WASHINGTON – As President Bush prepares an address next week on corporate responsibility, Democrats have launched an aggressive campaign to accuse Bush of hypocrisy, charging that his own actions as a businessman 10 years ago did not live up to the standards he now champions.
The White House said it is not all what critics allege, and it is very old news.
Critics charge that according to Securities and Exchange Commission documents, Bush in 1990 sold stock in Harken Energy based on insider information, failed to disclose those sales in a timely manner as required and hid losses in the company to inflate its stock price.
The president's supporters say the charges are largely wrong.
"This is one of the most widely reported stories of the '90s and then going into the campaign," said White House spokesman Ari Fleischer. "That has been an issue in his campaigns that political opponents have raised against him, going back to 1994 in his first campaign ever for office."
The SEC investigated the insider trading charges from the June 1990 sale. Though Bush, who made $848,000 two months before the company reported millions of dollars in losses, knew the company was having some problems, SEC staff wrote a memo after a year-long investigation saying, "There is insufficient evidence to establish ... [the] necessary aspects of a possible insider trading case."
On the question of disclosing sale of stock by an insider, two forms must be filed, by the individual and the corporation.
Bush filed his form on time, notifying the SEC of his intent to sell on the same day he sold it, but the corporation filed its papers months after the fact.
"The point is, the president believed that all the forms were filled out properly by the attorneys and filed with the SEC, because he knew that he filed his form with the SEC," Fleischer said.
An SEC official told Fox News that it is the individual's, not the corporation's, responsibility to make sure those forms are filed on time.
In the face of recent corporate scandals, the latest being WorldCom's admission that it cooked the books to the tune of $3.8 billion in hidden losses — a situation that the president called "outrageous," Bush is calling for corporate officers to take more responsibility for the health of their company, and to take the fall when the company fails.
But Democrats don't want to miss the opportunity to score points on an issue that they have admitted they want to take full advantage of during the election season.
"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.'"
The White House dismissed comparisons between Bush's dealings at Harken and the current corporate scandals.
"To compare a $12 million sale of a subsidiary company by Harken to a deliberate attempt to hide $3.8 billion in losses is ridiculous," said White House communications director Dan Bartlett. "The proof is in the results. Harken fully complied with the SEC and restated its loses and by 1991 the value of their stock doubled from its price a year before."
The Associated Press contributed to this report.