Conflicting Interests: Politicians Who Play Both Sides

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It seems that many who run for public office have an inate inability to distinguish between the Public Interest and the politician's own Private Interests.

This thread is for posting info / articles / opinions regarding those politicians who profess to serve the public but at the same time use their elevated status to fill their own pockets...

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Senate Leader Explains His Sale of a Stock That Then Plummeted

By DAVID D. KIRKPATRICK
September 22, 2005

http://www.nytimes.com/2005/09/22/po...gewanted=print

WASHINGTON, Sept. 21 - Senator Bill Frist offered an explanation on Wednesday for the timing of his sale in June of his stake in HCA, the giant hospital company that his family founded, as its shares reached a peak and began a steep slide.

An aide to Mr. Frist, majority leader of the Senate and brother of the HCA chairman emeritus, disclosed the sale on Monday in an interview with Congressional Quarterly.

The senator's spokesman, Bob Stevenson, said Wednesday that Mr. Frist "made a conscious decision to divest himself of all HCA assets" so he could pursue an ambitious agenda of health care legislation free of any appearance of self-interest.

Since joining the Senate, Mr. Frist had been dogged by accusations about conflicts of interest from his HCA holdings, including "no fewer than 19 instances" of articles or other public accusations, Mr. Stevenson said.

Mr. Frist, who has said he will not run for another term as Tennessee senator, is widely considered to be weighing a presidential bid. That may give him another incentive to put some distance between himself and the company.

"Good fortune, isn't it?" asked Prof. John C. Coffee, an authority on securities law at Columbia.

Professor Coffee said such well-timed sales in the families of top executives were a red flag of possible insider trading and often drew regulatory inquiries, although just a small fraction of such instances lead to formal investigations.

The question, Professor Coffee said, is whether Mr. Frist received private information about the company performance from his brother or other insiders.

"There is no prohibition against a family member's dumping his stock in a company, unless it can be shown that the family member was tipped as to material nonpublic information," he said. "That seems to be the missing link."

Five years ago, the company pleaded guilty to 14 criminal counts for filing fraudulent Medicare reports and paying doctors kickbacks for referrals. It eventually paid $1.7 billion in fines and penalties in connection with the case.

Mr. Frist's brother Thomas F. Frist Jr. had left the management and was vice chairman. But he returned as chief executive to help HCA recover. He remains its largest individual shareholder and chairman emeritus.

The stock bottomed out under $20 a share in 1999 in the federal fraud investigation, but it climbed back steadily. Over the first six months of this year, the stock rose, from about $40 a share to more than $58 at its peak in June.

Top executives took advantage of the run-up to exercise options and sell shares worth $165 million in the first six months of the year, with the heaviest selling in February and April, according to data from Thomson Financial, which tracks insiders' sales. Thomas Frist did not have any significant transactions.

Senator Frist had reported this year that he owned $7 million to $35 million in assets, including his HCA shares, that were in blind trusts managed by others to reduce the appearance of conflicts. Although more than $10 million of the initial holding of the trusts was shares in HCA, Mr. Frist's spokesman said Wednesday that he could not determine how many shares remained.

On June 13, his spokesman said, Mr. Frist told the managers to sell all his shares. The stock hit its peak at $58.22 a share nine days later, on June 22. By July 8, all the shares held by Mr. Frist and his wife and children were sold, his spokesman said, adding that Mr. Frist did not control the exact timing.

Five days after that, on July 13, HCA announced that its second-quarter earnings would fall below Wall Street projections because of lower than expected hospital admissions and higher than expected numbers of patients lacking insurance. Its stock fell 9 percent, to $50.05 a share, that day on the New York Stock Exchange, and closed on Wednesday further down, at $47.41 a share.

Also on Wednesday, the Foundation for Taxpayer and Consumer Rights of Santa Monica, Calif., said it sent a letter to the Securities and Exchange Commission asking for an investigation of the sale.

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The view from some financial experts ...

Frist Stock Sale Raises Questions on Timing

By R. Jeffrey Smith and Jeffrey H. Birnbaum
Washington Post Staff Writers
Thursday, September 22, 2005; A10

http://www.washingtonpost.com/wp-dyn...102065_pf.html


Senate Majority Leader Bill Frist (R-Tenn.) has maintained for years that his stock holdings in the nation's largest for-profit hospital chain posed no conflict of interest for a policymaker deeply involved in health care matters. He even received two rulings in the 1990s from the Senate ethics committee that blessed the holding of the stock in blind trusts.

So when Frist decided in June to dump all the stock, and later cited as the reason his desire to avoid the appearance of a conflict of interest, eyebrows went up among ethics experts and congressional watchdogs. Why did he do it at that time?

Precisely a month later, after the stock was sold, its price tumbled 9 percent when executives in the company -- HCA Inc., which was founded by Frist's father and on whose board Frist's brother serves -- disclosed that hospital admissions of insured patients were lower than expected, depressing profits in the second quarter.

