McConnell Supports Frist in Stock Sale Probe

WASHINGTON – The No. 2 Republican in the Senate came to the defense of his colleague one day after Senate Majority Leader Bill Frist (search) issued a statement insisting that he did not do anything wrong when he ordered trustees to sell his stock in his family's company.

"I have absolutely no doubt facts will demonstrate that Frist acted in most professional and most ethical manner as he has throughout his career as a doctor and senator," said Senate Majority Whip Mitch McConnell (search).

McConnell of Kentucky offered his support to Frist, R-Tenn., saying that "he's a bit of a rarity in this town."

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After ducking and dodging reporters all day, Frist called the Capitol Hill press corps on Monday to issued a statement denying wrongdoing in selling stock from his family's company Hospital Corp. of America (search) over the summer.

"An examination of the fact will demonstrate that I acted properly," Frist told reporters in his first public statement since a federal probe was made public last week. "I had no information about HCA or its performance that was not publicly available when I entrusted the trustees to sell the stock."

Last June, Frist decided to order his blind trust to sell his and his family's stock in HCA, a company founded by the senator's father.

Two weeks after the sale went through, a lackluster earnings report caused the stock to drop nearly 15 percent. Now, Frist is under investigation by the Securities and Exchange Commission and federal prosecutors.

Frist said Monday that his decision to sell was motivated by the desire to end nagging questions about his ability to develop health care policy while his blind trust held millions in health care stocks.

"My only objective in selling the stock was to eliminate the appearance of a conflict of interest," he said.

Frist left without out answering questions and his staff said they were making relevant documents available to investigators. Frist has also hired two private attorneys who specialize in securities litigation and insider trading cases: William McLucas, a former SEC enforcement director and Harry Weiss, a former SEC attorney who was a co-author of a text titled "Preventing Insider Trading."

Frist has been the subject of numerous articles raising questions about his ability to develop national health care policy while his blind trust contained health care stocks worth millions. As a presidential hopeful, supporters say he wanted to clear the decks of any suggestion that he was influenced by the holdings in his portfolio.

President Bush recently appointed former Republican congressman Christopher Cox (search) to be chairman of the SEC. On Monday, Cox recused himself from any investigation into Frist's dealings.

"Because of my service in the congressional leadership for the last 10 years, I have recused myself in this matter. The purpose of the recusal is to avoid any appearance of impropriety in the commission's consideration in this case," Cox said in a written statement.

Cox gave the senator a $1,000 campaign contribution in 2000. Experts familiar with Senate rules are on record saying that Frist seemed to be operating within Senate rules when it comes to blind trusts. The difficult question that investigators will face is whether Frist had advance knowledge of the earnings.

Even if Frist did everything by the book and is ultimately cleared, it's not the kind of question a possible presidential candidate wants lingering as he starts to make trips to Iowa and New Hampshire.

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