What Fertilized the Bushes?

Since the Bushes are well on their way to becoming a political dynasty like the Kennedys, that’s the way they should be judged — not simply as individuals. Like the Kennedys, the Bush offspring inherited power bases in politics and among the moneyed elite. Like the Kennedys, they have not hesitated, for money and political support, to cozy up to some operators who played fast and loose, to put it mildly. Just as father Joseph Kennedy showed his political brood how the Mafia could be useful, father George Bush provided entrée to a corrupt bureaucracy. Recognizing the unity of the Bush dynasty-in-the-making, Mother Jones reporter Stephen Rizzo appraised the business ethics of the three most publicized Bush brothers in a single paragraph:


One of them [Jeb, now Governor of Florida] rented himself out to a crooked developer who scammed HUD and helped pry millions out of Medicare to fuel a giant health-care scam. A second [Texas Governor George W.] may have profited from an insider stock transaction in a [Persian] Gulf oil deal at the very time that U.S. soldiers were dying to make that region safe for oil. And a third son [Neil] ran a savings and loan into the ground while shoveling millions of its taxpayer-backed dollars into the pockets of two deadbeat partners.


An excessively harsh appraisal? Not at all. It’s quite accurate. But Florida’s Democratic Lieutenant Governor, Buddy McKay, had no luck trying to make Jeb Bush’s questionable business deals an issue last year in Florida’s gubernatorial campaign. And Ann Richards had little luck in 1994, using George W.’s probably illegal insider stock transaction in an attempt to arouse the Texas electorate. So we can assume that George W.’s presidential competitors will not find it easy to stir the public’s interest in such matters. Well, they can’t blame the press this time. Over the years, the questionable nature of the Bushes’ financial adventures has been laid out for inspection many times, particularly in the alternative press, such as The Texas Observer, Mother Jones, and The Nation. This is a review of their investigations.

Reporters have been particularly intrigued by George W.’s adventure in the oil industry, and well they might be. There was something about it that smacked of a shell game run by a very fast hand. With a pittance of his own money but several million dollars from his family’s Wall Street buddies, George W. launched an oil company in the mid-1970s. It was a failure. But before breathing its last, the company was absorbed by Spectrum 7, another rinky-dink oil company bankrolled by Reagan-Bush types. It, too, was a failure. This time the deathbed rescue, in 1986, was a merger into Harken Energy, yet another company with slender prospects.


Since he had an unbroken record of failures, George W. had nothing to offer Harken but his name. That was enough. He was made a company director and ultimately wound up with 1.5 million shares of Harken stock, making him the company’s third-largest non-institutional stockholder. He was also paid handsomely as a “consultant,” though shortly after the merger he moved back to Washington to help his father run for president. For Harken, that was the best move he could have made, it seems. In 1990, to the astonishment of the oil industry, little Harken — which had never drilled in water — beat out the international giant, Amoco, to win an exclusive offshore contract with the Persian Gulf nation, Bahrain.


When a Mother Jones reporter asked a Harken insider if George W.’s presence had helped win the contract, he responded: “Hell, that’s why he’s on the damn board. You say, ‘By the way, the president’s son sits on our board.’ You use that. There’s nothing wrong with that.”


Legally or morally wrong, of course not. But tacky, yes, like being used as a shill. Anyway, there’s no doubt about the wrongness of George W.’s next step. When the Bahrain contract was made public, Harken’s stock jumped in value, and he sold 212,140 shares — 60 percent of his holdings — for $848,500. Nice timing. Eight days later the company issued its quarterly report, showing a stunning loss of $23 million, and a month later the Gulf crisis exploded. The two blows caused Harken stock to drop nearly 50 percent from what it was when George W. cashed in. As a member of Harken’s audit committee, he had been privy to the company’s lousy financial condition. And it’s possible, even likely, that President Bush, loaded with C.I.A. data, warned him of the coming crisis. Did George W. sell because he had this exclusive, insider information that wasn’t available to the public? That would have been a violation of Securities and Exchange Commission regulations. There’s no question that he waited eight months to file a disclosure of his sale with the S.E.C. — another violation.