INSIGHT 
Bush sons' ventures expose him to scrutiny 

Michael K. Frisby 

05/17/1992 
Austin American-Statesman 
FINAL 
Page G1 

 

WASHINGTON - As President Bush prepares to seek re-election in a rugged political climate, questions are being raised about whether some business moves by his three sons show energy and pluck or instead add up to trading on the family name for business advantage and profit. . . .

 

A second son, Jeb Bush, was the focus of critical news stories in late 1988 for his business relationship with Miguel Recarey Jr., a Cuban American businessman indicted on a charge of fraud and suspected of bilking the federal government of up to $100 million in Medicare funds. 

Jeb Bush operated Bush Realty Inc., a small real estate agency in Miami. His firm received a $75,000 payment in 1986 from Recarey after Jeb Bush was retained to find a new headquarters for Recarey's International Medical Centers, a health maintenance organization, according to Newsday and other reports. 

But published reports said IMC records showed that Recarey apparently had already selected the building, and note that the payment to Jeb Bush came after the then-vice president's son called at least one official at the U.S. Department of Health and Human Services to assist Recarey in obtaining a waiver from the limit on the number of Medicare patients he could treat. 

 

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STATE FINES BUSH'S BROTHER IN
STOCK CASE

Author: By Frank Phillips, GLOBE STAFF
Date: 07/26/1991 Page: 1
Section: METRO

 

Massachusetts securities regulators have fined the stockbrokerage firm owned by President Bush's brother Jonathan $30,000 and barred it from trading with the general public for one year because the company and Bush violated state registration laws.

As part of a consent order worked out with Secretary of State Michael J. Connolly's securities division, the New York firm of J. Bush & Co., whose only principal is Jonathan J. Bush, also agreed that it would offer to reimburse its clients in Massachusetts for stocks it had sold them since January 1988. . . . 

 

Connolly's securities chief, Neal Sullivan, said yesterday that Bush's problems began in February when Bush informed his agency that he had never registered as a broker-dealer in Massachusetts.  But Sullivan said Bush compounded his legal problem by taking a ''cavalier"
attitude toward the violation of the Uniform Securities Act when he continued to carry out transactions even as state regulators were negotiating a consent decree with him.

"That created great concern for us. We were dismayed," Sullivan said.  ''Anyone who has been notified that he is violating state law and continues to do so certainly exemplifies a cavalier attitude toward the registration laws." . . .

 

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Bush Kin: Trading on the Name? Evidence
suggests the President's relatives may be exploiting their
relationship. But they hotly deny impropriety, saying such
accusations are spinoffs of the Bill Clinton scandals.
 
SARA FRITZ 

05/10/1992 
Los Angeles Times 
Page 1 

 

. . . Like his father and his older brother, Neil Bush established his own oil exploration company, JNB Exploration Inc., in Denver in 1983. His original investment was $100; his two partners, Bill Walters and Ken Good, put up $160,000. Before the company fell apart in 1989, Neil Bush received at least $550,000 in salary. 

In addition, Good gave Neil Bush $100,000 to play the commodities market in 1984. When all the money was lost, Good forgave the loan. Neil Bush said he saw nothing unusual about the deal. 

But federal regulators refused to accept Neil Bush 's argument that he did nothing wrong in his role as a paid director of Silverado between 1985 and 1988. The Office of Thrift Supervision found that the President's son ignored an obvious conflict of interest when, as director, he approved $132 million in loans to Good and Walters. 

Last year, OTS asked the Treasury Department to investigate the testimony of one high-ranking former thrift regulator, who claimed that he was asked by Administration officials to delay the seizure of Silverado until after the 1988 presidential election. Treasury officials said they handed the information over to the FBI. 

 

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Bush Brother Was a Consultant to Company Under Scrutiny in
Japan Finance: Prescott Bush gave investment advice to a firm
lately suspected of gangland ties and of exchange violations,
police investigators say. 
LESLIE HELM 

06/11/1991 
Los Angeles Times 
Page 10 

 

Police investigators following the serpentine money trails of a company strongly suspected of being tied to a major Japanese yakuza (gangster) group have stumbled across a surprising American connection. 

