White House Defends Bush's Financial Deal

WASHINGTON -- As President George W. Bush prepared for a major speech on corporate responsibility, the White House offered a new explanation about why he did not report in a timely manner his 1990 sale of nearly $850,000 worth of stock in a Texas-based energy company just weeks before its value plummeted.

Then a West Texas oilman, Bush was eight months late in filing a sales report with the Securities and Exchange Commission due to "a mix-up with the attorneys'' for the energy company, White House press secretary Ari Fleischer told reporters Wednesday.

Bush, in years past, has said that he had filed the required paperwork and suggested that the SEC had lost it. The revised explanation comes as Bush readies the speech he plans to give next week on business ethics, an address prompted by the rash of high-profile corporate scandals. Wednesday's developments are bound to raise questions about Bush's own actions as a businessman, and perhaps detract from his effort to respond to the corporate scandals.

In an interview, Fleischer emphasized that Bush, as required by law, had filed with the SEC a notice of intent-to-sell on the day that he sold his 212,140 shares of stock in the Harken Energy Corp. in June 1990, at $4 per share. At issue is the filing of a second form, which is required after such a sale.

Fleischer said the current focus on the tardy filing of the second form is misleading because "it makes it look like he was trying to hide something." Bush's filing of the first form shows that he was not, Fleischer said.

By the end of 1990, Harken's stock had dropped to close to $1 per share following its revelation that August of a $23 million loss.

Bush, a member of the Harken board of directors at the time, denied any advance or inside knowledge of the company's financial problems before his stock sale.

The SEC investigated the Bush transaction in 1991 and cleared him of any wrongdoing. According to documents released by the White House on Wednesday, the agency concluded: "It appears that Bush did not engage in illegal insider trading."

The SEC probe drew attention when it occurred because Bush's father was president at the time. It gained additional attention in Texas during Bush's first gubernatorial run in the state in 1994.

The Harken transaction is coming under fresh scrutiny because of the burgeoning corporate scandals involving insider trading and fraudulent accounting practices.

Bush in March proposed a 10-point "corporate responsibility" plan that would require corporate officers to disclose sales of company stock within two days.

In his Tuesday speech, which he plans to deliver on Wall Street, Bush may propose new or tougher criminal and civil penalties for business executives guilty of misleading or defrauding stockholders, employees and the public.