Less than a month before heading to Iowa to test the presidential waters, Senate Majority Leader Bill Frist (R-Tenn.) found himself Friday fighting off two federal investigations into his personal finances.

The giant health care company founded by the Frist family defended the Tennessean, saying Friday that it was unaware that he was selling his holdings in late June and early July. That sell-off — which preceded a decline in the company’s share price — has prompted dueling federal investigations into whether the leader had inside knowledge of the company’s affairs.

A spokesman for HCA Inc. said that the hospital chain has maintained its long-standing policy of keeping more than an arm’s-length distance from Frist, in an effort to avoid the sort of investigations it now finds itself mired in.

“The company became aware of it when we started getting calls from the media,” HCA spokesman Jeff Prescott said of the transactions that are now under the microscope.

The motive and timing behind Frist’s decision to dump an undetermined amount of assets in HCA from his blind trust is likely to be the focus of the investigations by the Securities and Exchange Commission and the U.S. Attorney for the Southern District of New York.

The company announced the U.S. Attorney’s investigation early Friday morning, before trading began on Wall Street. Frist’s office confirmed that the SEC and U.S. Attorney’s office, which is now headed by Michael Garcia, had requested financial information related to the stock sales. Frist agreed to cooperate and has not been subpoenaed in the case, unlike HCA, which received a subpoena last week.

Frist’s aides maintained that the Senator did not speak with anyone at the company to gain inside knowledge about a report that was coming out in early July declaring that the company wouldn’t meet its revenue expectations — an announcement that sent the stock sliding roughly 9 percent.

“Sen. Frist had no information about the company or its performance that was not available to the public when he directed the trustees to sell the HCA stock,” Bob Stevenson, Frist’s spokesman, said in a statement. “His only objective in selling the stock was to eliminate the appearance of a conflict of interest.”

The investigation comes as Frist is heightening his national profile. The Majority Leader, a possible contender for the GOP presidential nomination in 2008, is on his way to Iowa, home to the first-in-the-nation caucus, on Oct. 22 as the guest speaker at the state Republican Party’s Ronald Reagan Dinner in Des Moines.

Some insiders in the Frist camp speculated that the sale of the HCA stock was really a move to quell the conflict-of-interest issue long before the 2008 campaign heated up — and were left shaking their heads at the notion that this sell-off had instead sparked more cries of controversy and two federal investigations.

But he’s now facing an investigation that could turn into a major albatross, potentially sullying an image that had previously avoided the stain of corruption allegations that Democrats have regularly lobbed at other Republicans. Alternatively, an investigation that revealed nothing improper could put to rest the longtime issue of the family’s wealth derived from HCA.

While Minority Leader Harry Reid (D-Nev.) declined to challenge Frist over his sale (see related story, p. 27), other Democrats pounced on the issue. The Democratic National Committee accused Frist of putting his “personal gain” ahead of the nation’s best interests.

And former Sen. Max Cleland (D-Ga.) issued a statement likening Frist’s sales to those of Martha Stewart, who recently left federal prison after being found guilty of lying to investigators regarding a tip she received regarding a denial for a new drug from the Food and Drug Administration.

“The Securities and Exchange Commission investigation of the Senate Republican Leader indicates a spreading of the Republican culture of corruption which now pervades the Republican leadership in Washington, D.C.,” Cleland said. “We don’t need Martha Stewart in the United States Senate.”

But Frist’s allies remained behind him late last week, brushing off the attacks as partisan shots that won’t be backed up after the investigation is complete. (Cleland lost his 2002 Senate race to Sen. Saxby Chambliss (R-Ga.), whose campaign was run by Tom Perdue, who spearheaded Frist’s first campaign in 1994.)

Prescott, HCA’s spokesman, said that since Frist’s 1994 election to the Senate, the company has had a “long-standing practice” of staying out of his political affairs, forbidding its corporate lobbyists from contacting the Senator on any issue. In addition, Prescott said that Frist — who stayed out of the family business to pursue a career as a heart surgeon — has done his best to stay away from HCA’s affairs.

“He’s never been employed by the company, he’s never been on the board, and he’s never practiced medicine at a hospital owned or managed by the company,” he said.

But the company was founded by the Senator’s father, and his brother, Thomas Frist Jr., reclaimed power over the company in 1999 after a federal investigation found HCA guilty of 14 counts of Medicare fraud, resulting in $1.7 billion in fines and penalties. Thomas Frist Jr. maintains the title of chairman emeritus on HCA’s board.

Frist’s opponents have tagged him for his links to HCA dating back to the 1994 campaign, but until recently he never agreed to completely divest himself from the company’s stock, instead establishing a blind trust.

While top company executives sold off $165 million in shares before the stock’s price started to slide in July, it’s unclear how much stock in HCA was still held by Frist because of restrictions adhered to by the trust.

Ethics experts note that “qualified blind trusts,” as they are called in the Senate Ethics Manual, are not completely blind because the Senator knows what holdings he or she is placing in the trust at the outset. At the end of each quarter, in most Senate blind trusts, the Senator receives a generic financial update that tells how much the total value of the trust has risen or fallen, but does not inform the Senator about stocks that have been sold or purchased.

Because the Senator is aware of what initially went into the trust, ethics rules allow a Senator to instruct the trustee overseeing the account to sell off all the assets as a way of avoiding a potential conflict — a bit more leeway than is common in non-political trusts.

David Becker, a former general counsel at the Securities and Exchange Commission, told The Associated Press on Friday that blind trusts outside of the Senate do not typically allow the trust’s owner the same degree of knowledge and access to their holdings.

Assuming Frist’s motive was truly to end the groundswell of criticism against his HCA ties, the sale would appear to be acceptable under Senate rules.

Federal investigators will be looking to see if Frist received any bits of information about the company’s pending report — evidence that, if it materializes, could raise questions about his motive for the sale.