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Last Updated: Nov 17, 2008 - 8:24:45 AM |
So, with a smirk on his face, President Bush explained the predicament
that the United States and the world face after eight years of his
incompetence and mismanagement – teetering on the edge of a catastrophe
“greater than the Great Depression.”
Yet what is remarkable about American news coverage of this
extraordinary moment – and Bush’s strangely light-hearted comment at
the end of the Nov. 15 global economic summit – is how little blame is
being laid specifically at Bush’s door.
In a pattern typical of the preceding eight years, major U.S.
journalists are focusing on almost everything else – from Sarah Palin’s
political future to what President-elect Barack Obama should do after
he’s inaugurated in two months – not the lessons that should be learned
from Bush’s disastrous presidency.
An example was Tom Brokaw’s “Meet the Press” on Sunday, which addressed
the financial and energy crises with nary a negative word spoken about
Bush.
It was as if everyone else was responsible for the nation’s troubles,
from unions and auto executives to Congress and Obama (for not
providing immediate answers). Just not the person who is still in
charge and who was chiefly responsible for taking the United States
from an era of peace, prosperity and budget surpluses to the precipice
of endless war, economic devastation and national bankruptcy.
Part of that may be that Brokaw and some of his fellow pundits, such as
New York Times columnist Thomas Friedman, were major enablers of Bush’s
most harmful decisions. Brokaw and Friedman were among the leading
journalists in 2002-03 who didn’t ask tough questions about the Iraq
invasion and indeed cheered the war on.
Brokaw, Friedman and company also didn’t recognize the obvious danger
to the United States that Bush represented in 2000 when he and his
Republican allies ran a down-and-dirty campaign against Al Gore and
then blocked the counting of Florida’s votes so Bush could slip into
the White House.
The big-name pundits almost all bought into the myth that Bush’s
strange ascension to the White House -- as the first popular-vote loser
in more than a century -- was a good idea, pushing out Bill Clinton’s
crowd and putting “the adults back in charge.”
Beyond the affront that Bush’s “election” represented to American
democracy, there also was the troubling fact that Bush had a long
history of messing up whatever he touched and then “failing upward,”
pulled out of trouble by his father’s rich friends.
However, when this well-born wastrel was elevated to the highest office
on earth, there was really no way that daddy or daddy’s friends could
either control him or save him from himself. It may be that not even
all the central banks in all the world can undo the damage that George
W. Bush has done.
That big-name American journalists failed to recognize this danger back
in Campaign 2000 represented another example of their professional
limitations and moral deficiencies. At the time, it was easier to go
with the flow.
But the inadequacies of George W. Bush were well-known during Campaign
2000, although readers often had to search out the facts on the
Internet or in a few small-circulation liberal magazines. Bush’s
ominous history of business failures -- his reverse Midas touch -- drew
far less attention than the bogus stories about “Lyin’ Al” Gore and his
“exaggerations.”
Warning the Electorate
At Consortiumnews.com, we were among those small outlets that tried to
warn the American electorate about these risks. We also recounted this
reality in our book, Neck Deep, an excerpt of which follows:
At times grudgingly, George W. Bush traced virtually every early step
his father took. Like his father, George W. went to both Phillips
Andover Academy and Yale and joined the secretive Yale fraternity Skull
and Bones.
Like his father – when starting out on his own career – George W.
exploited both wealthy family connections and the nexus between oil and
politics. Like his father, too, George W. joined the armed forces
during war time.
But George W.’s early record had the look of a child shuffling around
in his father’s oversized shoes. In school, George W. was a C student,
while his father graduated Phi Beta Kappa. In sports, George the father
was captain of the Yale baseball team while George the son was captain
of the cheerleading squad.
George Sr. served under fire as a naval aviator in the Pacific theater
of World War II, while George Jr. slipped past other better qualified
candidates into the Texas Air National Guard where he would avoid
service in Vietnam and leave behind long-term questions about his duty
records and premature departure.
Bush’s checkered history with the National Guard coincided with a
period of his life when he drank heavily and apparently abused cocaine,
although he never exactly admitted to that last fact. During his
presidential run in 2000, Bush acknowledged the drinking problem – in
the context of saying he had licked the bottle with the help of his
Christian faith – but he slid away from the cocaine question.
When pressed, he didn’t confirm or deny that he abused cocaine but
asserted that he could have met his father’s White House personnel
requirement that set time limits on how far back an applicant would
have to admit illegal drug use.
