Another Reason Frist Dumped HCA
Senate Majority Leader Bill Frist’s well-timed sell-off of shares in Nashville-based HCA Inc. may have had less to do with profit-taking and more to do with distancing himself from the recently troubled hospital chain prior to running for president in 2008, some political observers believe.
According to Congressional Quarterly and wire reports, Frist in mid-June sold his stock in HCA — the company his family founded — shortly before it issued a disappointing earnings report and its share price fell roughly 14% from about $58 to $50. Early this week, HCA shares were trading around $48. Meanwhile, earlier this year, Frist reported that stock holdings in his blind trusts were valued at up to $35 million.
If Frist’s HCA stock accounted for 100% of the holdings in his blind trusts, his early stock sell-off would have resulted in a difference of about $5 million in net proceeds. It’s a fortune to the vast majority of Americans, although admittedly not a lot in a family that’s worth billions. Still, it’s enough to raise suspicions of insider stock trading by federal regulators.
Perhaps a more plausible explanation: Frist is cleaning up his personal house and wanted to dump the HCA stock as he lays the groundwork for a presidential bid in two years. Remember: Before Enron and WorldCom became synonymous with corporate scandal, HCA (formerly Columbia/HCA) was defrauding taxpayers by submitting bogus expense claims to federal healthcare programs including Medicare. The hospital chain ultimately agreed to pay $745 million to settle fraud charges with the government.
