Thought you would appreciate the way nobody seems to believe someone would
be this dishonest so they just keep letting it happen.

Steps to Wealth
By PAUL KRUGMAN

[Why are George W. Bush's business dealings relevant? Given that his aides
tout his "character," the public deserves to know that he became wealthy
entirely through patronage and connections. But more important, those
dealings foreshadow many characteristics of his administration, such as its
obsession with secrecy and its intermingling of public policy with private
interest.

As the unanswered questions about Harken Energy pile up — what's in those
documents the White House won't release? Who was the mystery buyer of Mr.
Bush's stock? — let me now turn to how Mr. Bush, who got by with a lot of
help from his friends in the 1980's, became wealthy in the 1990's. He
invested $606,000 as part of a syndicate that bought the Texas Rangers
baseball team in 1989 — borrowing the money and repaying the loan with the
proceeds from his Harken stock sale — then saw that grow to $14.9 million
over the next nine years. What made his investment so successful?

First, the city of Arlington built the Rangers a new stadium, on terms
extraordinarily favorable to Mr. Bush's syndicate, eventually subsidizing
Mr. Bush and his partners with more than $150 million in taxpayer money.
The city was obliged to raise taxes substantially as a result. Soon after
the stadium was completed, Mr. Bush ran successfully for governor of Texas
on the theme of self-reliance rather than reliance on government.

Mr. Bush's syndicate eventually resold the Rangers, for triple the original
price. The price-is-no-object buyer was a deal maker named Tom Hicks. And
thereby hangs a tale.

The University of Texas, though a state institution, has a large endowment.
As governor, Mr. Bush changed the rules governing that endowment,
eliminating the requirements to disclose "all details concerning the
investments made and income realized," and to have "a well-recognized
performance measurement service" assess investment results. That is,
government officials no longer had to tell the public what they were doing
with public money, or allow an independent performance assessment. Then Mr.
Bush "privatized" (his term) $9 billion in university assets, transferring
them to a nonprofit corporation known as Utimco that could make investment
decisions behind closed doors.

In effect, the money was put under the control of Utimco's chairman: Tom
Hicks. Under his direction, at least $450 million was invested in private
funds managed by Mr. Hicks's business associates and major Republican Party
donors. The managers of such funds earn big fees. Due to Mr. Bush's change
in the rules, these investments were hidden from public view; an employee
of Utimco who alerted university auditors was summarily fired. Even now,
it's hard to find out how these investments turned out, though they seem to
have done quite badly.

Eventually Mr. Hicks's investment style created a public furor, and he did
not seek to retain his position at Utimco when his term expired in 1999.

One last item: Mr. Bush, who put up 1.8 percent of the Rangers syndicate's
original capital, was entitled to about $2.3 million from that sale. But
his partners voluntarily gave up some of their share, and Mr. Bush received
12 percent of the proceeds — $14.9 million. So a group of businessmen,
presumably with some interest in government decisions, gave a sitting
governor a $12 million gift. Shouldn't that have raised a few eyebrows?

All of this showed Mr. Bush's characteristic style. First there's the
penchant for secrecy, for denying the public information about decisions
taken in its name. So it's no surprise that the proposed Homeland Security
Department will be exempt from the Freedom of Information Act and from
whistle-blower protection.

Then there's the conversion of institutions traditionally insulated from
politics into tools for rewarding your friends and reinforcing your
political control. Yesterday the University of Texas endowment; today the
Federal Energy Regulatory Commission; tomorrow those Social Security
"personal accounts"?

Finally, there's the indifference to conflicts of interest. In Austin,
Governor Bush saw nothing wrong with profiting personally from a deal with
Tom Hicks; in Washington, he sees nothing wrong with having the Pentagon
sign what look like sweetheart deals with Dick Cheney's former employer
Halliburton.

So the style of a future Bush administration was easily predictable, given
Mr. Bush's career history.

--------------------------------------------------------------------

GW Bush

Hi Colleen,
Here is a copy of the e-mail my friend sent me about George W.(Dubya)Bush---

