[Mb-civic] SEC Issues Subpoena To Frist, Sources Say - Washington Post

[William Swiggard]

SEC Issues Subpoena To Frist, Sources Say
Records Sought On Sale of Stock

By Carrie Johnson and Jeffrey H. Birnbaum
Washington Post Staff Writers
Thursday, October 13, 2005; Page A01

Senate Majority Leader Bill Frist (R-Tenn.) has been subpoenaed to turn 
over personal records and documents as federal authorities step up a 
probe of his July sales of HCA Inc. stock, according to sources familiar 
with the investigation.

The Securities and Exchange Commission issued the subpoena within the 
past two weeks, after initial reports that Frist, the Senate's top 
Republican official, was under scrutiny by the agency and the Justice 
Department for possible violations of insider trading laws.

Frist aides previously said he had been contacted by regulators but did 
not mention that the lawmaker had received a formal request for 
documents. The sources, who spoke on condition of anonymity because of 
the investigation, said Frist is expected to testify under oath about 
what he knew about the company's health in the weeks before he sold 
stock. Frist has told reporters that he did nothing wrong and that he 
directed the sale to eliminate potential conflicts as he considered a 
2008 presidential bid.

The formal request for documents usually presages an acceleration of a 
federal probe. In Frist's case, regulators had to proceed with caution 
due to his status in Congress and their mutual desire to avoid 
triggering constitutional objections to the release of documents. The 
disclosure of the subpoena comes as Democrats blasted Frist anew for his 
financial and personal ties to Hospital Corporation of America, a 
Nashville chain founded in 1968 by his father and his brother, Thomas 
Frist Jr. Critics yesterday seized on a report that Frist held a 
substantial amount of his family's hospital stock outside of blind 
trusts between 1998 and 2002 -- a time when he asserted he did not know 
how much of the stock he owned.

The Associated Press reported on Tuesday that Frist earned tens of 
thousands of dollars from HCA stock in a partnership controlled by his 
brother, outside of the blind trusts he created to avoid a conflict of 
interest.

"It seems that for years, Frist may have misled his constituents and the 
American people about his health care industry stock holdings and the 
conflict of interest they created as he drafted our nation's health care 
policy," said Democratic National Committee Communications Director 
Karen Finney. "This deal raises even more questions about the Republican 
culture of corruption in Washington, D.C."

During his decade in the Senate, Frist has been active in shaping health 
care policy, including creation of a Medicare prescription drug benefit.

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/12/AR2005101202286.html
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