by user | September 28, 2005 12:47 pm
Bill Frist, a name you are likely to recognize as he has a pretty strong position in the Senate for the Republicans. He was in the news for defying strategies set out by the White House and of course the confirmation hearings of John Roberts. Here’s a side you haven’t heard about yet, thank the mainstream media for that!
Bill Frist was a likely candidate to run for the Republicans at the 2008 Presidential Elections, he “was” because what I’m about to reveal here will make sure he will not be the Republicans candidate.
This Tennessee Republican is not good at lying, well perhaps he is, he is just not good at covering things up. Lucky us! Frist claims he had absolutely NO inside information prior to the massive sale of his part of the stocks of Hospital Corporation of America, in short HCA. This well-known company is coincidentally the country’s largest for-profit hospital chain, coincidentally founded by Frist’s father, Thomas Frist, and his brother Thomas Jr. Frist. Coincidentally not long after the sale of all his stock the company reported lower than expected earnings on the 13th of July, plummeting the stock to a very low price. That’s a lot of coincidence isn’t it?
The press secretary for Bill Frist’s office quickly rushed with a perfectly understandable explanation, Frist decided to sell his stock because he wanted to prevent an apparent conflict of interest between his work which largely meant shaping the country’s healthcare policies, and his interest in HCA. His wife’s and children’s stocks were all sold as well for this very same reason.
In 1995 Frist set up a “blind trust” in which a trustee handles all the equity and the owner of the trust has no authority over what happens, to a certain degree of course. Of course this blind trust wasn’t as “blind” as he led people to believe. For a long period he got away with managing his portfolio of shares quite vividly and also doing political work which directly influenced the companies he shared investments in.
The mainstream media bought into this as expected and there has been no mention of this case on the main news networks. Here’s what they didn’t tell you, his trustee for this “blind” trust is mister Scobey, the president of a company called Equitable Trust, a company Bill Frist has a long history of business with. The trust was set up by James C. Gooch an attorney at the prestigious law firm Bass, Berry & Sims in Nashville. The exact firm where Frist’s brother-in-law H. Lee Barfield has the position of partner. In fact Scobey, his boss Cammack and attorney Gooch are all honorable members of the West Nashville culture, the culture in which Bill Frist grew up.
Equitable Trust was very generous in this deal, awkwardly generous even. They waved the $5,000 annual fee for managing assets and the management fee for trusts was cut down from 0.3 percent to 0.22 percent. That’s mighty friendly isn’t it?
Actually in 2001 and 2002 Scobey transferred three blocks of HCA stock from Frist’s parent’s estate to his trust, worth a nice $750,000. Filings show that Scobey sold a total of $8 million worth of Frist’s HCA stock between 1995 and 2002, a bulk of which was sold in the last two years. Frist’s statement that he had no knowledge of his assets is total nonsense seeing he has to file annual financial disclosure statements with the Secretary of the Senate every year.
Even after the creation of his “blind” trust in 1995 Frist switched trusts in 2000. He gave a strange reason for doing this, but financial experts say it’s very clear why he did it. During such a transition the trust stops being blind for a certain period, granting Frist full insight in his assets. The annual financial disclosure statements were even an easier way for Frist to figure out his HCA stocks, considering 89% of his assets were formed by HCA stock he didn’t have to be a rocket-scientist to figure out the worth of his HCA stock.
Another interesting fact, the Justice Department was heavily investigating HCA’s position in defrauding the Medicaid and Medicare programs developed by the federal government which could have led to the imprisonment of Frist’s brother, Thomas Jr. Yet when Frist was chosen as Majority Leader the Justice Department abruptly ended its’ investigation and settled for a whopping $1.7 billion.
Frist was not the only one with inside information as it seems, almost the entire HCA executive staff seemed to know about the rise in treatment of uninsured patients which would hurt the earnings of HCA. Not surprisingly in February of this year the majority of the executives sold off $112 million worth of HCA shares, making a net profit of about $45 million.
As a dessert we have Thomas Sr. Frist’s son-in-law, Charles Elcan. Elcan bought 116 medical buildings with his company from HCA in 2000 for an amount of $250 million. Yet when MedCap, Elcan’s business, was sold HCA disclosed that only a fraction of the initial sum of $250 million was actually paid by Elcan’s company. Spicy detail is that the investment Elcan never really paid for more than doubled in the next three years, leaving the son-in-law with a decent sum of money.
This article is taken from the original written by Jason Leopold. Visit www.jasonleopold.com for updates and the original article.
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