CBS News contributor and U.S. News & World Report contributing editor Gloria Borger continued a pattern, identified by Media Matters for America, of discussing the brewing scandal over Senate Majority Leader Bill Frist's (R-TN) suspiciously timed stock sale while leaving out key facts that undermine the credibility of claims Frist has made in his defense.
Frist is currently under investigation by federal prosecutors and the Securities and Exchange Commission for initiating the sale of stock in HCA Inc., a hospital chain founded by his family, shortly before a weak earnings report caused the company's share price to plummet. The stock was sold from qualified blind trusts belonging to him and his immediate family. But what viewers would not know from Borger's report on the September 27 broadcast of CBS' Evening News is that in a 2003 interview, Frist twice made the demonstrably false claim that he was unaware his qualified blind trusts included major holdings in HCA.
Borger reported that the trustees in control of Frist's stock assets "manage [Frist's stock] largely without his knowledge ... [and] he never knows the actual amount he owns." Frist has defended himself with similar remarks in the past, falsely claiming in January 2003 that "[s]o as far as I know, I own no HCA stock," and "[i]t is illegal right now for me to know what the composition of those trusts are. So I have no idea."
But Borger failed to note that statements Frist previously made about his knowledge of his trust's holdings of HCA stock are false. The Associated Press reported September 24 that Frist received at least three updates on HCA holdings being added to or sold from his trusts in 2002, plus one update informing him of an HCA stock transfer into one of his trusts just two weeks before the 2003 interview in which he denied knowing whether he owned any HCA stock. And contrary to Borger's assertion that Frist's trustees "manage [his stock] largely without his knowledge ... [and] he never knows the actual amount he owns," the AP reported in another September 24 article that "the trustees for Frist and his immediate family wrote the senator nearly two dozen times between 2001 and July 2005," giving him "regular updates of transfers of assets to his blind trusts and sales of assets." The AP reported that these written updates were specific as to the value of assets traded: "[s]ome assets have a dollar range of the investment's value and some list the number of shares."
Additionally, Borger accepted as fact Frist's explanation that, in initiating the sale of HCA shares, he was merely trying to eliminate the appearance of a conflict of interest, not profit from inside information: "One thing that is clear ... is that in trying to solve one problem [the apparent conflict of interest], Bill Frist created another [the scandal surrounding his stock sale]," Borger said.
From the September 27 broadcast of CBS' Evening News:
BORGER: And Frist doesn't directly trade stock, since it's in a blind trust, which means others manage it largely without his knowledge. He can ask that a stock be sold, but he never knows the actual amount he owns.
JACOB FRENKEL (former federal prosecutor): Instead of calling this a blind trust, the Senate's version of a blind trust really is an impaired vision trust.BORGER: One thing that is clear, Bob [Schieffer, anchor], is that in trying to salve one problem [the apparent conflict of interest], Bill Frist created another [the scandal surrounding his stock sale].