Tired of questions about their boss’s stock dealings, aides to Senate Majority Leader Bill Frist (R-Tenn.) angrily confronted an Associated Press reporter in the Senate chamber and in a nearby hallway yesterday after a question-and-answer session on the floor.
Frist’s top aide, Eric Ueland, took exception to Jonathan M. Katz’s line of questioning during the “dugout,” loudly chastising Katz as reporters filed out of the Senate chamber and into the hallway.
“It’s ticking me off because it’s offensive,” Ueland said in an exasperated tone.
The testy exchange demonstrates sensitivity among Frist’s aides to both the legal and political questions posed by the timing of the majority leader’s divestiture of HCA holdings just before a sharp drop in the company’s share price. Frist is widely expected to seek the presidency in 2008, but the story could jeopardize his political viability.
The Justice Department and the Securities and Exchange Commission have launched probes into the matter.
Katz was the first to report on the stock-price drop, which occurred shortly after Frist got rid of shares that he had held for years in a blind trust blessed by the Senate Ethics Committee. He has said he sold the shares to ensure that he had no appearance of a conflict of interest.
That concern did not stop Frist from establishing the blind trust or keeping it when he became majority leader. His aides say he established the trust in the first place to avoid accusations of a conflict of interest.
During the “dugout” yesterday, Katz asked Frist whether comments he made to Fox News this weekend that he did not know how much stock he held comport with requirements that he be informed when assets are bought or sold.
Frist initially deflected Katz’s question. After an interceding question on another topic, Charles Babington of The Washington Post followed-up on Katz’s query.
Frist indicated that he does not read everything that comes across his desk.
A third question, from yet another reporter, led Frist to declare all HCA inquiries off limits.
When the session closed a few minutes later, Ueland and Frist Communications Director Bob Stevenson blasted Katz for continuing to ask their boss about his stock sale.
They have made Frist’s lawyers available to answer Katz’s questions. An outside adviser held a background briefing with reporters yesterday afternoon.
About three dozen reporters gathered in a hallway next to the Senate chamber as Ueland and Stevenson unloaded on Katz.
“You really do your readers a disservice,” Ueland said.
Katz and Babington continued to ask questions as other reporters watched the fireworks. Few took notes.
Frist secured Senate Ethics Committee approval in December 2000 of an intricate trust structure that included no less than 13 trusts for the senator and his family, including three qualified blind trusts in Frist’s own name.
“For the last 10 years or 11 years, I have no idea, no earthly idea at any point in time, how much stock of anything, not just that particular stock, but all of the stock that I’ve owned in the past,” Frist told Fox News on Sunday.
He also maintained that he did not know the value of the stock sold off, although his yearly financial disclosure forms showed how much HCA stock had accumulated in the qualified blind trusts.
The “qualified” nature of Frist’s blind trusts, enabling trustees to inform him in writing of the value of specific assets, has led some trust lawyers to question whether the trusts were ever truly blind.
“Qualified, I’m not sure if the term has any general meaning. ... The fact that [Frist] can still influence the trust operations is pretty unique,” said Jim Walker, an estate planning lawyer at Denver-based Rothgerber Johnson & Lyons.
“The blind aspect of it is that somebody else is managing assets and handling investments in a way that the person who created it — namely, the politician — has no knowledge and no input,” said Mary Lou Parker, a partner in the trust practice at New Jersey law firm Pitney Hardin.
Two of Frist’s named trusts, a charitable remainder unitrust and a generation-skipping tax trust, are used by wealthy individuals seeking to avoid tax by dedicating part of their income either to charity or to their descendants.
Frist also held HCA stock until 2002 through Bowling Avenue Partners, a financial partnership directed by Frist’s brother Thomas, who founded HCA along with Frist’s father. Frist advisers have contended that the complicated probate process for the estate of Frist’s mother, who died in 1998, accounted for much of the shifting and transferring between trusts.
Ethics watchdog Public Citizen last month asked the Ethics Committee to open its own investigation into whether Frist acted improperly by selling off the stock and maintaining separate stakes in Triad and Lifepoint Hospitals, two chains affiliated with HCA.
Frist and his aides insist he has done nothing wrong. “It’s very simple and not confusing,” Ueland said after Katz suggested that the whole imbroglio is difficult to follow.