UQ Wire: The Loyalties of George W. Bush
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The Loyalties of George W. Bush
By Barbara O’Brien of
There is a thread running through George W. Bush’s biography that connects family to power to wealth. With no assets but his name and connections, Bush became a wealthy man, and a governor, and now a President. Without those connections, he’d be nothing.
Reporters finally are questioning the President’s financial integrity. But there is one big, fat question nobody is asking: Is there a connection between Bush’s financial interests and the September 11 attacks? This is the elephant in the living room that the pundits are quietly stepping around and which none will acknowledge.
I do not believe, as some do, that the President deliberately enabled the September 11 attacks for political gain. For one thing, the attacks clearly threw him off guard; he fluttered around the country in Air Force One like a startled pigeon for several hours before he got a grip on himself and returned to Washington. However, there is enormous circumstantial evidence that the Bush Administration willfully closed its eyes to clear signals that something terrible was about to happen. The question is, why?
An examination of Mr. Bush’s life story reveals clearly that he considers himself and his business cronies to be above law and ethics and morality, and his first priority is always to help himself and his friends make money. Little matters like building a financially sound business as a CEO or looking out for the people of Texas while he was governor were way down his list. Bush’s first loyalties are not to the People, his state, his country, his religion, or his principles; his first loyalties are to his connections.
And some of those connections are named bin Laden.
A close look at President Bush’s time in the Oval Office before September 11 reveals he hadn’t changed his priorities. And while Bush was focused on taking care of himself and his friends, Osama bin Laden was also very focused, indeed.
Lilies of the (Oil) Field
The account of how G.W. Bush made his fortune, absent from major news media during the 2000 campaign, is now under a spotlight. Anyone who is halfway paying attention knows this basic story:
In 1978 Bush incorporated an oil company, Arbusto Energy. The company did not make money and, apparently, did not find much oil, although it was a nifty tax shelter.
In 1982, Bush changed Arbusto's name to Bush Exploration Oil Co. The company continued to lose money. Even so, several wealthy benefactors bailed Bush out. One benefactor paid a million dollars for a share of the company that was worth less than half of that at the time, and he soon lost the entire million. (Molly Ivins gives a detailed account of this in her book, Shrub.)
In 1984, Bush Exploration merged with another oil company called Spectrum 7. GWB became CEO and was awarded with a substantial portion of the stock, but Spectrum 7 lost money, too.
In 1987, Spectrum 7 was acquired by Harken Energy. Harken assumed $3.1 million in debts and swapped $2.2 million of its stock for the hemorrhaging Spectrum 7. Harken gave Bush a seat on the Board of Directors, more than $300,000 of Harken stock with options to buy more, and a consulting contract that paid him as much as $120,000 a year.
Pretty good for a guy who has never been a success at anything in his life. But there’s more …
In 1989, Bush borrowed money to buy a 2 percent share of the Texas Rangers.
Also in 1989, Harken Energy sold 80 percent of a subsidiary, Aloha Petroleum, to a partnership called International Marketing & Resources. The catch is that IM&R was also Harken, as the partners were all Harken insiders. Further, $11 million of the $12 million “sale” was through a note held by Harken; $8 million the company entered in its books as a capital gain was actually vapor. It should be noted that Bush was on the company’s audit committee at the time.
This takes us to 1990 and the juicy parts.
In January 1990, the government of Bahrain announced it had awarded exclusive offshore drilling rights to Harken. This astonished people in the oil industry, as Harken had never ventured out of the Texas-Louisiana area and had never drilled offshore at all.
On June 22, 1990, G.W. Bush sold his Harken stock for $4 a share.
On August 2, 1990, Iraqi dictator Saddam Hussein invaded Kuwait, thus jeopardizing Harken’s offshore drilling deal.
By August 22, 1990, Harken could no longer conceal it was losing money; its second quarter report was a disaster. Stocks fell to $2.37 a share. And, that fall the Securities and Exchange Commission discovered the Aloha sale scam and required Harken to restate its earnings.
In 1991, the Wall Street Journal reported that the Securities and Exchange Commission had not been notified of Bush’s stock trade until eight months after the legal deadline. The SEC investigated but took no action.
In the meantime, Mr. Bush had used the Harken money to pay the Texas Rangers loan, and he commenced to use his baseball-owner status as a springboard for his political and financial ambitions.
Running through this narrative are a number of nearly incestuous relationships. For example, when the SEC was investigating Mr. Bush, the agency’s general counsel was Bush’s personal attorney who had helped him arrange the Texas Rangers deal. And the head of the SEC was a long-time, loyal supporter of Mr. Bush’s father, who was President of the United States at the time.
Thanks to a recent column by Nicholas Kristof of the New York Times, we know how G.W. Bush made a 2400 percent profit on his Texas Rangers investment. Mr. Bush and the other Rangers owners persuaded the city of Arlington, Texas, to raise taxes to build a $200 million stadium to be handed over to the Rangers.
Even more incredible, Bush and his fellow owners got state and local government to confiscate land for their own enterprises. According to Eric Alterman (“The Scandal No One Cares About,” MSNBC) the state of Texas gave Arlington Sports Facilities Development Authority the power to expropriate private land on which to build the stadium. Several landowners – mostly homeowners and farmers – refused to sell for what the Authority was offering. “The Authority condemned their land and expropriated it by force of law,” wrote Alterman. “It did this with 270 acres of land, even though only about 17 acres were needed for the ballpark. The rest was used for commercial development that made Bush and his friends rich.”
A Little Help for His Friends
The story of Bush in Texas could fill a book—several, in fact. These include Shrub: The Short but Happy Political Life of George W. Bush by Molly Ivins and Lou Dubose, and Paul Begala’s Is Our Children Learning?
