And glad I am that you did.
When Mandelstam speaks, I invariably sigh a contented little sigh of happiness. You are one of my SDMB heros.
And I especially second thisL
Indeed.
stoid
Mandelstam: Recall though that Clinton rejected Krugman when he was looking for a CEA chief in the beginning of his administration. I’ve seem to recall reading a number of critical comments from Krugman regarding the Clinton administration.
Hilariously, the right-wing never seriously complained about Krugman until Bush came to power. AFAIK.
Nobody has addressed this point because it is tangential (though not entirely irrelevant) to the OP.
I skimmed the WSJ’s website today; it appears to me that your characterization of the Merrill story qualifies as a minority opinion, (IMO, of course).
Can you provide a source for your interpretation that (eg) Blogett’s emails did not contradict his public statements? (If you can’t do it quickly, that’s ok, since I consider this a bit of a hijack).
Scylla: Once again, the idea isn’t that some smoking gun, in which Bush is seen to act directly on the basis of his nonpublic knowledge, was ignored by the SEC.
Here is the bulwark of your position:
*“Based upon our investigation, it appears that Bush did not engage in illegal insider trading because it does not appear that he possessed material nonpublic information." Bartlett said the information about the losses at issue was available only to Harken’s executive committee, of which Bush was not a member.” *
So yes, there is no proof that those insiders on the executive committee bothered to mention to those insiders on the audit committee that the company’s assets were about to be hugely devalued–including that particular inside member of the audit committee who just happened to be the son of the president of the US.
That bulwark might be sufficient for you if anyone were arguing that Bush oughta be in jail right now, or to have a criminal record. But no one is making that argument.
Rather the argument being made can be encapsulated in these two excerpts from your own cite:
" Bush’s brushes with the SEC have new resonance now that he is preparing to respond to the wave of accounting scandals by proposing tough restrictions on corporate officials during an address on Wall Street next week. "
and
" Charles Lewis, founder of the Center for Public Integrity, said the memo shows the nation has a president “whose company has been under investigation by the SEC, who has been involved one way or another in controversial transactions.”
It’s not about whether Bush broke the law or whether he just, um, inhaled his misfiled form, it’s about his credibility on a matter of direct importance to the governance of this country.
The nation is in the midst of a huge wave of scandals, and Bush, while claiming outrage, is still casting deregulators such as Pitt in the role of watchdogs while he himself is cast as someone who, as a businessman, er, occasionally broke the speed limit. Well isn’t that nice?!
Look, I wouldn’t have voted for Clinton to head up a convent either ;).
flowbark, I’m sure you’re right about Clinton/Krugman; I was actually living outside the US at that time.
I like reading Krugman’s column precisely because it’s so colorful. And I’m not at all suggesting that he’s prone to misreporting or distorting the facts: I don’t think that’s true at all–or I wouldn’t read him as I hate propaganda. Only when the Clinton era comes up he seems to get a certain twinkle in his eye ;).
(And I thought his review of Wm. Greider’s book on globalization was wrong-headed but that’s another subject entirely.)
Stoid, thanks as always for your support; it’s nice to be appreciated. 
And the aforementioned Mr. Watson? You remember, the guy who’s testimony is reproduced here. Who states, unequivocally, that Bush was briefed on a constant, ongoing basis as to the financial condition of the company. Who states that the “audit committee” at Harken was fully informed.
You seem to have skipped over this rather lightly, considering that you place so much emphasis on your “alternative” theory as to what an “audit committee” is. A theory entirely lacking in any support by cite or evidence, I might add.
So: what about Mr. Watson, hmmm?
Isn’t the title of this thread ““Bush is a crook” says Mr. Krugman”? Sounds to me like someone is claiming that Bush is a crook.
Jesus Christ elucidator. My job isn’t to educate you. I’ve hit every single point your brought up in your posts.
Watson and Bush disagree. I’ll wager it’s because they were interviewed at seperate times and did not share the same conception of what “fully informed” meant based on the context of the question.
