US President George W. Bush had substantial information about the dire financial plight of a Texas oil company before he sold the majority of his holdings in 1990, triggering a federal insider trading investigation, the Washington Postreported today.
The US president's business dealings have come under scrutiny as he tries to restore confidence in markets hurt by a spate of corporate scandals.
Citing records from the federal Securities and Exchange Commission (SEC), the Post reported that several weeks before Bush sold most of his stake in Harken Energy Corporation, he and other board members received a letter from management calling the previous year's profits disappointing and warning that the company would "continue to be severely limited in our activities due to cash constraints."
The failure of a deal involving a subsidiary had "left the company with little cash flow flexibility," said the documents, which indicated that much of the same information was covered at an earlier board meeting.
Mr Bush sold the Harken stock for some $848,500 on June 22, 1990, just days before Harken closed the second quarter with staggering losses.
The White House has said Mr Bush knew the company would record losses but did not know how large they would be.
Most of the proceeds from the sale of the stock were used to finance Mr Bush's $600,000 partnership stake in the Texas Rangers baseball team. Mr Bush later made $14.9 million dollars when the Rangers were sold in 1998.
Mr Bush has refused to authorize the SEC to open the full file on his investigation, but selected documents have been released under the Freedom of Information Act.
Mr Bush has been forced to again defend himself for his often-scrutinized role as a board member for Harken, based in Grand Prairie, Texas, before he became the state's governor in 1995.
The questions about Bush's days at Harken - involving allegations of insider trading, the masking of company losses and late reporting on a stock deal - were aired extensively in three political campaigns, and Mr Bush was effectively cleared in a SEC investigation.
The SEC's investigation of Mr Bush was closed after officials determined he did not have enough insider information before his stock sale to warrant a case.
But consumer watchdog groups have maintained that Mr Bush's past business dealings are similar to widely condemned practices exposed in recent investigations involving Enron Corporation and WorldCom, among others.
AFP