In September of 2005, CREW filed an ethics complaint against then-Majority Leader Bill Frist alleging that the Senator violated Senate ethics rules by engaging in apparent insider trading and then attempting to cover it up.

Today, we got a response. Yep, two years later. And, with Frist out of the Senate, we're told nothing can be done. Of course, Frist was in the Senate for over a year after the complaint was filed. Melanie Sloan had to say and the letter is below:

In a case of too little too late, further demonstrating the need for a congressional Office of Public Integrity, the Senate Ethics Committee has – two years later – responded to CREW’s fall, 2005 ethics complaints against former Senate Majority Leader Bill Frist. Astonishingly, after failing to take action while Senator Frist was in office, the Ethics Committee now notes it does not have jurisdiction over former members, meaning it is now barred from acting. What does this mean? Senator Pete Domenici, retiring at the end of this term, has nothing to worry about.

Last night, Bill Frist's home state paper, the Memphis Commercial Appeal, posted an article about his decision against running for President. That article, which appears on CREW's website, included this passage about Frist's ethical woes:

Melanie Sloan of Citizens for Responsibility and Ethics in Washington (CREW), which filed complaints against Frist with the Federal Election Commission, said Frist was majority leader when his party lost the majority and couldn’t reasonably expect to receive much GOP support. That and "numerous ethics matters" probably drove him to the realization that he should throw in the towel, she said.

For some reason, the same article on the Commercial Appeal's website this morning omits that information about Frist's ethical issues. But, you can read it here anyway.

We can't argue with this:

[Frist] also was damaged by a federal probe into his stock sales, a critical drawback in a year when Republicans were hammered by voters over ethical issues.

Bill Frist's ethical woes are being featured prominently in the coverage of decision to not run for President.  Here's the excerpt from Washington Post: 

Frist's decision came after a series of politically damaging events, including an investigation by the Securities and Exchange Commission into allegations of insider trading for his sale of a large bloc of shares in HCA Inc., a hospital chain founded by his father and his brother. The sale was completed just weeks before the company issued an earnings estimate that failed to meet analysts' expectations, causing a drop in HCA's stock price.

Frist also has faced questions about his role on the board of a charitable foundation that paid consulting fees to some of his close political allies.

Anyone looking at the exit polls of voters in 2006 knows that ethics and the culture of corruption in Congress mattered to the electorate.  Frist already had legal troubles with the SEC and the FEC.  That's not a good starting point for a Presidential race in this climate.

From the Associated Press:

As a presidential candidate, Frist would have had to contend with several ethics controversies.

He has a multi-million-dollar fortune gained largely through his ownership of stock in Hospital Corporation of America (HCA), a hospital chain founded by his brother and father. The company later became Columbia/HCA Healthcare.

HCA was the subject of a decade-long federal investigation into double-bookkeeping and suspected criminal fraud involving the bilking of Medicare and other federal health programs. The company has paid $1.7 billion in fines.

In 2005, Frist sold his HCA shares, which had been in a blind trust, at a time when the price of stock shares was peaking and insiders were also selling. Two weeks later the company announced that earnings would not meet expectations, causing a substantial drop in the share price.

For more than a year, Frist has been under investigation by the SEC regarding allegations of insider trading. He has vehemently denied any wrongdoing, although he has not gained the quick resolution of the issue that he had hoped for.

Frist also failed to publicly disclose his role in two family charitable foundations. Questions have arisen regarding his role on the board of a third charitable foundation that paid consulting fees to members of his political inner circle.

In August, The Associated Press reported that Frist did not complete the 40 hours of continuing medical education every two years needed to keep his state medical license active, although he submitted paperwork to Tennessee officials indicating that he had.

 

Senator Bill Frist (R-TN), the outgoing Majority Leader, will not run for President according to Hotline.

Frist was named one of the 20 most corrupt members of Congress by CREW in our September 2006 report "Beyond DeLay." That report found "[Frist's] ethics issues stem from the illegal financial activities of his campaign committees and violations of securities law and Senate ethics rules." The soon-to-be former Tennessee Senator is currently facing an SEC investigation for insider trading. The US Attorney for Southern New York is also looking in to Frist's stock dealings.

In the wake of elections where corruption and ethics were key issues for voters, you have to wonder if those on-going investigations played a role in Frist's decision.

