THURSDAY, SEPTEMBER 29, 2005
NEWS
THE UNIVERSITY DAILY KANSAN 5A
CONGRESS
Frist inquiry now formal
BY MARCY GORDON THE ASSOCIATED PRESS
WASHINGTON - The Securities and Exchange Commission, which is examining a stock sale by Senate Majority Leader Bill Frist, has upgraded its initial informal inquiry to a formal investigation.
The change means the agency can issue subpoenas for documents rather than just requesting them.
Federal prosecutors also are investigating the Tennessee Republican's recent sale of stock in HCA Inc. about two weeks before its price dropped. Frist's family founded the big hospital operating company.
The SEC has made the in
vestigation formal, a person familiar with the matter said Wednesday, speaking on condition of anonymity because
Frist ordered the stock sold from several blind trusts this summer, about two weeks before HCA issued a disappointing earnings forecast that drove its share price down almost 16 percent by mid-July.
Frist's office said prosecutors and SEC investigators had contacted the senator's office about the sale.
Manhattan asking for documents the company believed were related to Frist's sale of company stock.
He sold the stock at a time when top executives and directors of HCA — including the chief executive and the treasurer — also were selling off shares worth a total of $112 million.
The change means the agency can issue subpoenas for documents rather than just requesting them.
the agency does not comment publicly on its inquiries.
It is customary in potential cases of insider trading for the agency to initiate a formal inquiry so investigators can obtain telephone and financial records and other documents.
Asked whether any subpoenas had been issued to the majority leader's office, he said, "I can't get into that right now."
"We're going to cooperate with them every step of the way. This is a usual step in inquiries of this nature." Frist spokesman Bob Stevenson said.
Already, Nashville, Tenn-
based HCA has said it has
received a subpoena from the
office of the U.S. Attorney in
Aides to the majority leader, who is widely considered a potential presidential candidate in 2008, say he ordered his trustee to sell
his shares to avoid any appearance of a conflict of interest.
The new SEC chairman, former Rep. Christopher Cox, on Monday said that to avoid a potential conflict he would take no part in the agency's investigation. Cox was a member of the Republican leadership in Congress with Frist.
Frist has hired two private attorneys who specialize in securities litigation and insider trading cases: William McLucas, a former SEC enforcement director, and Harry Weiss, a former SEC attorney who was a co-author of a text titled "Preventing Insider Trading." Their representation of Frist was confirmed by their law firm, Wilmer Cutler Pickering Hale and Dorr.
HURRICANE KATRINA
A lone house stands among a neighborhood totally wiped out in New Orleans's Ninth Ward Wednesday. The area has nearly dried out for the second time since Hurricane Katrina devastated the area a month ago.
Residents return to New Orleans
BY ADAM NOSSITER THE ASSOCIATED PRESS
BATON ROUGE, La. — More areas of New Orleans that escaped flooding from Hurricanes Katrina and Rita will be formally reopened starting today, Mayor Ray Nagin said.
The areas include the French Quarter, the Central Business district and Uptown with its historic Garden District. Business owners will be allowed in today, and residents on Friday.
breathing."
"The re-entry started Monday and is going very well — exceedingly well." Nagin told legislators at a hearing Wednesday at the state capitol. "Everything you hoped to happen is happening. Algiers is alive and well and
On Monday, Nagin opened the Algiers neighborhood, which has electricity and clean water.
Nagin said checkpoints where officers stop people will be pulled back today so that only areas that were flooded will be off limits. Homes in those areas were heavily flooded and most are likely beyond repair.
If all goes well, as of Oct. 5 only the Lower Ninth Ward, which was hit especially hard by the flooding, will be cordoned off, Nagin said.
Electricity has been restored to some dry parts of the city, but the water is not yet drinkable. The mayor disagreed with the head of the state's Health
Department about the condition of the city's water, insisting residents could now wash in it, though they shouldn't drink it.
"The two things that are absolutely necessary to ensure public health — clean drinking water and proper sewage systems — simply are not available in the east bank area of New Orleans at this time," said Fred Cerise, secretary for the state Department of Health and Hospitals.
"People who re-enter the city may be exposed to diseases such as E. coli, salmonella or diarrhea illness if they do not allow time for the necessary inspections to ensure public health and safety," Cerise said.
Many residents of the city have returned ahead of Nagin's official timeline, and the mayor appeared eager Wednesday to get more of them back.
Nagin complained that state opposition was feeding a misperception about New Orleans, saying. "We're fighting this national impression that we're tainted, we're not ready."
Yet a handout from the mayor's office to returning motorists struck a more cautious tone than Nagin himself.
"You are entering the city of New Orleans at your own risk," it reads, before going on to detail potential health hazards from water, soil and air, and advising residents to bring in food.
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