(And then there is James Hatfield’s Fortunate Son: George W. Bush and the Making of an American President. This book was scheduled to come out during the 2000 presidential campaign, but the Bush campaign released information about the author’s background that caused St. Martin’s Press to delay the book’s publication. Hatfield was later found dead in a motel room, allegedly from a drug overdose.)
A short essay can only provide a few highlights of events during Bush’s two terms as governor of Texas. However, even a brief overview of the record reveals that as governor of Texas, Bush treated the Texas taxpayers’ money as his own and generously repaid those who made him a success.
Ed Vulliamy of the London Observer (“Dark Heart of the American Dream,” June 16, 2002) reported that George W. Bush sailed into the governor’s mansion with $42 million dollars collected for his two campaigns. Much of this money came from corporations that generate a lot of pollution, including Exxon, Shell, Amoco, Enron, and Alcoa. A gift of $348,500 came directly from Ken Lay of Enron.
Governor Bush rewarded his benefactors with legislation that allowed “self-regulation” of pollution. Companies could audit their own pollution records and enjoy protection from public disclosure. As a result, Texas enjoyed the highest air pollution volume in the nation.
Another Bush benefactor was a man named Tom Hicks, who bought Bush’s shares of the Texas Rangers. Paul Krugman explained in his New York Times column of July 16, 2002, how Governor Bush was able to funnel University of Texas endowment money to Hicks and other cronies.
First, he changed the rules governing the endowment so that Texas officials no longer had to tell the public what they were doing with public money. “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,” Krugman said.
Next, Governor Bush made Tom Hicks the chairman of UTIMCO. Hicks saw to it that his friends and his political interests were well funded by Texas money. According to Krugman, at least $450 million went to funds managed by Hicks’s business cronies and Republican Party donors. Such transactions were safe from public view, thanks to Governor Bush. An employee of UTIMCO who alerted auditors was fired.
Further, when Bush sold his shares of the Texas Rangers to Hicks, he was entitled to about $2.3 million from that sale, according to Paul Krugman. “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.”
And then there was “funeralgate,” in which by all appearances Governor Bush and other politicos obstructed an investigation by the Texas Funeral Service Commission of the SCI funeral home chain, under suspicion of using improperly licensed embalmers. SCI gave $35,000 in campaign contributions to Bush, according the Austin Chronicle (Robert Bryce, “Funeralgate Hits Texas,” Vol. 18, No. 45).
While campaigning for President, Governor Bush often bragged about how he had cut taxes in Texas and still left a budget surplus. Too bad it wasn’t true.
As governor of Texas, Bush pushed through massive tax cuts for the wealthy. Once upon a time the state had a budget surplus, but when Bush left the governor’s mansion to become President, Texas was enjoying record cost overruns. This is well chronicled on BushWatch.com.
What Bush did was push for ways to bring his 1999 tax cut up to an even $2 billion, even attempting to take money from workmen's compensation and kindergarten funds at one point. Although he had to settle for $1.7 billion, $1 billion of which was taken from the so-called state surplus, the point was to use the tax cut as political leverage on the presidential campaign trail. This, of course, was done at the expense of the average Texan, and could very well threaten what has been set aside for programs such as health care and education. Not only did Bush's wealthy friends get an unfair share of the tax cut through oil subsidies and property tax write-offs, but the average citizen is now being asked to pay for Bush's political ambitions. (Politex, Bush Watch, 7/14/00)
Cracks in the state budget were plainly visible by the summer of 2000, while Bush was running for president. In typical Bush style, the candidate brushed off questions about Texas’ financial problems with a flip answer: “I hope I'm not here to deal with it. I'm seeking another office.” R.G. Ratcliffe wrote in the Houston Chronicle,
As Texas governor, Bush pushed a combined total of $3 billion in state property, consumer and business tax cuts through in 1997 and 1999.
But now lawmakers are finding that unexpected costs of Medicaid health care for the poor and health insurance for retired teachers and state employees have pushed the state toward the red. Some say Texas ' red ink might only be pink if Bush's tax cuts had been spent on state services instead.
“It's landed in our lap, and now the guy who started it is in Washington,” said state Sen. Mario Gallegos, D-Houston. “They've barely left here and now it's our problem.” …
But despite the fact that Bush increased state spending on public schools by $3 billion a year since 1995, local school property taxes continued to rise and the tax cuts were enjoyed by few Texans. (“State's Budget Crunch Haunting Bush,” February 18, 2001)
According to the Houston Chronicle article cited above, the Texas tax cuts caused a decrease in state funds to local governments, which meant local governments had to raise property taxes to make up the difference. Further, in 1999 the state legislature decided to fund Medicaid for 23 months of the next 24, so that $110 million would be available to make the budget balance. The imbalance was passed on to the 2001 budget.
On the other hand, Richard Rainwater enjoyed a $1 million tax break. Texas billionaire Rainwater, a former co-owner of the Texas Rangers, is another Bush benefactor who has done well by investing in Bush’s political career. Rainwater was able to buy several buildings from the Texas teachers’ retirement system without bidding, at a $70 million loss to the teachers. Also, according to Bush Watch, Tom Hicks invested $9 million of UTIMCO money in one of Rainwater’s equity funds.
As Paul Krugman pointed out in his July 16 column, Bush’s record as a businessman and a governor reveal three characteristic traits. First, he likes to work in secret, as if the people have no right to know what their chief executive is doing on their behalf. Second, he freely appropriates public monies and institutions to reward his friends and reinforce his political power. And third, he is utterly indifferent to conflicts of interest.
Follow the Money
The captains of several American industries did not want Al Gore to be elected president.