The timing thus raised questions about whether Frist had somehow traded on information he obtained in advance from the company. "Frist has been in the Senate for many years now, and the conflict is not new," said Melanie Sloan, executive director of the watchdog group, Citizens for Responsibility and Ethics in Washington. "Why did he decide to sell it then? Why not years ago? What's changed? Did he know that the stock was about to take a fall?"

Frist spokeswoman Amy Call said yesterday that Frist "did not have any conversations with HCA executives about HCA stock when he was making the decision to divest." Asked more generally whether he had discussed the company's performance with its executives, she replied, "No."

She said Frist's decision was based "purely on wanting to avoid any future appearances of conflict" while pursuing new health initiatives, and said he had no way of knowing -- under the rules of the blind trusts -- how quickly the stock would be sold. Call promised to provide recent examples of criticism directed at Frist's stock holdings, but all those she eventually cited occurred before May 2004.

Until the sale, Frist's holdings in HCA formed a significant source of his wealth. His political career was launched in part by a loan secured by the stock; in 1994, he valued his holdings at $13 million, and the following year he placed them in a blind trust. In 2000, he transferred the HCA stock into a new blind trust, a transaction that could have given him insight into its value.

Frist's signed financial disclosure statements indicate that the overall value of his blind trusts did not substantially change from 2003 to 2004. As one of the Senate's multimillionaires, Frist has other non-HCA-stock holdings outside of the trusts.

Several ethics experts and watchdogs said they found it odd that Frist could intervene to order such a sale when the HCA stock was ostensibly out of his reach in blind trusts. Fred Wertheimer, president of Democracy 21, said, "The notion that you have a blind trust but you can tell your trustee when to sell stock in it just doesn't make any sense. It means you have a seeing eye trust and not a blind trust. It's ridiculous."

Larry Noble, executive director of the nonpartisan Center for Responsive Politics, agreed that the arrangement "seems to defeat the purpose of a blind trust. Somebody else is supposed to have control over it to avoid potential conflicts of interest. If you can just reach in and sell stock, it seems it defeats the whole purpose."

A sample agreement for blind trusts published by the Senate ethics committee staff on its Web site states that there should be no "direct or indirect communication" between senators and trustees unless the senator is directing the trustee "to sell all of an asset . . . [which] creates a conflict of interest or the appearance thereof due to the subsequent assumption of duties" by the senator.

Jan W. Baran, a Republican ethics expert at Wiley Rein & Fielding LLP, said, "That's the question, 'What changed?' " to compel Frist to sell his stock when he did.

According to Senate ethics rules, Baran said, Frist "can tell somebody to dispose of all of an asset that was initially placed into the blind trust. As a matter of Senate ethics rules, he is in compliance. The question that remains is, why did he sell the stock at that time? What conflicts arose in June that did not exist beforehand?"

"For the Securities and Exchange Commission," Baran added, "the answer is probably very important."

According to Thomson Financial, a reporting service, seven senior HCA executives sold 574,882 shares worth $19,942,610 between May 17 and June 10. A company spokesman, Jeff Prescott, said the executives are entitled "like other stockholders [to] make personal decisions . . . about when to sell." He said the executives complied with "blackout restrictions" imposed by the SEC to prevent dealing within a certain period prior to restatements of earnings.

An SEC spokesman said it is the commission's policy not to comment on investigations, and would neither confirm nor deny that it is probing insider trading at HCA.

Researcher Richard Drezen, in New York, contributed to this report.

© 2005 The Washington Post Company

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HCA subpoenaed, may involve Senate leader

September 23, 2005
http://news.yahoo.com/s/nm/20050923/...HE0BHNlYwN0bWE


HCA Inc., operator of the largest chain of U.S. hospitals, said it received a subpoena from the U.S. attorney for the Southern District of New York requiring it to produce documents.

HCA said it believes the subpoena relates to the sale of HCA stock by Senator William H. Frist, the Republican Majority Leader. The company said it intends to cooperate fully.

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Another rat ...

Leader of the F.D.A. Steps Down After a Short, Turbulent Tenure

By ROBERT PEAR and ANDREW POLLACK
September 24, 2005
http://www.nytimes.com/2005/09/24/po...gewanted=print

WASHINGTON, Sept. 23 - Lester M. Crawford, the commissioner of food and drugs, resigned abruptly on Friday, causing further upheaval at an agency that has been in turmoil for more than a year.

Dr. Crawford, who was confirmed just two months ago, on July 18, after serving as acting commissioner for more than a year, did not say why he was stepping down.

Senior officials at the Food and Drug Administration said they were stunned to learn of the resignation in an e-mail message from Dr. Crawford, who also sent a letter to President Bush stating that he was resigning "effective immediately."