         I wish I could send this to everyone in America.  It is a summary
of the articles below.
         The only way Dubya got to be governor of Texas and the President
of the US was by doing what all the other crooks did at Enron, MCI, etc.
         He was on the board of a company.  The company loaned him and
others money to buy large blocks of stock to make sure they all benefited
from what they would do next.  As a board member, he approved the sale of a
piece of their company for millions of dollars to a company owned by
another board member.  The company let that member buy it with very little
money and a note due in 3-4 years.  Then as a board, they agree to say
their company will recognize they got all the money now for the sale (even
though they did not).  That will let the company  appear to have much, much
more revenues to offset big losses.
         That act alone is a crime.  Bush was even on the audit committee
of the board that oversees the company's audit each year.  That act is a
way to pump up your stock price or as the Attorney General has said (not
about his boss, of course),
                 "It fraudulently induces people to buy stock at a higher
price than they are worth so that the board members with shares can then
sell at the falsely inflated price.  When the truth of the stock value is
then found out, the share price drops to its real value, and the
falsely-informed stock purchaser losses their money that was actually taken
by the board member.  This is fraud. Pure and simple.  This is a
crime.  This is stealing."
         The SEC investigated Dubya for insider trading.    Since the chief
counsel for the SEC, appointed by George Bush, Sr. who was then President,
was little George W.'s personal attorney before, he had to recluse
himself.  Instead, his law firm partner did the investigation.  Guess
what.  Dubya did nothing wrong.  Where is that guy today who said Dubya did
nothing wrong?  He was appointed as ambassador to Saudi Arabia by Dubya
when he became President last year.
         So, with that criminal act of fraud by George W., he was able to
pay off the loan by which he had bought the Texas Rangers that gave him his
popularity in Texas, then sell the baseball team to make $10 million, be
governor of Texas and then move up to President of the US.   Before that,
he was broke and his companies had all failed.
         The people who bought shares at the fraudulently higher price and
then lost their money suffered a major personal financial loss.  We are now
suffering.
      Insider trading is not the biggest problem here.  It is the fraud
that caused the problem.  The fact George W. was on the audit committee and
so knew in advance when the public would find out about the fraud and could
sell his shares before the fall was only the second step in the fraud.

         That is bad.  Still worse is Dick Cheney's disgusting acts.  (See
article below Bush's) 
         As Secretary of Defense under George, Sr., he orchestrates the
destruction of Iraq's oil production capacity and slaps embargoes on Iraq
so they cannot sell oil on the open market.  Then, he leaves office and as
CEO of Halliburton, through front companies in Europe, he arranges
expensive loans to Iraq and sells them, at greatly inflated prices, all the
equipment to build back up their oil production capabilities.  This sale,
of course, was in direct violation of the spirit of the restrictions placed
on Iraq by him.  He was able to figure a way around them both in his mind
and by shuffling offshore companies.
         This sale of critically needed equipment is the most significant
reason for Iraq's resurgence as a threat today.  Disgusting.  Now he wants
to lead an attack on them again, now that they are strong enough to
threaten again.  I wonder what he will sell them after he leaves office as
Vice President?  This is disgusting.

         Now you can read the facts as reported in the papers below.