Clinton was bad enough, they thought. Clinton had faced down the timber industry, the automobile industry, major utilities, coal, and Big Oil itself by decreeing anti-pollution measures that cut into profits. Yes, Clinton was bad enough. But Al “Earth in the Balance” Gore promised to be even worse.
According to the Center for Responsive Politics, industry put its money on Bush, not Gore.
Oil & Gas
Data: Center for Responsive Politics, opensecrets.org
After some of the most outrageous electoral shenanigans in American history, George W. Bush was named president-elect. As Inauguration Day approached, California’s energy shortage was reaching crisis proportions. The cost of power had shot up 1000 percent, and still the state was plagued with rolling blackouts. Many in the state believed that out-of-state suppliers, such as the Texas-based Enron Corporation, were manipulating the supply and gouging consumers.
In the meantime, President-elect Bush had named Enron CEO Ken Lay to advise his presidential transition team. (According to the Center for Responsive Politics, Bush named 474 people who had collectively donated about $5.3 million to Republican candidates and the GOP in the previous two years to be transition team advisers.) Bush flew to his inauguration on an Enron jet.
On the day of his inauguration as the 43d President of the United States, George W. Bush directed his chief of staff, Andrew Card, to announce a plan to put on hold a number of regulations ordered by the Clinton Administration. These ranged from health insurance guidelines and meat safety standards to the designation of historical monuments. Inevitably, with Bush as President, the interests and well being of workers, the environment, and consumers were sacrificed in favor of industry, and money.
The infamous, cabinet-level Energy Task Force, headed by Vice President and former oil company CEO Dick Cheney, met for the first time January 29, 2001. The Task Force met nine times, in secret, and presented their recommendations to the President on May 16. Breathlessly titled “Reliable, Affordable, and Environmentally Sound Energy for America’s Future,” provisions of the policy include:
- Building 1,300 to 1,900 new electric plants over the next 20 years
- Relaxing environmental restrictions so that existing coal-fired power plants and oil refineries can expand without having to buy up-to-date antipollution equipment
- A review by the Justice Department of pending Clinton Administration lawsuits against energy companies for lack of compliance with environmental regulations, with the objective of dropping the cases whenever possible
- Allowing petroleum companies to drill for oil and natural gas on parts of the 23-million acre Arctic National Wildlife Refuge (ANWR) in Alaska
Lindsay Sobel wrote in The American Prospector:
You might think it was a sizable oversight that President Bush released his 163-page energy plan for America without including a single provision that would tackle skyrocketing energy prices in the short term. But Bush was way ahead of us on that. At a news conference just before he released his energy plan, he pronounced, “The best way to make sure that people are able to deal with high energy prices is to cut taxes, is to get people more of their own money so they can meet the bills, so they can meet the high energy prices.” (“Fueling an Epidemic,” May 18, 2001)
Never mind that Bush’s tax cuts were intended to benefit the very rich, not the very poor. If the people are cold, let them eat cake!
But, some may ask, the Task Force recommended strengthening the Low Income Home Energy Assistance Program to $1.7 billion, which is $300 million more than budgeted for 2001. That sounds like a good break for the poor! The catch is that in 2000 the Program received $2 billion; Bush’s figure to be “strengthened” represented a big cut.
Sobel points out that not only are Bush and Cheney ex-oil company CEOs; National Security Advisor Condoleeza Rice was on the board of directors of Chevron; Secretary of Commerce Don Evans was chairman of an oil and gas company (Tom Brown, Inc.).
“With the Bush Administration filled with friends of energy companies,” Sobel wrote, “you'd think that the president could use that advantage to turn up the heat on companies raking in the profits while Americans suffer blackouts, squeezed bank accounts, and threats of an economic nosedive. Instead, it appears, the Powerpuff Girls and Boys are drubbing the poorest of the poor to benefit their friends.” (Emphasis added.)
While the Energy Task Force was secretly thinking of many ways to enrich energy corporations, Enron was cleaning up big time in California. David Lazarus of the San Francisco Chronicle wrote,
As California's utilities drew closer to financial ruin, Houston energy giant Enron Corp. was whistling all the way to the bank yesterday, after reporting a 34 percent increase in quarterly profit.…
The company has had at least several lawyers and representatives at recent meetings of the California Public Utilities Commission and has been a vocal participant in talks this month on rescuing Pacific Gas and Electric and Southern California Edison from the brink of bankruptcy.
Enron refuses to break out its performance in California from the rest of its balance sheet.
“If you could break out the returns so you could see California only, you'd see that their profits here are way above the norm,” said Nettie Hoge, executive director of The Utility Reform Network in San Francisco. “They don't want you to see it.”
What can be seen is that Enron's wholesale services division, which includes energy trading and services, saw its quarterly revenue almost quadruple to $39.2 billion. Profit before taxes nearly tripled, rising to $777 million. (“Enron Reports 34% Increase in Its Profits,” January 23, 2001
California’s pleas for federal help fell on deaf ears in the Bush Administration. “We're prepared to do those things that we can to help, but the basic problem in California was caused by Californians,” Vice President Cheney said. Bush’s economic advisor Larry Lindsey was more blunt. “They should expect no more help from the White House,” he said. (San Francisco Chronicle, “Cheney Calls Energy Woes State's Mess,” January 21, 2001)
And, as one more obvious payback to his supporters, in March 2001 Bush refused to sign the Kyoto Protocol of 1997 designed to reduce the “greenhouse” gases in Earth’s atmosphere that cause global warming.
Behind Closed Doors
The National Energy Policy was created in total secrecy. The public was not permitted to know the names of the people who met with the task force; the names of staff members assigned to the task force; or the names of outside people consulted by the task force.
