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George W. Bush violated federal securities laws at least four times when he was a director of a Texas oil firm in the late 1980s and early 1990s, according to an internal government report.

The document was prepared by the Securities and Exchange Commission in 1991 during its well-publicized investigation into whether Bush had benefited from insider information when he sold Harken Energy Corp. stock before its value plummeted, and then failed to promptly report the transaction to the SEC in violation of federal law. Bush’s stake in Harken helped make him a multimillionaire.

The internal SEC memorandum, prepared by the commissions enforcement division and obtained by The Public i from sources, discloses what was previously not known—that Bush also had been tardy in reporting three other transactions involving stock in Harken, on whose board he sat as director.

(This report was prepared in collaboration with Talk magazine, whose article, “George W. Bush . . . And the Horse He Rode In On,” appears in the magazine’s November issue.)

The Securities and Exchange Act of 1934 requires company insiders to disclose publicly, in a report called a Form 4, all stock purchases and sales by the 10th day of the month following the transaction.

A former SEC official who asked not to be further identified said that he could recall at least one instance—involving the late stock manipulator Alexander Guterma, who began a three-year prison term in 1960 for a variety of securities offenses — where a prison sentence was imposed for failure to report a transaction. More commonly, he said, the SEC has obtained court injunctions barring frequent violators from repeating the offense. But he said that instances of insiders filing late disclosures were “fairly common” and that the SEC, with a limited staff, seldom pursued those cases.

The filing requirements are not a trivial matter. Insider transactions can sometimes alert outside investors that corporate officers or directors are nervous about the companys earnings or growth. They can also alert the SEC that an officer or director benefited from information that only an insider could have known, a violation of securities laws.

Bush, the SEC memo noted, had on four occasions filed late Form 4s involving Harken stock worth more than $1 million. The tardiest—34 weeks late—was his Form 4 report disclosing that he had sold $848,560 of Harken stock on June 22, 1990, just weeks before the company filed a quarterly report revealing that it had hemorrhaged $23 million during that period. Bush had sold his stock for $4 a share. By the end of the year it was trading not much above $1.

The Public i in April reported that Harken had been bleeding profusely in 1989, before Bush sold his stock, but masked the losses by claiming in its annual report a capital gain on the sale of a subsidiary even though the transaction was through a seller-financed loan. Months after Bush sold the stock, the SEC directed Harken to recast its balance sheet to reflect a net loss of $12,566,000 for 1989.

The SEC did not press charges against Bush, even though the tardy disclosures had become something of a pattern, according to the memo, which was drafted for the files on April 9, 1991, by three enforcement investigators.

“The SEC never raised any missed deadlines with us,” Bushs attorney in the matter, Robert Jordan, told Talk magazine, which analyzed the transactions in cooperation with The Public i. “It was either a trivial matter to the SEC, or everything was fine.”

That indeed appears to have been the SECs conclusion after it learned that between 1987 and 1989, Bush was about three months late on three other occasions in reporting the acquisition of Harken stock, including the shares he eventually sold in June 1990, the memo discloses.

Yet the memo also makes clear that Bush was aware of the requirement to report insider transactions. On June 25, 1984, the document reveals, he was timely in filing a report disclosing that he was a director of Silver Screen Management Inc., the managing partner of a movie production company, Silver Screen Partners; was prompt in reporting on Aug. 31, 1989, that he owned shares in Tom Brown, Inc., an energy company on whose board he served, and was only three days late in reporting on Jan. 6, 1984, that he owned stock in Lucky Chance Mining, where he also was a director.

In its book The Buying of the President 2000, the Center for Public Integrity reported that Bush had acquired the stock he sold in 1990 in a deal that made little economic sense. Bush had been chief executive officer of a tiny money-losing energy company called Spectrum 7. Harken acquired the firm in 1986 from Bush and two partners for $2 million in stock despite the fact that Spectrum 7 had posted losses of $400,000 six months before the purchase and carried a debt of $3 million.

“His name was George Bush,” Phil Kendrick, Harkens founder, said of the purchase. “That was worth the money they paid him.”

At about the same time Bush unloaded his Harken stock in 1990, he also sold nearly $700,000 worth of shares in four other companies. His accountant, according to a March 1992 SEC memo to the file, had been “bugging him to get liquid.” About $600,000 of the proceeds, the memo noted, went to pay off a bank loan he had taken a year earlier for his minority stake in the Texas Rangers baseball team. In 1998 Bushs trust sold that stake for $16 million, catapulting him to the rank of multimillionaire.

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