WASHINGTON, July 11: While he served as a board member of the now-defunct Harken Energy company, US President George W. Bush was granted two low-interest loans to purchase stock — the same type of loans he now wants banned, US media reported on Thursday.
The revelations that Bush accepted $180,375 in loans from Harken in 1986 and 1988 to buy company stock that he then returned once he left the company, but not before he sold other shares worth $848,000, came as he pledged a new dawn in corporate accountability.
On Tuesday, Bush addressed Wall Street and called for an end to insider transactions, challenging directors of publicly-traded companies to “put an end to all company loans to corporate officers.” “Those who sit on corporate boards have responsibilities,” he said on Tuesday.
The New York Times reported Harken offered the loans as part of a stock options programme available to “executive officers” that was extended to include Bush, even though he was a director and consultant rather than a member of the management.
The loans did not require repayment for eight years and were assessed a five-per cent interest rate — below the prime rate of 7.5 per cent at the time, the daily said.
The terms of the loans were further relaxed by the oil company, which went bankrupt after having to restate its earnings to show quadruple the loss that it had reported, so that they would remove “any personal liability to yourself,” according to a company lawyer’s 1989 memo to Bush, the daily wrote.
The White House, which has sought to distance the president from the decade-old Harken stock transactions, responded to the new loan revelations by insisting that there was no hypocrisy in Bush’s demands for more stringent corporate accountability standards.
“President Bush looked at these loans, and the president felt the best way to do it was to draw a bright line; the best way to handle these loans going forward is through a bank,” White House communications director Dan Bartlett was quoted as saying by the Washington Post.
The Securities and Exchange Commission opened an investigation into Bush’s 1990 sale of the 212,000 shares of Harken stock that netted him nearly one million dollars, which came just weeks before the company disclosed its worse-than-expected earnings.
The regulatory body found there was no evidence of insider trading but raised questions as to why it took him so long to file the necessary paperwork — 34 weeks after the transaction was completed, and sent undated, the Times reported.
Democrats, hoping to gain some momentum ahead of November’s polls, have questioned the president’s ability to regulate corporate behaviour.—AFP