The report created by the task force was remarkably tilted in favor of increased fossil fuel production. So tilted, in fact, that many suspected the report had been written by insiders in the oil and coal industries looking for big contracts for themselves.
Two Democratic legislators, Representatives John Dingell of Michigan and Henry Waxman of California, asked the General Accounting Office to investigate. The GAO asked Cheney for “full and complete access to records relating to the development of the administration's national energy policy.” The Vice President refused the request.
“We are acting 100 percent within the law, and the GAO does not have the authority to make this request,” said Cheney spokeswoman Juleanna Glover-Weiss. “It's not appropriate to set a new precedent as to what the GAO can request from a president.” (Major Garrett, CNN, “Cheney Won’t Turn Over Energy Task Force Records,” July 19, 2001)
(Meanwhile, back at Enron … in spite of the big profits in California, the company as a whole was in big trouble. Although the company was making money by trading derivatives in natural gas and power, it had branched out into many other enterprises that were not doing so well. Enron was losing billions on such investments as a power plant in India, telecommunications, Internet stocks, and broadband. The company hid the debt through creative bookkeeping. Eventually the scam unraveled; when Enron filed for bankruptcy in December 2001, the filings showed $13.1 billion in debt for the parent company and an additional $18.1 billion for affiliates.)
In January 2002, the GAO threatened to sue for the task force documents. “This is about the right of the Congress to oversee the executive branch, the right of the GAO to assist Congress,” said GAO Comptroller General David Walker. “Our concern is that never before have we had a situation where an administration has refused to provide this kind of information, whether it be a Democratic or Republican administration.”
The President became a co-stonewaller. “In order for me to be able to get good, sound opinions, those who offer me opinions, or offer the vice president opinions, must know that every word they say is not going to be put into the public record,” Bush said, ignoring the fact that the GAO was not asking for minutes, just names.
The GAO made good its threat to file suit to obtain the Enron records on February 22, 2002. A spokesperson for the Vice President said the White House would fight the case in court. “The president and the vice president are committed to defending this important constitutional principle,” the spokesperson, Jennifer Millerwise, said. She did not elaborate on what constitutional principle allows the executive branch of government to be unaccountable to the people.
The Senate Governmental Affairs committee, seeking records of White House contacts with Enron, voted on May 22 to issue the first congressional subpoenas on the Bush administration. Hours later, the White House acknowledged more extensive contacts with Enron executives in 2001 than previously disclosed.
At about the same time, the Natural Resources Defense Council (NRDC) received 13,000 pages of documents by the Energy Department (DOE) after winning a lawsuit filed under the Freedom of Information Act (FOIA). The documents revealed that energy industry lobbyists had enjoyed extraordinary access to the task force.
The data shows that industry representatives had 714 direct contacts between January 2001 and September 2001, while non-industry representatives had only 29. The NRDC could not definitively categorize another 105 direct contacts.
“A year ago the Cheney task force issued recommendations that read like a wish list for energy companies,” said NRDC senior attorney Sharon Buccino. “When it came to developing the administration's environmentally and fiscally reckless energy policy, it was all industry all the time.”
The representatives tallying the most direct contacts with the energy task force were from some of the nation's largest and most influential energy companies and trade associations — industries that stood to benefit from the president's policies to boost domestic energy production. Some of them also are major donors to President Bush and Republican congressional candidates.
For example, the Nuclear Energy Institute had contact with the task force 19 times. This group contributed $437,404 to Republican candidates and the Republican Party from 1999 to 2002. Energy giant Southern Company, a group that contributed $1,626,507 to Republican candidates and the GOP from 1999 to 2002, had contact with the task force seven times. (Cat Lazaroff, “Energy Task Force Documents Show Industry Influence,” Environment News Service, May 22, 2002)
A convoluted tale, but what does it tell us? It tells us where George W. Bush’s loyalties lie. There is no question he and the Vice President conspired to allow Republican donors and business cohorts to enrich themselves at the expense of the American people. Even the infamous financial scandals of the past, such as Teapot Dome or Crédit Mobilier, did not involve the President of the United States himself.
As of this writing the records of the Energy Task Force are still secret.
Let’s rewind to the beginning of 2001. On January 31, just a few days after Bush’s inauguration, the U.S. Commission on National Security/21st Century issued a report in which seven Republicans and seven Democrats unanimously approved 50 recommendations to combat terrorism. Co-chaired by Senators Gary Hart and Warren Rudman, the Commission had been chartered in 1998 by President Clinton. Its final report, Road Map for National Security: Imperative for Change, represented two years of hard work and had strong bipartisan support in Congress.
The combination of unconventional weapons proliferation with the persistence of international terrorism will end the relative invulnerability of the U.S. homeland to catastrophic attack. A direct attack against American citizens on American soil is likely over the next quarter century. The risk is not only death and destruction but also a demoralization that could undermine U.S. global leadership. In the face of this threat, our nation has no coherent or integrated governmental structures. (Road Map for National Security, Part I, Securing the National Homeland)
The Hart-Rudman Commission recommended the formation of a cabinet-level agency to combat terrorism, called for better intelligence gathering and sharing between agencies, and urged that steps be implemented right away. In March 2001, Representative Mac Thornberry, R-Texas, introduced the National Homeland Security Agency Act. Other members of Congress, including Representatives Wayne Gilchrest, R-Maryland; John Kyl, R-Arizona; and Dianne Feinstein, D-California, began drafting legislation based on the Commission’s recommendations.