The police discovered that Prescott Bush , the older brother of President Bush , was working as a consultant to West Tsusho , a Tokyo-based investment company police believe is backed by one of Japan's most powerful underworld figures and which they are investigating for possible violation of foreign exchange laws.

The foreign exchange law violations are related to West Tsusho 's investments in two American companies, Quantum Access, a Houston-based software development company, and Asset Management International Finance and Settlement, a company in which Prescott Bush was a senior adviser until resigning the position last year.  According to documents filed with the U.S. Securities and Exchange Commission, Bush recommended the two companies to West Tsusho as investments and was paid a $250,000 commission by West Tsusho for his services in connection with the Asset Management acquisition. Bush also guaranteed some of West Tsusho 's investments, according to the SEC documents. . . .

 

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Seidman Puts S&L Bailout at $500 Billion 
OSWALD JOHNSTON 

07/31/1990 
Los Angeles Times 
Page 1 

L. William Seidman, chairman of the Federal Deposit Insurance Corporation, said Monday that the S&L bailout probably will end up costing "much in excess of" $500 billion -partly because the recent slump in the real estate market will push more thrifts over the financial edge. . . .

 

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IS GEORGE W. REALLY READY?
A leader with a gentleman's C may no longer cut it

in a world where speed and smarts rule

Newsweek, 11/22/99, Vol. 134 Issue 21, p47
Author(s): Alter, Jonathan

 

. . . Bush wouldn't have to worry so much about performance if he had a compelling life story to give him gravitas.  Unfortunately for him, he's had the least eventful personal history of any major political figure in modern memory.  Until his 1994 election as governor of Texas, Dubya lived deep in his father's shadow. President Bush was an academic and athletic star at Andover and Yale, a war hero and successful oilman. George W. was an academic slacker at the same schools, a mediocre athlete, a member of the Texas Air National Guard during the Vietnam War and an unsuccessful oilman. Before politics, he was probably best known for the nicknames he attached to peopleóa hipper and more sarcastic version of the "Saturday Night Live" character who gives everyone he meets a name while "makin' copies." . . .

 

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George Bush the Son Finds That Oil and Blood Do Mix 
By KEVIN SACK 

New York Times

May 8, 1999, p. 1

 

. . . After receiving an M.B.A. from Harvard Business School, for instance, he started a small oil company in Midland with the $17,000 remaining in an educational trust fund established by his parents. Some of the most powerful businessmen in America then took a chance on the untested oilman by investing hundreds of thousands of dollars in his first drilling funds. Many were recruited by his uncle, Jonathan Bush, a New York City stockbroker and the brother of the former President. When the company stagnated because of declining market conditions and a serious miscalculation by George W. Bush, it survived by merging twice with larger firms. 

It was Mr. Bush's role in the 1989 purchase of the Rangers and the attention he gained by managing the franchise that launched his career as Governor. His partners praise him for working aggressively to secure the purchase and for making improvements, including the construction of a graceful new stadium, that tripled the value of the team by the time they sold it last June. 

But even with the Rangers, Mr. Bush's fortunes were aided by his status as a First Son and by the help of others. The late Eddie Chiles, who sold the team to Mr. Bush's group, was a longtime friend and political supporter of President Bush who picked George W. Bush from among other suitors at least partly because of his deep affection for the President, said Richard E. Greene, a former Mayor of Arlington.  

And while Mr. Bush rounded up half the money used to buy the team, the deal came together only when Peter V. Ueberroth, then the baseball commissioner, personally persuaded Richard E. Rainwater, a prominent Fort Worth investor, to take a major interest. Mr. Bush had previously failed to recruit Mr. Rainwater. One source close to those negotiations said that Mr. Ueberroth had suggested that Mr. Rainwater team up with Mr. Bush, at least partly ''out of respect for his father,'' the President. 

