GOP colleagues vouch for Frist
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Citizens for Responsibility and Ethics in Washington filed a complaint with the Senate Select Committee on Ethics. The complaint contends the Tennessee Republican violated Senate ethics rules by engaging in apparent insider trading and then attempting to cover it up.
Frist promised Monday to cooperate with federal investigators into his sale of stock in Nashville-based HCA Inc., but said he did nothing improper.
Federal prosecutors and the Securities and Exchange Commission are examining records related to the sale.
Sen. Lamar Alexander, R-Tenn., vouched for Frist’s honesty.
“Senator Frist is one of the most straightforward persons I have ever met,” Alexander said Tuesday. “So far as I can tell, he asked what the rules were and followed those rules, and to me that is the end of it.”
Senate historian Don Ritchie told the Chattanooga Times Free Press that Frist is the first sitting majority leader whose actions have been investigated by the SEC.
Frist asked a trustee to sell all his HCA stock in June, near a 52-week price peak of $58.40 a share. Reports to the SEC show HCA insiders sold about 2.3 million shares worth a total of about $112 million.
The sale of the majority leader’s stock preceded by about two weeks a disappointing earnings forecast. HCA’s stock price dropped almost 16 percent by mid-July.
Frist’s brother, Thomas Frist Jr., is a former chief executive of HCA and is now a director and the largest individual shareholder in the company.
The value of Frist’s stock at the time of the sale was not disclosed. Earlier this year, he reported blind trusts with all holdings valued at $7 million to $35 million.
Documents show Frist was updated several times about his investments in HCA and other transactions even though they were held in blind trusts. Frist has said he didn’t know what was in the trusts.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Government, said Frist has not addressed the timing of the sale of his HCA stock.
“His explanations simply don’t ring true,” said Sloan, a former employee of congressional Democrats.
Senate Majority Whip Mitch McConnell, R-Ky., said Republicans remain loyal to the majority leader.
“We have taken a look at the situation and think he handled himself appropriately,” McConnell said.