But in May, President Bush shot it all down by announcing that he would turn the issue of national security over to Vice President Cheney, who would come up with a new plan. “Bush announced his plan almost as if the Hart-Rudman Commission never existed, as if it hadn't spent millions of dollars, ‘consulting with experts, visiting 25 countries worldwide, really deliberating long and hard,’ as Hart describes it,” Jake Tapper wrote in Salon (“We Predicted It,” September 12, 2001) In particular, Bush resisted the idea of creating a cabinet-level national security agency. Once Cheney came up with a plan, implementation could be handled by FEMA. No problem.
Well, excuse me, but … why? It’s not as if Mr. Cheney needed something to do to keep busy; he had lots of meetings scheduled with the corporate heads of the oil and coal industry to write energy policy, after all. And it’s not as if Republicans were opposed to the Hart-Rudman proposals. Republicans as well as Democrats were following up on the proposals to write law.
The simplest and most obvious explanation for Mr. Bush’s behavior is sheer arrogance. The homeland security committee had been commissioned by (organ glissando, B minor) Bill Clinton. Therefore, it was wrong. Toss it out and start over.
There are other explanations, however.
In 1984, the FEMA contact in the National Security Agency was Colonel Oliver North. North collaborated with FEMA director Louis Giuffrida on legislation to allow the president to impose censorship, seize means of production, and outlaw anti-government strikes during times of national emergency. North and Giuffrida also wrote an executive order that would allow FEMA to take over all government operations and detain “enemy aliens.”
Bill Molson wrote in Online Journal,
North also planned FEMA-Pentagon war game scenarios that contemplated the imposition of martial law and the suspension of key constitutional guarantees, such as freedom of speech and due process. The Pentagon confirmed that the simulations, code named Rex 84 Alpha and Night Train 84, took place April 5–13, 1984. Interestingly, the Miami Herald also reported that Giuffrida attempted to steer FEMA into areas beyond civil defense, specifically counter-terrorism. (“September 11: The Circumstantial Case,” Part 3, April 24, 2002)
Yes, that was several years ago. However, a remarkable number of Reagan Administration insiders are now inside the Bush Administration, including several Iran-Contra conspirators; e.g., John Poindexter, Elliott Abrams, Otto Reich, and John Negroponte. These men are now, respectively, head of the Information Awareness Office (and what is THAT, pray tell?), on the National Security Council staff, an Assistant Secretary of State, and ambassador to the United Nations.
It’s circumstantial, yes, but it bears watching.
There is one more possibility, even more disturbing. Did the Bush Administration kill the Hart-Rudman proposals to cover its own duplicities?
Bush’s less-secret national security plan is the National Missile Defense. Although there is no agreement the NMD would be effective, or even work, Bush is determined to throw money at it to make it happen. Why? Here’s a clue: According to the Center for Responsive Politics, for the 2000 elections the defense industries’ gave more than four times more in campaign contributions to Bush than to Gore ($190,725 to $43,750). And the Bush Administration has other, more lucrative connections to the defense sector.
The Carlyle Connection
On September 11, 2001, members of the Carlyle Group were holding their annual investor conference in the Ritz-Carlton Hotel in Washington, DC. Those in attendance included former Reagan Administration secretary of defense Frank Carlucci, former Reagan Administration chief of staff and secretary of state James Baker III, and representatives of the bin Laden family, including one of Osama bin Laden’s brothers, Shafig bin Laden.
The Carlyle Group calls itself “a private global investment firm that originates, structures and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings. … As of March 31, 2002, the firm had more than $13.5 billion of committed capital under management.”
Very basically, Carlyle buys and sells privately held companies and divisions of publicly owned companies for big profits. “Unlike other private-equity groups, Carlyle concentrates on companies funded by the government, or those affected by government regulation, such as telecommunications firms, and then hires people with relevant government experience,” Melanie Warner explained in Fortune.
The revolving door has long been a fact of life in Washington, but Carlyle has given it a new spin. Instead of toiling away for a trade organization or consulting firm for a measly $250,000 a year, former government officials can rake in serious cash by getting equity cuts on corporate deals. Several of the onetime government officials who have hooked up with Carlyle—Carlucci, Baker, and (Richard) Darman, in particular—have made millions. (“The Big Guys Work for the Carlyle Group,” Fortune, March 18, 2002)
(So, ironically, after September 11 Shafig bin Laden was well positioned to make a killing— financially—on a war being waged on his brother Osama. However, Carlyle reports that it gave the bin Ladens their money back a few weeks after September 11.)
Frank Carlucci is the Chairman of the Carlyle Group. Chairman of Carlyle-Europe is former British Prime Minister John Major. Former President George H.W. Bush does consulting work for Carlyle, often in Saudi Arabia and Kuwait. (Saudi ties to the Bush family go deep; Prince Bandar bin Sultan bin Abdul Aziz gave $1 million to the Bush Presidential Library in College Station, Texas.)
The current President Bush was on the board of Caterair, a Carlyle subsidiary, for five years. While he was governor of Texas, the board of directors of the Texas teachers' pension fund – the infamous UTIMCO, previously discussed — voted to invest $100 million with the Carlyle Group.
(Connect the dots. Defense and aerospace firms make up a large part of Carlyle’s portfolio. These firms depend on getting contracts from the U.S. government. The head of the U.S. government is …?)
In 1995, the bin Laden family invested $2 million in Carlyle Partners II Fund, which raised $1.3 billion overall. According to the Wall Street Journal,
The fund has purchased several aerospace companies among 29 deals. So far, the family has received $1.3 million back in completed investments and should ultimately realize a 40% annualized rate of return, the Carlyle executive said.