A government official said the resignation was related to the fact that Dr. Crawford had not fully disclosed information about his finances to the Senate before his confirmation. The official spoke on condition of anonymity, citing Dr. Crawford's privacy.

Michael O. Leavitt, the secretary of health and human services, accepted the resignation and thanked Dr. Crawford for his service.

Christina Pearson, a spokeswoman for Mr. Leavitt, refused to say whether Bush administration officials had asked for the resignation.

"I can't comment," Ms. Pearson said. "This is a personnel issue."

In recent weeks, consumer advocates and scientists inside and outside the agency had said scientific decisions were being warped by politics.

On Thursday, a commentary in The New England Journal of Medicine titled "A Sad Day for Science at the F.D.A." said that "recent actions of the F.D.A. leadership have made a mockery of the process of evaluating scientific evidence," disillusioned many scientists, "squandered the public trust and tarnished the agency's image."

Mr. Bush said he intended to name Dr. Andrew C. von Eschenbach, director of the National Cancer Institute, to be acting commissioner of food and drugs.

Dr. Crawford, a veterinarian and expert on food safety, was named deputy commissioner of the agency in early 2002 before his tenure as acting commissioner. In that time the agency has been rocked by disputes over many issues, including the safety of painkillers like Vioxx, the regulation of heart defibrillators and other devices, and delays in deciding whether to allow over-the-counter sales of an emergency contraceptive.

The director of the agency's Office of Women's Health, Dr. Susan F. Wood, resigned three weeks ago to protest delays in approving over-the-counter sales of the morning-after pill Plan B.

Critics, including members of Congress from both parties, say the agency has not provided the public with enough information about the risks of drugs and devices.

"In recent years the F.D.A. has demonstrated a too-cozy relationship with the pharmaceutical industry and an attitude of shielding rather than disclosing information," said Senator Charles E. Grassley, Republican of Iowa and chairman of the Senate Finance Committee.

Senator Barbara A. Mikulski, Democrat of Maryland, said the agency had been "politicized and degraded" under Dr. Crawford, whose leadership she described as "tepid and passive."

Before the Senate confirmed Dr. Crawford, a Senate committee looked into accusations that he was having an affair with a woman who worked in his office and that he had wasted government money by taking her on official trips when she was not needed. An anonymous letter also suggested that Dr. Crawford had helped the woman secure a promotion to a higher-paying job.

An inquiry by the inspector general of the Department of Health and Human Services found some contradictions in statements by Dr. Crawford and the woman. Investigators found a close personal relationship between them but no evidence of an extramarital affair.

The committee chairman, Senator Michael B. Enzi, Republican of Wyoming, said at the time that the inspector general had found no merit to the charges leveled at Dr. Crawford. No senator wanted to pursue the issue then.

In his message to colleagues on Friday, Dr. Crawford said that after three and a half years in top positions at the agency, "it is time, at the age of 67, to step aside."

Senator Richard J. Durbin, Democrat of Illinois, who voted against Dr. Crawford's nomination, said Friday: "The Food and Drug Administration is facing nothing short of a crisis in leadership. The controversy surrounding Vioxx and other pharmaceuticals has exposed weak oversight, conflict of interest and poor management at the F.D.A."

Ira Loss, senior health analyst at Washington Analysis, which studies federal issues for investors, said he had been told by someone in the White House that Dr. Crawford had been asked to resign for a reason not yet known to the public.

"Something new has arisen that has led to this," Mr. Loss said. It was not the controversy over the morning-after pill, he said, because Dr. Crawford "did what they wanted on Plan B."

Under Dr. Crawford, the agency was buffeted by fierce debates over drug safety.

Critics, including many in Congress, said the agency had tried to stifle one of its own scientists who had found evidence that the use of antidepressants could cause children and teenagers to become more suicidal.

The agency was also criticized as slow to recognize that Vioxx and similar pain medicines could increase the risk of heart attacks and strokes. Merck withdrew Vioxx from the market a year ago and is facing thousands of lawsuits from people who say they were harmed by the drug.

Under pressure, Dr. Crawford and the agency have started to release more information about potential safety problems of drugs and devices, rather than waiting, as in the past, until they had a fuller picture.

"I think he started to lift the veil on how the F.D.A. does business, which was long overdue," said Peter Pitts, a former associate commissioner under Dr. Crawford.

While many critics say drugs are approved too quickly, the F.D.A. has also come under fire from pharmaceutical companies and some patient advocates for not approving drugs quickly enough.

Pharmaceutical and biotechnology companies had generally welcomed Dr. Crawford's appointment, partly because of his long experience at the agency, but also because they wanted a full-time commissioner. Many industry officials say that under an acting commissioner, the agency tends to put off difficult decisions.

The agency has had a full-time commissioner for only about 18 months out of the four and a half years that President Bush has been in office.

