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Friday, 12 July, 2002, 10:21 GMT 11:21 UK
Bush on defensive over cheap loans
President George W Bush
Bush's critics say the loan shows he is unfit to lead
President Bush's officials have denied he was involved in any wrongdoing in obtaining big loans at preferential rates when he was a director of an energy company in the 1980s.


It is hard to lead when you haven't done the things that you're asking others to do

Richard Gephardt
Democrat leader
Opposition politicians have accused Mr Bush of double standards after he said on Tuesday that such loans should be banned.

Correspondents say the disclosure that he himself received low-cost loans are a further embarrassment to Mr Bush as he seeks to clean up the image of corporate America.

Critics have long argued that large American companies have too much influence on his administration.

'Completely appropriate'

Mr Bush took out loans of more than $180,000 in the 1980s while he was a director of the Harken Energy Corporation.

The 5% interest rate was significantly lower than the going rate of 7.5%

Details have been confirmed by America's main stock market regulator, the Securities and Exchange Commission, after being reported in the US press.

But Mr Bush singled out such loans as bad practice when he made a major speech on Tuesday, calling for a new era of integrity in corporate America.

Dick Cheney
Dick Cheney is being sued for alleged fraud
White House spokesman Scott McClellan went to the president's defence.

"The loan was completely appropriate and fully disclosed," he said, arguing that the need for new business practices had only later become evident.

"In recent years, abuses have emerged, and that's when it becomes necessary to implement reform."

'Hard to lead'

But the Democrat's top men in Congress say the issue shows Mr Bush is in no position to implement reform to corporate America.

"It puts him in a difficult position to criticise others," Tom Daschle, the leader of the Senate said.

And the Democrat leader in the House of Representatives, Richard Gephardt argued: "It is hard to lead when you haven't done the things that you're asking others to do."

Earlier this month, the White House acknowledged that Mr Bush had failed to follow the law and disclose details of shares he sold when he was a director of Harken.

A spokesman blamed the omission on a clerical mistake by company lawyers.

In 1990, Mr Bush sold a large number of shares in Harken just before the company announced news that prompted a sharp fall in the share price.

Mr Bush was on the auditing committee of the company at the time.

Previously, the president said that he had filed all the necessary forms regarding the sale on time with the accounting authorities.

Cheney under fire

On Wednesday, a US pressure group filed a lawsuit against Vice-President Dick Cheney, accusing him of defrauding shareholders in a company he used to run.

Judicial Watch, based in Washington DC, says Mr Cheney artificially boosted the share price of the Halliburton energy company during the time he was chief executive in the 1990s.

The White House has dismissed the lawsuit as "without merit".

Mr Cheney has faced further embarrassment over the revelation that in 1996 he took part in a promotional video for the disgraced accounting firm Andersen.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Stephen Evans
"Share prices are down 3% since Mr Bush first spoke out on corporate corruption"
See also:

10 Jul 02 | Business
02 Jul 02 | Business
28 Jun 02 | Business
11 Jul 02 | Americas
11 Jul 02 | Americas
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