Arbusto Energy
Encyclopedia
Arbusto Energy was a petroleum
and energy
company
formed in Midland
, Texas
, in 1977, for former US President
George W. Bush
by a group of investors which included Dorothy Bush, Lewis Lehrman
, William Henry Draper III
, Bill Gammell
, and James R. Bath
. The company's chief financial officer was K. Michael Conaway, now a United States Congressman from Texas
.
It was later revealed that Bath made an investment of $50,000 while representing Salem bin Laden
of the Saudi Binladin Group. This fact became controversial after the September 11, 2001 attacks
due to Salem bin Laden being an older, half-brother of Osama bin Laden
, who is alleged to have planned and financed the attacks. Upon Salem bin Laden's death in a 1988 airplane crash, in Texas, his interest in Arbusto (along with other Binladin Group assets), passed to Khalid bin Mahfouz
.
In 1982, Arbusto became known as Bush Exploration, a year after George H. W. Bush
became Vice President. A friend of the Bush family, Philip Uzielli, invested $1 million in 1982 in exchange for a 10% stake in the company, at a time when the whole company was valued at less than $400,000. As it neared financial collapse again in September 1984, Bush Exploration merged with Spectrum 7
Energy Corp., a company owned by William DeWitt
and Mercer Reynolds
. Bush became Chairman and CEO of Spectrum 7.
In 1985 Spectrum 7 reported a net loss of $1.5 million and was bought in 1986 for $2.2 million by Harken Energy
, with Bush joining the Harken board of directors and finance audit committee.
In 1987 the Saudi investor Abdullah Taha Bakhsh bought most of Union Bank of Switzerland
's shares in Harken becoming its third largest investor owning 17% of the company. He was represented on the board by Talat M. Othman
. Another investor was Ghaith R. Pharaon
, a partner of Bakhsh's, who would later be involved in the Bank of Credit and Commerce International
scandal, and is currently the target of an international dragnet.
In January 1990 with the company in the same state as its previous incarnations, it was awarded a contract to drill for crude oil off the coast of Bahrain
, a move that shocked industry insiders as Harken had no previous experience outside of the US or of drilling offshore.
In June 1990 Bush sold more than half of his shares in Harken to a Los Angeles broker named Ralph D. Smith. One week after the sale Harken announced an overall loss of $23.2 million triggering an investigation by the U.S. Securities and Exchange Commission into the sale.
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
and energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
company
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...
formed in Midland
Midland, Texas
Midland is a city in and the county seat of Midland County, Texas, United States, on the Southern Plains of the state's western area. A small portion of the city extends into Martin County. As of 2010, the population of Midland was 111,147. It is the principal city of the Midland, Texas...
, Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
, in 1977, for former US President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
by a group of investors which included Dorothy Bush, Lewis Lehrman
Lewis Lehrman
For the Texas judge, see Debra Lehrmann.Lewis E. "Lew" Lehrman is an investment banker who actively supports the ongoing study of American history from a conservative perspective. He was presented the National Humanities Medal at the White House in 2005 for his scholarly contributions...
, William Henry Draper III
William Henry Draper III
William Henry Draper III is a prominent American venture capitalist.-Early life and career:Draper was born in White Plains, New York, the son of Katherine and banker and diplomat William Henry Draper, Jr. He attended Yale University with George H. W. Bush, graduated in 1950, the year after George...
, Bill Gammell
Bill Gammell
Sir William Benjamin Bowring Gammell, commonly known as Bill Gammell is a Scottish sportsman and industrialist.-Early life:Bill Gammell was born in Edinburgh...
, and James R. Bath
James R. Bath
James Reynolds Bath is a former director of Bank of Credit and Commerce International , and also former part owner of Arbusto Energy with George W. Bush, with whom Bath served as a member of the Texas Air National Guard during the Vietnam War...
. The company's chief financial officer was K. Michael Conaway, now a United States Congressman from Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
.
It was later revealed that Bath made an investment of $50,000 while representing Salem bin Laden
Salem bin Laden
Salem bin Mohammed bin Awad bin Laden was a Saudi Arabian investor and businessman.-Life:Considered the eldest son of Mohammed bin Laden, the founder of Saudi Binladin Group and a half-brother and cousin of the infamous terrorist...
of the Saudi Binladin Group. This fact became controversial after the September 11, 2001 attacks
September 11, 2001 attacks
The September 11 attacks The September 11 attacks The September 11 attacks (also referred to as September 11, September 11th or 9/119/11 is pronounced "nine eleven". The slash is not part of the pronunciation...
due to Salem bin Laden being an older, half-brother of Osama bin Laden
Osama bin Laden
Osama bin Mohammed bin Awad bin Laden was the founder of the militant Islamist organization Al-Qaeda, the jihadist organization responsible for the September 11 attacks on the United States and numerous other mass-casualty attacks against civilian and military targets...
