WASHINGTON – Senate Majority Leader Bill Frist (search) paid $72,012 from his own pocket to his 2000 re-election campaign fund in August, two months after he was notified that trustees had sold millions of dollars of his stock in HCA Inc., the hospital chain founded by his father and brother.
That Aug. 30 payment was disclosed in Federal Election Commission filings last Friday. The documents also show the campaign fund on the same day paid off a $349,107 outstanding loan from U.S. Bank Corp.
Both transactions enabled the Tennessee Republican to close the Senate campaign fund in anticipation of his retirement from the Senate next year and a possible run for the White House in 2008.
Frist has come under scrutiny from federal prosecutors and the Securities and Exchange Commission following the sale of his HCA stock. The sales were completed by July 1, near the stock's 52-week peak and two weeks before share prices fell 9 percent.
The U.S. Bank Corp. loan originally was taken to repay Frist some of the $1 million of his personal fortune he put into his initial 1994 campaign for the Senate.
Linus Catignani (search), the finance director for Frist's 2000 re-election campaign, said the senator's $72,012 payment was made to close out the campaign committee, which was short of funds.
"So you have two options. One would be to fundraise and the other would be for him to pay it off personally and he chose to pay it off personally," he said.
Asked if the payment was made with the proceeds from stock sales, Catignani replied, "It was from his personal checking account."
Frist's spokesman, Bob Stevenson, declined comment, referring all questions about the loans to Catignani.
An FEC spokesman, Ian Stirton, said a candidate can lend his campaign as much money as he wishes.
Larry Noble, a former FEC enforcement lawyer and the executive director of the nonpartisan Center for Responsive Politics, said the loan repayment raised questions about the senator's finances.
"It's possible that the reason he sold the HCA stock was to have money to pay off the debt, but he hasn't said that," Noble said. "There's a number of financial actions going on here which fairly raise several questions.... They all could be part of one pattern or be separate things going on."
Noble said Frist's actions could be the result of a reluctance to ask donors he might tap for a presidential bid to help pay off old Senate campaign debts. He said it also could reflect an lingering embarrassment over the $478,000 that the Senate campaign fund lost in stock investments in 2000-2002.