Chris Cox and the Harken Test
The Center for American Progress has put together a devastating critique of Representative Chris Cox, President Bush's choice to succeed William Donaldson as chairman of the SEC. Cox's support for curtailing shareholder lawsuits, bill providing cover for Enron and his own checkered past show that Bush was never serious about his demand for corporate accountability.
Cox's confirmation seems assured, especially with the broad support he enjoys from the financial services industry. Senate Majority Leader Bill Frist said of Cox, "with a career dedicated to public service, Chris Cox has the expertise needed to handle the intricacies of securities regulation."
As part of the confirmation process, Cox should face the Harken Test. That is, he ought to answer one simple question:
"If Sarbanes-Oxley were in place 20 years ago, would George W. Bush have faced charges over his leadership of Harken Energy?"
As has been well-documented by the Center for Public Integrity and others, the answer should be "yes."
In 1990, Bush essentially pocketed $848,000 from insider trading activity at Harken. The key personnel at the SEC during his 1991 case, chairman Richard Breen and general counsel James Doty, were long-time Bush family friends and business associates from the law firm of Baker Botts. While the SEC in 1993 finally recommended that no action should be taken against Bush, it also noted that the investigation's termination must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result.
Harken is, of course, old news which the Bush administration will say has "already been parsed." But as he goes about undoing the corporate accountability reforms of William Donaldson, Chris Cox at least could speak the truth about it.
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