Of Further Interest

Chapter 1

Bush Stock Fraud and his link to BCCI

by

Thomas J. Wheat

In this section I explore the connections concerning George Bush II's ineptitude as a businessman, a man who should have been investigated for stock fraud and insider trading, as well as his connection to the now defunct bank, BCCI. BCCI funneled money to Bush to bail out his company, was alleged to have laundered drug money and later collapsed in a bank fraud scandal.

Bush was a failed businessman. Every Business he founded folded. The one successful venture he ever had was one he bought a part ownership share in the Texas Rangers Baseball team. However, that money was fraudently obtained from when he sold his share in Harken Energy stock, just before the company's stock price folded.

Bush was investigated by the SEC for insider trading, but the charges were dropped. It turns out that the head of the SEC was appointed by Bush's Father, who was president at the time.

In 1977 Bush founded his first company, Arbusto Energy. Bush's company struggled and never found any oil. Then Phillip Uzielli a friend of James Baker bailed Bush out. He gave Bush 1 million dollars in exchange for 10% of the company. However, Arbusto Energy was only worth $382,000 according to Time magazine. Uzielli paid 26 times the market price of Arbusto for his 10% share. Obviously he was paying for influence.

In 1984 Bush merged Arbusto with another one of his companies, Spectrum 7. In 1985, Spectrum 7 lost 1.6 million dollars. Bush was doomed for failure. The oil boom in Texas had long ended. The next year Spectrum 7 owed over 3 million dollars. Then as if there was really a stroke of luck, Billionaire financier George Soros bailed him out and bought his company for 2.25 million. Bush made 600,000 dollars out of the deal, including a seat on the board of directors making 120,000 dollars a year. In 1989 after Spectrum 7 merged with Harken energy, Harken lost 12 million dollars. In 1990 Harken lost 40 million dollars. (Unger, 118)

On June 22nd 1990 Bush sold 212,140 shares of Harkens stock for $848,560. It turns out Harken's second quarter losses were 23 million dollars. It was at this point that the SEC decided to investigate Bush for insider trading. However Bush declined to hand over any documents citing Attorney Client privilege. August 21st 1991 the SEC decided not to charge Bush with insider trading.

It turns out that the Chairman of the SEC, Richard Breedon, was a former lawyer from James Baker's law firm Baker-Botts, and had been nominated by Bush's Father, the President at the time, to the post as head of the SEC. (124) James Baker was Bush's father's Secretary of State. Furthermore the SEC's general counsel, James Doty also belonged to James Baker's lawfirm. Doty later recused himself. Doty also represented Bush when he tried to buy the Texas Rangers Baseball team. Bush's lawyer Robert Jordan was law partners with Doty and Breedon in the Baker-Botts lawfirm. Bush later appointed him to be ambassador to Saudi Arabia.

It was Paul Krugman, the syndicated columnist for the new york times, who said that: "Mr. Bush profited personally from aggressive accounting identical to recent scams [Enron and Arthur Anderson] that have shocked the nation."

Paul Krugman, "Succeeding in Business," New York Times, July 7, 2002

Obviously Bush circumvented what it takes to achieve the american dream. He was immune from failure because his father secured investors to invest in a failing company and when the company folded Bush's father, the president sheilded him from sanctions by the SEC. Needless to say the SEC was also packed with Bush supporters. The fact that the investigation was riddled with conflicts of interests says alot about the respect that the Bush dynasty has for the rule of law when it comes to themselves.

Bush was also tied to a bank called BCCI: a bank prosecuted for fraud and linked to the drug trade

Bank of Credit Commerce International (BCCI)

biggest share holder, Khalid bin Mafouz, (indicted for fraud) founded by Agha Hasan Abedi notable fact: funneled money to George W. Bush

At one time BCCI was the fastest growing bank in the world. In 1972 it was worth 200 million. In 1977 it was worth 2 billion. BCCI laundered Saudi money to Iraq to faccilitate arms purchases. (78) It was also used by the US and Saudi Arabia to funnel money to the Afghani Mujahadin, (112) and the Nicaraguan Contras, the latter were known drug traffikers. (Unger, 34) BCCI also funneled money to bail out President George W. Bush's failing company, Harken energy. (112)It was Arkansas investment banker, Jackson Stephens who managed to raise 25 million to bail out Bush. Money was wired to Bush through the Union Bank of Switzerland. UBS was linked to BCCI via a joint venture in a Geneva bank.(121) Bush was also bailed out by, Abdullah Taha Bakhsh. His investment gave him 17.6% equity in Bush's company. He was also connected to BCCI, via his control of the Saudi Finance company which was partly owned by BCCI shareholders.(121) He was also business associates of Khalid bin Mafouz.

The 1992 Senate investigation into BCCI noted that their common business practices were to operate through, "shell corporations, bank confidentiality, and secrecy havens,, layering of corporate structure, front men and nominees,..kickbacks and bribes, intimidation of witnesses, and retention of well placed insiders to discourage govermental action." (121-122)

There were also credible reports that suggested BCCI laundered drug money and that the Justice Dept. impeded Congressional investigations regarding BCCI's link to drug traffiking.(126)

BCCI went out of business in 1991.

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see Bert Lance

also see a Wall Street Journal article, "Family Ties" written by Thomas Petzinger, Peter Truell, and Jill Abramson pg. A1

Also see:

"Outlaw Bank," Financial Times, July 13th, 1992

The BCCI Affair: A Report to the Committee on Foreign Relations, Senator John Kerry, and Sen. Hank Brown, December 1992, 102nd Congress, 2nd session,, Senate print 102-140

Google search terms:

James Bath, BCCI, Ghaith Pharon, Sheik Zayed bin Sultan al-Nahayan (United Arab Emirates)

James Bath was friends with, James Baker III, and Bush when he served in the Texas National Guard. He was also business associates with Khalid bin Mafouz. Bath was also Salem Bin Laden's personal representative to America.

Book Source: Unger, Craig. "House of Bush House of Saud," 2004

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Bush, SEC, insider trading

Kranish & Healy

http://www.commondreams.org/headlines02/1030-06.htm Boston Globe, October 30th 2002

also see http://www.cnn.com/2002/ALLPOLITICS/07//14/bush.stock.sale

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Albosta Report, Iran hostage crisis, Jimmy Carter

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