Additionally, the SEC seems to agree with Bush’s assessment that we would have had no knowledge of this particular area.
BTW, that’s not my “alternate theory” of what an audit committee is and what it does. That’s what it means. If you lack the education or knowledge to understand that it’s basic truth, it’s not my responsibility to provide it for you.
On the other hand, if you see fit to challenge my asessment please do so specifically.
Finally, I can’t beleive that after the two humongous point by point answers I’ve made to your posts, you would have the bad taste to accuse me, again, of skipping your points.
Hopefully you will be as diligent with my points when your time allows.
Perhaps you would care to address some of mine, and explain what is really the basic crux of your argument.
What material nonpublic information do you beleive Bush was in posession of at the time of the sale. Please be specific.
flowbark:
The emails themselves are available for your perusal at www.ml.com
mandelstam:
The actual OP is debating whether or not Bush is a criminal, and guilty of jailable offenses.
If it were simply that he had some suspicious and shady appearing dealings during his career there wouldn’t be much of a debate.
Since elucidator has called for a speical prosecutor scenario based on Bush’s “criminal” dealings, the burden of proof lies with him to demonstrate that such occured.
Let me get this straight: I have to prove what an investigation might uncover before an investigation can legitimately be called for?
Is this the same Scylla who insists that I must provide proof that Ari F. publicly stated the the document in question was legitimate?
Well, then, aren’t you under some obligation to prove that “audit committee” means what you say it means? I purport that the words mean pretty much what they say: the committee is charged with auditing, or, at least, delegating such an audit and vetting its accuracy. Which is precisely what Mr. Watson testifies.
There are more than one interpretation of the words “fully informed”? Really? What might they be, pray? “Fully informed” means just that, and Mr. Watsons statements admit no equivocation. They’re right there, just up the page a bit. All nicely bolded, and all.
Mr. Watson “disagrees” with George. Well, actually, one might be tempted to use the word “contradicts”. An investigation might reveal just what is what.
It might clarify which of two entirely disparate statements George made as to his filings is accurate. I don’t recall any statements from the corporate lawyers saying “Yeppers, we screwed the pooch on that one, my bad.”
George seems to feel that his bald statement that Mr. Watson is mistaken is entirely adequate rebuttal. I think not.
Kind of makes you wish there was some historical precedent, some investigation of possible shady dealings on the part of a sitting President. We would perhaps have some sort of guidelines as to what degree of suspicion is required before some sort of investigation is called for.
Wait! Wasn’t there one just recently? Something about somebody making some land deals? Well, that would certainly give us some historical precedent, wouldn’t it? Some indication as to how these things were done, some guidelines as how to proceed.
Wow! Wouldn’t it be even better if the investigation involved a sitting President of the opposing party? Sort of sauce for the goose, sauce for the gander? Can’t hardly get any fairer than that!
Why, just the thing! Surely George will leap at the opportunity to have everything out in the light of day. “Operation Candor” has a nice ring to it.
As such an investigation is certain to prove Our Leader’s unsullied virtue and moral clarity, why, I should think you would cheerfully support an independent investigation, since you are entirely convinced it would conclusively prove what you so steadfastly aver. Unless, of course, there are national security issues involved.
elucidator:
I’m asking your to verify a specific incident (and offering $20,) You’re asking me to provide you with general knowledge about Corporate structure that either comes with personal experience of the area, or an MBA or its equivalent. It’s up to you to be qualified for the debate you started it’s not up to me to educate you.
Verifying a fact is a different request than asking for a detailed education on a topic. Nonetheless I’ve provided it. Now you want cites. Fine. I will be happy to provide them. I will ask you for the second time to tell me what points concerning the role of an audit committee as I have described it that you take issue with. Be specific.
No my friend. What you need to show is that there is reason to believe an investigation is merited. Once you’ve done that you have to decide what you want to investigate. Then you have to some idea of what it is your looking for.
