The Color of Money: From 1992

George W. Bush shares more than a name with his father. The president's eldest son has followed closely in his father's footsteps, trading Yale for Texas, working his way up from the dust and dry oil wells of West Texas to carve out his own piece of the Lone Star dream. Today he runs the Texas Rangers baseball team, sits on the boards of several companies and is a rising star in the state's Republican Party. As George Bush the president glides to victory in the Texas primary this week, George Bush the son will be at center stage with his father. Some say he is the president's most influential adviser. It was George W. Bush, after all, who was called upon to tell John Sununu that powerful Republicans wanted him to resign as the White House chief of staff. Sununu was gone soon afterward.

In one important respect, however, George W. Bush has less in common with his father than with his younger brother Neil, who sat on the board of Denver's now infamous Silverado Savings & Loan. When the thrift failed in 1988, with $1 billion in losses, Neil Bush said he didn't understand Silverado's complex deals. George W. Bush has also benefited from some questionable but less well-known business associations. A U.S. News examination of one of his principal investments, in the Dallas-based Harken Energy Corp., found that:Bush sold $848,560 worth of Harken stock just one week before the company posted unusually poor quarterly earnings and Harken stock plunged sharply. Shares lost more than 60 percent of their value over six months. When Bush sold his shares, he wasa member of a company committee studying the effect of Harken's restructuring, a move to appease anxious creditors. According to documents on file with the Securities and Exchange Commission, his position on the Harken committee gave Bush detailed knowledge of the company's deteriorating financial condition. The SEC received word of Bush's trade eight months late. Bush has said he filed the notice but that it was lost. Despite Harken's small size and poor performance in recent years, it continues to provide Bush and its other directors and executives with unusually generous pay and perquisites. In 1989, for instance, Harken suffered losses of more than $12 million against revenues of $1 billion. That same year, Bush received $120,000 as a company consultant and stock options worth $131,250; other Harken executives also drew six-figure salaries and five-figure bonuses. The next year, Harken's board was equally generous, even though the company lost $40 million and shareholder equity plunged to $3 million–down from more than $70 million in 1988.Harken has been characterized by a pattern of financial deal making so burdened with debt and tangled stock swaps that its largest creditors threatened to shut the company down and oil-industry analysts have all but given up on tracking it. "It's a lot of jiggery-pokery," says analyst Barry Sahgal. "I want to be an analyst, not a speculator."

Despite repeated requests for interviews, Bush declined to discuss Harken or the reason for his stock sale, saying through an assistant that he "does not wish to read about himself." Harken executives say the company's practices are proper.

Harken Energy today is a very different company from the gutsy start-up outfits that Bush and his father once ran. In 1983, Harken was purchased by a group of investors led by Alan Quasha, an aggressive young lawyer from New York. Quasha and his colleagues transformed Harken overnight, playing the oil game like high-stakes poker. They spent money, they made money–and most recently, they have lost money. The company's annual reports now speak little of oil and gas production but volumes about share offerings and renegotiated debt.

George W. Bush arrived in the Texas oil fields in the mid-1970s. Within a few years, he had founded his own exploration company. His partner, Mike Conaway, says they "made some money and lost some money." But by 1983, the oil market was in trouble, and so was Bush Exploration. Relief came from two Cincinnati investors who had their own small oil firm, Spectrum 7. William DeWitt was the son of the former owners of the Cincinnati Reds baseball team. Mercer Reynolds was his business partner. A DeWitt family relative and old oil hand, Paul Rea, ran Spectrum 7. Rea met Bush when he first arrived in Texas. The two became friends.