Professional life of George W. Bush
Encyclopedia
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....
, the 43rd President of the United States
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....
. Prior to his election as President in 2000
United States presidential election, 2000
The United States presidential election of 2000 was a contest between Republican candidate George W. Bush, then-governor of Texas and son of former president George H. W. Bush , and Democratic candidate Al Gore, then-Vice President....
, Bush held numerous other positions, including oil executive, a Major League Baseball
Major League Baseball
Major League Baseball is the highest level of professional baseball in the United States and Canada, consisting of teams that play in the National League and the American League...
franchise owner, and Governor of Texas
Governor of Texas
The governor of Texas is the head of the executive branch of Texas's government and the commander-in-chief of the state's military forces. The governor has the power to either approve or veto bills passed by the Texas Legislature, and to convene the legislature...
.
Business
Bush began his industry career in 1979, when he established Arbusto EnergyArbusto Energy
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...
, an oil and gas exploration company he financed with his education trust fund surplus and money from other investors, including 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 last of whom represented 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...
, a half-brother and cousin 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...
. In 1984, Bush sold the company, hurt in the wake of the 1979 energy crisis
1979 energy crisis
The 1979 oil crisis in the United States occurred in the wake of the Iranian Revolution. Amid massive protests, the Shah of Iran, Mohammad Reza Pahlavi, fled his country in early 1979 and the Ayatollah Khomeini soon became the new leader of Iran. Protests severely disrupted the Iranian oil...
, to 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....
, another Texas gas exploration firm. Under the terms of the sale, Bush became CEO
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
. Spectrum 7 lost revenue and was merged into 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...
Corporation in 1986, with Bush becoming a director of Harken.
Texas Rangers and allegations of insider trading
After working on his father's successful 1988 presidential campaign, Bush learned from fellow Yale alumnus William DeWitt, Jr.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...
, that family friend Eddie Chiles
Eddie Chiles
Harrell Edmonds "Eddie" Chiles was the founder of the Western Company of North America and an owner of the Texas Rangers. He was also the paternal uncle of actress Lois Chiles....
wanted to sell the Texas Rangers
Texas Rangers (baseball)
The Texas Rangers are a professional baseball team in the Dallas-Fort Worth Metroplex, based in Arlington, Texas. The Rangers are a member of the Western Division of Major League Baseball's American League, and are the reigning A.L. Western Division and A.L. Champions. Since , the Rangers have...
baseball
Major League Baseball
Major League Baseball is the highest level of professional baseball in the United States and Canada, consisting of teams that play in the National League and the American League...
franchise along with the new sports dome; built on land acquired under eminent domain
Eminent domain
Eminent domain , compulsory purchase , resumption/compulsory acquisition , or expropriation is an action of the state to seize a citizen's private property, expropriate property, or seize a citizen's rights in property with due monetary compensation, but without the owner's consent...
law and built under funding financed through taxpayers' funds backed by a bond issued for its debt. The new home of the Texas Rangers is still being contested in court by the original landowner who has not received payment for the land. The sports dome has not yet been paid off with the tax increase enacted to pay off the bond. The selling of the baseball team included the new stadium, which accounts for the huge profits the investors received. The benefits to the taxpayers or the landowner from their contributions are unknown. In April 1989, Bush assembled a group of investors from his father's close friends, including fellow fraternity brother Roland W. Betts
Roland W. Betts
Roland Whitney Betts is an investor, film producer, developer, and owner of Chelsea Piers in New York City. A classmate and Delta Kappa Epsilon fraternity brother of George W. Bush, Betts was the lead owner in Bush's Texas Rangers partnership. He is a graduate of St...
; the group bought an 86% share of the Rangers for $75 million. Bush received a 2% share by investing $606,302, of which $500,000 was a bank loan. Against the advice of his counsel, Bush repaid the loan by selling $848,000 worth of stock in Harken Energy. Harken reported significant financial losses within a year of this sale, triggering allegations of insider trading. On March 27, 1992, the Securities and Exchange Commission concluded that Bush had a "preexisting plan" to sell, that Bush had a "relatively limited role in Harken management", and that it had not seen evidence of insider trading.