But a foreign financier with ties to the bin Laden family says the family's overall investment with Carlyle is considerably larger. He called the $2 million merely an initial contribution. “It's like plowing a field,” this person said. “You seed it once. You plow it, and then you reseed it again.” (“Bin Laden Family Could Profit from a Jump in Defense Spending Due to Ties to U.S. Bank,” Wall Street Journal Online, September 27, 2001)
United Defense Industries is one of Carlyle’s firms. UDI makes a land-based weapon called the Crusader, which can fire ten rounds of 100 lb shells per minute over a distance of 25 miles. In 1997 a Pentagon advisory panel rejected the Crusader program, calling it inappropriate for modern warfare – a relic of the Cold War.
However, two weeks after September 11, 2001, the Army signed a $665 million contract with UDI to complete development of the Crusader. On December 13, Congress approved the program. The next day, Carlyle took UDI public and made a fast $237 million. Secretary of Defense Donald Rumsfeld pulled the plug on the program in May 2002 (news of which was considerately leaked to Carlyle by the Pentagon), but thanks to Crusader, Carlyle’s investment in UDI brought a $315 million profit. (And the Crusader program may yet be resurrected, as many influential members of Congress receive campaign contributions from Carlyle.)
More troubling is Carlyle’s connection to several wealthy Saudis, including the family of Osama bin Laden..
At the same time that the elder Bush counsels his son on the ongoing war on terrorism, the former president remains a senior adviser to the Washington D.C.-based Carlyle Group. That influential investment bank has deep connections to the Saudi royal family as well as financial interests in U.S. defense firms hired by the kingdom to equip and train the Saudi military. (Maggie Mulvihill, Jack Meyers, and Jonathan Wells, “Bush Advisers Cashed in on Saudi Gravy Train,” Boston Herald, December 11, 2001)
The Carlyle Group served as paid advisers to the Saudi royal family on the so-called ``Economic Offset Program,'' which required U.S. arms manufacturers selling weapons to Saudi Arabia to give back a portion of their revenues in the form of contracts to Saudi businesses, most of which are connected to the royal family. The program was terminated some time in 2001.
Before becoming head of Carlyle, Carlucci spend most of the 1990s as head of B.D.M., a large defense contractor in which Carlyle had a controlling interest (sold to TRW International in 1998). During its Carlucci years, B.D.M. had multimillion-dollar contracts to train and manage the Saudi National Guard and the Saudi Air Force.
There may be other connections between George W. Bush and the Saudis. For example, back in 1978 when Bush set up his first oil company, one of the partners was James Bath. Bath was financial representative in Houston for Salem bin Laden, an older brother of Osama. Although Bath says the money he put into Arbusto was his own, it has long been speculated the money came from Salem bin Laden. In “Questionable Ties: Tracking bin Laden's Money Flow Leads Back to Midland, Texas (In These Times, The Institute of Public Affairs, undated article) Wayne Madsen describes extensive financial ties between the Bush and bin Laden families going back several years. See also this graphic from Bush Watch.
Although Shalem bin Laden may not be making money on the War on Terror, Vice President Dick Cheney’s old company, Halliburton, is doing quite well. Very recently, Halliburton was awarded a $9.7 million contract “to build an additional 204-cell detention camp at the U.S. naval base at Guantanamo Bay, Cuba, to hold additional suspected al Qaeda and Taliban prisoners,” according to Reuters.
In November 2001, “Halliburton was awarded a $140 million contract to develop an oil field in Saudi Arabia by the kingdom's state-owned petroleum firm, Saudi Aramco, and a Halliburton subsidiary, Kellogg Brown & Root, along with two Japanese firms, was hired by the Saudis to build a $40 million ethylene plant,” according to the Boston Herald (Maggie Mulvihill, Jack Meyers and Jonathan Wells, “Bush Advisers Cashed in on Saudi Gravy Train,” December 11, 2001).
Other members of President Bush's inner circle have business connections to the Saudis. Condoleeza Rice, national security adviser, is a former longtime member of the board of directors of Chevron. Through its subsidiary Saudi Chevron Philips, the company has many investments and interests in Saudi Arabia.
I received a phone call from a high-placed member of a US intelligence agency. He tells me that while there's always been constraints on investigating Saudis, under George Bush it's gotten much worse. After the elections, the agencies were told to “back off” investigating the Bin Ladens and Saudi royals, and that angered agents. (Greg Palast, “Has Someone Been Sitting on the FBI?” BBC Newsnight, November 7, 2001)
September 11 has been called a massive failure in intelligence. United States intelligence agencies have been described as too bureaucratic and lacking in imagination. But was there also a willful blindness at the top, or an inability to make objective, rational judgments because of personal interests?
What Did We Know? When Did We Know It?
I have documented the following (and more) on the Timeline of Terror:
October 12, 2000: A small boat filled with C4 explosives motored alongside a U.S. destroyer, the Cole, which was fuelling up off the coast of Yemen. Two men aboard the small craft waved at the larger vessel, then blew themselves to pieces. Seventeen American sailors died, and thirty-nine others were seriously wounded. FBI agent John O’Neill leads a team of investigators to the scene.
March 2001: Moscow’s Permanent Mission at the United Nations submits a report to the UN Security Council with very specific information about Osama bin Laden and al Qaeda. This information is given to the Bush Administration, which took no action.
According to Alex Standish, the editor of the (Jane’s Intelligence) Review, the attacks of September 11 were less of an American intelligence failure and more the result of US inaction based on “a political decision not to act against Bin Laden”. (Rashmee Z. Ahmed, “U.S. Had Specific Information on Laden,” The Times of India, October 6, 2001)
May 2001: Bush kills the Hart-Rudman report (see above).
May 30: Four men are convicted in the bombings of U.S. embassies in Kenya and Tanzania on August 7, 1998. Witnesses testified at the trial that Osama bin Laden was sending al Qaeda agents to the United States for flight-school training.
