Deals for Dubya
Bush’s family ties to shady bank BCCI help explain his “success” in the oil biz
by Bob Fitrakis
columbusalive.com
Trying to make sense of George W. Bush’s days in the oil business and his bizarre Harken Energy stock transactions? Well, if you dig deep enough, you’ll find a core group of people surrounding the notorious Bank of Credit and Commerce International (aka Bank of Crooks and Criminals International).
BCCI was, among other nefarious things, the bank of choice for al Qaeda, the CIA, Saddam Hussein and Manuel Noriega. This spooky collection of opium warlords, Arab sheiks, Pakistani financiers and organized crime perpetrated perhaps the greatest banking fraud in world history. BCCI’s global criminal conspiracy was aided by connections to Washington insiders like the Bush family, former secretary of defense and CIA co-founder Clark Clifford, Senator Orrin Hatch and President Jimmy Carter.
Award-winning journalists Peter Truell and Larry Gurwin document Dubya’s ties to al Qaeda’s favorite bank in their authoritative tome, False Profits: The Inside Story of BCCI, the World’s Most Corrupt Financial Empire.
Truell, a Wall Street Journal reporter, and Gurwin, who broke the infamous Banco Ambrosiano scandal in the early 1980s, point out that both Bush political brothers Jeb and Dubya had close links to BCCI. Jeb socialized with Abdur Sakhia, BCCI’s Miami branch manager and later the bank’s top U.S. official. Jeb’s real estate company, Bush Klein Realty, managed the Grove Island complex of luxury condominiums where Sakhia lived. BCCI financed various real estate deals at the complex.
But, as Truell and Gurwin note, “George W. Bush had even closer ties to the BCCI network.” In order to understand Bush’s bogus Horatio Alger claims of being a struggling West Texas oilman who struck it rich and the later Harken stock shenanigans now in question, people need to look beneath the mythology and political spin.
As three-time Pulitzer Prize nominee Molly Ivins explains, “There’s one thing to keep in mind as you read the many stories about George W. in the oil patch… He never found a revenue stream—unless you count investor’s dollars flowing from England to New York into the alkaline West Texas soil.”
“The governor’s oil-field career can be summed up in a single paragraph. George W. arrived in Midland in 1977, set up a shell company, lost a Congressional election in 1978, restarted building the company he’d put on hold, lost more than $2 million of other people’s money, and left Midland with $840,000 in his pocket,” Ivins offers in Shrub: The Short but Happy Political Life of George W. Bush.
Both Ivins and her co-writer Lou Dubose and the tandem of Truell and Gurwin concur that to assess Dubya’s dubious business dealings, you’ve got to understand the role of rich and powerful family friends who were losing money in energy stock investments but speculating in Bush political futures.
When Dubya organized Arbusto Energy Inc. in the 1970s, James R. Bath, a well-known Texas businessman, provided some of the financing. During George Bush senior’s tenure as CIA director, the agency allegedly used Bath, a business associate of the Saudi Khalid Bin Mahfouz—described by Truell and Gurwin as a “BCCI insider”—to buy CIA planes from Air America and other secretly held agency airlines.
Public records show that in 1976 the CIA sold several planes to Skyway, a firm managed by Bath. Bath denies it, but his former business partner Bill White has alleged the CIA’s role in Skyway in lawsuits and also attested that Bin Mahfouz was an owner of Skyway.
Criminal and civil suits against BCCI established that Bath invested money on Bin Mahfouz’s behalf and that he and Bin Mahfouz were part owners of Houston’s Main Bank with Ghaith Pharaon, the son of a royal advisor to Saudi Arabia’s King Faisal.
Dubya’s undercapitalized and floundering Arbusto received badly needed cash from an old Princeton pal of Bush political advisor James Baker, Philip Uzielli, who paid $1 million for a 10 percent share in a company valued at $382,376. “Uzi,” who made a fortune in Panama as the CEO of Executive Resources, claims he met Bush senior when he was CIA director.
In the mid 1980s, Arbusto hit hard times and merged with another desperate oil company to form Spectrum 7 Energy Corporation. Harken Energy Corporation, called by Time magazine “one of the most mysterious and eccentric outfits ever to drill for oil,” rescued Dubya’s failing enterprise in a stock swap with Spectrum 7 in 1986. Dubya received nearly $600,000 worth of Harken stock, joined its board of directors and became a $120,000-a-year “consultant” for Harken. The next year, Harken stayed afloat through debt restructuring and was in the same sad financial shape as the earlier Spectrum 7 and Arbusto.
But Harken dramatically reversed its ill fortune in January 1990. As Truell and Gurwin explain, “Harken Energy was awarded one of the most coveted oil deals in the world: a concession to drill for crude oil off the coast of Bahrain. The decision stunned many people in the industry. Harken was not only a small firm, it had never drilled outside the United States, nor had it drilled offshore. The only explanation that made sense to many oil executives, was that the Bahrain government wanted to do a favor for the family of President Bush.”
Coincidentally, Bush the Elder enjoyed similar success in the early ’60s when his small oil company, later listed in a public document as a CIA proprietary, received a lucrative contract to drill the first deep-water oil wells off the shores of Kuwait.
Harken’s Bahrain deal sharply drove up the price of the company’s stock. By June 1990, Dubya had bailed and sold two-thirds of his Harken shares—a transaction he improperly failed to disclose to the Securities and Exchange Commission for several months. Dubya made $318,430 in profit on the sale. In August, Iraq invaded Kuwait and Harken stock fell by 25 percent, from $4 to $3 a share.
Harken creditors were threatening to foreclose unless debt payments were made, according to U.S. News and World Report. “Substantial evidence [existed] to suggest that Bush knew Harken was in dire straits,” the magazine reported. Under U.S. law, insiders like Dubya are required to publicly report when they liquidate large blocks of stock. Bush reported his Harken stock sale eight months after the federal deadline, according to the Wall Street Journal.
“A extraordinary number of people connected to Harken or the oil deal have ties to BCCI,” Truell and Gurwin conclude. In False Profits, they document that Harken’s investment banking firm Stephens Inc. was the same firm that helped BCCI’s founder Agha Hasan Abedi secretly and illegally buy up stock in First American Bank. Bahrian’s Prime Minister Sheikh Khalifa bin-Salman al-Khalifa was both a BCCI stockholder in 1990 and instrumental in awarding Harken Bahrain’s offshore drilling contract.
Another of Harken’s large shareholders was Sheikh Abdullah Taha Bakhsh, whose principal banker was BCCI’s Bin Mahfouz. Also, Harken board member Talat Othman, Bakhsh’s investment manager, visited the White House on three separate occasions to discuss Middle East policy with President Bush the Elder.
Senator John Kerry’s BCCI investigatory committee established that BCCI was a conduit for opium money laundering from the Golden Crescent where Afghanistan, Iran and Pakistan come together. The Arab oil sheiks were fronts to create the illusion of “petro dollars” funding the bank. Dubya and Harken Energy’s friends at BCCI were the core of a group of people—supported by the CIA, the Pakistani Inter Service Intelligence Agency and the Saudi royal family—secretly funding the al Qaeda terrorist network and Islamic fundamentalist groups in their successful campaign to destroy the Soviet Union.
August 29, 2002
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