On March 6, 2004, the New York Times published an editorial entitled “Courtroom Tales of Martha’s Lies…”. It states that her persecution “was not about unfairly targeting a celebrity defendant but about enforcing the transparency of the financial markets.” The Times also commented on how “the trial depicted a cozy world where insiders routinely use their wealth and connections to benefit from insider information.”
Isn’t that the American way? In June 1990, George W. Bush sold 200,000 shares of Harkin Energy stocks while he sat on the oil company’s board as a member of its audit committee. He unloaded his shares before the price plummeted and while outside investors were unaware of the company’s desperate situation. Mr. Bush later blamed his lawyers and the “loss of documents” by the Securities and Exchange Commission when it was discovered that he failed to disclose the $848,560 sale within the time required by law. He used most of the proceeds to pay off a loan he had taken out the previous year to buy a partnership interest in the Texas Rangers baseball team. The SEC, suspicious about the timing of these events, opened and then abruptly closed its investigation. A letter to his lawyers informed the future president that the decision to end the investigation should “in no way be construed” as exonerating him. George Bush Sr. was then president while the SEC Chairman was a family friend and sometime legal advisor.
Martha Stewart was convicted of an attempted cover-up. She had taken for granted the fact that American aristocrats now and then bend the rules governing insider-trading. Her crime, however, pales in comparison with what we already know about the President’s and his Vice President’s abuses of privilege for self protection and the pursuit of wealth. Mr. Cheney ran the Halliburton Corporation when the company reportedly bribed Nigerian officials for lucrative oil-related contracts. He continues to hide the minutes of the so-called “Energy Taskforce”, a convocation of plugged in, insiders who have chosen to remain anonymous.
It will be interesting to see if John Kerry and the media challenge Mr. Bush on Martha Stewart. Will they ask him to spell out how his activities at Harkin Energy differ legally and ethically from the insider-trading and attempted cover-up by the queen of image and good taste. Ms Stewart, according to the findings of a jury, attempted to conceal the truth about dumping ImClone stocks following an illegal tip from her broker that the president of the company was dumping his shares. If Mr. Bush as a board member knew the precarious nature of Harkin’s finances when he sold his shares, he would be guilty of defrauding clueless investors .
Ms. Stewart’s misfortunes are focusing attention on insider-trading. This may help shed light on the murky abuses of those who are not only rich and famous but also truly powerful. It is clear that the President, an insider, profited from the sale of his Harkin shares while outsiders who invested in the company lost millions of dollars. Even a Dick Cheney cannot hide these well known facts.
The burning question is, was George W. Bush also able to use the full force and power of the SEC chairman and/or his father’s presidency to save his own neck from prosecution? It is time for the SEC to release all documents pertaining to the agency’s decision to end the investigation of what the President knew before he unloaded his Harkin Energy shares. Otherwise we are left with a nearly palpable impression that, compared to the cover-up of the President’s insider-trading, Martha Stewart’s misdeeds are really small change.
Stephen F Minkin is currently writing “ White Plague: The Missing History of How AIDS Came to Africa.”