One day after a front-page Washington Post report documented that the trustees for hospital company HCA Inc. "have written to" Senate Majority Leader Bill Frist (R-TN) "15 times detailing the sale of assets from or the contribution of assets to trusts of Frist and his family," The New York Times uncritically reported on October 25 that Frist "often said he did not know how much HCA stock he held." Times reporter Sheryl Gay Stolberg ignored the very evidence cited in a Times editorial published the same day that credited the Post with breaking the story and argued that "Mr. Frist must answer to the American people for the fact that his statements before the sale were, at the very least, misleading."
From The New York Times article on Frist, who is currently under investigation by federal prosecutors and the Securities and Exchange Commission (SEC) for initiating the sale of stock in HCA, a hospital chain founded by his family, shortly before a weak earnings report caused the company's share price to plummet:
In 2000, Mr. Frist decided to take his investments out of several Tennessee trusts and place them in a "qualified blind trust." Under Senate rules, such trusts are managed by independent trustees; the lawmaker, however, can direct the trustee to sell off an asset. Mr. Frist often said he did not know how much HCA stock he held; this year, he reported $7 million to $35 million in assets, including his HCA shares.
Records show that Mr. Frist, his wife and their children initially contributed $10 million in HCA stock to the trust, which also included stock in the pharmaceutical companies Abbott Laboratories and Johnson & Johnson. Senate rules did not require a blind trust, but Mr. Frist said last week that he wanted to go beyond what the rules required.
"I thought, 'Why not raise the bar?' " Mr. Frist told reporters. "Why not do a good deed and put everything in a blind trust where you are not the day-to-day manager, where you can proceed with business here and avoid any appearance?"
Yet, as the Post noted, the letters written by HCA trustees to Frist -- which include notice of the addition of HCA shares to Frist's trust in 2001 and 2002 -- "seem to undermine one of the major arguments the senator has used throughout his political career to rebut criticism of his ownership in HCA: that the stock was held in blind trusts beyond his control and that he had little idea of the extent of those holdings":
Senate Majority Leader Bill Frist (R-Tenn.) was given considerable information about his stake in his family's hospital company, according to records that are at odds with his past statements that he did not know what was in his stock holdings.
Managers of the trusts that Frist once described as "totally blind," regularly informed him when they added new shares of HCA Inc. or other assets to his holdings, according to the documents.
Since 2001, the trustees have written to Frist and the Senate 15 times detailing the sale of assets from or the contribution of assets to trusts of Frist and his family. The letters included notice of the addition of HCA shares worth $500,000 to $1 million in 2001 and HCA stock worth $750,000 to $1.5 million in 2002. The trust agreements require the trustees to inform Frist and the Senate whenever assets are added or sold.
The letters seem to undermine one of the major arguments the senator has used throughout his political career to rebut criticism of his ownership in HCA: that the stock was held in blind trusts beyond his control and that he had little idea of the extent of those holdings.