The SEC has already investigated and has stated that they do not beleive Bush engaged in illegal insider trading.
The SEC also believes “fully informed” doesn’t mean that the audit committee had access to information that was privy only to the executive committee. Doubtless they think “fully informed” means fully informed on the scope of the audit, and not omniscience as you would like to imply.
I am of the opinion that we shouldn’t spend 20 million or so on a special prosecuter unless there is a reasonable possibility that a crime has been committed.
The first step would be to tell us what material nonpublic information you beleive Bush was in posession of that caused him to sell the stock.
I’ll spell it out for you.
Are you maintaining that Bush had prior knowledge that the SEC was going to disallow the transaction that had passed the independant auditors?
Or is it something else?
What the fuck is it that you want to investigate?
[hijack]
Thanks, but the WSJ had also helpfully presented a number of these emails. (I have a subscription; for Dopers who do not, your link should prove helpful though).
I didn’t come across any commentators who put forward your contention that the emails were just “give-and-take” and not evidence of two-faced assessment of the dot-coms. I should also say though, that I didn’t stumble across evidence that would conclusively refute your position.
[/hijack]
Another good reason not to have children. My son advises me that he has the transcript for the press conference, and Ari F. did not, in fact, have anything to say as to the (ahem) provenance of the Dreaded Document. He was affirming the most recent explanation about bumbling lawyers causing all this trouble.
He did, however, affirm that the facts as outlined in the Dreaded Document are correct. You get to keep your money. Technicly.
The testimony of Mr. Watson is in direct contradiction to your rather sophistic re-definition of “fully informed”.
“…Earnings reports at Harken “were never a surprise to us,” said Mr. Watson, who joined Harken’s board after retiring as a senior executive with Arco USA in 1982. As members of the audit committee, the two were briefed by the company treasurer and the inside and outside auditors, Mr. Watson said…”
Well, not quite. As has been noted here, one official of the SEC said this. Another, however, communicating with Bush’s lawyer pointedly noted that no exoneration was implied. You statement, while entirely true, is nonetheless half-true.
Point of fact, the late filing is a crime in and of itself. Not much of one, mayhap. But a crime nonetheless. The poor dumb schmuck who bought George’s stock only to watch it turn to crap before his very eyes might also feel as though a crime had been committed. Wouldn’t you?
One point I’ve not been able to get at. Did George sell all of his Harken shares, or just some? If it turns out that he did sell out his position entirely, that would be suspicioius, but not by itself damning.
Please keep in mind: as I said, I find the “clueless doofus” defense plausible, that he was the dupe of Texas Awl Men. Would you be any better pleased?
And, no, I don’t think this needs a special prosecutor, necessarily. A preliminary investigation that gathers sworn testimony as to the events in question ought to be sufficient. If the whole matter is proven blameless, so be it. If your reluctance to accept an investigation into this is based on economic issues, your concerns could be accomodated.
Well, of course it was going to be disallowed! How could it not have been? Even I know that you can’t report a loan as an asset.
And, heavens, man, if you are so certain of your position, why wouldn’t you want to cheerfully watch as we liberals go down in flames?
Why shouldn’t we know the truth?
(NB: this is becoming, as it so frequently has, a discussion between the two of us, which I find tedious. If no one else wants to chime in, I recommend letting this thread drift to the bottom and sleep with the fishes. Last word is yours, if you like.
elucidator:
Why yes indeed. Doubtless neither Watson nor Bush were surprised when Harkens reported exactly what they thought it would: positive earnings that agreed with the audited financials they had reviewed when they were kept fully informed on the audit committee.
The surprise surely came later when the SEC disallowed the transaction and forced Harkens to restate their earnings.
Well, personally, I agree with you. Too bad the SEC isn’t on the same page. You’d think that their officials would know that an investigation does not either exonerate, or prove guilt.
