- The Washington Times - Sunday, October 8, 2006

RICHMOND — Sen. George Allen has failed for the past five years to tell Congress about the stock options he got for his work as a director of a high-tech company. Mr. Allen, a Virginia Republican running for re-election, also asked the Army to help another business that gave him similar options.

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

The requirements allow the public to police lawmakers for possible conflicts of interest, especially those involving companies with government business.

Mr. Allen has stock options from January 1998 to January 2001 when he was between political jobs and had plunged into the corporate world.

A review of his financial dealings from that time found that the senator:

• Joined three Virginia high-tech companies that he assisted as governor. Mr. Allen served on boards of directors for Xybernaut and Commonwealth Biotechnologies and advised 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 agency requires timely notification and can fine those who file late.

• Kept stock options for serving as a director of Xybernaut and Commonwealth, but steered other compensation from his board service to his law firm.

Mr. Allen, is running for re-election against Democrat James H. Webb Jr. and is a potential 2008 presidential candidate.

He also has served in the U.S. House and as governor. From 1998 through 2000, he worked as a private lawyer and businessman before his election to the Senate.

Mr. Allen and his staff have downplayed 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.

Mr. Allen’s office said the senator 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. Mr. Allen also said he saw no conflict in going to work for companies shortly after assisting them as governor.

“I actually got no money out of Xybernaut,” he said. “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.”

Mr. Allen’s office also said the senator did not report his Commonwealth options on his past five Senate disclosure reports because their purchase price was higher than the market value. Mr. Allen viewed them as worthless and believed in “good faith” that he did not have to report them, aides said.

Mr. Allen disclosed the options once — on an amendment to his 2000 ethics report filed three months after the normal filing period ended. He excluded the options from subsequent reports.

When Mr. Allen’s lawyer was shown the Senate ethics manual requirement that such options must be reported each year regardless of value, the lawyer said he was unfamiliar with the provision. Mr. Allen has asked the Senate ethics committee for an opinion on whether he should have disclosed them.

“While we continue to believe that we have disclosed more than is required, we will abide by the formal ruling of the committee,” Allen spokesman John Reid said.

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