Thursday, October 20, 2005

Frist: next Delay?

Tom Delay is scheduled for his perp walk on Friday (Lindsay at Majikthise will cover it). Maybe Bill Frist is next? (a Republican leadership post seems to be a risk factor). Frist? Well Frist's investigation for possible insider trading has been given a pretty low key treatment by the media, so you might not know the details the way you know Plame-Rove-Scooter. It's not out of the blue, though. It is a public health story, or at least a medical care one.

Here is some of a superb post by Larry Beinart, whose novel Wag the Dog became first a movie and then the Bush Administration:
Bill Frist is a very rich man. At the time of his first Senate race in 1994, he declared his personal holdings as $20 million, and $13 million of that was in HCA stock. HCA is the largest health care company in the country. It was founded by Frist’s father, Thomas, and, later on, run by his brother, Thomas, Jr.

When Frist won, he became the health care industry’s own senator. It’s not that they bought him, he was them. He voted against the “Patient Bill of Rights.” He made it harder for patients to sue their HMOs for not receiving care. He sponsored the bill that protects pharmaceutical companies from liability for their use of thimersol, a mercury-based ingredient in vaccines. He pushed through the mega-bill that makes Medicare pay top dollar to the pharmaceutical industry. He worked for the tobacco interests and against USDA inspections of food suppliers.

Meantime, an investigation of HCA was going on. It turned into the largest medical fraud case in history. HCA had defrauded Medicare, Medicaid and Tricare, the military’s health care program. They kept two sets of books. They paid kick backs. They engaged in “upcoding,” billing for more expensive procedures than what they actually performed. They charged their advertising to the government as “community education.”

HCA consolidated and sold billions in property to pay for the legal fight. But then they settled with the government just two days before Trent Lott stepped down and Frist stepped up to become Majority Leader.

Part of that settlement could be regarded as a sweetheart deal. A plea of guilty to the criminal part of the charges would have disqualified them from government contracts. They were allowed to use subsidiaries to accept the criminal liability and then let those companies go out of business.

Frist’s brother, Thomas, was charged with insider trading in 1997, but survived the allegations.

This was not Bill Frist’s only peculiar financial transaction. In 2000 he took a million dollars in campaign contributions and invested them in the stock market. He lost $710,000 of it. He stood by his decision, saying, "Over time, money that is placed in markets will increase faster than placed in banks."
You can find more on the Frist family shenanigans in Henry Scammell's superb book, Giant Killers.

(hat-tip, Rebecca's Pocket)