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The company began as an unprofitable collection of Texas oil wells for investors seeking tax write-offs.[1]
In 1986, Spectrum 7 was bought by Harken for $2.2 million[citation needed]. After the sale of his company, as part of the deal, George W. Bush would serve on Harken's board of directors. George W. Bush remained on the board through 1993 and was also paid fees as a consultant.[2]
In 1987, Talat M. Othman joined the board of the company and served as the chair of the Audit Committee.
Aloha Petroleum was sold in a controversial deal in which Harken's equity stake in Aloha was turned into a loan, thereby disguising financial loses.[citation needed] This questionable accounting technique, which can serve to inflate profits, was also used byEnron. It helped result in the infamous 2001 Enron scandal, when the fifth largest corporation in America at the time suddenly collapsed into bankruptcy.
[edit]Insider trading allegations
HKN, Inc., formerly known as Harken Energy Corporation, is a smallAmerican oil and gas production company, with ownership interests in other production companies. The company is headquartered inSouthlake, Texas, near Fort Worth. There is a second office near Dallas, in the town of Paris. The total number of employees varies. It is at approximately 20 in 2009. Shares with the stock symbol HKN trade publicly on the American Stock Exchange.
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[edit]History
The company began as an unprofitable collection of Texas oil wells for investors seeking tax write-offs.[1]
In 1986, Spectrum 7 was bought by Harken for $2.2 million[citation needed]. After the sale of his company, as part of the deal, George W. Bush would serve on Harken's board of directors. George W. Bush remained on the board through 1993 and was also paid fees as a consultant.[2]
In 1987, Talat M. Othman joined the board of the company and served as the chair of the Audit Committee.
Aloha Petroleum was sold in a controversial deal in which Harken's equity stake in Aloha was turned into a loan, thereby disguising financial loses.[citation needed] This questionable accounting technique, which can serve to inflate profits, was also used byEnron. It helped result in the infamous 2001 Enron scandal, when the fifth largest corporation in America at the time suddenly collapsed into bankruptcy.
[edit]Insider trading allegations
See also: George W. Bush, business and early political career and George W. Bush insider trading allegations
Harken has attracted attention because of the role played in its affairs during the 1980s by George W. Bush, later the President of the United States. While a member of the company's board of directors, Bush sold stock in Harken on the 22nd of June, 1990, shortly before the company announced substantial losses.[3] This transaction resulted in a U.S. Securities and Exchange Commission investigation of probable insider trading.
A Harken transaction associated with the endowment fund of Harvard University has also been questioned; see Harken Energy scandal and the Harken board member from Harvard, Michael R. Eisenson.
The controversy is discussed in the 2004 film Fahrenheit 9/11. In another documentary, Orwell Rolls in His Grave, one of the responders, Charles Lewis of theCenter for Public Integrity said that his organisation brought this controversy on April 4, 2000, 7 months before the 2000 U.S. presidential election, but the mainstream media "chose not to report the story".[4]
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