Bush Inc.

Understanding the political dynasty that's made crony capitalism a way of life. Part 4 of "Big Lies."

By Joe Conason

Aug 21, 2003 | For the Bush dynasty, crony capitalism is rite of passage, way of life, and family business. President Bush, his father, his three brothers, and sundry other relatives all have joined (and sometimes hastily abandoned) enterprises where their chief contribution was the perception of political influence at home and abroad. It would be possible -- although grim and morally exhausting -- to write an entire book about nothing but ethically dingy Bush business deals.

The Bush clan's investments and directorships have ranged across nearly every sector of the modern economy: oil exploration, banking, equities, venture capital, computer software, life insurance, major-league baseball, high-tech security, real estate, cable television, shoe wholesaling, fruit and vegetable imports, irrigation pumps, and airline catering, among others.

Family partners, investors, and benefactors have included former government appointees, present and former campaign contributors, foreign potentates and favor-seekers -- and numerous business executives who benefited from decisions by government overseen by members of the Bush family. Time after time, Bush family members or their business associates have sidled up to the very edge of legality, and perhaps over it -- without being held accountable.

Until the ascendancy of George W. Bush, the most notorious example of that syndrome was his younger brother Neil. He too ran a failed oil company, like those once operated by George W. -- and his oil company, too, was awarded exploration rights from a foreign government while their father was in the White House. Neil's best-known venture, however, was in the savings-and-loan business.

For the benefit of those who don't remember the name Silverado, that was the romantic moniker of the Denver savings-and-loan whose board Neil graced during the eighties. In the gigantic federal bailout overseen by Neil's father's administration, Silverado's failure eventually cost taxpayers about a billion dollars.

Neil Bush's checkered career overshadowed the business activities of brother Jeb, which took him from the Florida swamps to the capital of Nigeria in the years before he first ran for governor in 1994. Jeb earned much of his fortune in partnership with Armando Codina, a Miami real estate baron and politically active Cuban exile. They eventually got in trouble with a savings-and-loan, Broward Federal, which had loaned them $4.5 million via a third party to purchase an office building. Like so many other thrifts, Broward failed. When the loan went into default, federal regulators reduced the liability of Bush and Codina to $500,000 (and considerately allowed them to keep their building). Around this time, Jeb also got involved in a deal with Miguel Recarey, the strange character who ran International Medical Centers, a Miami-based health maintenance organization. IMC and Recarey were eventually indicted for the largest Medicare fraud in history, costing the U.S. government hundreds of millions of dollars.

Four years later, when his father was president, Jeb visited Nigeria as chief salesman and partner of Bush-El, a firm marketing water pumps to the notoriously corrupt African dictatorship. The water-pump sale went through, conveniently financed by a $74.3 million loan from the U.S. government. Jeb Bush told the Miami Herald that he did nothing to secure the U.S. government loan, and that he turned down a million-dollar commission on the pump-sale after he learned about the taxpayer financing. He did, however, earn $650,000 from Bush-El. In a 1998 letter to the Herald, Jeb responded with the smirking insouciance of the crony capitalist: "Is favorable name recognition helpful in business, as it is in almost every other aspect of life? Perhaps. Is it an 'unfair advantage'? No. It is just a fact of life."

Brother Marvin has rarely caused any negative publicity for his family, with one notable exception. Three months after he left the White House, the first President Bush flew to Kuwait on the emir's private plane to be decorated with the monarchy's highest honors for commanding the Gulf War. Accompanying the former President were his two youngest sons and his former Secretary of State James Baker III. Several months later, the New Yorker magazine revealed that Baker went to Kuwait as a consultant to Enron, which was seeking contracts to rebuild the sheikdom's damaged power plants. Neil Bush was also seeking a share of the fees to operate Enron's power plants. And Marvin Bush was working for a Washington firm that wanted to build an electronic security system for the Kuwaitis. In the eyes of many people there and at home, the grasping conduct of Baker and the Bush sons soiled American honor.

George W. Bush's business career wasn't quite as colorful as those of Neil or Jeb, but the eldest son has also been the most successful in acquiring both power and money. The national media occasionally examined his activities for evidence of influence peddling when his father was still in the White House, but there was no searching scrutiny during his presidential campaign in 2000. Only when the Enron scandal broke did reporters again consider his sojourn in the oil business, especially at Harken Energy, and the baseball deal that made his fortune.

Next Page: Bush's first venture: No profits but a nice tax shelter

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