>Harken Papers Offer Details on Bush Knowledge
>Motive for Stock Sale In '90 Remains Unclear
>
>By Mike Allen and George Lardner Jr.
>Washington Post Staff Writers
>Sunday, July 14, 2002; Page A01
>
>
>The thrill of standing at the pitcher's mound on opening day as the new
>managing partner of the Texas Rangers baseball club was one year old for
>George W. Bush. As he looked toward politics, Bush wanted to pay off a
>$500,000 loan he had taken to buy into the team. It was 1990, and his
>father was president. The younger Bush, who joked in his oil-patch days
>about being "all name and no money," was short on cash.
>
>He did have one asset big enough to retire the loan: a block of stock in
>Harken Energy Corp., a Texas oil and gas explorer. Harken had bought out
>Bush's failing drilling company in 1986, put him on its board and hired
>him as a consultant.
>
>So Bush sold most of his Harken stock -- 212,140 shares at $4 a share, or
>$848,560, on June 22, 1990. Two months later, Harken announced huge losses
>for the quarter ending June 30, and its stock price plunged. The
>Securities and Exchange Commission investigated Bush for insider trading
>but found no case.
>
>Although Bush has maintained over the years that the size of the losses
>took him by surprise, interviews and internal Harken documents provide a
>newly detailed picture of how much Bush knew about Harken's financial
>straits when he sold the stock.
>
>A confidential Harken chronology, obtained by the nonpartisan Center for
>Public Integrity, said that 16 days before he sold the stock, Bush was
>sent the company's "weekly flash report," giving "information provided by
>subsidiaries regarding estimated historical and projected earnings."
>
>Asked about the document, a White House official said Bush thought the
>company was going to lose about $9 million in the quarter. That would have
>been four times as much as the company lost in the previous quarter but
>not nearly as much as it did lose. As it turned out, the company lost $23
>million for the period, according to an earnings report made public two
>months after Bush sold.
>
>SEC investigators knew Bush had seen the flash report but still dropped
>the case. Bush agreed to be interviewed by the SEC, but the investigators
>did not take him up on it, provoking skepticism from some government
>officials about their thoroughness.
>
>The latest information leaves unresolved whether Bush knew his biggest
>asset was about to shrink and unloaded before other investors found out,
>or whether he sold only because, as he says, he wanted to pay off his loan.
>
>The Harken trade was one of many turning points in Bush's life that showed
>golden timing, or uncommon luck, and the circumstances have tormented him
>since. During his winning campaign to unseat Texas Gov. Ann Richards (D)
>in 1994, she repeatedly accused him of getting an SEC whitewash because he
>was a president's son.
>
>Now, the sale is a major reason President Bush has been flummoxed in his
>efforts to respond convincingly to the corporate accounting scandals that
>have contributed to a bear market on Wall Street and turned a recovering
>economy into a faltering one.
>
>The episode also has caused critics to question Bush's credibility and
>candor. Bush aides refused, both in 1994 and last week, to call on the SEC
>to release its full file on the investigation.
>
>Bush had hoped to use a news conference last Monday to preview his package
>of proposals for reining in corporate executives. Instead he was asked
>repeatedly about his record in Harken's boardroom. "This is recycled
>stuff," he said. "I guess we're going to have to go through this again in
>the 2002 campaign. But nothing has changed."
>
>Bush, who sat on Harken's audit committee, has said he did not know about
>the extent of the losses later reported for the quarter in which he sold
>the stock. If he had, he could have been subject to charges that he
>profited from insider information. "I absolutely had no idea and would not
>have sold had I known," he told the Dallas Morning News in 1994.
>
>The White House said only Harken's executive committee, which did not
>include Bush, knew about the size of the losses that took investors by
>surprise when the second-quarter earnings were reported Aug. 20, 1990.
>Other board members, including Bush, knew part of the story. "They knew
>that there were going to be some losses -- in the neighborhood of $9
>million, not $22 million," White House communications director Dan
>Bartlett said.
>
>Harken minutes list Bush as attending a March 14, 1990, audit committee
>meeting at which a "significant supply and trading loss and other
>accounting issues" were discussed. An April 20, 1990, memo to the board
>from Harken President Mikel D. Faulkner, addressed "Gentlemen," warned of
>a "liquidity crisis." Other internal Harken documents from the period
>refer to a "severe cash crisis" and "critically-tight cash flow."
>
>The flash report Bush was sent 16 days before his stock sale, which was
>for the week ending May 31, 1990, projected losses for the second quarter
>of about $4 million.
>
>Ralph D. Smith, a broker for Sutro & Co. in Los Angeles who retired five
>years ago, said he approached Bush and other Harken stockholders and told
>them he had an institutional client who wanted to buy a large number of
>Harken shares. "At the first conversation, he said not at that time but
>maybe in a couple of weeks he might be able to," Smith said. "In a couple
>of weeks, we still had the buyer. So I called him and he said yes, that
>he'd checked with the corporate counsel, that it was okay for him to sell.
>I then checked with corporate counsel, also, to make sure he could."
>
>Bush told The Washington Post in 1999, "I was mindful that this
>transaction would be completely scrutinized. I knew the law and I sold at
>a time that I was cleared."
>
>The buyer has never been identified, and Smith said he has an obligation
>of confidentiality to his client. Smith said it was a standard trade and
>that the buyer has nothing to do with Bush or his family "in the wildest,
>furthest part of anybody's imagination."
>
>Bush sent the SEC a notice of his intention to sell but filed his
>disclosure of the actual sale 34 weeks late. In explaining why, Bush said
>during his Texas campaigns that the SEC lost the form; his aides now say
>it was a mix-up between Bush and Harken lawyers. "I still haven't figured
>it out completely," he said at last week's news conference.
>
>The SEC opened a formal inquiry into Bush's sale in April 1991. The
>investigators said in an internal 1992 memo that the available evidence
>showed Bush "was not aware of the majority of the items that comprised the
>loss Harken announced" shortly after his sale.
>
>"Based upon our investigation, it appears that Bush did not engage in
>illegal insider trading because it does not appear that he possessed
>material nonpublic information," the memo said. Courts say information is
>material if a reasonable investor would consider it significant in
>deciding to buy or sell. An SEC analysis noted, as an exculpatory factor
>for Bush, that Harken's stock recovered shortly after the losses were
>announced.
>
>The SEC left open the possibility that it would reconsider the case if new
>information became available, and Democrats have pointed to that in
>arguing that Bush was never cleared. An Oct. 18, 1993, letter from the SEC
>Enforcement Division to Robert W. Jordan, Bush's lawyer, said "no
>enforcement action is contemplated." It then adds, in a quotation from
>securities regulations that was set off from the body of the letter and
>that SEC officials said was boilerplate, the standard caution that a
>case's termination "must in no way be construed as indicating that the
>party has been exonerated."
>
>Bush had many family connections to the investigation. The SEC's general
>counsel at the time was James R. Doty, who represented Bush in his
>purchase of the Texas Rangers. Doty recused himself. Bush was represented
>in the SEC case by Jordan, who had been law partners with Doty and now is
>Bush's ambassador to Saudi Arabia. The SEC chairman was Richard C.
>Breeden, nominated by Bush's father.
>
>Several former SEC officials said they found it unusual that Bush and
>other board members were not interviewed during the inquiry. William R.
>McLucas, a Washington lawyer who was SEC enforcement director at the time,
>said he has no reservations about the process. "We were free to interview
>him -- his counsel certainly made that crystal clear," he said. "If you
>determine that the information wasn't material, you can talk to somebody
>under the hot lights for 10 hours, what's it going to get you?"
>
>McLucas acknowledged that investigators knew they were investigating the
>president's son. "They know who George Bush is, for God's sake -- they
>don't live on the planet Mars," he said. "But these are hungry,
>aggressive, hopefully fair-minded people."
>
>Bush's service on the Harken board has drawn attention in other ways as
>the recent wave of revelations about accounting fraud unfolded. In 1989,
>Harken sold a subsidiary, Aloha Petroleum Ltd., by lending money to the
>buyer. Harken then declared the amount as a cash gain, masking massive
>losses on its balance sheet. Critics call it reminiscent of Enron Corp.'s
>accounting gimmicks, although the White House contends the Harken
>situation was different in scope and intent.
>
>At his news conference, Bush told reporters who asked about his Aloha role
>that they "need to look back on the director's minutes." His aides then
>refused to release the minutes, saying they did not have them and would
>not ask Harken for them. Texas newspaper accounts show aides took the same
>position in 1994.
>
>Aloha Petroleum, a retail gasoline subsidiary in Hawaii, was picked up in
>1986 as part of Harken's purchase of Aloha's parent company, E-Z Serve
>Inc., which had about 900 retail outlets. The deal gave Harken numerous
>tax advantages. By 1989, Harken had financial problems. E. Stuart Watson,
>then a Harken board member, said he thought the Harken executives "were nuts."
>
>"They were engaging in hedging operations, trying to protect themselves in
>the purchase and sale of gasoline and oil, and man, they were losing
>millions," he said.
>
>Eager to "redeploy assets," as the company later put it in a report to the
>SEC, Harken sold for $12 million an 80 percent interest in Aloha to a
>company that was one of its major shareholders. The purchaser,
>Intercontinental Mining and Resources Ltd., two of whose directors were
>also on Harken's board, paid $1 million in cash and submitted an $11
>million IOU.
>
>The first installment on the loan, for $1 million, wasn't due until

