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Texas Bush's stock sale questioned

Securities and Exchange Commission documents cast some doubt over George W. Bush's explanation about his sale of stock in an oil company several weeks before it reported a $23-million loss.

Bush denies wrongdoing, and the SEC declined to act against him last year after an insider-trading investigation. Nevertheless, the case has emerged as an issue in the Texas governor's campaign.

Bush, the eldest son of the former president and Republican candidate for governor, contends he "sold into good news" on June 22, 1990, when he unloaded $840,000 in stock _ nearly two-thirds of his holdings _ in Harken Energy Corp. Bush served as director and a paid consultant to the Dallas-based oil company, but left the company's board in 1993.

A Bush campaign spokeswoman said Thursday that the issue has been fully investigated and that the SEC documents recently released contained nothing new about the controversy.

The SEC files offer a decidedly mixed picture about Harken's financial prospects at the time of the stock sale. Harken could deservedly boast about a major oil drilling agreement with the government of Bahrain in the Persian Gulf.

But Harken's bankers had clamped down on the company after it violated terms of a $115-million loan package, according to SEC documents obtained by the Associated Press through a Freedom of Information Act request.

The renegotiated loan agreement, reached May 21, 1990, featured strict terms, including a high interest rate, less credit for acquisitions, a $750,000 fee and requirements by some major stockholders to guarantee $22.5-million in debt.

The next day, Harken announced plans to raise $40-million, $15-million of which would repay bank debt. The balance would infuse cash into two of its companies and fund acquisitions.

Bush's attorney, Robert Jordan, defended Bush's "selling into good news" statement, saying the loan restructuring "was extremely good news to the company because it showed the supreme confidence of these two major shareholders."