIS is going to make. But no, the Bush segment turned out to have nothing to do with Harken. It was about Skull & Bones.
It is an interesting contrast nonetheless.
Not to say the two cases are identical.
Waksal compounded his problems by lying about what he had done, and was also found to have avoided New York sales tax on some large art purchases by having the art shipped out of state (and then brought back in). Few, including Waksal, would dispute he made very serious mistakes that should carry serious consequences, even if some might argue that seven years is extreme. (Mitigating circumstances? The company he founded is still going strong – this wasn’t a case of stealing from the employee pension fund, say – and the drug it has developed seems to be showing promise for certain cancer patients.)
Bush seems to have put a lot more thought into his stock sale – and to have been eight months late in reporting it. He may or may not have been lying when he said the required disclosure forms had been ‘lost.’ But we know he was lying when, both as a candidate and as President, he looked into the camera and told us that ‘by far the vast majority of the help [from his proposed tax cut] goes to people at the bottom end of the economic ladder.’ This trillion-dollar lie ultimately affects the well-being of tens of millions of people, and so may be worth noting. (As may be the yellowcake from Niger.)
As I have written before, Bush’s insider trading became the subject of an S.E.C. investigation that was not pursued. According to the Washington Post (July 30, 1999), ‘Bush took that as vindication. ‘The SEC fully investigated the stock deal,’ he said in October 1994. ‘I was exonerated.’ . . . [Then Associate Director of the Division of Enforcement Bruce] Hiler, however, was more cautious. His statement said it ‘must in no way be construed as indicating that the party has been exonerated . . .”
How could he have been exonerated? He was on the three-man audit committee and, eight days before the release of highly adverse information, he sold $823,000 of the stock — every share he owned.
Is it possible the investigation was not pursued because his father, at the time, was President of the United States? (And a fellow Skull & Bonesman?) Whatever the case, you will be relieved to know that Bush’s lawyer on this matter went on to be our ambassador to Saudi Arabia.
[Note to all who will write in that this is ancient history, and we should ‘get over it,’ etc.: I largely agree. My reasons for alarm are prospective, not retrospective. I think we are doing our country grave long-term economic and social harm, and that we have lost much of the world’s trust. We need to fix that.]
I’m tellin’ ya: read Al Franken’s book.
Quote of the Day
[It would be splendid if someday] economists could manage to get themselves thought of as humble, competent people, on a level with dentists.~John Maynard Keynes
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