From James Doran in New York
A HARVARD UNIVERSITY watchdog accused President George W. Bush yesterday of colluding with university investors to hide financial troubles at the oil company where he was a director before his election to the White House. The group alleged that it was the kind of accounting procedures that Enron had employed.
Mr Bush, a director of Harken Energy from 1986 until 1993, allegedly approved a complex partnership with Harvard University into which millions of dollars worth of Harken debt and loss-making assets were poured into in 1990.
The accusation was made by HarvardWatch, an independent group that scrutinises the university’s investments, which are drawn from its $15 billion endowment fund. The watchdog released copies of Harken board minutes from 1990 at which Mr Bush, acting as a senior director, signalled that Harken should pursue a partnership with Harvard.
Harvard Management Company, which controls the school’s endowment, was the biggest shareholder in Harken in 1990 when the deal, called the Harken Anadarko Partnership (HAP), was struck. Then Harken revealed a loss of $23 million and its shares plunged. But in November that year Harken transferred some $36 million of debt and loss making assets to the partnership.
The partnership was set up in such a way it was kept off the Harken balance sheet. After the transfer of debts to HAP, Harken’s shares rose.
HarvardWatch said: “HAP bears a striking resemblance to the partnerships Bush has condemned at Enron: it was controlled by and transparent only to Harken insiders and was likely used to artificially brighten the company’s business prospects.”
Enron, which collapsed last year, hid debts in offshore partnerships that were kept off the balance sheet so they would not show up in the accounts.
The White House said the HAP deal was in no way illegal and the comparison with Enron was invalid.
timesonline.co.uk |
