BY ERIC RUDER
CHICAGO "I'm all name and no money", George Bush claimed in 1986. In 1975, Bush returned to Texas after his stint at Yale and Harvard in the hope of copying his father's success in the Texas oil business. By the end of the 1990s, he had a $15 million fortune even though each one of his business ventures was an unquestionable failure.
Today, the idea that Bush could be an aggressive cop on the corporate crime beat is about as believable as the idea that he got into Yale because of his sharp intellect.
It's not just that Bush has packed his administration with officials who have their own records as corporate hucksters. Bush himself owes his fortune to a string of insider deals.
Along the way, he relied on the same corporate shenanigans that he complains about today not to mention wealthy investors who were happy to bail out Dubya as a favour to the Bush political dynasty.
Bush's first four ventures after returning to Texas in the 1970s were all failures.
In 1986, Harken Energy bought out Spectrum 7, the company that had bought out Bush's last disaster. Like in past deals, Bush was kept on as an executive, so Harken could make the most of his connections. He was given $600,000 in stock and a $120,000-a-year salary for his troubles.
As oil prices plunged in the mid-1980s, Harken began having its own troubles. On June 22, 1990 two months before Harken reported a whopping $23 million quarterly loss Bush sold 212,140 shares of Harken stock at $4 a share, netting a tidy $848,560. News of the loss two months later pushed Harken's stock price down sharply by the end of the year, it was trading at $1.
Maybe this explains why Bush waited until well past the deadline to file the Securities and Exchange Commission form required of executives who trade their own company's stock. The late filing and the fact that Bush cashed out ahead of Harken's public disclosure of bad news sparked an SEC investigation.
Bush's "defence" was that he had no idea about the company's financial woes even though two weeks before his stock sale, Harken president Mikel Faulkner sent Bush a memo warning of a "Harken International shutdown effective June 30, unless third party funding [is] obtained".
As to why he filed the SEC form late, Bush has had at least three stories. In 1994, he claimed that the SEC lost the forms. When asked about it in July, Bush first blamed Harken's lawyers. But when it became clear that he, not the company's lawyers, was responsible, Bush changed his tune again.
"As to why the Form 4 was late, I still haven't figured it out completely", Bush told reporters in early August. "But nevertheless, the SEC fully looked into the matter and the people that looked into it said there is no case."
In fact, during the SEC's "thorough" investigation of Bush, neither he nor any other Harken board member was ever interviewed. How could this be, you ask? Bush's father, former president George H.W. Bush, had a good friend at the helm of the SEC and the general counsel in charge of deciding whether to pursue legal action had just finished negotiating Dubya's participation in the purchase of the Texas Rangers baseball team.
It certainly does pay to have friends and family in high places.
In 1989, Harken was scrambling to keep from going under. So Harken executives cooked up a scheme to sell an asset Aloha Petroleum to a corporate entity made up of Harken insiders. Harken loaned this dummy entity $11 million of the $12 million asking price for Aloha and then recorded a $7.9 million profit on the sale.
"The people at Enron could have gone to school on this thing", said Alfred King, former managing director of the Institute of Management Accountants and former adviser to the Financial Accounting Standards Board. "They sold to themselves and recorded a profit. That's exactly what Enron did on a number of those off-balance-sheet transactions."
In early July of this year, reporters asked Bush about Harken's Enron-esque accounting methods. "In the corporate world", Bush had the gall to reply, "sometimes things aren't exactly black and white when it comes to accounting procedures."
Dubya's big haul came when he bought into the Texas Rangers baseball team in 1989. But this deal was handed to him on a silver platter again, because big investors figured his name and connections would be useful. Bush needed $606,000 to become a co-owner. That's a pittance by baseball standards, but Dubya could only scrounge together about $100,000 in cash. So he borrowed $500,000 from United Bank a bank in which he sat on the board of directors.
The initial $606,000 gave him a 1.8% share in the team. But the real windfall came when the other owners decided to up Bush's stake to 12%. Overnight, Bush had a Texas-sized fortune.
Dubya returned the favour by being the Rangers owners' front man in pushing for public financing of a new ballpark in Arlington, Texas. With a new stadium paid for by taxpayers, Rangers owners sold the team for triple the purchase price of a decade earlier. Bush's $606,000 investment netted an astonishing $14.9 million return. But after more than two decades of corporate scams, Bush thinks it's time to move on.
"I believe people have taken a step back and asked, 'What's important in life?'" Bush said last month. "You know, the bottom line and this corporate America stuff is that important? Or is serving your neighbour, loving your neighbour like you'd like to be loved yourself?"
Fine words from a man who served himself up a multimillion-dollar fortune through insider scams.
[From Socialist Worker, weekly paper of the US International Socialist Organization. Visit <http://www.socialistworker.org>.]
From Green Left Weekly, August 14, 2002.
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