>mid-1992, three years after the purchase, but Harken accounted for the
>sale as a $7.9 million capital gain for 1989. The move enabled it to keep
>its losses down to $3.3 million that year. Harken's outside auditors,
>Arthur Andersen LLP, approved the company's annual report to the SEC as a
>fair presentation of Harken's financial position.
>
>The SEC's accountants didn't see it that way and told the company to
>restate its earnings. In 1991, Harken filed an amended report for 1989,
>stating that as a result of "discussions with the Securities and Exchange
>Commission's accounting staff," it was no longer counting the $7.9 million
>as a gain for 1989. As a result of "the change in accounting method" and
>other restatements, Harken said in a footnote, its losses for that year
>were actually $12.6 million.
>
>What did Bush know?
>
>Bartlett, his communications director, said of the decision to sell Aloha
>that Bush and other board members "gave management the discretion to
>execute the transaction and negotiate the details, but not every board
>member was involved in those negotiations."
>
>As to Bush and the disputed accounting, Bartlett said the audit committee
>was briefed after the fact about the write-downs resulting from SEC
>objections. "I can't tell you if there was any other meeting in which they
>discussed the details of how they were going to account for the sale," he
>said. "I can't say definitively. This is based on the material I have."
>
>Harken, based in Houston, closed Friday on the American Stock Exchange at
>41 cents a share.
>
>Staff writer Lois Romano and staff researcher Madonna Lebling contributed
>to this report.
>
>
>© 2002 The Washington Post Company