Russia had a lot to learn from America over the past decade. We taught them all they needed to know about privatization, democracy, capital markets and human rights.
Over the past year, Americans have made a big stink about the lack of Russian corporate governance and its disrespect for shareholders. Americans were just as pious and self-righteous about how naughty the Russians were to American shareholders, and how upright and honest American companies and accounting firms were compared to the Russians. The Russians actually started to listen, and companies from YUKOS to WBD began to act, as did the FSC.
But then, just as America’s lessons about capital markets ended in the BoNY and Jonathan Hay scandals, and as Florida humbled America’s pretensions to democracy, and as the bombing of Serbia ended America’s claim to champion human rights and civil restraint, so have the last six months put a serious damper on America’s high-n-mighty attitude about its corporate governance. For as we’ve learned, AMERICA HAS NO CORPORATE GOVERNANCE. Our corporate executives steal all the money for themselves and call them loans, they conduct insider trading, avoid taxes, siphon off corporate revenues into layers of off-shore bank accounts and shell companies, and they cook the books and get them signed off by the leading multinational (i.e. American) accounting firms who use “internationally recognized accounting standards” (cuz without those accountants signing off on the books, no one will believe ‘em!), the same “standards” we’re trying to force the Russians to sign off on if they want to play on our squeaky-clean capital markets. The only difference being that America ripped its shareholders and citizens off for hundreds of billions, while the Russians only ripped off a couple dozen billion dollars.
Does that mean that America doesn’t have anything to teach Russia? Heck no, we’ve got a lot to teach them. We didn’t mean what we’d preached all this time about how we opposed crony capitalism, corporate corruption and the like. What we REALLY meant to say was that Russia needs to learn how to steal and plunder on the American scale. And what better teacher could there be than America’s own corrupt and bumbling commander-in-chief, George W. Bush.
We at the eXile believe that you should teach by example. So, without any further 2-do, here, in simple, plain E-Z-2-Read English is the example of George W. Bush, corporate director, political aspirant, and kickback king. We’ll put it into E-Z chronological order so that y’alls don’t get too confused. So pay attention, put on your thinkin’ caps, and hop aboard!
1978: Uses his wealthy Uncle Jonathan Bush to line up investors for an oil drilling company called Arbusto, collecting some $3 million in total. Investors include William Draper III, family friend who later went on to head the Ex-Im Bank and James Bath, a neighbor of the Bushes and BCCI shareholder who made his money by investing on behalf of Khalid bin Mahfouz, banker to the Saudi regime, and Sheikh bin Laden, father of Osama. Mahfouz is presently under house arrest in Saudi Arabia for financing Al Qaeda.
1980: George W. Bush’s father elected Vice President of the United States.
1982: Realizing that Arbusto was a bad name for a failing company, changes name to Bush Exploration Oil.
Bush Exploration Oil almost collapses, saved by tycoon Phillip Uzielli, an old Princeton friend of James Baker, now Chief of Staff in the Reagan Administration. Uziella pays $1 million for a 10% stake; at the time, Bush Exploration Oil’s total value: $400,000.
Around this time, former Yale classmate and baseball enthusiast William DeWitt arranges for Bush Exploration Oil to merge with his energy company, Spectrum 7. Bush named chairman and CEO, offered substantial amount of stock.
1986: In a single six-month period, Spectrum 7 loses $400,000. Partners fear that creditors will foreclose remaining assets.
1986: Harken Energy acquires Aloha Petroleum, a chain of 40 petroleum stations in Hawaii, from Getty Oil.
September, 1986: Harken Energy Corp. acquires Spectrum 7, saving it. Bush named to board, given first of two below-market-rate “loans” by Harken to purchase cheap stock options.
1988: William DeWitt tells Bush that Texas Rangers are for sale.
1988: Second of two below-market Harken “loans,” totaling $180,000, handed to Bush to purchase more stock options.
1989: Bush puts up $605,000 to purchase a 1.8% stake in Texas Rangers, using loans backed by Harken stock. Eventually Bush’s small stake was increased to 12% by other investors who literally handed Bush portions of their shares in the Rangers for free. Investors subsequently benefited when Bush was governor of Texas from deals involving public financing.
1989: Harken loses $16.6 million on bad bets on commodity futures.
1989: Harken sells 80% stake in Aloha Petroleum, one of its subsidiaries, to a group of investors for $12 million dollars — $1 million up front and an I.O.U. to pay $11 million more at a later date. This allows Harken to post a $7.9 million profit for the year, rather than a $3 million loss. Buyer of Aloha stake turns out to be company controlled by Harken’s chairman, Alan Quasha. The $11 million I.O.U. turns out to be an interest-free loan from Harken.
