Bush Harken Deal Faces New Scrutiny

WASHINGTON –– George W. Bush signed a letter in 1990 saying he wouldn't sell any stock for at least six months in the struggling Texas oil company where he was a director. But 2½ months later, with Harken Energy Corp. hit by a sudden financial crisis, Bush cashed out his shares for $848,560.

Bush's accountant, Robert McCleskey, said Monday that Harken's troubled finances were "not, in my opinion," a factor in the stock sale and that Bush sold his shares 12 years ago as part of a pre-existing plan in place for many months to "get liquid."

McCleskey said one goal was to pay off a bank loan that Bush had used to buy his stake in the Texas Rangers baseball team. The Harken stock sale became the focus of an insider trading probe of Bush in 1991 by the Securities and Exchange Commission.

The SEC did not interview Bush and took no action against him. But Bush's sale is under renewed public scrutiny as he tries to restore investor confidence in the financial markets.

McCleskey said he wasn't aware of Harken's financial condition and that Bush "never said anything about it to me."

But two securities lawyers questioned Bush's motive in selling Harken stock amid financial turmoil just over two months after he had pledged not to sell.

The promise came in the form of Bush's signature on a "lockup" letter on April 3, 1990. It said he would hold onto his Harken stock for six months after the effective date of a proposed public stock offering.

Little more than a week later, the company was plunged into a financial crisis when one of its bank lenders withdrew its support.

Harken abandoned the proposed stock offering, began a desperate search for cash, and eventually split itself into three parts.

"Bush's signing of the April 2, 1990, lockup agreement undercuts his lawyers' explanation for the early sale of his Harken stock," said Houston securities lawyer Thomas R. Ajamie, whose firm advises companies that did business with the failed energy trader, Enron Corp.