Leadership before Pride (7/9/02)
by Dean Hartwell
Recently, President
Bush was confronted with allegations that as a Texas oilman a number of years
ago he violated Security Exchange Commission (SEC) rules. He admitted that he
failed to file his sale of stock disclosure form for thirty-four weeks.
Unfortunately, during this era of corporation trickery and our need for a
leader who can stop it, that was not the point.
Bush and associates did what many current companies are doing: they “cooked”
their financial books to disguise losses and thus appear more profitable to
stock investors. Their connection with Bush began when the president’s oil
company faded in the mid-1980s. In exchange for the oil company and his
political connections (the Elder Bush was Vice-President during this time),
Harken gave him stock.
After warnings a few years later from the president of Harken that the company
had “liquidity problems” (i.e. problems converting assets into cash), Bush sold
the stock for $848,000. Just two months later, Harken reported millions of
dollars in losses and its stock fell from $4 to $1 per share within a year.
This transaction prompted the SEC to investigate Harken. It found that the
company had used the sale of stock to Bush as a way to hide corporate losses.
The SEC then forced Harken to re-state its earnings.
Now, the recent misdeeds of companies like Enron and WorldCom have prompted a
public outcry for more regulations on corporations. The President says the Bush
Administration will "end the days of cooking the books, shading the truth
and breaking our laws.” He has called for stiffer penalties for corporate
criminals as a way to do so.
As for his questionable past dealings, President Bush tells us that mention of
it is just “politics.” Is that a poke at the people who bring up the question
as to how this president can enforce laws he did not bother to follow or
respect? If so, the president is barking up the wrong tree. In my book Truth
Matters, I list several presidents and presidential candidates, each of
whom compromised his ability to lead by failing to address his past mistakes.
One of them was President Bill Clinton. By failing to admit to his infidelities
with women before he became president, he betrayed his own supporters and
misled them into believing he had done nothing improper with Monica Lewinsky.
Had he more sincere support, he may well have headed off impeachment.
Bush should put his ability to lead before his pride and admit that his critics
have a point about the shadiness of his past conduct. Only then can he rise
above politics and be the messenger this issue of corporate dishonesty.