1989: 3-man Harken Board audit team —which includes George W. Bush and Talat Othman, a Palestinian representing a 13% stake in Harken controlled by Saudi money — signs off on Aloha Petroleum deal. So does Harken’s accounting firm, Arthur Andersen. SEC spends months investigating it, overturns the accounting statements for the deal and forces Harken to restate earnings for 1989. A $3 million loss becomes a $12 million dollar loss. Harken CEO calls company financial statements “a mess.”
1989: Bahrain in talks with Amoco about large off-shore oil drilling concession.
Jan. 25, 1989: Bahraini minister of development and industry Yousef Shirawi contacts retired Mobil oil executive Mike Ameen, who at the time was on the US government payroll as a consultant to the new U.S. ambassador to Bahrain. Ameen put Shirawi in contact with Harken.
January, 1990: Harken awarded $25 million exclusive concession for offshore drilling in Bahrain. Oil industry “shocked.” Tiny Harken had only drilled on land in Oklahoma, Texas and Louisiana, had never drilled off-shore before. Harken so cash-poor that the Bass brothers, Texas billionaires, brought in as equity partners. Harken stock price rises 25% from $4.50 per share to $5.50.
1990: Talat Othman added to Arab delegation, granted three personal meetings that year with President Bush and National Security Advisor Brent Scowcroft.
April 3, 1990: Bush signs “lock-up” letter promising not to sell his shares for 6 months because Harken was planning a stock offering to raise money.
April 20, 1990: Harken President Mikel Faulkner sends letter to all directors, including Bush, warning of a “liquidity crisis” within the company. The planned stock issuance “dramatically affected” by several negative factors. Also warns that Harken was in “technical violation” of a loan agreement it had with the Bank of Boston.
May 18, 1990: Harken VP Bruce Huff notifies Bush to attend an emergency convened “Fairness Committee” meeting, on which Bush served, to discuss the planned offering. Offering soon canceled.
June 22, 1990: Bush sells two-thirds of his Harken stock for $848,560 to unnamed “institutional investor.” To this day no one will name this investor. In violation of SEC laws, he doesn’t report the sale for eight months.
August 1990: Harken posts losses of over $20 million dollars. Stock falls from $5.50 to $3.12. By year’s end, stock selling for $1.25.
October 1990: Arlington, Texas Mayor Richard Greene signs contract with Texas Rangers guaranteeing $135 million in taxpayer money to build new Texas Rangers stadium. Deal allows Rangers to later purchase stadium after paying Arlington city $60 million in rent. Rangers also get 270 acres of surrounding land as part of the deal.
January 1991: Arlington voters approve sales tax hike, at urging of mayor and Bush, to finance stadium. One family that owned 13 of the 270 acres refuses to sell its land at below market price. Family’s land condemned and seized by municipal authority. Outraged jury awards the family $4 million.
February 1991: Bush reports sale of Harken stock to the SEC.
1991: SEC investigates possible insider trading. SEC general counsel was, in 1989, Bush’s attorney during the Texas Rangers acquisition. Bush’s attorney in the SEC suit is Robert Jordan, parter at Secty of State Baker’s firm, and who, in 2001, is named ambassador to Saudi Arabia.
1994: Bush elected governor of Texas. Names large campaign donor Tom Hicks to University of Texas board.
1995: Bush signs UTIMCO bill handing control of U. Texas’s $13 billion endowment to investment firm run by Hicks. Investments now closed to scrutiny; one known vehicle it invested in was $10 million to the Carlyle Group, a large private equity fund in which George Bush Sr. is an officer and Osama Bin Laden’s father was a major investor.
June 1998: Hicks heads investors who buy Texas Rangers for $250 million. Bush earns $15 million from initial $600,000 investment financed through “loaned” shares from Harken and free equity.
2000: Talat Othman helps form Islamic Institute to attract Muslims to Republican Party. At Republican Convention in Philadelphia, Othman gives benediction. During November election, Muslims vote overwhelmingly for Bush.
2000: Bush named President of the United States by the majority-Republican-appointed Supreme Court.
2001: Osama Bin Laden accused of attacks on US that leave almost 3,000 Americans dead.
2001: Bin Mahfouz placed under house arrest for ties to charities and banking transactions to bin Laden.
2001: Talat Othman fingered by Justice Department for being important figure in Islamic Charities that it had raided.
2001-2: Collapse of corporate America due to corrupt insider deals, loans, false accounting, etc.
2002: More Americans blame former President Bill Clinton for collapse of corporate America than they do President George W. Bush.