The president's first appointee, Dr. Mark B. McClellan, did not take office until November 2002 and then left about 16 months later to run the Medicare program.

It now appears that the agency will be without a permanent commissioner for some time. Experience shows that it is difficult for any nominee to obtain broad support in the Senate, because the agency handles so many volatile issues.

Dr. von Eschenbach has been director of the National Cancer Institute, part of the National Institutes of Health, since January 2002. Before that, he had a long career as a doctor and executive at the M. D. Anderson Cancer Center in Houston.

James C. Greenwood, president of the Biotechnology Industry Organization, which represents biotech companies, described Dr. von Eschenbach as an "excellent choice" who would provide strong leadership.

Mr. Greenwood had no comment on Dr. Crawford's resignation. Nor did the Pharmaceutical Research and Manufacturers of America, which represents big drug companies.

• Copyright 2005 The New York Times Company

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Bush's Choice for F.D.A. Chief to Keep Other Job

By ROBERT PEAR and ANDREW POLLACK
September 25, 2005
http://www.nytimes.com/2005/09/25/po...gewanted=print


WASHINGTON, Sept. 24 - The man chosen to run the Food and Drug Administration said Saturday that he would keep his job as director of the National Cancer Institute while serving as interim chief of the drug agency.

In an interview, the official, Dr. Andrew C. von Eschenbach, said he had a "100 percent commitment" to both jobs.

As director of the cancer institute since January 2002, Dr. von Eschenbach has worked closely with patients and their advocates. At the F.D.A., he said, he would use that experience to ensure that patients gain swift access to the fruits of biomedical research.

Promising new drugs, he said, should be made available "as rapidly as possible," especially to patients with life-threatening diseases, who he said were often willing to accept greater risks than people with less serious illnesses.

Dr. von Eschenbach, a urologic surgeon, is a cancer survivor himself, having had melanoma, prostate cancer and basal cell carcinoma. He said his experience at the cancer institute would inform his work as the chief regulator of drugs and medical devices.

But he could find conflicts between the two roles, because the cancer institute serves as a sponsor of many applications seeking permission from the F.D.A. to test cancer drugs in humans. Moreover, a nationwide network of researchers created by the institute generates some of the data included in drug companies' applications to sell cancer drugs.

In the interview, Dr. von Eschenbach said he would strike "an appropriate balance" in evaluating the risks and benefits of drugs.

President Bush said Friday that Dr. von Eschenbach would become the acting commissioner of food and drugs. He replaces Lester M. Crawford, who resigned on Friday, with no explanation, just two months after being confirmed by the Senate.

The resignation of Dr. Crawford left the agency adrift as it considers major changes in drug regulation, to monitor and publicize the hazards of drugs on the market. Critics inside and outside the agency said Dr. Crawford had allowed politics to trump science by repeatedly delaying a decision on whether to allow over-the-counter sales of an emergency contraceptive, the morning-after pill, known as Plan B.

Paul Goldberg, editor of The Cancer Letter, a Washington newsletter that has been critical of some of Dr. von Eschenbach's policies, said he suspected that if given free rein, Dr. von Eschenbach would relax standards on drug approvals.

"He is revered by people who want to loosen the criteria for approval of cancer drugs," Mr. Goldberg said.

But much of the criticism of the F.D.A. in recent years has centered on its handling of drugs for less serious ailments, like Vioxx and other painkillers.

Scientists say the selection of Dr. von Eschenbach comes at a time when the pendulum at the F.D.A. has swung toward an emphasis on drug safety. That shift has caused concern among some cancer specialists.

"The excessive emphasis on safety, particularly for patients with life-threatening diseases who have limited therapy options, could slow the whole process of drug development for these individuals," said Dr. Richard L. Schilsky, a professor of medicine at the University of Chicago.

In an interview, Dr. Schilsky, a cancer researcher who is active in the American Society of Clinical Oncology, said he believed that Dr. von Eschenbach "would evaluate the risk-benefit ratio for drugs from his perspective as an oncologist."

At the cancer institute, Dr. von Eschenbach has declared a goal of "eliminating suffering and death due to cancer by 2015." The idea is that prevention, early detection and new drugs, while not curing cancer, would make it more of a chronic disease like diabetes.

Many cancer experts say such a timetable is wildly unrealistic and might undermine the credibility of the cancer program.

"A lot of people feel very uncomfortable about that," said Dr. Otis W. Brawley, a professor and oncologist at Emory University, who was an assistant director at the cancer institute from 1996 to 2001. But if viewed as a direction for research rather than as a specific deadline, Dr. Brawley said, "the concept is not nearly as bad as it initially sounds to a lot of people."


Gardiner Harris contributed reporting for this article.

