Much is said now about credibility gap as concerning American companies, especially after loud scandals connected with profit overestimation and concealment of information about company’s real state from investors and stockholders. The scandals originally touched bankruptcy of Enron and other corporations, Kmart retail trade network for example. Then Worldcom, Vivendi and Xerox faced serious problems. Xerox overestimated its profit by $4 billion, however the first two companies are currently said to be on the bankruptcy verge. It is to be admitted that Vivendi, the company owning famous Universal company, rather fell victim to ineffective management than suffered from murky deals of the direction. However, this fact is not comforting for the stockholders.
It seems that moment has come for the US President to justify himself. George W. Bush was perfectly lucky to come off clear from the Enron scandal, although much was said about friendly relations between the President and Enron management.
This time political opponents to the US Administration are unlikely to lose the chance: George W. Bush’s activity at Texas oil company Harken Energy Corporation board of directors is actively discussed nowadays. The incumbent American president sold his Harken Energy Corporation shareholding in 1990. What is unusual about the sale? The problem is that George W. Bush sold main part of the shareholding right before the company announced its $23 million quarterly losses, which entailed a triple reduction of the company’s 4-dollar shares. From a juridical point of view, the American President has nothing to be reproached with. George W. Bush is blamed for not informing the US Securities and Exchange Commission of the sale. As it turned out, President Bush informed the Commission only of his intention to sell the securities, but no information was presented about the deal itself. Earlier the President attempted to shift responsibility for the problem onto SEC clerks who were said to be slow with documents execution. But at a briefing in Washington on Wednesday a presidential representative announced, the mistake was made by lawyers of the oil company who believed that George W. Bush had already presented all necessary documents. Then SEC initiated an additional investigation of the deal, however, no criminal case was instituted against then-president’s son.
As we see now, the story has been brought to light once again; it is rather vivid against the present-day background. Taking coming elections to the US Congress in November into consideration, it is for sure that Democrats will try to use the story to the maximum. So, America’s President is in for many problems. And in response to his appeals made to US corporations for more responsibility to the society George W. Bush is very likely to be reproached for his own faults.
Vasily Bubnov PRAVDA.Ru
Translated by Maria Gousseva
Read the original in Russian: http://pravda.ru/main/2002/07/04/43655.html