Allen Failed to Report Stock Options

Posted 09 October 2006 @ 07:29 am EET     Print     Reprint     E-Mail     Comments

RICHMOND (AP) - For the past five years, Sen. George Allen (news, bio, voting record), has failed to tell Congress about stock options he got for his work as a director of a high-tech company.

The Virginia Republican also asked the Army to help another business that gave him similar options.

Congressional rules require senators to disclose to the Senate all deferred compensation, such as stock options. The rules also urge senators to avoid taking any official action that could benefit them financially or appear to do so.

Those requirements exist so the public can police lawmakers for possible conflicts of interest, especially involving companies with government business that lawmakers can influence.

Allen's stock options date to the period from January 1998 to January 2001 when Allen was between political jobs and had plunged into the corporate world.

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.

Allen, a potential 2008 presidential candidate, rose to prominence as a conservative from Virginia, serving in the U.S. House and as governor. From 1998 through 2000, he worked as a private lawyer and businessman before joining the Senate in 2001.

He now faces a tough re-election campaign against Democrat Jim Webb.

In interviews, Allen and his staff sought to play down his corporate dealings, saying they were a good learning experience but did not lead to extraordinary riches except for a quarter-million-dollar windfall from Com-Net Ericsson stock.

Allen's office said he sold his Xybernaut stock at a loss and has not cashed in his Commonwealth options because they cost more than the stock is now worth. The senator also said he saw no conflict going to work for companies shortly after assisting them as governor.

"I actually got no money out of Xybernaut. I got paid in stock options which were worthless. Commonwealth Biotech asked me to be on their board. Glad to do it. I learned a lot on their board and enjoyed working with 'em, and they seem to be doing all right, I guess," Allen said.