Bush's period in the oil business has been central to the shaping of his career. It is said that he arrived as a 32-year-old in the West Texas town of Midland 24 years ago with $20,000 and started an independent oil company. Several years and several business mergers later he left a millionaire.
As it so happens, most of his business experience comes from Arbusto, the first company he owned. To get started, he had relied extensively on family ties, receiving help from a variety of well-heeled Republicans, a Fortune 500 company CEO; a self-made multimillionaire who lobbied to become treasury secretary under former President Ronald Reagan; and the chief executive of one of the nation's largest brokerage firms.
Arbusto's formative years—while the seed money was being raised—coincided with the period that his father ran unsuccessfully for the 1980 Republican nomination for president, and the time that he served as Ronald Reagan's vice president. More than 50 investors put about $4.7 million into Arbusto, which was renamed Bush Exploration in 1982.
By 1984, when Bush sold his company to the Spectrum 7 Energy Corp., it had drilled 95 holes; of which 47 yielded oil, three yielded gas and 45 were dry. The two primary shareholders of Spectrum 7 were instrumental in helping Bush put together the group that purchased the Texas Rangers baseball team in 1989.
In 1986, Spectrum 7 was purchased by the Harken Energy Corp, and Bush, who was holding a substantial number of shares in Spectrum 7 shares, became a shareholder in Harken Energy.
In January 1990, Harken Energy was the surprise winner of a tender put out by the government of for an exclusive offshore oil-drilling contract. In doing so, the company beat out Amoco, despite the fact that it had very limited oil drilling experience. At the time, Bush's father was serving as president, and rumors circulated that this fact had been instrumental in Harken's successful bid. But the younger Bush vehemently denied that any such thing was possible. Indeed, he said in an interview with the Wall Street Journal, he was opposed to the Bahraini contract.
But claims were later made that, after Bush was named to the Harken Energy board of directors, individuals connected to the company began getting access to the highest levels of the U.S. government. Three times in 1990, Talat Othman was one of a number of Arab businessmen who met with George Bush and National Security Adviser Brent Scowcroft, with one of the visits taking place just two days after Iraq invaded Kuwait. Othman was the representative of Sheikh Abdullah Bakhsh, who had purchased 10 percent of Harken stock and was also closely connected to the infamous BCCI bank. It's worth noting that Sheikh Kalifah, the prime minister of Bahrain, was also a BCCI shareholder and he had played the key role in selecting Harken for the oil contract.
In June 1990, Bush sold 60 percent of his stock in Harken Energy for $848,560Two months later, Iraq invaded Kuwait and Harken's stock dropped 25 by 25 percent. It was soon to fall further, following a quarterly loss in revenue.
Already in may, Harken's internal financial advisers at Smith Barney had issued a report in May warning of the company's deteriorating finances. At the time, the company owed more than $150 million to banks and other creditors. Bush was then a member of the board and also of Harken's restructuring
The fact that Bush sold his stock before the dramatic fall in prices, raised eyebrows at the time, and the sale was investigated by the U.S. Securities and Exchange Commission for potential insider trading. Bush claimed to have sold the Harken stock to repay $500,000 in loans needed to fund his stake in the Rangers partnership. The SEC chose not to press charges.
So ended George W. Bush's direct involvement in the oil industry. From then on he was to devote his time to baseball, and then state and presidential politics. — (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)
