MADELEINE BRAND, host:
This is DAY TO DAY. I'm Madeleine Brand.
In a few minutes, actor Philip Seymour Hoffman talks about playing writer Truman Capote.
But first, the rush of news about Hurricanes Rita and Katrina has displaced almost every other story in Washington this month, but as the waters along the Gulf Coast recede, they're revealing new features on several other news fronts and those are subjects to catch up on with NPR senior Washington editor Ron Elving.
Hi, Ron.
RON ELVING reporting:
Hello, Madeleine.
BRAND: So let's start with Senate Majority Leader Bill Frist. He's suddenly being compared to Martha Stewart. What's that all about?
ELVING: It's not about household furnishings. It's about a stock sale. And you remember Martha got in trouble last year for selling some stock on inside information about the prospects for that stock. And now the Senator majority leader, Bill Frist, sold some stock earlier this summer in HCA. That's an enormous hospital company, that was founded by Thomas Frist Sr., Bill Frist's father. And he has held this stock in a blind trust since he became a senator back 11 years ago. He sold it, though, earlier this summer when the price was high just before it took a rather big drop and the question is: Did he have some sort of information about a bad earnings report that was coming up that was going to depress the price of that stock.
BRAND: So I thought senators put these kinds of assets into blind trusts.
ELVING: Yes, that's the idea and the Senate does have some rules. Many do, not all. And Senator Frist was among them, and he has always said that it was OK for him to work on health-care issues that might affect hospitals because his own assets, which might include hospital stock, HCA, were in this blind trust. But we learned that, of course, blind trusts are not deaf, they can receive instructions. And in this particular case, the senator had instructed the trustee earlier this summer to sell whatever HCA the trust might still have. We don't know how much that was, but it might have been quite a lot.
BRAND: And so what's going to happen?
ELVING: In the Senate, probably nothing because it doesn't appear that Senator Frist violated the Senate rules or at least that's what most of the people who follow these things seem to think. On the other hand, the Securities and Exchange Commission, a federal agency, is interested in the possibility that there might have been insider trading here or inside information that not everyone would have been able to be aware of and that that could have been part of his decision to sell. So they're investigating, and this morning, we saw the new chairman of the SEC, Chris Cox, a former congressman from California, who has had some dealings with Frist and given him some money in the past as a political donation, recused himself from any role in that investigation.
Now just as important, there are prosecutors involved from the US Attorney's Office for southern New York. That's the Manhattan Wall Street office. They're the big boys. They know this world rather well.
BRAND: And so what does Senator Frist say about why he sold the stock?
ELVING: His office said he sold it strictly to avoid any appearance of a conflict of interest. Now that may sound odd after he's been in the Senate for a decade, but his next political project has been running for president in 2008. He's leaving the Senate. He's announced he's not going to run for re-election and he's got a big speech coming up next month in Iowa. And he may have been trying to clear the decks for that campaign.
BRAND: And let's talk about another emerging financial story, The New York Times today reporting about questions arising about contracts for work in the wake of Hurricane Katrina, some contracts given without any competitive bidding to some people with some political connections. What's going on there?
ELVING: Well, we're hoping there's going to be a lot of fast work done on these disaster sites. That's the idea behind quickie contracting like this, but fast contracting often leads to long, slow investigations into who got what from whom over time, and in this case, the Katrina money is available without competitive bidding on contracts up to a quarter of a million dollars each. And that was written into the legislation just a few weeks ago, appropriating the most recent $50-some billion of aid for the people in the hurricane zone.
BRAND: Now whose idea was that?
ELVING: Well, it seems to have come from several places. Of course, the Congress didn't think it was a bad idea, but it was also put forward by the administration. And here's an interesting detail. The man who was up there to explain all this to them and put forward the administration's view was David Safavian, who was then the chief procurement office for the Bush administration, number three man in the Office of Management and Budget, who just a week ago was arrested and charged in another matter.
BRAND: And what was that matter?
ELVING: It has to do with his relationship with a lobbyist named Jack Abramoff, kind of a familiar name here in Washington, and the charges say that Mr. Safavian lied to the FBI and obstructed the federal investigation into Mr. Abramoff when he was questioned about his relationship with Abramoff. We've also got an eight-page letter that Abramoff wrote, advertising his services around Washington and his contacts with people all the way up to Karl Rove in the Bush administration and up to the top levels of Congress as well.
BRAND: NPR senior Washington editor Ron Elving. He writes the weekly Watching Washington on NPR's Web site, npr.org.
Thanks a lot, Ron.
ELVING: Thank you, Madeleine.
BRAND: More coming up on DAY TO DAY from NPR News.
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