Despite this implicit confirmation of drug abuse, most of the major
news outlets, such as The New York Times, took Bush’s side and reported
that there was no evidence Bush had ever used illegal drugs.
But what he may have lacked in early accomplishments, he made up for in
ambition and charm, two traits that served him well in both business
and politics. In 1978, his ambition led George W. Bush to embrace his
father’s two career paths, oil and politics.
With almost no political experience, George W. launched an uphill
campaign for the U.S. Congress in 1978. He lost badly to the Democratic
incumbent. That same year, he incorporated his own oil-drilling
venture, Arbusto (Spanish for bush) Energy.
George W. Bush’s oil business venture seemed promising at first. Just
as his father had done nearly 30 years prior, George W. sought
financial assistance from an uncle, this time, Jonathan Bush, a Wall
Street financier. Jonathan Bush pulled together two dozen investors to
raise $3 million to help launch Arbusto.
James Bath, one of George W.’s friends from the National Guard, also
invested $50,000 for a five percent stake. At the time, Bath was the
sole U.S. business representative for Salem bin Laden, scion of the
wealthy Saudi bin Laden family and half-brother of Osama bin Laden, who
in the 1980s would be heading to Afghanistan to help Islamic
fundamentalists resist the Soviet invasion.
Though responsible for investments for Salem bin Laden, Bath insisted
that the $50,000 for Arbusto came from his own personal funds. (Salem
bin Laden could not be questioned about the investment. He died in a
1988 plane crash in Texas.)
A History of Bailouts
In his subsequent business career, George W. was the beneficiary of
three major bailouts.
The first occurred in 1982 when, despite the millions already pumped
into Arbusto, the company faced a cash crunch. George W.’s balance
sheet showed $48,000 in the bank and $400,000 owed to banks and other
creditors.
George W. realized that he had to raise additional cash and decided to
take Arbusto public. With the company so deeply in debt, however,
George W. would need a new infusion of money to clear the books.
In stepped Philip Uzielli, a New York investor and friend of Bush
Family lawyer James Baker III from their days at Princeton University.
Uzielli worked out a deal with George W. to purchase a 10 percent stake
in Arbusto for $1 million, though the entire company was valued at less
than $400,000.
In a 1991 interview, Uzielli recalled the investment as a major money
loser. “Things were terrible,” he said.
As bad as Uzielli’s investment turned out to be, George W. now had
enough money to seek public investors. But first he decided to make one
other change. In April 1982, perhaps realizing the negative connotation
of “bust” in Arbusto, George W. changed the name of his company to Bush
Exploration. The name change also made better use of Bush’s primary
asset, his family name.
In June 1982, George W. issued a prospectus, seeking $6 million in the
initial public offering. But he managed to raise only $1.14 million.
The shortfall was due in large part to the waning interest in the oil
industry among investors. The price for a barrel of oil was falling and
special tax breaks for losses incurred in oil investments had been
slashed.
Within two years, it was clear that Bush Exploration was in trouble
again. Michael Conaway, George W.’s chief financial officer, told the
Washington Post, “We didn’t find much oil and gas. We weren’t raising
any money.” Something had to be done.
In walked bailout number two in the persons of Cincinnati investors,
William DeWitt Jr. and Mercer Reynolds III. Heading up an oil
exploration company called Spectrum 7, DeWitt and Mercer contacted
George W. about a merger with Bush Exploration. For Bush and his
struggling company, the decision wasn’t hard to make.
In February 1984, George W. agreed to a merger with Spectrum 7 in which
Dewitt and Reynolds would each control 20.1 percent and George W. would
own 16.3 percent. George W. was named chairman and chief executive
officer of Spectrum 7, which brought him an annual salary of $75,000.
Even though the merged companies still failed to make any money, the
pieces were finally starting to fall into place for George W. Bush.
Spectrum 7 president Paul Rea remembers Bush’s name as a definite
“drawing card” for investors. With oil prices collapsing in the
mid-1980s, however, it became clear that George W.’s name alone would
not save the company.
In a six-month period in 1986, Spectrum 7 lost $400,000 and owed more
than $3 million with no hope of paying those debts off. Once more, the
situation was growing desperate.
In September 1986, George W. was tossed his third lifeline, this time
by Harken Energy Corporation, a medium-sized, diversified company that
was purchased in 1983 by a New York lawyer, Alan Quasha.
