White House defends Bush loans from Harken Energy
WASHINGTON (CNN) -- The White House acknowledged Thursday that President Bush, when he served on the board of Harken Energy more than a decade ago, received more than $180,000 in loans from the company, a practice the president is now condemning in his campaign to stop corporate abuse.
Bush used the loans buy 105,000 shares in the company, said White House spokesman Scott McLellan.
"It was completely appropriate and fully disclosed, McLellan said.
Democrats seized on the revelation, with the Democratic National Committee accusing the administration of "hypocrisy" and Senate Majority Leader Tom Daschle, D-South Dakota, arguing the loans put the president in a "difficult position to criticize others."
"He did criticize (the) effort in his speech and yet it appears that is what he did himself," Daschle told reporters.
During his lecture to Corporate America on Wall Street Tuesday, Bush called on U.S. corporations "to put an end to all company loans to corporate officers."
According to SEC filings obtained by CNN, Bush received $180,375 in loans from Harken Energy to purchase stock in the company. White House aides said the two low-interest loans, in 1986 and 1988, to purchase 105,000 shares of stock were designed to encourage a long-term commitment to the company among directors.
Bush advisers said the president's loans were legal, appropriate and were fully disclosed at the time, and said such loans have been common in companies around the country. They dispute any suggestion that the president, who now says the loans should come to an end, is being hypocritical, arguing that the situation has changed.
"It's become clear (the practice) can be abused, as we've seen in some recent cases," Claire Buchan, White House deputy press secretary, told CNN, referring to cases such as WorldCom, where a company director borrowed nearly $400 million from the company.
The president believes the practice "needs to be fixed," Buchan said.
Bush repaid the loan by transferring his stock back to the company in 1993, and was given new stock options that he never exercised.
In another development, Daschle reiterated his call for the Securities and Exchange Commission to release its file on its insider trading investigation of Bush. The SEC looked into the president's 1990 sale of Harken stock, which came as he served on the board and just two months before the company announced a major loss that sent the stock price tumbling. The SEC found no evidence of insider trading.
"The way to resolve it is simply for the SEC to release the file so that there isn't any more outstanding question, that there isn't any doubt about what happened and why," Daschle said.
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