The curious world of Corporate George....

[jmcon007]

This is old news, sure, but no excuse not to add it to the eventual formal charges against our esteemed President.

Imagine owning a company with subsidiaries. A group of your own executives forms a partnership and approach you about purchasing one of the subsidiaries for $8 million. You agree. The new partnership doesn’t have the funds to purchase the smaller company, so you draw up a note and finance the sale yourself through the parent company.
Neat, huh?

Now, I’m no MBA like George W Bush, but in my filings with the SEC I would be reluctant (to say the least) to reveal this loan as an $8 million capital gain for my company. But, maybe that’s just me and I realize, again, I’m no MBA like GW.

In any event, this is exactly what Harken did in its sale of Harken subsidiary, Aloha, to a group of Harken insiders. What is so neat about this type of accounting is that it allows you to show minimal losses in your SEC report, which for Harken indicated only $3,300,000 for 1989, fairly modest for that time period.

Whoops. Wrong accounting method. The SEC kindly and patiently explained to Harken several months later that the loan cannot be considered a capital gain and allowed Harken to amend its balance sheet and its losses for that year. Darn it! So, instead of the $3,300,000 in red ink that was reported, Harken’s losses for 1989 were actually $12,566,000. Yikes!

Not to worry, Laura. GW had already sold his shares between the time of the bogus report and the correction, copping a cool $4 a share, for a total of $848,560, instead of the paultry amount he would have made at the $2.37 per share to which it plunged immediately after the “correction” was made public.

Now, before anyone jumps to conclusions maybe we should just take George at his word when he says that it’s merely a difference of opinion in the world of accounting. You say potatoe, I say potawto.

Anyway, GW claims he had no way of knowing the poor condition of the company at the time. That’s a valid point, I suppose. After all, do we laypeople actually believe that GW’s positions on the executive board and the AUDIT COMMITTEE of Harken give him some kind of special insight? Who died and left us corporate world experts?

And forget that one week before George W. Bush's stock sale, Harken was warned by its lawyers that Bush and other members of the troubled oil company's board faced possible insider trading risks if they unloaded their shares. http://www.boston.com/... What do corporate lawyers know, anyway?

And the SEC Investigation? The SEC General Counsel then was James R. Doty, who represented Bush in his purchase of the Rangers and the SEC Chairman was Richard C. Breeden, nominated by Bush Sr., who was PRESIDENT OF THE UNITED STATES at the time. 'nuff said?

(What if there actually were a College of Spinomics? Can you imagine a finals problem being to take the above facts and make Bush look good?)

On a lighter note:

From a President Bush speech given 7/9/2002 on Wall Street:
http://money.cnn.com/2002/07/09/news/bush/index.htm

"With strict enforcement and higher ethical standards, we must usher in a new era of integrity in Corporate America. In the end, there is no capitalism without conscience, no wealth without character." (insert patriotic music of your choice)

Clip

"We will use the full weight of the law to expose and root out corruption," Bush said. "My administration will do everything in our power to end the days of cooking the books, shading the truth and breaking our laws."

Clip

"Responsible business leaders do not jump ship during hard times ... do not collect huge bonuses when the value of their company dramatically declines ... do not take on tens of millions of dollars in compensation as the company prepares to file for bankruptcy, devastating the holdings of investors," he said.

sigh