Quasha seemed interested in acquiring not just an oil company, but a
relationship with the son of the then-Vice President, George H.W. Bush.
Harken agreed to acquire Spectrum 7 in a deal that handed over one
share of publicly traded stock for five shares of Spectrum, which at
the time were practically worthless.
After the acquisition in 1986, George W. got a seat on the Harken board
of directors, landed a $120,000-a-year job as a consultant and received
$600,000 worth of Harken stock options. By any account, this wasn’t a
bad deal for an oilman who had never made any money in the oil business
and, indeed, had lost lots of money for his investors.
A Political Bonus
But Harken found that its investment at least in George W. appreciated.
Though the company had acquired the son of the Vice President, it ended
up in 1989 with the son of the President. Harken moved to exploit that
upgrade by expanding its operations into the Middle East, where
business and family connections are of legendary importance.
In 1989, the government of Bahrain was in the middle of negotiations
with Amoco for an agreement to drill for offshore oil. Negotiations
were progressing until the Bahrainis suddenly changed direction.
Michael Ameen, who was serving as a State Department consultant
assigned to brief Charles Hostler, the newly confirmed U.S. ambassador
to Bahrain, put the Bahraini government in touch with Harken Energy.
In January 1990, in a decision that shocked oil-industry analysts,
Bahrain granted exclusive oil drilling rights to Harken, a company that
had never before drilled outside Texas, Louisiana and Oklahoma – and
that had never before drilled offshore.
Nearly two years later, when The Wall Street Journal examined the
curious Bahrain transaction, Bush declined to be interviewed but did
agree to answer some questions in writing. Some of his responses were
snippy, such as his answer to a question about whether his involvement
in Dallas-based Harken lent it extra credibility in the Arab world.
“Ask the Bahranis,” Bush shot back.
Nevertheless, the January 1990 deal added to Harken’s stock value, with
its shares rising more than 22 percent from $4.50 to $5.50. The run-up
in Harken’s stock marked one of George W. Bush’s first successes in the
oil business.
That limited success opened the door to Bush’s next step up the ladder,
as a popular young owner of the Texas Rangers baseball team.
The beginning of that deal traced back to an idea of George W.’s
Spectrum 7 partner, Bill DeWitt, whose father had owned the St. Louis
Browns baseball team and later the Cincinnati Reds. DeWitt wanted to
pull together a group of investors to buy the Texas Rangers.
To do so, DeWitt understood that he needed a native Texan in his group
of investors. George W. fit the bill. The group of investors was
missing only one thing – money. To address that need, George W. tapped
a Yale fraternity brother, Roland Betts, who brought with him a partner
from a film-investment firm, Tom Bernstein, both from New York.
The New York connection became a problem when Major League Baseball
Commissioner Peter Ueberroth insisted on more financial backing from
Texas-based investors. But Ueberroth was eager to put together a deal
for the son of the President, so the commissioner brought in a second
investment group headed by Richard Rainwater, who had built a $4
billion empire while working with the Bass family of Fort Worth.
Rainwater agreed to join Betts, Bernstein and George W. in the $86
million deal, but Rainwater imposed a strict limit on George W.’s
active participation in the team.
Bush got to be called a “managing partner.” But – under Rainwater’s
conditions – George W. would only be the handsome front man for the
team; he would have no actual say in how it was run.
Selling Stock
To finance his part of the purchase price, Bush decided to sell
two-thirds of his holdings in Harken. He pressed ahead with this
decision though he knew that Harken was struggling financially and was
planning to sell shares in two subsidiaries to avert bankruptcy.
Outside lawyers from the Haynes and Boone law firm advised Harken
officers and directors on June 15, 1990, that if they possessed any
negative information about the company’s outlook, a stock sale might be
viewed as illegal trading. Bush, who had attended a meeting four days
earlier on the plan to sell off the two subsidiaries, went ahead anyway.
On June 22, 1990, Bush sold 212,140 shares to a still-unidentified
buyer who spared Bush the trouble of selling on the open market, which
likely would have tanked Harken’s lightly traded stock and meant less
money for Bush.
The sale also preceded Harken’s disclosure in August 1990 of more than
$23 million in losses for the second quarter, which caused the stock to
fall 20 percent before recovering for a time. To make matters worse,
Bush missed deadlines by up to eight months for disclosing four stock
sales to the Securities and Exchange Commission.