 

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Campaign 2000 
How George Got His Groove The late-blooming Bush was a
failure at 40. But he changed his life and found a road that led him
to the statehouse and beyond. Here's how 

Eric Pooley with S.C. Gwynne 

06/21/1999 
Time Magazine  
Page 34+ 

 

. . . The Dallas years were marred, however, by a p.r. nightmare that arose from his sale of his Harken stock. In June 1990, Bush sold all 212,140 of his shares for $848,560, more than 2 1/2 times their original value. His mistake was to sell the stock less than two months before Harken reported a stunning $23 million second-quarter loss. (Bush says he did not know Harken was going to report the loss and thought he was selling into good news--the forthcoming announcement of a new drilling contract.) But it was widely assumed that Bush, a director of the company, had insider knowledge and dumped his stock in advance of the bad news. He compounded the problem by failing to file an SEC disclosure form. . . .

 

 

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The Color of Money 
The presidentís eldest son and his ties to a troubled Texas firm 
by Stephen J. Hedges 

US News and World Report 
March 16, 1992

 

. . . 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 Denverís now infamous Silverado Savings & Loan.  When the thrift failed in 1988, with $1 billion in losses, Neil Bush said he didnít understand Silveradoís 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 $828,560 worth of Harken stock just one week before the company stock posted unusually poor quarterly earnings and Harken stock plunged sharply. Shares lost more than 60% of their value over 6 months. When Bush sold his shares, he was a member of a company committee studying the effect of Harkenís 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 companyís deteriorating financial condition. The SEC received word of Bushís trade eight monthís late. Bush has said he filed the notice but that is was lost.  Despite Harkenís 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 ans stock options worth $131,250; other Harken executives also drew six-figure salaries and five figure bonuses. The next year, Harkenís 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. "Itís 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 companyís practices are proper. 

 

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The Real S&L Scandal

How Bush's Pals Broke the Banks

by Jonathan Kwitny

Village Voice, October 20, 1992, pp. 24 ff.

 

There's a lot that Americans haven't been told about George Bush and the savings-and-loan catastrophe--mainly that Bush's friends, his son Neil, and their social circle caused a major portion of the damage, and that the president, by his continued loyalty to these people, bears some responsibility himself.

 

In Houston and Denver, the president, his son, and White House chief of staff James Baker were surrounded socially and financially by the biggest feeders at the national taxpayers' trough.  A repeated pattern appears in which investigations were called off, proposed fraud charges weren't brought, and President Bush continued to pal around with investigative targets who got off scot-free. . . .

 

Hundreds of millions of dollars in questionable loans ended up enriching the friends of George Bush, the CIA, and favorite Republican causes, among them the contras, and Jonas Savimbi's war in Angola.

 

Bush's current campaign manager, Fred Malek, was a partner of a big S&L defaulter in a bank they founded with the help of Mafia-tainted money.

 

Robert Clarke, a friend of George Bush and Jim Baker, and the man they named as U.S. comptroller of the currency, helped organize a bank that laundered S&L money into an overseas account; he also was a shareholder in a bank the government found to be under the "influence or control" of a Mob figure.

 

Of the five biggest S&L defaulters ($200 million each), four have connections to George Bush's longtime friend Walter Mischer (also a friend of Chief of Staff Jim Baker), or to Neil Bush's friend and mentor, Bill Walters.

 

Bush's friend and former Houston landlord, Joe Russo, defaulted on loans totaling tens of millions of dollars from five failed S&Ls, and his own bank went bust at taxpayers' expense.  Texas examiners filed two criminal referrals with the Justice Department, which took no action. . . .

 

Bush visited with the Denver man who set up Neil Bush and business, and who would later take huge loans from Silverado that he never repaid. . . . 

 

(Background on author Jonathan Kwitny, from his November 28, 1998 obituary:

Jonathan Kwitny, an award-winning journalist whose career spanned more than 30 years on three continents, died Thursday at the age of 57 from cancer.  Best known for his 17 years of investigative reporting at the Wall Street Journal and for his critically acclaimed national television news program, "The Kwitny Report," which aired on PBS, he also authored eight
books. The latest one, "Man of the Century," was a 750-page biography of Pope
John Paul II published last fall.)

 

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