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AP:

Frist Accumulated Stock Outside Trusts

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Oct 11, 8:51 PM (ET)

By LARRY MARGASAK and JONATHAN M.

KATZ

WASHINGTON (AP) - Outside the blind trusts he

created to avoid a conflict of interest, Senate Majority Leader Bill Frist

earned tens of thousands of dollars from stock in a family-founded hospital

chain largely controlled by his brother, documents show.

The Tennessee Republican, whose sale this

summer of HCA Inc. (HCA)

stock is under federal investigation, has long maintained he could own HCA

shares and still vote on health care legislation without a conflict because he

had placed the stock in blind trusts approved by the Senate.

However, ethics experts say a partnership

arrangement shown in documents obtained by The Associated Press raises serious

doubts about whether the senator truly avoided a conflict.

In that case, the HCA stock was accumulated by

a family investment partnership started by the senator's late parents and later

overseen by his brother, Frist. The brother served as president of the

partnership's management company and as a top officer of HCA. Sen. Frist holds

no position with the company.

The senator's share of the partnership was

placed in a Tennessee

blind trust between 1998 and 2002 that was separate from those governed by

Senate ethics rules. Frist reported Bowling Avenue Partners, made up mostly of

non-public HCA stock, earned him $265,495 in dividends and other income over

the four years.

Edmond M. Ianni, a former Wilmington, Del.,

bank executive who established blind trusts for corporate executives,

questioned why the senator's brother was able to manage assets " when the

whole purpose of a blind trust is to ensure lack of not only conflict of

interest - but appearance of conflict of interest? "

Kathleen , a government ethics expert at

the Washington University

in St. Louis School of Law, said she doesn't believe the Senate trusts or the Tennessee trust

insulated Frist from a conflict because the senator or his brother were advised

of transactions and could influence decisions.

" What I find most appalling is the Senate

calls it a qualified blind trust when it's not blind, "

said. " Since the Senate says it's OK, the Senate has made it a political

question. It's up to the voter. But there's no doubt it's a conflict of

interest. "

Frist's interest in Bowling Avenue Partners

and the Tennessee

blind trust were listed on the annual disclosure reports he filed with the

Senate. Frist's ability to influence HCA stock decisions in the

partnership was detailed in separate trust and partnership documents obtained

by the AP.

Those documents show Frist was listed

as the " general partner " and " registered agent " of Bowling

Avenue Partners. He also was listed as president of the partnership's

management company.

Frist founded HCA, the nation's largest

for-profit hospital chain, with his and the senator's father. He currently is

the company's chairman emeritus.

Frist advisers confirmed the senator's brother

could influence investment decisions in the Bowling Avenue partnership and said the

partnership was placed in a Tennessee

trust because Senate ethics rules didn't allow the non-public HCA shares to be

included in Senate-approved trusts.

" His interests in the family partnership

were not held by his Senate blind trusts because Senate rules did not permit

it. Senator Frist did not control the assets in this partnership and he

annually disclosed his interests to the public as required, " Frist

spokesman Bob son said.

Frist did not return repeated phone

calls to his office at HCA seeking comment.

Bowling Avenue Partners' HCA shares became

marketable securities when the estate of Frist's mother was settled in probate.

Frist then began transferring those shares in stages from the Tennessee blind trust to the Senate-approved

trusts in 2001 and 2002.

The value of all the transferred shares,

calculated on the dates they went into the Senate trusts, was between $775,000

and $1.57 million, according to letters the trustees sent to Frist and the

Senate. That stock was on top of millions of dollars in various investments Frist

already owned in the Senate blind trusts.

With his background as a heart surgeon as well

as majority leader, Frist has been at the forefront of legislation that would

affect the hospital chain. Among the issues: a Medicare prescription drug

benefit and limits on medical malpractice lawsuits.

Frist kept HCA stock in Bowling Avenue

Partners and the Tennessee

blind trust - but outside the Senate-approved trusts - between 1998 and 2002.

His investments in Nashville-based HCA are

being investigated by federal prosecutors and the Securities and Exchange

Commission after an AP report that the senator had asked administrators of his

Senate blind trusts to sell his HCA holdings.

Frist ordered the stock sold June 13 and all

sales were completed by July 1. HCA stock peaked on June 22 and then gradually

declined. On July 13, it dropped 9 percent.

Reports to the SEC showed insiders sold about

2.3 million shares of HCA stock worth at least $112 million from January

through June 2005.

Frist has denied having insider company

information when he ordered the stock sold in June. The profit the senator made

from the sales is not known.

The Bowling

Avenue name came from the street of the Frist

family home in Nashville.

Sincerely,

Holly Bortfeld

AutismCares Care Package Coordinator

http://www.autismcares.org

AutismCares

is a coalition of National Autism Organizations who have come together to help

families dealing with autism who are victims of Hurricane Katrina.