• Copyright 2005 The New York Times Company

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Abramoff Probe May Threaten Leading Republicans as It Expands

http://www.bloomberg.com/apps/news?p...top_world_news


Sept. 22 (Bloomberg) -- The widening investigation of lobbyist Jack Abramoff is moving beyond the confines of tawdry influence-peddling to threaten leading figures in the Republican hierarchy that dominates Washington.

This week's arrest of David Safavian, the former head of procurement at the Office of Management and Budget, in connection with a land deal involving Abramoff brings the probe to the White House for the first time.
Safavian once worked with Abramoff at one lobbying firm and was a partner of Grover Norquist, a national Republican strategist with close ties to the White House, at another. Safavian traveled to Scotland in 2002 with Abramoff, Representative Robert Ney of Ohio and another top Republican organizer, Ralph Reed, southeast regional head of President George W. Bush's 2004 re-election campaign.

House Majority Leader Tom DeLay, who once called Abramoff ``one of my closest and dearest friends,'' already figures prominently in the investigation of the lobbyist's links to Republicans. The probe may singe other lawmakers with ties to Abramoff, such as Republican Senator Conrad Burns of Montana, as well as Ney.

``These people all shared transactions together,'' said former House Democratic counsel Stan Brand, now a partner in the Washington-based Brand Law Group. ``That's always something that worries defense lawyers.''

Nervous Republicans

Some Republicans acknowledge they are nervous. ``Sure there's a concern,'' said former Representative Jack Quinn of New York, who's now president of Cassidy & Associates, a Washington lobbying firm. ``But like everyone else, we have to wait and see where the investigation goes.''

Abramoff, 46, a top fund-raiser for Bush's re-election campaign, is under investigation by a government task force consisting of the Justice Department's public integrity section, the FBI, the Internal Revenue Service and the Interior Department's inspector general. The Senate Indian Affairs Committee is conducting another inquiry.

Safavian, 38, who in the 1990s worked with Abramoff at the Washington-based lobbying firm of Preston Gates Ellis & Rouvelas Meeds, was charged Sept. 19 by the Justice Department with making false statements about whether he had any dealings with the lobbyist in the course of Abramoff's attempts to obtain government land. He was also charged with obstructing an investigation. His lawyer, Barbara Van Gelder, told the Washington Post he would vigorously contest the charges.

Safavian took the Scotland trip three years ago aboard a chartered jet. Abramoff was paying for the plane, Safavian said in an e-mail to the ethics office of his employer at the time, the U.S. General Services Administration.

Abramoff's Network

Abramoff's web of connections runs deep in the Republican Party. DeLay, 58, has participated in at least three overseas trips he sponsored; Democrats have demanded that the House ethics committee investigate whether DeLay violated House rules prohibiting lawmakers from accepting trips financed by lobbyists.

One of those trips was to the Commonwealth of the Northern Mariana Islands, a U.S. territory. DeLay has opposed legislation requiring the Marianas to follow U.S. minimum wage and labor laws. Abramoff was lobbying for the Marianas at the time.

Two former DeLay aides, spokesman Michael Scanlon and deputy chief of staff William Jarrell, worked with Abramoff. Jarrell later was part of Bush's transition team focusing on the Interior Department, the parent agency for the Bureau of Indian Affairs, at a time when Abramoff was representing casino-owning tribes. The Senate Indian Affairs Committee is investigating Abramoff's and Scanlon's work for the tribes.

Diverted Funds

Abramoff diverted funds paid to him by Indian tribe clients that were supposed to be used on lobbying activities to a variety of personal projects, according to testimony and e-mails released at a Senate Indian Affairs Committee hearing. The personal projects ranged from an Orthodox Jewish academy to an Israeli sniper school; some money also went to pay off a personal debt, according to the testimony and e-mails.

Abramoff and Scanlon took in more than $66 million in fees from 2001 to 2004 from tribal clients, according to Senator John McCain, the Arizona Republican who chairs the Indian affairs panel. In one e-mail released by the Senate committee, Abramoff wrote to Scanlon, ``I have to meet with the monkeys from the Choctaw tribal counsel.''

Abramoff also has a relationship with Ney, the Ohio congressman. Ney's former chief of staff, Neil Volz, worked with Abramoff at the Miami-based law firm of Greenberg Traurig LLP.

Reopening a Casino

Ney, 51, in 2002 agreed to insert language in federal legislation to allow an Abramoff client, the Tigua Indians of El Paso, Texas, to reopen a casino closed by state authorities. The provision didn't make it into the final measure.

In 2000, Ney placed two statements in the Congressional Record in support of Abramoff's purchase of SunCruz Casino Ltd., a casino ship company. Abramoff was indicted by a federal grand jury in Fort Lauderdale, Florida, in August on wire fraud charges in connection with the purchase.

Burns, 70, who is up for re-election in 2006, has been the subject of an advertising campaign by the Montana Democratic Party criticizing him for receiving $136,500 in donations from Indian tribe clients of Abramoff and Scanlon from 2001 to 2004. Burns in 2003 pushed for a wealthy Michigan Indian tribe, one of Abramoff's clients, to receive a $3 million federal grant.

