The Scandal-Ridden Frist Empire

by Joe Conason

Apprehended again in dubious ethical circumstances, Bill Frist has assured the nation that he is faultless. Although he is suddenly under suspicion of insider trading for dumping his stock in Hospital Corporation of America, the Senate majority leader predicts that he will be vindicated when probes by the Justice Department and the Securities and Exchange Commission are completed.

Whatever those investigations may conclude, however, the facts that have emerged so far cast a deep shadow on his integrity.

Ever since the telegenic surgeon from Tennessee entered the Senate in 1995, he has been plagued by questions about HCA, the gigantic, highly profitable hospital and insurance conglomerate founded by his father and brother. While Frist billed himself as a health care expert with a "free-market" orientation, he also had tens of millions of dollars invested in HCA stock.

For a legislator involved in creating national health policy, the conflicts of interest were obvious, and those conflicts only intensified after Frist replaced Sen. Trent Lott of Mississippi as the Senate majority leader during the winter of 2003.

Cultivating his image as a kindly and caring physician, he never failed to mention his pious concern for patients while casting his vote against their interests. He is the most reliable Senate ally of the pharmaceutical and insurance lobbyists. He voted to kill the Patients' Bill of Rights. He voted to limit awards to medical-malpractice victims to $250,000, a "reform" that directly benefited his family business. He sought to limit regulation of profit-making hospitals and other providers by Medicare, which would likewise protect the Frist empire.

Of course he knows that HCA's profits depended on such unsavory practices as bribing doctors and inflating costs. (Over the past several years, the company has disgorged about $1.7 billion to settle fraud charges brought by the Justice Department, the largest such payments in American history.)

Frist has broadly promoted the ideology of the health care industry as well as its legislative agenda. He wants government to "get out of the way" of privatized health care, except when it's providing billions in subsidies to shareholders like him.

But whenever anyone has pointed out that his connections with HCA clashed with his duties as a senator, Frist forcefully demurred: "There is a stone wall that comes between any money that I get or interests that I have, and what I do [in the Senate]."

Upon taking over as majority leader in January 2003, he repeatedly responded to such queries by noting that he had put all his investments, including any HCA stock, in a blind trust. He told a television interviewer that his holdings, along with those of his wife and children, had been placed beyond his oversight.

"Well, I think really, for our viewers, it should be understood that I put this into a blind trust," he said. "So as far as I know, I own no HCA stock. . . . I have no control. It is illegal right now for me to know what the composition of those trusts are [sic]. So I have no idea."

The Jan. 4, 2003, issue of National Journal similarly quoted Frist claiming ignorance of his holdings: "Right now, I don't know if I own HCA [stock] because it's a qualified blind trust."

Yet he did know, according to documents recently uncovered by the Associated Press, because the "blind-trust" manager had informed him about his HCA stockholdings during the months prior to those interviews.

Now that the press has exposed how he dumped those HCA shares last June, he no longer claims that he didn't know he owned them. Naturally, he insists that he possessed no inside information about the bad earnings report that HCA made public just two weeks after he had sold off the stock at the peak price. And most amusingly, he claims that when he sold the stock, he simply was trying to satisfy his implacable critics.

"The complaints and questions have persisted," he told reporters on Sept. 26. "Because of these continuing questions, and looking ahead at my final years in the Senate and what might come next, I have for some time wanted to eliminate even the possibility of an appearance of a conflict by totally divesting of any HCA stock in my family's trust."

So he was just trying to purify his ethics -- and preserved his capital purely by accident. That's an explanation only a senator could believe.