George W. Bush is a crook
lnp3 at panix.com
Wed Jul 10 06:22:11 MDT 2002
Village Voice, July 16, 2002
by James Ridgeway
George Bush, Failed Corporate Crook
Nitwit Scion Turns Avenger
President George Bush says he's outraged at the scams that have sent
big-name companies crashing, and he's not going to take it anymore. Feeding
the polls, Bush tells the nation he wants new laws to bring criminal
charges against dirty-dealing CEOs who fake company books and destroy not
only the public's trust but its savings as well.
In common parlance, what these execs are doing is called fraud, and common
knowledge says Bush already has the power to do something about it. Yet
again, the president is ducking a tough issue in favor of a PR operation.
The problem for Bush is how to seem to be attacking corporate scoundrels
while keeping their campaign contributions coming. This is, after all, an
election year, and the GOP badly wants to recapture control of the Senate
and widen its margin in the House.
If Bush really wanted to address the situation, all he'd have to do is to
pick up the phone, call Attorney General John Ashcroft, and ask him to
launch an investigation of any one of these CEOs for fraud, conspiracy,
theft, obstruction of justice, or perjury. The president could also turn to
the Securities and Exchange Commission, which can refer a civil case for
criminal prosecution. Bush doesn't need additional legislation to do this.
All he has to do is call. He refused to do that in the Enron case, even
though his administration knew about the scandal months before the company
went public with its bankruptcy. And he hasn't done it with any of the
Perhaps Bush's inaction stems from his own history of stumbling in the
corporate back alleys. Last week, the media revived a case from the early
'90s, where it looks like Bush was involved in insider trading with the
stock of an oil company of which he was an official. He dumped the shares
shortly before the firm tanked, then failed to report his activity to the
Securities and Exchange Commission for months. The ensuing investigation,
handled by an agency whose director was a Bush appointee and whose general
counsel was Bush the younger's own former attorney, was dropped.
Though Bush has shown he can play the game, too, he's not quite ready for
the majors. The big difference between him and a guy like Kenneth Lay is
that Lay at least was successful. Before he left the world of commerce for
a life in politics, Bush lost money time and again. "It was dreadful," one
investor told The Wall Street Journal. "I think we got [back] maybe 20
cents on the dollar," said another.
The hapless Shrub took shelter under his family tree. Nowhere is this
blue-blood network more evident than in the feeble activities of the
president before he became governor of Texas. Consider this chronology, put
together largely from research done by the Center for Public Integrity in
Washington for its book The Buying of the President 2000.
1979-83: Fifty Bush family investors and friends, led by uncle Jonathan,
a New York Republican Party official and an investment manager, fork over
$4.7 million to set up young Bush in a company called Arbusto. It's a flop,
and in 1982 gets a new name: Bush Exploration.
1984: Spectrum 7 Corporation, an Ohio oil exploration outfit owned by
Dubya's Yalie pal William DeWitt Jr., buys out Bush Exploration, setting up
young Bush as CEO at $75,000 a year and giving him 1.1 million shares of
the firm's stock. Another flop. The company's fortunes soon sink, with
$400,000 in losses and a debt of $3 million.
1986: In the nick of time, Bush and partners merge the failing Spectrum
with Harken Oil, a Dallas exploration company, with a $2 million stock
purchase. Bush puts up about $500,000 and gets a $120,000 annual consulting
fee along with $131,250 in stock options. Harken is a small outfit, looking
for oil opportunities within the U.S. Then out of the blue comes Harvard
Management Corporation, an investment adviser for Harvard University's
endowment portfolio. It pumps millions into the venture.
1990: Although Harken has no international expertise, it gets the
attention of the Bahrain National Oil Company, which unexpectedly appears
on the scene and bypasses big oil's Amoco and Chevron to sign a production
agreement with the little Texas concern. The contract grants Harken
exclusive rights to what seems to be a promising offshore area squeezed
between two productive tracts owned by Saudi Arabia and Qatar. The Wall
Street Journal speculates Bahrain was trying to cozy up to Daddy Bush, who
was plotting an assault on Iraq after Saddam Hussein seized Kuwait.
Bass Enterprises Production Company finances the Bahrain drilling with $25
million, and Harvard Management raises its investment. A couple of members
of the Fort Worth Bass family have places on Team 100, an elite business
group contributing to the Republican National Committee.
In June, Harken drills two dry holes in Bahrain. The future looks bleak.
Dubya dumps two-thirds of his Harken holdings (212,140 shares), for
$848,560. He uses some of this money to buy into the Texas Rangers baseball
club. This is a lot of stock to dump on the market all at once, and brokers
say it was purchased by an unnamed institutional investor.
That August, Harken posts a loss of $23 million.
January 1991: Daddy Bush attacks Iraq.
February 1991: Dubya, as the official in charge at Harken, reports his
big stock sale to the SECeight months late.
April 1991: The SEC begins an investigation into Harken dealings.
Chairman Richard Breeden, who had been appointed by the senior Bush and
served him as an economic policy adviser, hails from Baker & Botts, a big
Texas oil law firm where he was a partner. Inside the SEC, James Doty,
general counsel and the official in charge of any litigation that might
come out of the Harken investigation, is another alumnus of Baker & Botts.
And as a private attorney, before joining the government, Doty represented
the younger Bush in matters related to Dubya's ownership of the Rangers.
1993: The SEC ends its Harken investigation following perfunctory
The good people of Baker & Botts continued looking out for Shrub. Since
1993, Breeden, Doty, and other lawyers there have given him $182,050 for
his various political campaigns, making the firm one of his biggest
That's how the network functioned in the Harken affair. Dubya also has
historic mentors among his kin. During the Second World War, for example,
the government investigated his grandfather, Prescott Bush, and his
maternal great-grandfather, Bert Walker. Under the Trading With the Enemy
Act, officials seized Bush stockholdings, charging that "huge sections of
Prescott Bush's empire had been operated on behalf of Nazi Germany and had
greatly assisted the German war effort."
When it comes to business, the contemporary Bush men have been equally good
role models for Dubya. Think about it:
Dubya brother Neil Bush made the news during the late 1980s because he
was a director of Silverado Savings & Loan, which went broke and ended up
costing taxpayers about $1 billion. In the Silverado case, federal
investigators accused Neil of conflicts of interest, but he was never
prosecuted. The Resolution Trust Company, set up to bail out bankrupt S&Ls,
brought a civil suit against Bush and other Silverado officers. The case
was eventually settled for $26.5 million.
Prescott Bush Jr., a brother of Bush Senior, was reported in 1989 to have
arranged investments in two U.S. firms by an alleged front company for the
Japanese mob, a task for which he was allegedly paid $500,000. Prescott
denied any knowledge of mob involvement.
In 1991, Jonathan Bush, the Daddy Bush brother who spearheaded the family
effort to get Dubya set up in business, was himself fined $30,000 in
Massachusetts and several thousand in Connecticut for violating
registration laws governing securities sales. He was barred from securities
brokerage with the general public in Massachusetts for one year.
Then there's George W.'s other brother, Jeb, currently standing for
re-election as governor of Florida, who defaulted on a $4.5 million S&L
loan in 1988, plunging the thrift over the edge. Jeb and his partners paid
but 10 percent back.
With his own personal landscape a minefield of weird business dealings,
Bush the younger has to watch his step. For him, leaving a few stones
unturned might be a wise choice. Thus does he find himself at once making a
show of righteous anger and shielding his wealthy friends. "You need to
know that by far the vast majority, by far, of corporate America are
above-board," he said, "and doing their job just the way you'd expect them
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