[CTRL] The Austin Chronicle O, Brother! Where Art Thou?

Kris Millegan Sat, 31 Mar 2001 06:58:11 -0800

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The Austin Chronicle Politics: O, Brother! Wher…</A>
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Like Hugh Rodham, the Bush Bros. Have Capitalized on Family Ties

O, Brother! Where Art Thou?

BY LOUIS DUBOSE

March 16, 2001:

Unless you've been reading the Houston Chronicle society page, it's unlikely
you've seen any current news about Neil Bush. The third Bush sibling has been
almost as invisible as his apolitical brother Marvin, a venture capitalist
living in northern Virginia, and his sister Dorothy "Doro" Koch, the youngest
of the five Bush siblings, who quietly raises funds for charities in a
Maryland suburb near Washington. While Jeb was governor of Florida and George
W. was twice elected governor of Texas, Neil was either part of the late
Maxine Mesinger's "crème de la crème crowd" at a Houston social event, or a
stale S&L footnote: "the director of Silverado Banking, Savings and Loan when
it crashed in 1988 at a cost of $1 billion to taxpayers."

In 1990, Bush paid a $50,000 fine and was banned from banking activities for
his role in taking down Silverado, which actually cost taxpayers $1.3
billion. A Resolution Trust Corporation Suit against Bush and other officers
of Silverado was settled in 1991 for $26.5 million. And the fine wasn't
exactly paid by Neil Bush. A Republican fundraiser set up a fund to help
defer costs Neil incurred in his S&L dealings. Friends and relatives
contributed -- but not then-President and Barbara Bush, which would have been
unseemly. Since then, the Bush political combine has done such a remarkable
job keeping Neil in the background that what seemed like a 10-year news
blackout didn't end until mid-February, when the Austin Business Journal
reported that Bush "quietly is heading a local start-up that's raising at
least $10 million in second-round funding." According to the business
newsweekly, Bush has already raised $7.1 million from 53 investors
underwriting Ignite! Inc., an educational software company. After being
banned from banking and all but airbrushed out of the family portrait -- or
at least the family news profile -- Neil Bush is back.

Bush wasn't just an average S&L exec drawing a big salary and recklessly
pushing a federally insured institution beyond its lending limits. As a
director of a failing thrift in Denver, Bush voted to approve $100 million in
what were ultimately bad loans to two of his business partners. And in voting
for the loans, he failed to inform fellow board members at Silverado Savings
& Loan that the loan applicants were his business partners. Federal banking
regulators later followed the trail of defaulted loans to Neil Bush oil
ventures, in particular JNB International, an oil and gas exploration company
awarded drilling concessions in Argentina -- despite its complete lack of
experience in international oil and gas drilling. It probably helped that the
Bush family had cultivated close ties with the fabulously corrupt Carlos
Menem, former president of Argentina.

When JNB's rights and obligations were assumed by other investors, Neil tried
to persuade another American oil and gas exploration company, Plains
Resources, to invest in Argentina. Plains wasn't buying. But it was hiring,
and picked up Neil as a consultant for its Argentine market -- because, as
Plains executive Carlos Garibaldi told The New York Times' Jeff Gerth in
1992, Neil had "traveled [in Argentina] and played tennis with President
Menem." Plains President J. Patrick Collins told Gerth at the time that Neil
Bush "bent over backwards not to trade on his name."

That claim was hard to make in 1993, when Neil, Marvin, James Baker III, John
Sununu, and Thomas Kelly (who had served as director of operations for the
Joint Chiefs of Staff during the Gulf War) joined President Bush on a trip to
Kuwait. Three months out of office, the elder Bush was traveling on a Kuwait
Airlines flight to accept an honorary degree from the country's university
and its highest honor from its leader: Emir Sheikh Jabir al-Ahmad al-Sabah.
The rest of the Bush entourage was following along to exploit the market in a
country that considered the ex-president its savior. Former Secretary of
State Baker was doing deals for Enron (the Houston-based energy-related
company and contributor to Bush the Elder and later a $525,000 donor to
George W. Bush's two gubernatorial races in Texas). Marvin was representing
U.S. defense firms selling electronic fences to the Kuwaiti Defense Ministry.
And Neil was selling anti-pollution equipment to Kuwaiti oil contractors.

There is "no conflict of interest. ... We're just capitalizing on whatever
good feelings exist," an executive from the company Neil Bush represented
later told Seymour Hersh, who laid out the embarrassing story on the pages of
The New Yorker in September 1993. Neil, according to Hersh, later returned to
Kuwait and set up shop in the International Hotel in Kuwait City, where he
tried to secure a management contract with Kuwait's Ministry of Electricity
and Water. Neil's deal included foreign and Kuwaiti members of the Enron
consortium, and would have had the Kuwaiti government paying a management fee
to a Kuwaiti company that was owned in part by a private company set up in
the Caribbean or some other tax haven. "The offshore firm would have various
owners, in Europe and elsewhere, one of which would be a company in which
Neil Bush had an interest," The New Yorker reported. The scheme was
ingenious, a financial analyst told Hersh."If you looked at one of the
contracts, how in the hell would you know that Bush was in it?" The whole
deal was as unsavory and unpardonable as a round of golf with Hillary Clinton
sibling Huey Rodham.

Jeb missed that junket, but the current governor of Florida isn't above
taking the family name abroad to make a buck. In 1989, Bush and his wife
traveled to Nigeria with a executives of M&W Pump, a Florida-based company
that had been selling agricultural pumps to Nigeria. Jeb and Columba Bush
were received by Nigerian President Ibrahim Babangida and celebrated by tens
of thousands of Nigerians who turned out to see the son of the U.S.
president. President Babangida expressed his interest in visiting the White
House -- a request Jeb promised to pass along to his father -- and by 1992
the Florida pump company had secured $74 million in financing from the
Export-Import Bank of the United States. It was by far the largest Ex-Im deal
M&W had ever done in Nigeria -- a country Ex-Im loan officers considered a
bad risk. "I didn't get paid for the Nigeria business," Bush told The Palm
Beach Post in 1994. "I have not made a dime on business with Nigeria." Yet the
Post found tax records that revealed Bush and earned at least $300,000
through his association with the owner of the same company for which he had
done a pro-bono sales trip to Nigeria. Bush-El, a 50-50 partnership with the
owner of M&W, paid Bush at least $300,000 for his participation in a separate
venture, marketing agricultural hand pumps. Why would Bush suddenly find
himself involved with a company selling agricultural hand pumps around the
world? the Post asked. "I know how to sell things," responded Bush. "I know
international sales. I know how to get people to put together tenders because
I financed a lot of them when I was working at Texas Commerce Bank."

Here in Austin, it's a safe bet that Neil will raise the additional $10
million in start-up money Ignite! needs to get its software to market. In six
years at Interlink Management, a venture capital firm he ran out of his
father's Houston office from 1994 to 1999, he raised $60 million for high
tech and biotech start-ups. Ignite! is a new company and a new market niche,
but there's nothing new in what Neil Bush is about this year: leveraging the
family name and other people's money into a business that will turn a profit
-- if for no one else, at the very least for him.

------------------------------------------------------------------------
See Also:
The Hightower Lowdown
[02-23-01]
Naked City
The Lawsuit That Wouldn't Die [01-26-01]
The Greening of George W. Bush
The Governor's 'Clean Air' Bill Hasn't Cleaned Up Texas' Air [10-27-00]

More by Louis Dubose:

[03-09-01]

Off the Desk [03-02-01]

Off the Desk [02-23-01]
More...

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