Yup. The aalogy I saw in the press was that it was like going 60 in 55 zone. What is it that you would like to make of this crime?
Ummmm. This is your turn to be embarassed. That “poor dumb schmuck” would have seen his stock take off like a rocket from its lows, recoup all the losses within four days, and go on to double his money within 12 months.
I’ll ask you to reconsider the “poor dumb schmuck” comment. “Rich dumb schmuck” is however acceptable. (Charts of the stock are available online.) I use a subscriber site, but you can try www.bigcharts.com and satisfy your curiosity that my statement is accurate.
I dunno, and I don’t know if that information is public.
You can’t prove a negative. What an investigation has to do is find credible evidence to suggest that a crime was committed. You have it backwards.
This is just… False. If it were true, I guess there’s a lot of banks and financial institutions that are getting away with massive fraud.
The fact is that a loan is both a liability and an asset. And yes, divisions of the same company can and do incur debts, and pay interest to each other as a matter of course and GAAP. Again, I’m not going to educate you in basic Financial Accounting. You should know this if you wish to discuss it.
For the umpteenth time, I have no idea whether a crime was committed or not. The reason I think it’s a bad idea is that there doesn’t need to be a crime for their to cause a big brouhaha and controversy. He can be perfectly innocent and be crucified in the court of public opinion, or at the hand of Ken Starr’s unholy liberal counterpart.
YOU CAN"T HANDLE THE TRUTH!!!
Ummm. Sorry.
Because we just don’t investigate for the fun of it. There’s money, reputations, and politics. If you’re going to open the can of worms, you better have a better reasonable expectation that there’s fish in the pond.
Why shouldn’t we know the truth?
I think I read that it was 2/3 of his shares (no cite, sorry). I think I also read that the sale occurred at a time when Iraq began getting uppity in the first half of 1990, and that Haken’s only real asset was a contract to explore/drill offshore of Bahrain. I would assume that would be a more rational explanation for his selling (although it doesn’t look too good, when you think about it, still a rat jumping a sinking ship). I’m sure it wouldn’t have taken much for someone in the administration, if not his father, to drop a hint that that area would soon heat up. Imagine Sunday dinner at the White House in spring of '90: “Say son, did you get to see the cherry blossoms in bloom? They’re quite lovely this year. A place like, say, Iraq, doesn’t have cherry blossoms. But they do have many, many soldiers and a megalomaniacal leader with an itchy trigger finger. Wanna play some horseshoes? Close is good in horseshoes. And hand grenades. Hand grenades go boom. Sometimes entire regions go boom. Did you know Millie pooped in the Lincoln bedroom yesterday? Your mother made me clean it up. She said it was either that or eat broccoli…” So what I’m saying, and probably very poorly, is that while W did sell early, it might not have been the loan issue.
And why isn’t Senator Tom Harkin getting introuble for this? His name’s all over the damn thing.
Yes why shouldn’t we know the truth?
Do not lose focus: see the contradictions happening NOW, not then:
“July 4, 2002 in the San Francisco Chronicle :
Story Changes on Bush Stock Sale
Past business deal haunts president as he plans Wall Street speech
by Zachary Coile”
Yes, we have a president running the USA like a business now.
Ok. He filed late, and changed excuses.
Since by all accounts this action is on par with a slight speeding ticket, what say we fine him $60 or $70 bucks, and call justice served.
Seriously, hasn’t George Bush admitted to drunk driving?
I might be mistaken, but I think there was an admission of drug use as well.
While we’re at it, shouldn’t we imprison Bill Clinton for posession of marijuiana during the “didn’t inhale” incident.
Then there’s Bill’s perjury.
Let’s throw Newt Gingrich in jail for failing to pay SS tax for one of his maids.
Doggone it, I have an outstanding parking ticket, so you better take me away to.
Gigo:
You don’t seem to understand that the late filing thing in and of itself is a De minimus kind of thing that nobody cares about.