Two former aides of Burns, Will Brooke and Shawn Vasell, went to work with Abramoff at Greenberg Traurig.

Burns spokesman Grant Toomey said the request for the grant came from the Michigan congressional delegation.

An Offer to Meet

Ney spokesman Brian Walsh said, ``The congressman has sent two letters to the House ethics committee as far back as last year offering to meet with them. To date, there has been no response.'' Walsh said there have been no inquiries from the Justice Department ``on any matter related to Mr. Abramoff.''

DeLay spokesman Kevin Madden said the majority leader has asked the ethics committee ``to look into everything in order to exonerate him.''

Norquist declined through a spokesman to comment. Reed didn't respond to a request for comment.

Ed Patru, a spokesman for the National Republican Congressional Committee, said Abramoff won't be an issue in next year's mid-term congressional elections. ``No member of Congress has ever been kicked out of office because of an allegation against another member or another lobbyist,'' Patru said. ``Democrats are trying to nationalize the 2006 elections. Their approach has been to throw everything up against the wall and hope something sticks.''

Gambling in Alabama

Abramoff's links to the party go beyond lawmakers. He worked with Reed, a former director of the Republican-oriented Christian Coalition, and Norquist to kill an effort to bring legalized gambling to Alabama.

At Abramoff's behest, one of his tribal clients, whose casino could have been hurt by the competition, sent money to Norquist's anti-tax group, Americans for Tax Reform, which in turn wrote a check to help Reed's effort.

One of Norquist's former partners in another venture was Safavian. The two men worked at Janus-Merritt Strategies LLC, a Washington lobbying firm that was later sold to a Richmond, Virginia-based law firm, Williams Mullen.

``Safavian is a small fish, but in combination with Abramoff and his ties to Norquist and DeLay, it presents a very inviting target to Democrats,'' said Ross Baker, a political scientist who studies congressional politics at Rutgers University in New Brunswick, New Jersey.

Safavian was one of three former Abramoff associates who joined the Bush administration. Another was Patrick Pizzella, assistant secretary of labor for administration and management. The third was Susan Ralston, special assistant to White House deputy chief of staff Karl Rove.

Last Updated: September 22, 2005 00:05 EDT

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According to Congressional ethics rules, the votes of our elected officials are never tainted by "personal pecuniary interests".

Yeah , right...



Blind Trusts Get New Look After Sale by Frist

By DAVID D. KIRKPATRICK
September 26, 2005

http://www.nytimes.com/2005/09/26/po...gewanted=print


WASHINGTON, Sept. 25 - Federal investigations into a stock sale by Senator Bill Frist are calling new attention to the blind trusts that he and many other government officials use to deal with potential conflicts of interest.

Federal ethics laws make it virtually impossible for members of Congress or top White House officials to set up trusts fully beyond their knowledge or control. While officials may choose to set up a conventional blind trust under the control of an independent administrator, ethics laws require the annual public disclosure of its contents.

So the laws provide for the creation of special "qualified blind trusts" like Mr. Frist's that are exempt from public disclosure. The laws strictly limit communications between the trustee and the beneficiary, but they also mandate disclosure of the original holdings and notification to the beneficiary whenever an original asset is sold.

And the rules give beneficiaries like Mr. Frist, Republican of Tennessee and the Senate majority leader, the power to order the sale of all of a stock or other asset at any time in the name of eliminating a potential conflict.

"That doesn't really sound very 'blind,' does it?" asked Celia Viggo-Wexler, vice president for advocacy of the group Common Cause.

The ethics laws that set rules for such qualified blind trusts apply to White House officials as well as members of Congress, but the trusts have become especially popular among the growing number of millionaires in the United States Senate (at least 45, according to the last count by the Capitol Hill newspaper Roll Call).

In addition to Mr. Frist, other senators with blind trusts of one kind or the other include the Democratic Senators Jon Corzine of New Jersey, Hillary Rodham Clinton of New York, Barbara Boxer of California, Herb Kohl of Wisconsin, John D. Rockefeller IV of West Virginia and Edward M. Kennedy of Massachusetts as well as the Republican Senators Lincoln Chafee of Rhode Island and Michael B. Enzi of Wyoming.

Elected officials cite their creation of blind trusts as insulation against conflicts of interest. When asked about the influence of his multimillion-dollar stake in HCA, the hospital company his family founded, Mr. Frist often said his blind trust kept him ignorant of how many shares he owned. Occasionally, he even said, "I don't know if I own HCA," as he told The National Journal in an interview two years ago.

Though choosing to create a blind trust might help candidates politically, ethics rules do not require one. Many other government officials and members of Congress own or even trade stocks directly.