The subsequent SEC investigation ended in 1992 with a memo stating "it appears that Bush did not engage in illegal insider trading," but noted that the memo "must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result". Critics allege that this decision was strongly influenced by the makeup of the SEC at the time, which heavily favored Bush. The chairman at the time was Richard Breeden, a good friend of the Bush family's who had been nominated to the SEC by President George H. W. Bush and who had been a lawyer in James Baker's
James Baker
James Addison Baker, III is an American attorney, politician and political advisor.Baker served as the Chief of Staff in President Ronald Reagan's first administration and in the final year of the administration of President George H. W. Bush...
firm, Baker Botts
Baker Botts
Baker Botts L.L.P. is a major United States-based international law firm of around 800 attorneys, with a long, prominent history, significant political connections, boasting more than half of the Fortune 100 companies among its clients. Headquartered in One Shell Plaza in Downtown Houston, Texas,...
. The SEC's general counsel at the time was James Doty, who had represented George W. Bush when he sought to buy into the Texas Rangers (although Doty recused himself from the investigation.) Bush's own lawyer was Robert Jordan, who had been "partners with both Doty and Breeden at Baker Botts and who later became George W. Bush's ambassador to Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
".
In House of Bush, House of Saud
House of Bush, House of Saud
House of Bush, House of Saud: The Secret Relationship Between the World's Two Most Powerful Dynasties is a 2004 book by Craig Unger that explores the relationship between the Saudi Royal Family and the Bush extended political family...
, Craig Unger
Craig Unger
Craig Unger is an American journalist and writer. He grew up in Dallas, Texas, and attended Harvard University. His most recent book is The Fall of the House of Bush, about the internal feud in the Bush family and the rise and collusion of the neoconservative and Christian right in Republican party...
notes that at the time of Bush's sale, Harken Energy "was expected to run out of money in just three days" (p. 123). In a last-ditch attempt to save the company, Harken was advised by the endowment fund of Harvard University to spin-off two of its lower-performing divisions. "According to a Harken memo, if the plan did not go through, the company had 'no other source of immediate financing.'" Bush had already taken out a $500,000 loan and sought Harken's general counsel for advice. The reply was explicit: "The act of trading, particularly if close in time to the receipt of the inside information, is strong evidence that the insider's investment decision was based on the inside information... the insider should be advised not to sell". This memo was turned over by Bush's attorney the day after the U.S. Securities and Exchange Commission (SEC) ruled that it would not charge Bush with insider trading. On June 22, Bush sold his 212,140 shares of stock anyway for a net profit of $848,560. The very next quarter, Harken announced losses of $23 million, which continued to the end of the year when the stock "plummeted from $4 to $1.25".
As President, Bush has refused to authorize the SEC to release its full report on the Harken investigation. When the Rangers franchise was sold for $250 million in 1998, at a total profit of $170 million, Bush personally received $14.9 million for his $600,000 investment.
As managing general partner of the Rangers, Bush assisted the team's media relations and the construction of a new stadium. Many in Arlington protested that the stadium was paid for with public funds, and when the stadium title was given to the Texas Rangers Organization, it effectively allowed Bush to cash out public funds. Some say this was evidence of organized corruption. His public role generated valuable goodwill and reinforced name recognition throughout Texas that was already high as he had the identical name as his father who was President during this era.
Early political career
After a United States National GuardUnited States National Guard
The National Guard of the United States is a reserve military force composed of state National Guard militia members or units under federally recognized active or inactive armed force service for the United States. Militia members are citizen soldiers, meaning they work part time for the National...
transfer in 1972, he served as political director for an Alabama
Alabama
Alabama is a state located in the southeastern region of the United States. It is bordered by Tennessee to the north, Georgia to the east, Florida and the Gulf of Mexico to the south, and Mississippi to the west. Alabama ranks 30th in total land area and ranks second in the size of its inland...
senate campaign. In 1978, Bush ran for the U.S. House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
but lost to Kent Hance
Kent Hance
Kent "The Hancellor" Ronald Hance is a lobbyist and lawyer who was a Democratic member of the United States House of Representatives from West Texas, having served from 1979 to 1985...
. Bush stressed his energy credentials and conservative values in the campaign. Hance, however, also held many conservative views, opposing gun control
Gun control
Gun control is any law, policy, practice, or proposal designed to restrict or limit the possession, production, importation, shipment, sale, and/or use of guns or other firearms by private citizens...
and strict regulation; he successfully portrayed Bush as out of touch with rural Texans. Hance later became a Republican and donated money to Bush's campaign for Governor of Texas in 1993.