It is only germaine in the context of being seen as a potential cover-up for an illegal insider trade.
But it’s not really suggestive of that either. As I’ve said, if you’re performing illegal insider trades you file your form in a timely manner for the same reason that you don’t drive 95 mph if the back of your car is filled with pot.
Tends to happen when we vote in an MBA…
Then there is Bill’s business dealings from. . .
Oh yes, nobody cares about that…
But context can do you in when politics is the subject.
This is the scenario many in the left saw about Bush: That his cabinet was going to be a business fox guarding the CEO henhouse. Virtually all members of his cabinet have conflicts of interest with the mess at hand (So mr. Cheney, how is Haliburton doing?) Right now even corrupt CEO’s got or are getting golden parachutes, while the workers are getting golden showers.
My take is that in this case, those “nobody cares” dealings of Bush, put pressure on him to do something about the current mess . . .
And to take credit, years from now, saying that it was his leadership that fixed the problem. . .
Gigo:
You’re missing the point. If Bush is so big and bad and terrible: protecting the bad guys and giving the shaft to the little guy, and running amok with our laws, than why are you interested in a pissant thing like a late filing.
Ok. He filed late. He’s guilty.
It’s like a parking ticket!
It’s not a Federal crime.
Why don’t you focus on something meaningful like failure to recycle or something.
For the unpteenth time, filing late is not a big deal
It is only interesting as it relates to a potential insider trading issue, and it only becomes significant once you have a case against him.
The statute of limitations for insider trading on this issue has passed.
Normally, there would be no point in looking at it. However, if it looks like a strong case can be made I think we should pursue it for the issue of credibility as well as for the potential for criminal charges in activities related to the insider trade.
But, first, You have to have the expectation of having a good case for the insider trading.
If you have enough evidence or reason to believe that it really happened, go for it.
If you don’t then it is irresponsible to waste the money, damage the reputations, and create the political fallout such an investigation would generate.
Again, if you are going to open the can of worms, you should at least check to make sure you are near water that may have fish in it. Otherwise, don’t open it.
Right now, I only see one possible scenario for a charge of illegal insider trading.
That is that Bush had knowledge that the SEC was going to disallow the transaction that passed the independant audit and force the company to restate its earnings.
There are two possible permutations for this scenario:
-
Somebody tipped Bush off that the SEC was going to do what it did.
-
Bush had reason to strongly suspect that the SEC would overturn the independant auditors position.
There are two permutations for scenario 2.
A. There was a conspiracy between Bush, members of the board of directors, all of the audit commitee, and the independent auditors to conduct a fraudulent audit with the intention of creating a window of opportunity between the time the audit was complete and the time the SEC detected the problem so that Bush (and apparently only Bush) could sell his stock and net a half-million profit or so.
The problem with this is that that is a damn big and complex conspiracy to put together and pull off just for half a million or so. Also, a conspiracy that big, you would think somebody would have cracked by now. Also, why would all these people go to all this criminal risk on George’s behalf without any upside of their own. Also, in order to make this half-million, you’re going to shitcan what is probably a billion dollar company, and spend more on fake audits and restatements than you will make.
In other words that scenario is absurd.
B. Bush was a criminal mastermind with vast knowledge of the intricacies of corporate structure, tax-law, GAAP, and the SEC’s inestigatory policies and habits that was far superior to everybody else on the board, the committee, or any of the auditors. Using this incalcualbe criminal genius and knowledge Bush engineered a scenario to get the board and the auditors to pass a transaction that they thought was Kosher, but yet that Bush knew the SEC would pick up on.
You can work out the problems yourself on that one.
That leaves us with scenario number one as the only possibility that makes sense.
It’s possible, of course, but before we proceed with an investigation, we need some kind of inkling of who tipped George off, when, and why. That’s gonna be a tough one to find, I’ll bet.
Then, we also need to demonstrate that it’s even possible. If Bush sold his stock before the SEC seriously considered disallowing the Harkens transaction, than scenario one is an impossiblity!
