AT HIS news conference on Monday, President Bush was beset with questions about his business dealings of 12 years ago. In 1990 Mr. Bush sold $848,560 worth of stock in Harken Energy Corp., eight days before Harken finished its second quarter with a loss that drove the stock price down. This episode raises two substantial questions and some smaller ones. But most have been aired over the years, and one has been the subject of a government investigation. Congress shouldn't let the temptation to play politics with this issue distract it from corporate reform.
The first substantial question is whether Mr. Bush sold the Harken shares ahead of bad results because he had inside information. He was on the company board, so the insider suspicion is natural. But the Securities and Exchange Commission investigated the case and did not take action, apparently because it could not find firm evidence of wrongdoing. The SEC's chairman at the time was Richard Breeden, a Republican who knew Mr. Bush's father but who was also a renowned enforcement hawk. People who worked inside the SEC during the early 1990s reckon that the organization would have gone after the son of the president if it had had sufficient evidence.
The second serious question is whether Mr. Bush is culpable for Harken's dubious accounting. In 1989 Harken used a phony sale to bump up its revenue; in 1991 the SEC forced the company to correct its numbers. Mr. Bush was on Harken's audit committee, so he shares responsibility for this episode. Moreover, the price Mr. Bush got for the shares he sold in 1990 may have been inflated by the accounting trick. Mr. Bush now proposes that chief executives who profit from accounting misstatements be made to give back their money; the fact that Mr. Bush himself may have profited from a misstatement is embarrassing. But it was not illegal, and there is no suggestion that Mr. Bush played a role in devising the accounting trick or that he sold the stock because he realized a restatement was coming.
The remaining threads in the Harken story are no more compelling. Mr. Bush was late in filing some of the paperwork relating to his stock sale, but not so egregiously late as to trigger SEC discipline. He accepted a loan from the company, a practice he now says should be stopped. But the size of the loan was relatively modest, and there is little shame in having participated in a legal practice years ago and then advocating its reform when others turn out to have abused it. Equally, as a member of Harken's board, Mr. Bush was supposed to oversee the managers, but he simultaneously accepted consulting fees from them. This is the kind of conflict that undermines the board independence Mr. Bush now urges. But it has to be said that almost nobody -- this page included -- objected to board members' accepting consulting fees before the recent outbreak of scandals.
There are cases in which an official's past dealings deserve to become a public issue: It will be interesting to see what emerges from the SEC's investigation into Halliburton, the company that Vice President Cheney headed until 2000. But the Harken story took place years ago. It has already been investigated and aired. It affected far fewer people than the billion-dollar scandals that have been in the news lately. Congress's focus must now be on preventing more corporate dishonesty, not on Harken. The real scandal involving President Bush is that he claims to be outraged by corporate misbehavior but refuses to support the bipartisan Senate bill that offers the best hope of progress.