Senate Majority Leader Bill Frist said Monday he had no insider information when he sold stock this summer in HCA Inc., a hospital company founded by his father and brother.
Separately, the new chairman of the Securities and Exchange Commission, former Rep. Christopher Cox, said that to avoid a potential conflict he would take no part in the agency's investigation of the stock sale.
Questions have been raised about whether Frist had inside information before the sale because insiders in HCA also sold stock during the first half of the year — and the stock price dipped soon after Frist sold his stock.
"I had no information about HCA or its performance that was not publicly available when I directed the trustees to sell the stock," Frist said Monday, referring to the sale by administrators of his blind trusts.
"My only objective in selling the stock was to eliminate the appearance of a conflict of interest," Frist's statement said.
Frist, R-Tenn., promised full cooperation with investigations by the SEC and federal attorneys in New York. He did not take questions from reporters.
The Democratic National Committee responded to Frist's statement on Monday, lashing out at what it called the "Republican culture of corruption."
"Republican Leader Bill Frist's desperate attempt to quell the fallout from the growing ethical scandal that has engulfed his office raised more questions than answers," said DNC communications director Karen Finney in a statement. "It's time for Republican Leader Frist to stop stonewalling and answer the legitimate questions raised by his ethically-questionable, multi-million dollar stock transaction. With Karl Rove, Tom DeLay and now Bill First all under investigation, the Republicans' culture of corruption is alive and well in Washington, D.C."
Blind trusts are designed to keep an arm’s-length distance between federal officials and their investments, to avoid conflicts of interest. But documents suggest that Frist knew quite a bit about his accounts from nearly two dozen letters from the trust administrators.
Frist, R-Tenn., received regular updates of transfers of assets to his blind trusts and sales of assets. He also was able to initiate a stock sale of a hospital chain founded by his family with perfect timing. Shortly after the sale this summer, the stock price dived.
A possible presidential contender in 2008, Frist now faces dual investigations by the U.S. attorney for the Southern District of New York and the Securities and Exchange Commission into his stock sales.