In the highly regulated health care industry, for example, 32 senators have disclosed stakes in pharmaceutical or medical device companies, 24 in companies that sell malpractice insurance and 27 in hospital companies or health care providers, according to a recent survey by the Foundation for Taxpayer and Consumer Rights.

In the case of Mr. Frist, the federal investigations center on the timing of his decision to sell his HCA stake in June, just as the shares hit a new peak and right before the company announced disappointing earnings that caused a sell-off. At issue is whether Mr. Frist, whose brother is the company's chairman emeritus, received nonpublic information before ordering the sale.

A spokesman for Mr. Frist has said he had no such information. The spokesman, Bob Stevenson, said Mr. Frist ordered the sale to minimize accusations that the shares created a potential conflict of interest, the same reason he created the blind trusts in the first place.

The resulting attention, however, has brought into new focus how much Mr. Frist knew about the trust. Public filings made to the Senate ethics committee show several letters from his main trustee, M. Kirk Scobey Jr., president of the Equitable Trust Company in Nashville, informing Mr. Frist that certain assets had been sold or, in at least one case in 2002, that shares of HCA had been added. (An aide to Mr. Frist said he had inherited them and transferred them into his existing trust.)

Jamie Court, president of the Foundation for Taxpayer and Consumer Rights in Santa Monica, Calif., said members of Congress should either divest their holdings in an industry or recuse themselves for legislation affecting it. With blind trusts, he said, "Senators have wanted to have it both ways."

When the foundation complained to the Senate Ethics Committee last year about Mr. Frist's stake in HCA, the committee responded by citing Senate ethics guidelines: "Votes cast by senators and congressmen are predicated on their perceptions of the public interest and the public good, not on personal pecuniary interests."

• Copyright 2005The New York Times Company

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If CBS is correct then this is about as "conflicted" as they come...

CBS News says Michael Brown rehired as FEMA consultant

RAW STORY

http://rawstory.com/news/2005/CBS_Ne...sult_0926.html

Click here for CBS video clip


CBS News' Bob Schieffer just announced that the Federal Emergency Management Agency has rehired ex-FEMA chief Michael Brown -- as a consultant to evaluate the agency's response to the disaster!

From CBS's Katrina blog: "Sept. 26, 2005 /6:44 p.m. (CBS) — CBS News correspondent Gloria Borger reports that Michael Brown, who recently resigned as the head of the FEMA, has been rehired by the agency as a consultant to evaluate it's [sic] response following Hurricane Katrina."

CBS says they've confirmed Brown had been rehired. Brown resigned after taking heat when a Time Magazine article revealed that he had padded his resume with bogus jobs.

The Associated Press, however, tells the story differently: "Brown is continuing to work at the Federal Emergency Management Agency at full pay, with his Sept. 12 resignation not taking effect for two more weeks, said Homeland Security Department spokesman Russ Knocke."

Brown had been shopping his resume in Washington. Wrote U.S. News' Washington Whispers last week: "Ex-FEMA Administrator Michael Brown seems to be doing for his career what he did for the beleaguered agency. Less than a week after FEMA's dismal Hurricane Katrina response forced Brown out of the agency, he has been shopping his resume to headhunters and Washington PR firms. And it's not working. "He's radioactive," said one exec. An ally of Brownie in the PR world said he should have waited a month before starting his job hunt. "It's just a bad play."

[lofter1]

I've got my fingers crossed ...

DeLay Probe Winds Down; Charges May Loom

By LARRY MARGASAK, Associated Press Writer
September 27, 2005

http://news.yahoo.com/s/ap/20050928/..._investigation


A Texas grand jury's recent interest in conspiracy charges could lead to last-minute criminal indictments — possibly against House Majority Leader Tom DeLay — as it wraps up its investigation Wednesday into DeLay's state political organization, according to lawyers with knowledge of the case.

Conspiracy counts against two DeLay associates this month raised concerns with DeLay's lawyers, who fear the chances are greater that the majority leader could be charged with being part of the conspiracy. Before these counts, the investigation was more narrowly focused on the state election code.

By expanding the charges to include conspiracy, prosecutors made it possible for the Travis County grand jury to bring charges against DeLay. Otherwise, the grand jury would have lacked jurisdiction under state laws.

The Associated Press spoke to several lawyers familiar with the case, all of whom requested anonymity because they were not authorized to comment publicly. DeLay, R-Texas, said Tuesday that prosecutors have interviewed him. He has insisted he committed no crimes and says Travis County District Attorney Ronnie Earle, a Democrat, is pursuing the case for political reasons.

The disclosure came as congressional officials said top House Republicans were quietly considering how to respond if an indictment were issued.

House GOP rules require any member of the elected leadership to step down temporarily if indicted, and it would be up to the rank and file to select an interim replacement. Speaker Dennis Hastert, R-Ill., could make a recommendation, whether choosing to elevate another member of the leadership or tapping an alternative to reduce the possibility of a struggle if DeLay were cleared and then sought to reclaim his post.

