boston.com your connection to The Boston Globe

Frist sold stock just before a decline

Trade involved a family firm

WASHINGTON -- The Senate majority leader, Bill Frist, a potential presidential candidate in 2008, sold all his stock in his family's hospital corporation, about two weeks before it issued a disappointing earnings report and the price fell nearly 15 percent.

Frist held an undisclosed amount of stock in Hospital Corporation of America, in Nashville, the nation's largest for-profit hospital chain. On June 13, he instructed the trustee managing the assets to sell his shares and those of his wife and children, said Amy Call, a spokeswoman for Frist.

Frist's shares were sold by July 1, and those of his wife and children were sold by July 8, Call said. The trustee decided when to sell the shares, and Frist had no control over the exact time they were sold, she said.

Hospital Corporation of America shares peaked at midyear, at $58.22 a share on June 22. The price fell to $49.90 on July 13, after the company announced that its quarterly earnings would not meet analysts' expectations. Yesterday, the shares closed at $48.76.

The value of Frist's stock at the time of the sale was not given. This year, he reported holding blind trusts of $7 million to $35 million.

Blind trusts are used to avoid conflicts of interest. Assets are turned over to a trustee who manages them without divulging any purchases or sales, and who reports only the total value and income earned to the owner.

To keep the trust blind, Frist was not allowed to know how much Hospital Corporation of America stock he owned, Call said, but he could ask for it to be sold.

Frist, a surgeon who was elected to the Senate in 1994, had been criticized for keeping the holdings while dealing with legislation affecting the medical industry and managed care. Call said the Senate Ethics Committee has found nothing wrong with Frist's holdings in the company in a blind trust.

''To avoid any appearance of a conflict of interest, Senator Frist went beyond what ethics requires and sold the stock," Call said.

Asked why he had never done so before, she said, ''I don't know that he's been worried about it in the past."

A Hospital Corporation of America spokesman said the company had no part in Frist's decision to sell.

Frist's father, Thomas, founded the company, and his brother, Thomas Jr., is a director and leading stockholder.

The family is worth $1.1 billion, according to reports from Forbes magazine.

Hospital Corporation of America, formerly known as Columbia HCA Healthcare Corp., has been a top contributor to the senator's campaigns, donating $83,450 since 1989, according to the Center for Responsive Politics.

The sale of the Frist shares was first reported by the publication Congressional Quarterly.

SEARCH THE ARCHIVES
 
Today (free)
Yesterday (free)
Past 30 days
Last 12 months
 Advanced search / Historic Archives