http://www.findarticles.com/cf_0/m1111/1797_300/59086099/p1/article.jhtml?term=NOTES ON A NATIVE SON.
Harper's Magazine, Feb, 2000, by Joe Concson, Kevin P. Phillips
I. THE GEORGE W. BUSH SUCCESS STORY
A heartwarming tale about baseball, $1.7 billion, and a lot of swell friends
By Joe Conason
<snip>
Once more, however, the Bush name seems to have provided sudden deliverance--this time in the form of a contract with the emirate of Bahrain. Until 1989 the Bahraini oil minister had been negotiating an agreement for offshore drilling with Amoco, a huge energy conglomerate with decades of worldwide experience. Those talks were abruptly broken off, supposealy because the Bahrainis had decided that a smaller firm would give their project more attention. The Bahraini officials were put in touch with Harken through a former Mobil Oil executive named Michael Ameen. At the same time, Ameen also happened to be working as a consultant to the U.S. State Department, which had assigned him to brief Charles Hostler, the newly confirmed American ambassador to Bahrain (a San Diego real estate investor who had given $100,000 to the Republican Party for the 1988 election).
These several events culminated in a January 1990 announcement that astonished oil-industry analysts: the government of Bahrain had awarded exclusive offshore drilling rights to Harken. "It was a surprise," one top analyst told Time magazine with dry understatement. Quite apart from Harken's shaky financial condition, the company had never drilled a well anywhere but Texas, Louisiana, and Oklahoma, and had never drilled undersea at all. So depleted of cash and so deeply in debt was Harken that the company was forced to bring in the more experienced and solvent Bass brothers as equity partners, so that construction on the $25 million project could begin.
<snip>
However it was procured, the Bahrain contract pushed up the price of Harken stock from $4.50 to $5.50 in a matter of weeks. And on June 22, 1990, six months after the contract was announced, George W. quietly sold off 212,140 shares, or two thirds of his interest, which grossed him $848,560. He used most of the proceeds to pay off the bank loan he had taken a year earlier to finance his portion of the Texas Rangers deal. A few weeks later, in early August, Iraqi dictator Saddam Hussein invaded Kuwait. Saddam's aggression drove down the share prices of every oil company doing business in the Gulf, including Harken, whose shares fell to $3.12.
By the time George W. unloaded his Harken stock in late June, diplomatic alarms had been sounding in the Bush White House about Saddam's aggressive intentions. Although there is no evidence that the president's son was tipped off about the impending Gulf crisis, he certainly had reason to know that Harken was still in trouble. He served on the company's three-member audit committee and also on a special "fairness committee" appointed that spring to consider how a corporate restructuring would affect the value of the company's outstanding shares. Two months after Bush sold the bulk of his Harken holdings, the company posted losses for the second quarter of well over $20 million and its shares fell another 24 percent; by year-end Harken was trading at $1.25.
When Bush's stock dumping was first reported by the Houston Post in October 1990, there were no accusations of insider trading. Then in April 1991 the Wall Street Journal revealed that the Securities and Exchange Commission had not been notified of his timely trade until eight months after the legal deadline. The regulatory agency commenced an investigation that concluded in 1991 with no action against George W. It was hardly a surprise. The SEC chairman at the time, Richard Breeden, was an especially ardent Bush loyalist, and the agency's general counsel was the same Texas attorney who had handled the sale of the Rangers baseball team for George W. and his partners in 1989. Bush has insisted that he didn't know about the firm's mounting losses and that his stock sell-off had been approved by Harken's general counsel.
<much more - this is a 25 page article>
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