Saturday, Jul 13, 2002
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The revelation, reported in Friday's New York Times and Washington Post, could bolster Democratic efforts to tar Mr. Bush and his administration with the public dismay over company accounting scandals that have shaken investor confidence. The White House defended the President, saying the 1986 and 1988 loans from Harken Energy Corp. were ``entirely appropriate and fully disclosed.'' ``What has happened in recent years is that there have been abuses and there is a need to reform, and that's what the President is doing,'' the White House spokeswoman, Claire Buchan, said. The low-interest rate loans, which totalled more than $180,000, allowed Mr. Bush to buy 105,000 Harken shares through a stock option programme for senior officials, administration officials said, confirming the newspaper reports based on filings with the Securities and Exchange Commission. Mr. Bush on Tuesday called on companies to stop providing these types of loans to corporate officers as part of a broader crackdown on controversial business dealings and accounting irregularities. Companies have increasingly provided low-interest loans to top executives, but the practice was assailed after WorldCom Inc. reported massive accounting irregularities last month. The WorldCom chief executive, Bernard Ebbers, resigned in April under pressure over the company's huge debts and a $408 million low-interest loan that he received. ``Corporate officers should not be able to treat a public company like their own personal bank,'' a senior administration official said this week of Mr. Bush's proposal. The White House had hoped Mr. Bush's call for a crackdown on corporate misconduct would help stem the political fallout from corporate scandals. Instead, stocks have tumbled to lows last seen in 1997 and Democrats have cranked up pressure on the issue they hope will resonate with voters through November's Congressional elections. Mr. Bush was already under fire for his sale of $848,560 of Harken's stock in June 1990 — a time when he was an outside member of Harken's board of directors. Earlier this week, the President said he did not know why the transaction was disclosed to the SEC 34 weeks late. Mr. Bush has also sought to fend off questions about Harken's 1989 sale of its 80 per cent stake in Aloha Petroleum Ltd. In a later agreement with the SEC, Harken changed the way it accounted for the gain from the sale and restated its financial statements for 1989 and for the first nine months of 1990. The company's initial treatment of the sale significantly understated the losses Harken initially reported for 1989. As a result of accounting change, Harken's 1989 loss widened to $12.57 million from the $3.33 million loss initially reported. Mr. Bush has denied wrongdoing, saying the matter — which critics have compared to the accounting irregularities at bankrupt energy trader Enron — reflected an honest disagreement over accounting. ``This is old politics ... This has been around for a long time,'' Mr. Bush said, noting that the matter was raised when he ran for Texas Governor in 1994 and for President in 2000. ``I mean, this is recycled stuff.'' — Reuters
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