George Bush, Jr.: Insider Information, Oil, and Baseball The present President Bush has also reaped significant benefits from some highly questionable business practices: Bush sold $828,560 worth of Harken stock [on June 20, 1990] 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 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 is was lost (Hedges, 1992: 57-59). At the time of the stock sale President Bush was fully aware that Harken Energy was in a serious cash flow crisis and was about to lose millions of dollars (Yost, 2000). Bush was investigated for insider trading, but on October 18, 1993, Bruce A. Hiler, the SEC’s associate director for enforcement, wrote a letter to Bush’s lawyer stating that “the investigation has been terminated as to the conduct of Mr. Bush, and that, at this time, no enforcement action is contemplated with respect to him” (Lardner and Romano, 1999: A1). Hiler’s official letter went on to say that it “must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation” (Lardner and Romano, 1999:) It is instructive to note that head of the SEC at the time of investigation was a supporter of then-President Bush, as was the SEC’s general counsel (who later acted as George W. Bush’s private attorney) (Yost 2000). In addition, Harken, despite its poor performance and large losses, paid unusually high salaries and benefits to President Bush (Hedges, 1992: 57-59). Bush was allowed to purchase stock options at a 40% discount, paid for by company loans that were frequently forgiven (Hedges, 1992: 57-59). Harken Energy was awarded a contract to drill offshore oil wells for the government of Bahrain in 1990. It was a curious contract because Harken had never drilled an oil well in water. While Bahrain government officials denied that the fact that the President’s son was on Harken’s board had any impact on the contract, the Wall Street Journal quoted an official of Harken Energy as saying there was “never any question” about George W. Bush’s involvement (Morrison, 1999: A26). Harken Energy also had links to the infamous Bank of Credit and Commerce International (BCCI). BCCI was the seventh-largest privately owned bank in the world. It had over four hundred branch offices operating in seventy-three countries. Among its many criminal activities was the laundering of at least $14 billion for the Colombian cocaine cartels; the facilitating of financial transactions for Panamanian president Manuel Noriega and international arms merchant Adnan Khashoggi; the funneling of cash to the contras for illegal arms deals and contra-backed drug trafficking; and the assisting of Phillipine President Ferdinand Marcos in transferring his personal fortune, accrued through corruption and graft, out of the Philippines. Despite the enormity of BCCIs crimes and its vital role in drug trafficking, the U.S. Justice Department was more than reluctant to investigate. In fact, the Justice Department had complete information on BCCIs drug and arms operations and its illegal holdings in the United States for over three years before it even initiated an inquiry. Perhaps the reluctance of American law enforcement to interfere with such a major organized crime entity can be explained by the proliferation of what some have perceived as BCCIs friends in the U.S. government holding high office (Castro, 1988; Beaty and Gwynne, 1991). The Wall Street Journal commented extensively on Harken’s links to BCCI saying: “The mosaic of BCCI connections surrounding Harken Energy may prove nothing more than how ubiquitous the rogue bank’s ties were ... But the number of BCCI-connected people who had dealings with Harken -- all since George W. Bush came on board -- likewise raises the question of whether they mask an effort to cozy up to a presidential son” (Morrison, 1999). President Bush’s relationship with the Texas Rangers shows a similar pattern of curious business dealings. In investigating his purchase of the Texas Rangers, the Wall Street Journal commented that following “a pattern repeated through his business career, Mr. Bush’s play did not quite make the grade” (Morrison, 1999: A26). In 1989, an investment group Bush led was given preferential treatment to buy the Texas Rangers baseball team by its seller, a friend of George Bush, Sr. (Morrison, 1999: A26; Sack, 1999: 1). When they underbid for the team baseball commissioner Peter Ueberroth brought another financier into the deal, “out of respect for his father,” President Bush (Morrison, 1999: A26; Sack, 1999: 1). Bush later successfully promoted a controversial arrangement in which the City of Arlington provided a $135 million subsidy for a new ballpark, funded by a sales tax increase, with an option for the team to repurchase the park at a vastly reduced price (Milbank, 2000, A1; Romano and Lardner, 1999: A1). The present President Bush realized $15 million on a $600,000 investment when he sold his share of the team in 1998 (Morrison, 1999,
Posted on: Fri, 31 Jan 2014 23:25:33 +0000
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