WASHINGTON – Senate Majority Leader Bill Frist, R-Tenn., has been subpoenaed to turn over personal records and documents as federal authorities step up a probe of his July sales of HCA Inc. stock, according to sources familiar with the investigation.
The Securities and Exchange Commission issued the subpoena within the past two weeks, after initial reports that Frist, the Senate’s top Republican official, was under scrutiny by the agency and the Justice Department for possible violations of insider trading laws.
Frist aides previously said he had been contacted by regulators but did not mention that the lawmaker had received a formal request for documents. The sources, who spoke on condition of anonymity because of the investigation, said Frist is expected to testify under oath about what he knew about the company’s health in the weeks before he sold stock. Frist has told reporters that he did nothing wrong and that he directed the sale to eliminate potential conflicts as he considered a 2008 presidential bid.
The formal request for documents usually presages an acceleration of a federal probe. In Frist’s case, regulators had to proceed with caution due to his status in Congress and their mutual desire to avoid triggering constitutional objections to the release of documents. The disclosure of the subpoena comes as Democrats blasted Frist anew for his financial and personal ties to Hospital Corporation of America, a Nashville chain founded in 1968 by his father and his brother, Thomas Frist Jr. Critics Wednesday seized on a report that Frist held a substantial amount of his family’s hospital stock outside of blind trusts between 1998 and 2002 – a time when he asserted he did not know how much of the stock he owned.
The Associated Press reported on Tuesday that Frist earned tens of thousands of dollars from HCA stock in a partnership controlled by his brother, outside of the blind trusts he created to avoid a conflict of interest.