Do ethicists make house calls?

Surely we can find some expert of some sort to conduct spurious analysis from afar regarding the fitness of Senate Majority Leader Frist, AWISFIMD? I suspect it would prove quite fascinating. We certainly know he responds to stimuli:

Bill Frist was his high school's class president. He was a quarterback on the football team and a member of the honor society, and lived amid the upper crust of Nashville society. He dated the head cheerleader, and while he was in med school they were engaged to be married.

But while interning in Boston, he met another woman, spent a dinner and a night with her, and fell in love. Two days before his wedding, he flew back to Nashville and broke off his engagement.

And evidence seems to indicate cognitive recognition:

Frist acknowledged in a 1989 book that he routinely killed cats while an ambitious medical student at Harvard Medical School in the 1970s. His office said it had no record on how many cats died. Frist disclosed that he went to animal shelters and pretended to adopt the cats, telling shelter personnel he intended to keep them as pets. Instead he used them to sharpen his surgical skills, killing them in the process.

The newly elected leader of the Senate Republicans revealed the practice in his book "Transplant: A Heart Surgeon's Account of the Life-and-Death Dramas of the New Medicine."

"It was a heinous and dishonest thing to do," Frist wrote, in a passage quoted by The Boston Globe.

But the jury is still out on just how blind he really was regarding his blind trust.

Blind trusts are designed to keep an arm's-length distance between federal officials and their investments, to avoid conflicts of interest. But documents show that Senate Majority Leader Bill Frist knew quite a bit about his accounts from nearly two dozen letters from the trust administrators.

Frist received regular updates of transfers of assets to his blind trusts and sales of assets. He also was able to initiate a stock sale of a hospital chain founded by his family with perfect timing. Shortly after the sale this summer, the stock price dived.

...Documents on file with the Senate show the trustees for Frist and his immediate family wrote the senator nearly two dozen times between 2001 and July 2005.

The documents list assets going into the account and assets sold. Some assets have a dollar range of the investment's value and some list the number of shares.

There is also evidence that Frist suffers from a certain degree of higher-level cognitive impairment. His stated reason for making the stock sale was to avoid the appearance of a conflict of interest. So much for that plan:

Several ethics experts and watchdogs said they found it odd that Frist could intervene to order such a sale when the HCA stock was ostensibly out of his reach in blind trusts. Fred Wertheimer, president of Democracy 21, said, "The notion that you have a blind trust but you can tell your trustee when to sell stock in it just doesn't make any sense. It means you have a seeing eye trust and not a blind trust. It's ridiculous."

Larry Noble, executive director of the nonpartisan Center for Responsive Politics, agreed that the arrangement "seems to defeat the purpose of a blind trust. Somebody else is supposed to have control over it to avoid potential conflicts of interest. If you can just reach in and sell stock, it seems it defeats the whole purpose."

Maybe he's just afflicted with some little-known time dilation disorder; his HCA stock has been in a "blind" trust since 1995. The fact that he just happened to make the sale before the stock dropped 9% in price is strictly coincidence, you understand.

It will be interesting to see what will be revealed by the SEC's subpoena of Frist's personal records. Especially since known records already indicate that Frist had HCA holdings separate from and in addition to his "blind" trust.

Outside the [Senate] blind trusts he created to avoid a conflict of interest, Senate Majority Leader Bill Frist earned tens of thousands of dollars from stock in a family-founded hospital chain largely controlled by his brother, documents show.

...Edmond M. Ianni, a former Wilmington, Del., bank executive who established blind trusts for corporate executives, questioned why the senator's brother was able to manage assets "when the whole purpose of a blind trust is to ensure lack of not only conflict of interest but appearance of conflict of interest."

Kathleen Clark, a government ethics expert at the Washington University in St. Louis School of Law, said she does not believe the Senate trusts or the Tennessee trust insulated Frist from a conflict because the senator or his brother was advised of transactions and could influence decisions.

Yes; I'm afraid the prognosis just isn't looking good for Frist. It certainly doesn't help matters any that HCA has a bit of a history with Medicare fraud.

...in December 2002, HCA Inc. -- the company whose stock Frist sold off before share prices dropped sharply -- agreed to pay the government $1.7 billion in fines and penalties related to 14 counts of defrauding Medicare and Medicaid. HCA Inc. is the for-profit hospital chain founded by Frist's father. The total in penalties is the largest settlement ever recovered by the federal government in a health care fraud case, although many observers -- including a prominent Republican senator -- criticized the Bush administration's withholding of information in the case and aired concerns that the government may not have been adequately compensated.

But that's just the first layer of this scandal. As media matters points out later in the article, not only was the DOJ's investigation of HCA hampered, but the players in this scenario go straight to the White House, raising the specter of still more quid-pro-quo governmental appointments.

Grassley also raised concerns to Thompson about the involvement in the HCA case of Thomas A. Scully, the administrator of CMS. Scully was president and CEO of the Federation of American Hospitals, a lobbying organization of for-profit hospital chains, immediately prior to joining the CMS. Thompson responded by rejecting the notion that Scully's role in the federal settlement with HCA constituted an ethical conflict [Thomson Financial, August 12, 2002].

(The HCA settlement did not mark the end of ethical questions about Scully. Medicare chief actuary Richard Forster testified before Congress in 2003 that Scully, under orders from the White House, instructed him not to advise Congress of the real cost of President Bush's Medicare drug benefit plan and threatened to fire Forster if he did disclose the real cost. [The New York Times, 3/25/05 and 3/14/05].)

Amusing as it all is, the irony is almost too much - a stock sale purportedly intended to strengthen a presidential bid by eliminating a conflict of interest has the exact opposite effect, instead generating more scrutiny. This additional scrutiny delves well beyond the alleged insider trading and has spurred investigation into other matters implicating the current administration, which is already awash in scandals of every stripe - cronyism, security leaks, criminal negligence - you name it.

Okay, irony wins. It's not so amusing after all.


cross-posted at dembloggers


Tags:
Frist, corruption, HCA, insider trading