UPDATE: Earlier this year, acting on a complaint filed by CREW, the Federal Elections Commission (FEC) fined Frist's campaign and his campaign treasurer for violating elections laws:

Senate Majority Leader Bill Frist's campaign committee and treasurer were fined by the Federal Elections Committee for failing to properly report a loan Frist took out during the 2000 campaign that made it look as if he were flush with cash even as he was losing $1 million in contributors' money in the stock market, the FEC said Thursday.

Frist 2000 Inc. and its treasurer, Dawn Perkerson, were fined $11,000 --- the minimum penalty for two violations of federal campaign law. They were charged with failing to report the loan and its repayment.

Melanie Sloan told the Atlanta Journal Constitution that we weren't overwhelmed by the penalty,  "But they did find he violated the law, which I take as a total victory."

When CREW had to select the top 20 most corrupt members of Congress for "Beyond DeLay," Senate Majority Leader Bill Frist was an easy choice. He has multiple ethics issues stemming from the illegal financial activities of his campaign committees to violations of securities law and Senate ethics rules.

In June of 2006, the Federal Elections Committee (FEC) fined Frist's campaign committee for violating federal campaign finance laws:

The federal agency fined Frist 2000, Inc., $11,000, according to a lawyer representing Frist's campaign and a watchdog group. Citizens for Responsibility and Ethics in Washington had filed a complaint last year against Frist's 2000 campaign committee and received the FEC's findings Thursday.

The FEC found that Frist 2000, Inc., failed to disclose a $1.44 million loan taken out jointly by the campaign and Frist's 1994 campaign committee.

As the article notes, CREW filed the complaint against Frist that led to the penalty. That complaint was filed in June of 2005.

The FEC is not the only federal agency investigating Frist. He also has problems with the SEC (Securities and Exchange Commission). Bill Frist had a blind trust that wasn't really blind. Despite numerous public statements to the contrary, First was aware that his holdings included stock in HCA, Inc., his family's hospital corporation.

In June 2005, Frist sold all of his HCA stock, and all of the HCA stock owned by his wife and children. On September 22, 2005, The Washington Post reported on that transaction and the drop in the stock's price that occurred shortly after Frist's sale:

Precisely a month later, after the stock was sold, its price tumbled 9 percent when executives in the company -- HCA Inc., which was founded by Frist's father and on whose board Frist's brother serves -- disclosed that hospital admissions of insured patients were lower than expected, depressing profits in the second quarter.

The timing thus raised questions about whether Frist had somehow traded on information he obtained in advance from the company.

Within a week of the Post article appearing, CREW filed an ethics complaint against Frist asking "the Ethics Committee to review Sen. Frist’s conduct under the Senate rule allowing the Committee to investigate whenever a senator has engaged in 'improper conduct reflecting on the Senate.'" We also learned the SEC and the U.S. Attorney for the Southern District of New York were investigating the Majority Leader's HCA stock sale. The evidence strongly suggests that sale may have been based on insider knowledge -- a violation of federal securities law.

On October 24, 2005, The Washington Post reported that, despite Frist's claims that his trust was blind, he was well aware of the his holdings:

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.

Following that revelation, CREW filed a second ethics complaint against Frist after it was revealed publicly that he not only knew his trust contained HCA stock, but he actively engaged in buying and selling that stock -- despite public stating that he had no knowledge of his holdings:

CREW's second complaint refers the ethics committee to information that has come to light since CREW filed its initial complaint, namely that -- despite his statements that he did know whether he held HCA stock -- Senator Frist had repeatedly received information from his trustees clearly stating that he and his family held HCA stock.

Frist rightfully deserves the designation as one of the most corrupt members of Congress. FEC has already ruled against Frist and fined him for failing to disclose the $1.44 million loan. The SEC is investigating Frist for possible insider trading, which not only violates federal law, but would constitute improper conduct which may reflect on the Senate. Such behavior by Senator Frist is an appropriate matter for the Senate Ethics Committee to investigate. However, there has been no action from the Senate Ethics Committee relating to the Senate Majority Leader. Frist is retiring from the Senate in January of 2007. Time is running out for the Senate Ethics Committee to act. But, the SEC and US Attorney don't have that constraint.