June 26: Espionage sources report a spike in intelligence traffic about possible terrorist strikes on July 4. The White House is informed. (Time, May 27, 2002, “What They Knew, and When They Did”)
June 28: In a written briefing, CIA director George Tenet warns Condoleeza Rice that it is “highly likely” that “a significant Qaeda attack” will take place “in the near future.” (Newsweek, May 27, page 32)
July: John O’Neill is barred by bureaucrats in the U.S. Justice Department from returning to Yemen to continue his investigation of the Cole disaster. According to some accounts, he complained that his investigation into Al-Qaeda was shut down due to pressure from the Saudi government and oil interests. O’Neill decides to retire from the FBI. He accepts a position as chief of security at the World Trade Center in New York.
Meanwhile, intelligence had been streaming in concerning a likely Al Qaeda attack. “It all came together in the third week in June,” [Richard] Clarke* said. “The C.I.A.'s view was that a major terrorist attack was coming in the next several weeks.” On July 5th, Clarke summoned all the domestic security agencies—the Federal Aviation Administration, the Coast Guard, Customs, the Immigration and Naturalization Service, and the F.B.I.—and told them to increase their security in light of an impending attack. (Lawrence Wright, The New Yorker, January 14, 2002)
(*Richard Clarke was national coordinator for counter-terrorism in the White House from the first Bush Administration until 2001.)
Convicted in the spring of 2001 for planning to bomb the Los Angeles Airport, Ahmed Ressam gives investigators detailed information on Al Qaeda’s plans for terrorism in the United States.
He left no doubt that U.S. airports were a prime target “because an airport is sensitive politically and economically,” as Ressam said in court on July 3. At least two of the FAA’s summer warnings came from Ressam’s information, which should have given pause to Bush administration officials who remained convinced that the threat was abroad. (Michael Hirsh and Michael Isikoff, “What Went Wrong,” Newsweek, May 27, 2002)
July 1: Senator Diane Feinstein of California, a member of the Senate Intelligence Committee, tells CNN, “Intelligence staff tell me that there is a major probability of a terrorist incident within the next three months.” She says that more money is needed for intelligence and counter-terrorism measures. (Time, May 27, 2002, “What They Knew, and When They Did”)
July 2: FBI warns law enforcement agencies and the White House of possible al Qaeda attacks overseas, and also says domestic strikes cannot be ruled out. (Time, May 27, 2002, “What They Knew, and When They Did”)
July 5: July 4 passed with no terrorist attacks, but the CIA tells President Bush that attacks are still possible. (Time, May 27, 2002, “What They Knew, and When They Did”) According to Newsweek (May 27), Bush directs National Security Adviser Rice to find out what might be going on regarding domestic terrorism.
July 6: A National Security Council group led by Richard Clarke, national coordinator for counter-terrorism, meets to discuss intelligence and terrorist threats overseas. Nonessential travel by counter-terrorism staff is suspended. (Time, May 27, 2002, “What They Knew, and When They Did”)
July 5: In a White House meeting, counter-terrorism officials warn the FBI, CIA, INS, and others that a major attack on the United States is coming soon (Newsweek, May 27, page 32)
July 10: Kenneth Williams, a counter terrorism agent in the FBI’s Phoenix office, notices that a number of suspected terrorists were learning to fly airplanes and asking questions about airport security. Williams’s superior, William Kurtz, writes a memo urging all U.S. flight schools be checked. However, the warnings from the Kurtz team are ignored in Washington. (Romesh Ratnesar, Michael Weisskopf, “How the FBI Blew the Case,” Time, June 3, 2002)
July 18: The FBI warns law enforcement of threats made in connection to the conviction of Ahmed Ressam. The White House is also informed. (Time, May 27, 2002, “What They Knew, and When They Did”)
July 21: Violence marks a summit of the Group of Eight held in Genoa, Italy. CNN reports that “metal detectors, sniffer dogs and agents will stand guard at the luxury cruiser housing the leaders.” However, “U.S. President George W. Bush will not stay with other world leaders because of fear of terrorist attack.” (“G8 Summit Death Shocks Leaders,” CNN, July 21, 2001)
WASHINGTON — U.S. and Italian officials were warned in July that Islamic terrorists might attempt to kill President Bush and other leaders by crashing an airliner into the Genoa summit of industrialized nations, officials said Wednesday.
Italian officials took the reports seriously enough to prompt extraordinary precautions during the July summit of the Group of 8 nations, including closing the airspace over Genoa and stationing antiaircraft guns at the city's airport. (Los Angeles Times, September 27, 2001)
July 26: CBS News reports that Attorney General Ashcroft is traveling by private jet because of a “threat assessment.” (CBS News Correspondent Jim Stewart, “Ashcroft Flying High.”)
August: Mossad officials travel to Washington to warn the CIA and the FBI that a cell of up to 200 terrorists was planning a major operation. The Israelis specifically warn their counterparts in Washington that “large-scale terrorist attacks on highly visible targets on the American mainland were imminent.” (Douglas Davis, “Mossad Warned CIA of Attacks,” Jerusalem Post, September 17, 2001)
August 6: A daily briefing of the vacationing President Bush presented the possibility of an airplane hijacking as a terrorist threat. According to National Security Adviser Rice (Newsweek, May 27, 2002), the briefing was “an analytic report that talked about (bin Laden’s) methods of operation, talked about what he had done historically.”
