Prior to his election as president
in 2000,
George W. Bush
George Walker Bush (born July 6, 1946) is an American politician who served as the 43rd president of the United States from 2001 to 2009. A member of the Republican Party, Bush family, and son of the 41st president George H. W. Bush, he ...
held other positions including being an oil executive, an owner of the
Texas Rangers baseball team, and the
governor of Texas.
Business
Bush began his industry career in 1977, when he established
Arbusto Energy
Arbusto Energy was an oil and gas exploration firm started in 1977 by former U.S. president George W. Bush. In 1984, the company merged with Spectrum 7 Energy Corp.
Company history
Arbusto Energy was organized in 1977, but did not begin operati ...
, 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 E. "Lew" Lehrman (born August 15, 1938, in Harrisburg, Pennsylvania) is an American investment banker, businessman, Republican politician, economist, and historian who supports the ongoing study of American history based on original sourc ...
,
William Henry Draper III
William Henry Draper III (born January 1, 1928) is an American venture capitalist.
Early life
Draper was born on January 1, 1928, in White Plains, New York, the son of Katherine Louise (née Baum) and banker, general, and diplomat William Henr ...
,
Bill Gammell, and
James R. Bath
James Reynolds Bath (born August 18, 1936) is a Texas businessman who has business interests in aircraft sales and leasing and real estate. He is best known for his business relationships with Saudi businessmen Salem bin Laden and Khalid bin Mahf ...
, the last of whom represented
Salem bin Laden
Salem bin Mohammed bin 'Awad bin Laden ( ar, سالم بن محمد بن عوض بن لادن) (4 January 1946 – 29 May 1988) was a Saudi Arabian investor and businessman.
Life
Considered the eldest son of Mohammed bin Laden, he was the found ...
, a half-brother and cousin of
Osama bin Laden. In 1984, Bush sold the company, heavily damaged due to the
1979 energy crisis
The 1979 oil crisis, also known as the 1979 Oil Shock or Second Oil Crisis, was an energy crisis caused by a drop in oil production in the wake of the Iranian Revolution. Although the global oil supply only decreased by approximately four pe ...
, to
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.
According to George Soros
G ...
, another Texas gas exploration firm. Under the terms of the sale, Bush became
CEO
A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...
. Spectrum 7 lost revenue and was merged into
Harken Energy
HKN, Inc. is a company engaged in hydrocarbon exploration headquartered in Southlake, Texas. It is notable for the Harken Energy scandal, which involved allegations of insider trading by George W. Bush in 1990. The company was known as Harken En ...
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 Orville DeWitt Jr. (born August 31, 1941) is an American businessman who is currently the managing partner and chairman of the St. Louis Cardinals, a professional baseball franchise which competes in Major League Baseball (MLB).
The Ca ...
, that family friend
Eddie Chiles
Harrell Edmonds "Eddie" Chiles (May 11, 1910 – August 22, 1993) 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.
Eddie Chiles was born in It ...
wanted to sell the
Texas Rangers baseball
Baseball is a bat-and-ball sport played between two teams of nine players each, taking turns batting and fielding. The game occurs over the course of several plays, with each play generally beginning when a player on the fielding tea ...
franchise along with the new sports stadium; built on land acquired under
eminent domain law and built under funding financed through taxpayers' funds backed by a bond issued for its debt. In April 1989, Bush assembled a group of investors from his father's close friends, including fellow fraternity brother
Roland W. Betts; 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 firm,
Baker Botts
Baker Botts L.L.P. is an American law firm of around 725 lawyers. Headquartered in One Shell Plaza in Downtown Houston, Texas, the firm has energy and technology related clients. It is referred to as the second-oldest law firm west of the Mi ...
. The SEC's general counsel at the time was James Doty, who had been appointed by President H.W. Bush and as a lawyer in
James Baker's firm,
Baker Botts
Baker Botts L.L.P. is an American law firm of around 725 lawyers. Headquartered in One Shell Plaza in Downtown Houston, Texas, the firm has energy and technology related clients. It is referred to as the second-oldest law firm west of the Mi ...
had represented George W. Bush when arrangements were made to acquire the Texas Rangers baseball franchise (although Doty recused himself from the investigation.). With Baker Botts representing W. Bush, the Saudi BinLaden family, and W. Bush's funding conduit
James R. Bath
James Reynolds Bath (born August 18, 1936) is a Texas businessman who has business interests in aircraft sales and leasing and real estate. He is best known for his business relationships with Saudi businessmen Salem bin Laden and Khalid bin Mahf ...
, Doty was involved in the frivolous litigation campaign launched in the attempt to intimidate BinLaden middleman
James R Bath's business partner
Charles W. "Bill" White into cooperating with the attempted cover-up of secret BinLaden Family funding of W. Bush's campaigns and businesses. 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".
In ''
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. Unger ...
'',
Craig Unger
Craig Unger (b. March 25, 1949) is an American journalist and writer. He has served as deputy editor of ''The New York Observer'' and was editor-in-chief of Boston Magazine. He has written about George H. W. Bush and George W. Bush for ''The New ...
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 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. His public role generated valuable goodwill and reinforced name recognition throughout Texas.
Prior to his gubernatorial campaign, Bush briefly considered a candidacy to become the
Commissioner of Baseball
The Commissioner of Baseball is the chief executive officer of Major League Baseball (MLB) and the associated Minor League Baseball (MiLB) – a constellation of leagues and clubs known as "organized baseball". Under the direction of the Commiss ...
in the early to mid-
1990s
File:1990s decade montage.png, From top left, clockwise: The Hubble Space Telescope orbits the Earth after it was launched in 1990; American F-16s and F-15s fly over burning oil fields in Operation Desert Storm, also known as the 1991 Gulf War; ...
.
Early political career
After a
United States National Guard
The National Guard is a state-based military force that becomes part of the reserve components of the United States Army and the United States Air Force when activated for federal missions.[Alabama
(We dare defend our rights)
, anthem = " Alabama"
, image_map = Alabama in United States.svg
, seat = Montgomery
, LargestCity = Huntsville
, LargestCounty = Baldwin County
, LargestMetro = Greater Birmingham
, area_total_km2 = 135,7 ...]
senate campaign. In 1978, Bush ran for the
U.S. House of Representatives but lost to
Kent Hance
Kent Ronald Hance (born November 14, 1942) is an American politician and lawyer who is the former Chancellor of the Texas Tech University System. In his role, he oversaw Texas Tech University, Texas Tech University Health Sciences Center and Ang ...
. Bush stressed his energy credentials and conservative values in the campaign. Hance, however, also held many conservative views, opposing
gun control 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.
References
Further reading
* Obschonka, Martin, and Christian Fisch. "Entrepreneurial personalities in political leadership." ''Small Business Economics'' 50.4 (2018): 851-869.
* Smith, Jean Edward. ''Bush'' (2016), pp 25–53; detailed scholarly biograph
excerpt
{{George W. Bush
George W. Bush
Bush, George W.
Early lives of the presidents of the United States