Asked what he had heard of any late developments, DeLay said Tuesday, "Not a word."

He also said he earlier "had an interview" with prosecutors, adding, "everybody knows that."

The 11-term congressman has served as No. 2 in the House GOP leadership for three years, credited with maintaining iron discipline within the party and keeping Republicans in control of the chamber. He has retained the loyalty of most party members despite running into ethical problems last year. In a rare rebuke of a House leader, the ethics committee admonished DeLay three times for pressuring a fellow congressman, involving the Federal Aviation Administration in a political dispute and discussing energy legislation with lobbyists at a golf outing.

The grand jury's finale coincides with a wide swath of political trouble for the GOP. Ethical questions have been raised about stock sales by the Republican leader of the Senate, Bill Frist, R-Tenn. And President Bush, an uneasy ally of DeLay, faces the lowest approval ratings of his presidency.

The Texas grand jury has charged that corporate donations given to Texans for a Republican Majority Political Action Committee — formed by DeLay — were used to support state candidates in violation of state law. Texas law prohibits corporate money to be used to advocate the election or defeat of candidates; it is allowed only for administrative expenses.

Once DeLay helped Republicans win control of the state Legislature in 2002, the majority leader engineered a Republican redistricting plan that gave the state's U.S. House delegation a 21-11 majority in the current Congress. The effort helped Republicans increase their House margin by five seats this year.

Three of DeLay's political associates, the PAC itself, several corporate donors and a Texas business organization have been indicted so far — but not DeLay himself.

On Sept. 13, the grand jury re-indicted two of the associates, Jim Ellis and John Colyandro. The new charges included the criminal conspiracy counts.

The legal sources said that if the case had remained solely under the state election code, DeLay could only be indicted in his home county, Fort Bend.

The grand jury has charged that Texans for a Republican Majority and the Texas Association of Business worked together to circumvent the election code and funnel "massive amounts of secret corporate wealth" into campaigns, said Earle, the Travis County prosecutor.

The conspiracy charges were brought against Jim Ellis, who heads DeLay's national political committee — Americans for a Republican Majority — and John Colyandro, former executive director of Texans for a Republican Majority. They had previously been indicted on charges of laundering $190,000 in corporate donations.

The conspiracy counts against Ellis and Colyandro could bring a punishment of 180 days to two years and a fine of up to $10,000.

___

EDITORS — Associated Press Special Correspondent David Espo contributed to this report.

Copyright © 2005 The Associated Press. All rights reserved
Copyright © 2005 Yahoo! Inc. All rights reserved

[lofter1]

DELAY INDICTED

FOR CRIMINAL CONSPIRACY

"House Majority Leader Tom DeLay indicted on one count of criminal conspiracy by Texas grand jury, according to Travis County clerk's office."

12:30 PM 9/28/05

CNN has just reported that an indictment against Delay: 1 criminal count for "conspiracy" has just been handed down...

CNN: "Very Serious"

House Rules demand that he must step down following indictment

More info to come

[lofter1]

DeLay Indicted in Campaign Finance Probe

By LARRY MARGASAK, Associated Press Writer
9.28.05

http://news.yahoo.com/s/ap/20050928/...HE0BHNlYwN0bWE-

A Texas grand jury on Wednesday charged Rep. Tom DeLay and two political associates with conspiracy in a campaign finance scheme, an indictment that could force him to step down as House majority leader.

DeLay attorney Steve Brittain said DeLay was accused of a criminal conspiracy along with two associates, John Colyandro, former executive director of a Texas political action committee formed by DeLay, and Jim Ellis, who heads DeLay's national political committee.

The indictment against the second-ranking, and most assertive Republican leader came on the final day of the grand jury's term. It followed earlier indictments of a state political action committee founded by DeLay and three of his political associates.

The grand jury action is expected to have immediate consequences in the House, where DeLay is largely responsible for winning passage of the Republican legislative program. House Republican Party rules require leaders who are indicted to temporarily step aside from their leadership posts.

However, DeLay retains his seat representing Texas' 22nd congressional district, suburbs southwest of Houston.

DeLay has denied committing any crime and accused the Democratic district attorney leading the investigation, Ronnie Earle, of pursuing the case for political motives.

Democrats have kept up a crescendo of criticism of DeLay's ethics, citing three times last year that the House ethics committee admonished DeLay for his conduct.

[lofter1]

The Indictment:

http://i.a.cnn.net/cnn/2005/images/0...indictment.pdf

[TLOZ Link5]

Pride cometh before a fall. In due time, Tom DeLay will go from saying "I am the government" to saying "I am the Federal Bureau of Prisons."

[lofter1]

^^ Oh , yeah .. He'll be the poster boy!

Can't wait for that day.

Hope this brings this rat down HARD.