August 15: A flight school in Minneapolis reports Zacarias Moussaoui to the FBI. (Time, May 27, 2002, “What They Knew, and When They Did”)
August 17: Zacarias Moussaoui is arrested in Minnesota. (Newsweek, May 27, page 33)
August 27: French authorities notify the FBI that Zacarias Moussaoui is a suspected Islamic extremist. (Time, May 27, 2002, “What They Knew, and When They Did”)
September: In a memo on the Moussaoui case, a Minnesota FBI agent suggested that the suspect could fly a plane into the World Trade Center. (Time, May 27, 2002, “What They Knew, and When They Did”)
September 10: A plan by the CIA to attack al Qaeda in Afghanistan is put on the President’s desk. (Time, May 27, 2002, “What They Knew, and When They Did”)
September 10: Senator Feinstein asks for a meeting with Vice President Cheney to discuss terrorism. (Cheney had been directed to create a national counter-terrorism plan). Cheney’s chief of staff tells the senator they need six months to prepare for this meeting. (Time, May 27, 2002, “What They Knew, and When They Did”; the Vice President’s chief of staff disputes this account.)
September 10: The National Security Agency picks up Arabic conversations including the phrases “tomorrow is zero hour” and “the match begins tomorrow.”
September 10: Attorney General John Ashcroft rejects a proposed $58 million increase in financing for the FBI's counter-terrorism programs.
(U)nder Attorney General John Ashcroft, the (Justice) department was being prodded back into its old law-and-order mind-set: violent crime, drugs, child porn. Counterterrorism, which had become a priority of the Clintonites (not that they did a better job of nailing bin Laden), seemed to be getting less attention. When FBI officials sought to add hundreds more counterintelligence agents, they got shot down even as Ashcroft began, quietly, to take a privately chartered jet for his own security reasons. (Michael Hirsh and Michael Isikoff, Newsweek, May 27, 2002; emphasis added)
Yet the Bush Administration swore it had no idea anything like the September 11 attacks were about to happen. Right.
In a press conference on May 16, 2002, Condoleeza Rice flapped about nervously and claimed “I don’t think anybody could have predicted these people would take an airplane and slam it into the World Trade Center. … that they would use an airplane as a missile.” As pointed out in the May 27, 2002, Newsweek (page 33), “Intelligence agencies abroad had foiled two earlier terrorist plots to hijack commercial airliners and crash them into the Eiffel Tower and the CIA headquarters in Langley, Va.”
Further, in July at the G8 Summit in Genoa, the President had taken special security precautions because of intelligence that “Islamic terrorists might attempt to kill President Bush and other leaders by crashing an airliner into the Genoa summit of industrialized nations.” (See above, July 21.)
Epilogue: We’re Screwed
After September 11, President Bush became a national hero (for what? delivering a couple of speeches without drooling?). The evidence suggests that the President deserved to be tarred and feathered.
A number of conspiracy theories have been floated that accused the President of being the mastermind behind September 11. As I said at the beginning of this essay, I don’t agree with this. However, it is plain that Bush knew something bad was going to happen and took no measures to stop it. Why?
Conjecture (choose one):
- He knew there would be terrorist attacks but didn’t imagine they would be as bad as September 11 actually was. His approval numbers at the time were nothing to be proud of; perhaps he thought a small tragedy would work to his advantage.
- In spite of all the warnings, the Bush Administration just wasn’t focused on terrorism and paid no attention.
A great deal has been made of bungling by bureaucrats in the intelligence agencies. Certainly a great deal of old-fashioned incompetence played a part in the tragedy of September 11. But it seems to me that if a directive had come down from the top that intelligence on al Qaeda was to be given top priority … it would have been given top priority.
What Can We Do?
First, we must have a broad independent investigation of September 11. Even if it takes years, we must know what was done wrong, and the Oval Office must not be spared from the investigation.
Second, it is imperative that the President’s various schemes to enrich his cronies be kneecapped. Now.
For example, forget about privatizing Social Security. As Paul Krugman wrote in the July 26, 2002, New York Times:
Mr. Bush first proposed privatizing Social Security back when people still believed that stocks only go up. Even then his proposal made no sense; as I've explained before, it was based on the claim that 2-1=4, that you can divert the payroll taxes of younger workers into personal accounts and still pay promised benefits to older workers. But now even the nonsensical promise that individual accounts would earn stock market returns looks pretty unappealing. So why does he keep pushing the idea?
… Ask yourself: Who would benefit directly from the creation of “personal accounts” under Social Security?
Those personal accounts won't be like personal stock portfolios. The Social Security Administration can't and won't become a stockbroker for 130 million clients, most of them with quite small accounts. Instead it's likely that a privatization scheme would require individuals to invest with one of a handful of designated private investment funds.
That would mean enormous commissions for the managers of those funds. And those who would be likely to benefit showed their appreciation, in advance: During the 2000 election, according to opensecrets.org, campaign contributors in the two categories labeled “securities and investment” and “miscellaneous finance” (basically individual wheeler-dealers) gave Mr. Bush almost six times as much as they gave Al Gore.
Be advised: If you are not a fund manager, privatizing Social Security will not benefit you. Be against it.
Other suggestions: We must roll back the tax increases for the wealthy that have not yet gone into effect. We must not throw money at National Missile Defense. We should re-instate the estate tax. We must end the “Bermuda Loophole” that allows major corporations to avoid paying taxes.
Let’s not invade Iraq unless there is clear and incontrovertible evidence that Saddam Hussein either is connected to September 11 or is about to nuke somebody, and maybe not even then. No one, American or Iraqi, should have to die to make money for the Carlyle Group.
In other words, we must not permit the Bush Regime to continue to loot the wealth of America to benefit Bush’s friends.
Finally, all SEC documents pertaining to Bush’s role at Harken must be released. We need to know the truth about the character of the person we elected to be Leader of the Free World.
Oh, wait. We didn’t elect him, did we?