Frist Likely Knew About HCA Stocks

Jeff Birnbaum has a devastating piece on the front page of today’s Washington Post presenting evidence that Senate Majority Leader Bill Frist may well have known about his HCA stock holdings.

Letters Show Frist Notified Of Stocks in ‘Blind’ Trusts

Senate Majority Leader Bill Frist (R-Tenn.) was given considerable information about his stake in his family’s hospital company, according to records that are at odds with his past statements that he did not know what was in his stock holdings. Managers of the trusts that Frist once described as “totally blind,” regularly informed him when they added new shares of HCA Inc. or other assets to his holdings, according to the documents.

Since 2001, the trustees have written to Frist and the Senate 15 times detailing the sale of assets from or the contribution of assets to trusts of Frist and his family. The letters included notice of the addition of HCA shares worth $500,000 to $1 million in 2001 and HCA stock worth $750,000 to $1.5 million in 2002. The trust agreements require the trustees to inform Frist and the Senate whenever assets are added or sold.

The letters seem to undermine one of the major arguments the senator has used throughout his political career to rebut criticism of his ownership in HCA: that the stock was held in blind trusts beyond his control and that he had little idea of the extent of those holdings.


Frist, a heart-surgeon-turned-politician, has been actively involved in shaping national health care legislation, including passage of the Medicare prescription drug benefit, while maintaining a major financial interest in his family-founded health care business. Two watchdog organizations — Citizens for Responsibility and Ethics in Washington and the Foundation for Taxpayer and Consumer Rights — filed complaints with the Senate Select Committee on Ethics this yearcharging Frist with having a conflict of interest and questioning why he sold his shares after a decade of saying he did not need to.

Frist and his family have a dozen federal trust accounts, which are essentially piles of stock controlled by professional money managers. Under the terms of his “qualified” trust agreements set up in 2000, Frist is barred from contacting the managers except under specific circumstances. The managers, however, are required to contact him when the funds they control undergo certain changes — an arrangement similar to those of several other senators.

In January 2003, after winning election as majority leader, Frist was asked on CNBC whether his HCA holdings made it difficult for him to push for changes in Medicare, a federal health program for seniors that added to the hospital company’s revenue. “I think really for our viewers it should be understood that I put this into a blind trust,” Frist replied. “So as far as I know, I own no HCA stock.” He added that the trust was “totally blind. I have no control.”


Disclosures by the trustees to the Senate and to Frist indicate that Frist and his family probably owned a great deal of HCA stock at the time. When Frist’s federal trusts were created in late 2000, the trustees disclosed that one trust alone contained between $5 million and $25 million in HCA shares and that each of seven other trusts held more than $1 million of the stock.
Frist was notified in November 2002 that 14,781 HCA shares had been sold from one of his trusts. But he was not told that all of his HCA shares had been disposed of until this summer — after he had directed his trustees to sell them all, the documents show.

This certainly doesn’t look good for Frist. While I have never been a big fan of Frist, who I’ve considered motivated more by ambition that any particular vision of public policy, I never had any doubts about his integrity.

I hope there is an innocent explanation for all this. Certainly, the ethics rules requiring these trusts to be simultaneously “blind” and transparent seem fraught with peril. But Frist occupies a position of great power and his conduct has to be above reproach.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College. He's a former Army officer and Desert Storm veteran. Views expressed here are his own. Follow James on Twitter @DrJJoyner.


  1. Maggie says:

    Am I wrong? I didn’t think members of Congress were required to put their stocks in blind trusts…it was a choice that Frist for himself.

  2. Dean says:

    Unfortunately, even if there is an “innocent explanation”, he is likely gone.

    Look at Trent Lott, he was canned for far less.

  3. Mark says:

    Well, considering he is not running for re-election, he is “done” regardless.

    I never really considered him a serious 2008 contender anyway.

  4. DC Loser says:

    The man has less charisma than Al Gore, so that about sums up his chances.

  5. I never had any doubts about his integrity.

    I guess his kidnapping and torture of cats doesn’t bother you??

  6. Anderson says:

    Cat torture has been eclipsed, alas, by other torture in this administration.

  7. mikeyes says:

    Maybe you should look back at the way the Frist family has manipulated the stock in HCA over the years. Especially the time they sold all of the hospitals HCA owned that were losing money to the employees pension fund. Dr. Frist has a lot of explaining to do.