As Texas Oil Man, Bush's Business Practices Resembled Those of the Companies He Now Criticizes

As a Texas oilman, President Bush engaged in some of the same kinds of business practices he's now promising to clean up in response to a wave of corporate scandals.
Bush was a board member of Harken Energy Corp. in 1989 when the company engaged in a transaction that later prompted an inquiry by the Securities and Exchange Commission. The SEC forced the company to amend its books to reflect millions of dollars in losses that had been masked by the sale of a subsidiary to a group of insiders. And Bush, who was on the company's audit committee, was the subject of a separate insider stock trade investigation by the SEC.

More than a decade later, the SEC is investigating insider deals and questionable bookkeeping at Enron, WorldCom and other companies, and Bush is promising to crack down on corporate wrongdoers.

Questions about Bush's past business practices prompted the White House to acknowledge Wednesday that he had failed to promptly disclose the 1990 sale of his Harken stock as required by federal law. The notice of the sale was filed with the SEC 34 weeks after it took place.

A spokesman blamed it on a clerical mistake by company lawyers. Bush has said previously that he filed the disclosure form and government regulators lost it.

Bush's stock sale was the subject of an SEC insider trading investigation. The president sold Harken stock for $848,000 two months before the company reported millions of dollars in losses. The stock price plunged from $4 when Bush sold it in June 1990 to a dollar a share by year-end.

Bush had gotten the stock when Harken bought his failing oil company in the mid-1980s. The SEC took no action in the insider trading probe of Bush.

Democrats have made Bush's dealings at Harken a political issue over the years, and it resurfaced in recent days because of Bush's promises to deal harshly with corporate wrongdoers in the wake of the latest corporate scandal, at WorldCom.

"It's time this CEO, President Bush, took responsibility for his actions as a private businessman and as president of the United States," Democratic National Committee chairman Terry McAuliffe said Wednesday. He said the Bush administration has "given the green light to unscrupulous CEOs by helping to foster a business environment that says 'if it feels good, do it.'"