If the American public is not by now completely confused about what George W. Bush did or did not do at Harken Energy Corporation, it's sure not because us media folks got the story straight. I haven't seen us get so tangled up in the facts since we tried to explain global warming.
This is an old story, but it is not an old story. It has been gone over again and again by journalists, and it has not been gone over by journalists. It was thoroughly investigated by the Securities and Exchange Commission, and it was not thoroughly investigated by the SEC. The SEC concluded there was nothing wrong at all, and the SEC concluded there was something very wrong indeed.
So which part is true? All of it is. All of the above is quite accurate, unless you report one set of facts without the other. What we have here is two separate stories or, to be strictly accurate, two and a half.
The old story is that, in 1990, George W. Bush sold his stock in Harken for $848,560 while serving both as a consultant to the company and on its board of directors, assigned to both the audit committee and the fairness committee. He unloaded the stock 16 days after receiving an internal "flash report" that the company was about to record huge losses.
He then failed to report this insider sale to the SEC for eight and a half months. He sold the stock at $4 a share. It fell to $1 by the end of that year.
It is also true, but only arguably relevant, that the company eventually recovered. The SEC investigated all this in 1991, cleared Bush on the insider-trading charges, and gave him a slap on the wrist for late reporting.
On the other hand, it would have been highly unusual if he had been charged with anything for late reporting, which can be dismissed as a mere technical violation or argued that the law's the law -- depending on your taste.
That Bush's father was president of the United States at the time, that his father had appointed one of his own loyalists as chairman of the SEC, and that the SEC attorney in charge of investigating young Bush's actions had himself actually been George W.'s personal attorney are all relevant facts. But it's up to you whether you conclude there was a thorough investigation or an obvious whitewash or just another case of the insider connections and dealings that plague the whole system.
Yes, many people over the years have claimed that it all looked very fishy.
The second story, the new one, is about insider dealing at Harken. While Bush was on the board's audit committee, the company started hemorrhaging money from losses in commodities-futures trades. So insiders at Harken borrowed money from the company to buy Aloha Petroleum. They spent $1 million to buy it and booked it as a $7.5 million gain.
When the SEC investigated this deal back in 1990, it ruled that what the company had done was impermissible, and Harken was forced to restate its earnings to show a big loss.
So this is the story about which one accurately says the SEC ruled it wrong. The half-story is that Bush himself, while a consultant and director, got two loans worth a total of $130,000 from Harken in order to buy Harken stock. That was not only legal but also common practice and is of interest today only because the practice has gotten out of control and Bush himself urged that it be changed in his speech to Wall Street last week.
The Center for Public Integrity has posted much of the relevant material from the SEC investigations on its Web site, publici.org, so you can look it up yourself.
In journalism, our sins of omission are almost always more grave than our sins of commission. So, despite our lamentable performance last week, I believe a more serious problem than the error and confusion is what we are not hearing about at all.
No one is connecting the dots between the financial scandals and government. Here's almost every politician in Washington hot to trot on the terrible, terrible conduct of some corporate leaders, and no one is pointing out that the government itself -- by its 1990s mania for deregulation, by underfunding regulatory agencies, and by opening critical loopholes such as energy-futures trading -- is in large part responsible for this whole mess.
Molly Ivins writes for Creators Syndicate and the Fort Worth Star-Telegram, where this column first appeared.