, who is alleged to have planned and financed the attacks. Upon Salem bin Laden's death in a 1988 airplane crash, in Texas, his interest in Arbusto (along with other Binladin Group assets), passed to Khalid bin Mahfouz
Khalid bin Mahfouz
Khalid bin Mahfouz was a wealthy Saudi Arabian businessman residing in Ireland. He was accused of supporting al-Qaeda.As of 2002, he was believed to be confined in a hospital in Taif by Saudi authorities...
.
In 1982, Arbusto became known as Bush Exploration, a year after George H. W. Bush
George H. W. Bush
George Herbert Walker Bush is an American politician who served as the 41st President of the United States . He had previously served as the 43rd Vice President of the United States , a congressman, an ambassador, and Director of Central Intelligence.Bush was born in Milton, Massachusetts, to...
became Vice President. A friend of the Bush family, Philip Uzielli, invested $1 million in 1982 in exchange for a 10% stake in the company, at a time when the whole company was valued at less than $400,000. As it neared financial collapse again in September 1984, Bush Exploration merged with Spectrum 7
Spectrum 7
Spectrum 7 was an oil company started by William DeWitt and Mercer Reynolds.In 1984, Spectrum 7 merged with George W. Bush's Arbusto Energy. After the merger, Bush became the Chairman and CEO of Spectrum 7....
Energy Corp., a company owned by William DeWitt
William DeWitt, Jr.
William O. DeWitt, Jr. is an American businessman and currently the managing partner and chairman of the St. Louis Cardinals. He served on the President's Foreign Intelligence Advisory Board during the George W...
and Mercer Reynolds
Mercer Reynolds
Mercer "Merce" Reynolds III is an American businessman. He was the finance chair of U.S. President George W. Bush's presidential campaign.-Education and early career:...
. Bush became Chairman and CEO of Spectrum 7.
In 1985 Spectrum 7 reported a net loss of $1.5 million and was bought in 1986 for $2.2 million by Harken Energy
Harken Energy
HKN, Inc., formerly known as Harken Energy Corporation, is a small American oil and gas production company, with ownership interests in other production companies. The company is headquartered in Southlake, Texas, near Fort Worth. There is a second office near Dallas, in the town of Paris. The...
, with Bush joining the Harken board of directors and finance audit committee.
In 1987 the Saudi investor Abdullah Taha Bakhsh bought most of Union Bank of Switzerland
Union Bank of Switzerland
Union Bank of Switzerland was a large integrated financial services company located in Switzerland. The bank, which at the time was the second largest bank in Switzerland, merged with Swiss Bank Corporation in 1998, to become UBS to form what was then the largest bank in Europe and the second...
's shares in Harken becoming its third largest investor owning 17% of the company. He was represented on the board by Talat M. Othman
Talat M. Othman
Talat M. Othman is a Palestinian-American businessman, investor, and Republican fundraiser. On July 31, 2000, he opened the Republican National Convention session with a dua'a, or Muslim benediction, marking the first time a Muslim had addressed a major US political gathering. Governor Jim Edgar...
. Another investor was Ghaith R. Pharaon
Ghaith Pharaon
Ghaith Rashad Pharaon, is a prominent Saudi businessman and financier.-Background:...
, a partner of Bakhsh's, who would later be involved in the Bank of Credit and Commerce International
Bank of Credit and Commerce International
The Bank of Credit and Commerce International was a major international bank founded in 1972 by Agha Hasan Abedi, a Pakistani financier. The Bank was registered in Luxembourg with head offices in Karachi and London. Within a decade BCCI touched its peak...
scandal, and is currently the target of an international dragnet.
In January 1990 with the company in the same state as its previous incarnations, it was awarded a contract to drill for crude oil off the coast of Bahrain
Bahrain
' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...
, a move that shocked industry insiders as Harken had no previous experience outside of the US or of drilling offshore.
In June 1990 Bush sold more than half of his shares in Harken to a Los Angeles broker named Ralph D. Smith. One week after the sale Harken announced an overall loss of $23.2 million triggering an investigation by the U.S. Securities and Exchange Commission into the sale.
Further reading
- Beaty, Jonathan & Gwynne, S.C. (1993). The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. Random House Inc. ISBN 0-679-41384-7.
- Hatfield, J. H. (2002). Fortunate Son: George W. Bush and the Making of an American President (3rd ed.). Soft Skull Press. ISBN 1-887128-84-0.
External links
- Bush Name Helps Fuel Oil Dealings - a Washington Post article discussing Bush's oil ventures
- The George W. Bush Success Story - a Harper's MagazineHarper's MagazineHarper's Magazine is a monthly magazine of literature, politics, culture, finance, and the arts, with a generally left-wing perspective. It is the second-oldest continuously published monthly magazine in the U.S. . The current editor is Ellen Rosenbush, who replaced Roger Hodge in January 2010...
article on the investors in Bush's companies - Trust Agreement between James R. Bath and Salem Bin Laden
- DOE Petroleum Price Chart (Sheet# CRUDE(T))
