Between being governor of Virginia and his current position, the Senator from Virginia, George Allen, tried to make money by trading on the business relationships he had cultivated while governor. He was appointed to the boards of directors of several public companies. One of them was a Virginia high-tech company called Commonwealth Biotechnologies Inc. This company gave him options to buy 15,000 shares of stock. Allen disclosed the options in 2001 but never reported them again. His attorney apparently took the position that since the current stock price is less than the option price, they are worthless; but they're still an asset and should certainly have been disclosed. What if he was voting on some bill that would benefit Commonwealth Biotechnologies? The voters have a right to know if he has personal interests at stake.
Allen was also on the board of directors of another Virginia company called Xybernaut, which made wearable computers. Xybernaut seems to have been little more than an elaborate stock fraud. The company formally declared bankruptcy in July of 2005 (despite the fact that it in fact had $40,000,000, or 40 million dollars, in assets; in the modern world of bankruptcy, even huge thriving companies can declare bankruptcy to screw their unsecured creditors [see, asbestos examples]). Allen has never disclosed his stock options in Xybernaut, despite the fact that they were at one time worth $1.1 million dollars, and even went to so far as to advocate for the company with the Army while he was Senator.
Here's how AP summarizes Allen's sleazy shenanigans:
An Associated Press review of Allen's financial dealings from that era found that the senator:
- Did not have to look far to find corporate suitors, joining three Virginia high-tech companies he assisted as governor. Allen served on boards of directors for Xybernaut and Commonwealth Biotechnologies and advised a third company called Com-Net Ericsson, all government contractors.
- Twice failed to promptly alert the Securities and Exchange Commission of insider stock transactions as a Xybernaut and Commonwealth director. The SEC requires timely notification and can fine those who file late.
- Kept stock options provided to him for serving as a director of Xybernaut and Commonwealth, but steered other compensation from his board service to his law firm.
And that AP article made me realize something. George Allen is an attorney. He raised his hand and swore to uphold and protect the US Constitution. He swore to conduct himself in an ethical manner at all times. Doesn't Virginia police their attorneys? I can't believe someone hasn't filed a complaint with the Virginia bar about these several ethical violations.
Great comment on the Huffington Post article, by 'Kenosha Marge':
Let's see, racist, bully, and now a crook. What makes him different than any other Republican?
Trey Ellis, HuffPo: Sen. Allen's Shameless Stock Fraud
Bloomberg: Allen's Undisclosed Stock Options Were Worth Up to $1.1 Million
WaPo: Xybernaut Hid Gathering Storm In Bright Forecasts
SiliconInvestor.com: XYBERNAUT ROUGES GALLERY
WaPo Editorial: Mr. Allen's Ethics
A new report raises questions.
WaPo: Stock Options Held by Allen Not Disclosed to Congress
Senator Requests Opinion From Ethics Committee
AP: Allen didn't disclose stock options
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