July
15, 2002 10:45 a.m. Bush’s
Document Dilemma
Should
he release the SEC documents?
f he asked you to release the file, you would?"
"I would if
he asked."
That brief exchange
between NBC's Tim Russert and Securities and Exchange Commission chairman
Harvey Pitt might mean weeks, and possibly months, of continued controversy
over President Bush's decade-old business dealings with the Harken Energy
Corporation.
On Meet the Press
Sunday, Russert asked Pitt whether the files from the SEC's early-90s
investigation of the Harken stock sale should be made public. Pitt at
first resisted answering. "I think this is ancient history,"
he said, "and the president should do whatever he thinks is appropriate,
but unless there is a reason to reopen ancient history, we should move
on with the future and start helping today's investors." When Russert
persisted, Pitt finally said he would release the files, if the president
asked him to.
The files question
is an issue that has been hanging in the air at the SEC for several days
— and there has been more than a little reluctance to take any action.
"We don't generally give them out," one source said last week.
"Undoubtedly they name other people who are not public figures and
therefore there is no right to have their names in public. I assume there
are all kinds of thorny issues. But at the same time, at some point, the
issue gains a critical mass and you have no choice but to find some way
to do it."
One overlooked aspect
of the controversy is that the SEC has already released some of
its Harken documents — with Bush's consent. In 1998, the public-interest
group Center for Public Integrity made a Freedom of Information Act Request
for the papers as part of an examination of the business history and finances
of each major presidential candidate. Bill Allison, the center's managing
editor, says the SEC originally turned down a request for Bush/Harken
documents. Then the center appealed the decision, and later, Allison says,
"We got a letter from the SEC from their Freedom of Information Office
telling us that the subject of the investigation [Bush] had waived any
privilege claim over the documents and they could send them to us."
(Bush had also waived attorney-client privilege to give the material to
the SEC) The center used the information for its book The Buying of
the President 2000 and for later articles about Bush's business dealings.
Now, with the issue again in the news, the center has posted the documents
on its website.
The documents provide
an invaluable look into the Harken investigation. Several of them are
memos which outline the evidence SEC experts examined and explain how
they reached the decision not to take action against Bush or anyone else.
In the end, the SEC concluded that 1) Bush did not have any non-public
information that would have constituted insider trading when he sold his
Harken shares, 2) he did not act with any intent to deceive federal regulators,
and 3) Harken's stock was not immediately affected by bad economic news
that came after Bush's decision to sell, meaning the issue did not meet
the threshold definition of insider trading.
The memos make clear
that SEC investigators went through a lot of paperwork, and also generated
more themselves. "In its investigation the staff reviewed thousands
of pages of documents produced by Harken and Bush, interviewed witnesses,
met with counsel for Harken and Bush, and consulted with the Office of
Economic Analysis on the issue of materiality," says one memo.
What would happen
if those "thousands of pages of documents" were made public?
Do they contain information that would show wrongdoing on Bush's part?
Given the tone and conclusiveness of the documents that we have already
seen, it seems highly unlikely that the SEC investigators would have ignored
smoking-gun evidence pointing to Bush's guilt. And even if they had, it
seems unlikely that such evidence, if it existed, would have remained
secret through Bush's 1994 and 1998 campaigns for governor of Texas, and
his 2000 presidential race, when his political opponents were searching
for any scrap of derogatory information to use against him.
Now it appears increasingly
likely that Bush will be forced to authorize Pitt to release the remaining
documents. First, the president can't claim that SEC rules prevent the
release, because Pitt himself has said he'll give them out if Bush asks.
Second, if he had no objection to the release of some of the papers to
the Center for Public Integrity, it would be difficult for him to resist
further release now. And third, he is under growing political pressure
to do so. For example, yesterday Sen. Joseph Lieberman, a possible Democratic
presidential challenger in 2004, said that because of the stock sale,
"There is a large cloud hanging over [Bush's] head, which I am afraid
if he doesn't eliminate it soon, by giving full disclosure, will diminish
his moral authority....Right now it is critically important that the president
of the United States ... open up the files and let the American people
see what was there." Lieberman was just one of many Democrats calling
for the same thing.
What should Bush
do? All the available evidence suggests that he did nothing wrong in the
Harken deal. In the past he has waived privileges to allow others to see
the documents related to the deal. Now, with so many of his political
enemies accusing him of having something to hide, he might as well do
so again and release all the papers.
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f he asked you to release the file, you would?"