After the missed deadlines were noted in published reports in 1991, the
SEC opened an insider-trading investigation. At the time, Bush’s father
was President and the person responsible for appointing the SEC
chairman.
George W. Bush denied any wrongdoing in the Harken stock sales. He
insisted that he had sold into the “good news” of Harken landing
offshore drilling rights in Bahrain. Bush’s lawyers also argued that he
had cleared the stock sale with the Haynes and Boone lawyers, a claim
that proved to be important in the SEC’s decision to close the
investigation on August 21, 1991, without ever interviewing Bush.
But what the SEC didn’t know at the time was that the Haynes and Boone
lawyers had sent Bush and other Harken officials that letter warning
against selling shares if they knew about the company’s financial
troubles. One day after the investigation was closed, Bush’s lawyer
Robert W. Jordan delivered a copy of the warning letter to the SEC.
Asked years later about the letter, SEC investigators said they had no
memory of reading it.
“The SEC investigation apparently never examined a key issue raised in
the memo: whether Bush’s insider knowledge of a plan to rescue the
company from financial collapse by spinning off two troubled units was
a factor in his decision to sell,” the Boston Globe reported in October
2002, almost two years after Bush gained the presidency.
Bush also was less than forthcoming about why he missed the deadlines
for reporting the June 1990 stock sale and three others. For years, he
claimed publicly that he had sent the reports in on time and the SEC
had lost them, a sort of the bureaucrats-ate-my-stock-sale-reports
argument.
The issue resurfaced in 2002 after Enron and other major companies
collapsed in accounting scandals. Bush was positioning himself as a
friend of embattled shareholders and demanding that corporate officers
reveal their stock sales almost immediately.
Asked why he had not lived up to his own admonition, Bush shifted the
blame to Harken’s lawyers for the late filings. He then changed his
story again to say that he simply didn’t know what had happened. He
never apologized for claiming falsely for years that it had been the
SEC’s fault.
Nevertheless, on June 22, 1990, Bush made $848,560 on his Harken stock
sale. He used $606,000 of his profits to buy a 1.8 percent stake in the
Texas Rangers baseball team. Then, after helping engineer public
financing for a new baseball stadium in Arlington, Texas, he sold his
interest in the Rangers for $14.9 million, more than 20 times his
original investment.
The success of his Texas Rangers investment was even more dramatic when
compared with what happened to the Harken stock that Bush sold for $4 a
share to that unidentified buyer. A dozen years later, each of those
shares would have been worth two cents.
George W.’s time with Harken and his part ownership of the Rangers made
him a millionaire and a well-known personality in Texas. That measure
of success had derived almost entirely from the family’s triangle of
oil-political-financial connections, from Texas to Washington to Wall
Street.
Though most of Bush’s sordid business history was known during Campaign
2000, it attracted little attention in the mainstream press, especially
compared to the news media’s obsession with dissecting every comment by
Al Gore for signs of exaggeration.
Even today, as George W. Bush’s crony capitalism, aversion to
regulation, and his trillion-dollar war in Iraq have driven the U.S. –
and the world’s – economy off the road and into financial quicksand,
big-time journalists continue with their Bush deference. They won’t put
too much blame on the person who arguably should top the list of those
responsible.
While the Brokaws and Friedmans might justify their behavior as a
resistance to “piling on” a lame-duck President, they also are
contributing to a distorted history – one that fails to identify Bush
and his political/media enablers as largely to blame for this global
catastrophe.
By averting their eyes from Bush and focusing so much on Obama now, the
mainstream U.S. news media also clears space for right-wing media
voices like Rush Limbaugh to begin writing another false narrative,
blaming the financial collapse on the incoming President not on the one
who has held the office the past eight years.
That narrative, in turn, could restrict what an Obama administration
can do once in office. That, in turn, could open the way for a possible
Republican comeback in 2010, much as the GOP rebounded from Bill
Clinton’s victory in 1992 to win both houses of Congress in 1994.
Though the U.S. press corps is loath to examine history, especially
when it reflects badly on the Bush Family, the present – and the future
– might hinge on the American people finally understanding how George
W. Bush and his reverse-Midas touch managed to turn a relatively golden
U.S. economy to dross in just eight years.
It was all predictable.
Source:Ocnus.net 2008
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