Supposing that it’s possible we also need to wonder why, if Bush had such a big in with the SEC that somebody called him up and told him Karkens was about to be shitcanned, yet the SEC investigated him for the transaction. It seems to me that if somebody called him up and gave him the wink and nod, they wouldn’t have gone after him after helping him break the law.
So, we need to hypothesize somebody who knew about Harkens, but had no power in the SEC’s criminal investigation arm as the tipster. We also have to wonder why Bush filed late, since that would tend to draw attention to him.
We have to hypothesize a motive for the tipster.
So, unless I’m missing something (and I may be,) in order for it to make sense to start an investigation, or seriously consider this thing:
- We have to determine if scenario one is even possible.
- We need to find a likely tipster and a motive
At the risk of doing all the work for the opposing side, let’s ask the real million dollar question here:
Who at the SEC was in a position to know that the Harkens transaction was going to be disallowed, but had no influence with the investigative arm of that agency?
Answer that question, and that leads you to the next one: This one’s the granddady one. This is the one that starts the investigation that topples a Presidency.
Did that person or persons that you just identified get anything (payments, favors, a political appointment, etc) from George Bush after he sold his stock that could be construed as payment for the tip?
If not, what was the motive.
Answer those three questions, or present another scenario and we have something worth doing something about.
If you can’t then you don’t have doodley squat.
Scylla: you are piling on something I had already left behind. An investigation on bush wrong doings is a moot point in a court of law. The court of public opinion (or politics if you want to pretend you don’t understand) is what is important now.
My point in essence is this:
As a pragmatist, I think this scandal is a political pressure point that ensures the white house will do the right thing in the near future.
Proposals are cheap. If there is something Bush is good at, is to have political smarts. He knows by the time all his proposals, regarding corporate crime, get though congress very little of his “tough” new rules will remain . . .
Unless we apply some pressure. .
Or we can vote for a democratic majority that will make him sign a tougher bill.
Molly Ivins does say it better: Bush needs to do this:
http://www.commondreams.org/views02/0703-08.htm
by all accounts? :rolleyes: Because Bush’s people say this is equivalent to speeding we should take that as a given? How about you show us someone without a vested interest in minimizing the importance of this act willing to
say it’s equivalent to a parking ticket.
Until you do, the presumption is that an act that in effect,
hides from the SEC the fact that an insider is selling is rather significant.
And you don’t seem to understand that the only ones saying so are Ari and Bush’s lawyers. Sorry, you’ll have to do better than that.
Exactly, and since this probably was in insider trade, the coverup speaks volumes.
Unless your daddy is the president, in which case you figure that none of the laws apply to you anyway.
Now, you’ve said multiple times that Because Bush probably thought that they were going to get away with the bogus accounting over the Aloha sale, Bush didn’t have any insider information, and thus this was not an insider trade.
Ok, I’ll stipulate that he didn’t know that the SEC was going to make them redo the math but you seem to think that this exonerates Bush, when in fact it does no such thing. The fact that he didn’t know that the SEC was going to invalidate the accounting of that sale is completely irrelevant, because Bush knew that Harken was in far worse shape than the accounts were going to show. The fact that he believed that they were going to get away with misrepresenting losses for at least a quarter doesn’t change the fact that Bush knew what the real losses were. And that the rest of the world did not. Bush believed that the upcoming quarterly statement was going to understate losses, but he also knew what the real losses were.
Sounds like the very definition of insider trading to me. And the rest of the American Public are going to see it that way too if the are informed of the facts of the case, regardless of what the SEC says about it.
Think about what you are saying for a minute.
The books were cooked, Bush knew, but thought they were going to get away with it, He coundn’t have known that the SEC was going to make them re-figure for the Aloha deal, so he didn’t have any insider information
Really? so that fact that he knew that they were cooking the books to hide losses was NOT insider information? What a world you must live in…