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More details of Frist sale
Paper reports Senate leader was told of HCA holdings in "blind trust."
October 25, 2005: 9:57 AM EDT
Senate Majority Leader Bill Frist.
Senate Majority Leader Bill Frist.

NEW YORK (CNN/Money) - Senate Majority Leader Bill Frist received regular letters on his holdings in HCA, according to a published report.

The Washington Post reported Monday that trustees who controlled his holdings have written to Frist and the Senate 15 times since 2001 detailing the sale of assets from or the contribution of assets to trusts of Frist and his family. Those communications included notice of the addition of HCA (Research) shares worth $500,000 to $1 million in 2001 and HCA stock worth $750,000 to $1.5 million in 2002, according to the report.

Such letters, however, are required by federal law, a spokesman for Frist told CNN/Money.

Frist, who is widely reported to be weighing a run for president in 2008, is facing an investigation by both the Justice Department and the Securities and Exchange Commission into his instructions to the trustee to sell all of its holdings of HCA stock in June. Within weeks of that sale, HCA shares fell sharply because of a weak earnings report.

Frist has said he possessed only publicly available and not "insider" information about the company even though it was founded by his father and his brother, Thomas F. Frist Jr., is a former chairman and CEO of the company and remains on its board. His brother is still the largest individual shareholder of the company with nearly a four percent stake of 16.9 million shares. Bill Frist's stake in HCA at the time of his trust's final sale of its stock in June has not been disclosed.

Frist has characterized the trusts that hold the stock as totally blind. The Post quotes a television interview he gave in January 2003 after assuming the Senate leadership post in which he said, "So as far as I know, I own no HCA stock." But the paper reports that two weeks before that interview, M. Kirk Scobey Jr., a Frist trustee, informed the senator in writing that one of his trusts had received HCA stock valued at between $15,000 and $50,000.

"He (Frist) could have been more exact in his comments," Bob Stevenson, spokesman for Frist, told the paper. Stevenson added that Frist might better have said he did not know to what extent he owned HCA shares.

The Post reports that Senate rules prohibit any lawmaker with a blind trust from contacting his trustees unless the ownership of an asset poses a potential conflict of interest "due to the subsequent assumption of duties" by the lawmaker. The lawmaker can then ask the trustees to dispose of the asset.

Frist did not assume any new duties in 2005 that might have opened the way for him to ask for a sale of HCA stock. But a Frist adviser told the paper the senator had been thinking about selling his HCA stake from the time he was elected majority leader in late 2002. Frist had not known that he could sell his shares until this spring, the adviser told the paper, and went ahead with the sale based on his more than two-year-old wish.

The Post reports that last week Frist told reporters that he is "absolutely confident in the outcome" of the inquiries because he "acted properly at every point." He declined to address specifics about the investigations but said he is providing information as quickly and fully as possible, the paper reported.

For more into the probe of Frist's stock sale, click here.  Top of page

Bill Frist
Corporate Investigations
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