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UQ Wire: Harken Energy Chronology

Unanswered Questions: Thinking For Ourselves
Presented by…

Harken Energy Chronology

By Mudpie*
Updated Friday, October 25, 2002

Image Source- Bartcop


PLEASE NOTE: This is a work in progress and will be updated periodically. Check back at for the latest version. The last version was published on 27 August 2002



The purpose of this chronology is to show plainly and clearly that:

1. President George W. Bush did indeed have material non-public knowledge of adverse financial conditions at Harken Energy Co. prior to the sale of his Harken stock and therefore violated 15 U.S.C. § 78u-1 , insider trading of securities based upon material non-public information.

2. The Securities and Exchange Commission was indeed aware of Bush’s insider trading violation and chose to stand down.

3. While serving on the Board of Directors at Harken Energy Company, George W. Bush’s performance, motives and ethics were no different than those of the corporate executives and officers of Enron, Worldcom or any other national corporation being criticized by Bush for doing what he did.

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4. The Aloha Petroleum sale was an act of fraud and Bush was in a position to know it and prevent it.

5. George W. Bush sought business dealings with people strongly connected to and involved with BCCI, the empire of fraud and crime.



Harken Energy was formed in l973 by two oilmen who would benefit from a successful covert effort to destabilize Australia's Labor Party government (which had attempted to shut out foreign oil exploration). A decade later, Harken was sold to a new investment group headed by New York attorney Alan G. Quasha, a partner in the firm of Quasha, Wessely & Schneider. Quasha's father, a powerful attorney in the Philippines, had been a staunch supporter of then-president Ferdinand Marcos. William Quasha had also given legal advice to two top officials of the notorious Nugan Hand Bank in Australia, a CIA operation. (Mother Jones Sept. 1992)

Harken began life in the late 1970s as an unprofitable collection of Texas oil wells for investors seeking tax write-offs. That strategy changed in 1984 when Alan Quasha, a lawyer and Harvard M.B.A., bought control and became chairman. Quasha proceeded to trade large chunks of Harken stock for sick oil companies, which owned not only wells but also pipelines and retail gas stations. Aiming to salvage or spin off the assets, Quasha generated a dizzying web of deals that would eventually push Harken's debt past $100 million and boost its revenues to more than $1.1 billion by the end of the decade. (The Wackiest Rig in Texas by Richard Behar, Time Mag., Oct 28, 1991)


Bank of Credit and Commerce International (“BCCI”) was started in Pakistan with funds provided by Bank of America and the CIA. [Rodney Stitch]. San Francisco Chronicle writes “BofA, BCCI Dealings Hit $1 Billion-Plus a Day

In the late 1970s, the Soviets invaded Afghanistan. Countering the Soviets, the CIA helped supply the Afghani resistance with weapons. Interwoven with neighboring Pakistan's intelligence agency, Inter-Services Intelligence, was BCCI, the Bank of Credit and Commerce International. Inter-Services Intelligence controlled supplies of weapons to the Afghan resistance. AGHA HASAN ABEDI, founder of BCCI, dealt directly with CIA chief William Casey. "Abedi was close to Bill Casey. They met many times. BCCI financed operations. BCCI brokered weapons and supplies, BCCI acted as paymaster." (Anonymous source, qtd. in *The Outlaw Bank*.) The CIA/BCCI relationship grew, and BCCI helped fund CIA and U.S. military covert operations.

Note: Info on BCCI given as BCCI factors significantly into Bush’s business dealings over the years.

June, 1977

George W. Bush formed his own oil drilling company, Arbusto Energy, in Midland, Tex. James R. Bath, a friend and neighbor, was used to funnel money from Osama bin Laden's brother, Salem bin Laden, to set up George W. Bush in the oil business, according to The Wall Street Journal and other reputable sources.

Salem bin Laden, a close friend of the Saudi King Fahd had "invested heavily in Bush's first business venture," according to The Daily Mail (U.K.).

Bath found investors for Arbusto and "made his fortune" by investing the money of two BCCI-connected Saudi sheiks, Khalid bin Mahfouz and Salem bin Laden. Mahfouz was one of the richest men in the world and a controlling shareholder in BCCI..

Note: BCCI was not a bank. It was a drug and weapons conduit and money laundering operation fronting as a bank

"You are never going to understand BCCI if you persist in thinking of it as a bank." -- John Moscow, Assistant D.A., Manhattan (qtd. in The Outlaw Bank by Beaty & Gwynne)

In September of 1991, Time magazine carried an article describing BCCI as "a vast, stateless, multinational corporation that deploys its own intelligence agency, complete with a paramilitary wing and enforcement units, known collectively as the Black Network." BCCI's "Black Network" apparently is connected to at least 16 suspicious deaths, including of 2 reporters: Anson Ng of the Financial Times, and Danny Casolaro, a freelance reporter. Both had been working on the BCCI story.

Bill White, a former real estate business partner of Bath, said: "He had put up $50,000 to help George, Jr., get started in oil business" at a time when "Bath had no substantial money of his own," according to The Outlaw Bank. Shortly after Bush's father was appointed director of the CIA, Salem bin Laden appointed Bath as his business representative in Texas. (American Free Press, 10-07-01)


Jackson Stephens tried to take over Financial General Bankshares (FGB) in Washington, D.C. (FGB was later acquired by BCCI, renamed First American, and run by Robert Altman and Clark Clifford. Robert Altman was later acquitted of misleading regulators, and the case against Clifford was dropped due to his age and infirmity.) In the Stephens' takeover attempt, FGB sued Web Hubbell, and Hillary Rodham Clinton.

October, 1980

October Surprise meeting in Paris in which CIA Director George Bush allegedly arranged for Iran to delay releasing kidnapped Americans until after the election. Michael Riconosciuto told Congressional investigators he helped arrange a $40 million bribe from the Reagan-Bush team to Iranians.


Arbusto is hurting financially so Bush decides to take the company public but needs a cash infusion first.

Philip Uzielli, a New York investor and friend of James Baker III purchases a 10% stake in Arbusto even though the entire company is valued at less than $400,000.(Numerous sources)

April 1982

Bush changes name of Arbusto to Bush Exploration and takes the company public hoping to raise 6 million dollars but manages to raise only 1.14 million. Within two years, it was clear that Bush Exploration was in trouble again

The 50 investors, who were "mainly friends of my uncle" in Junior's own words, put in $4.7 million and lost most of it. Junior claims that investors "did pretty good," but Bush family friend Russell Reynolds told the Dallas Morning News: "The bottom line was there were problems, and it didn't work out very well. I think we got maybe 20 cents on the dollar." (Real Change)

Investing in Arbusto turned out to be the absolute pits. By April 1984, Arbusto had drilled ninety-five holes, with forty-seven yielding oil, three yielding natural gas, and forty-five that were dry. The company had returned only $1.5 million to its investors. Philip Uzielli tried to shore things up by buying another ten percent stake for $150,000, but to no avail. "We lost a lot of money in the oil business," Uzielli told a reporter for the Wall Street Journal in 1991. "We had a lot of dry wells. . . . Things were terrible. It was dreadful."

But the A-Team was willing to take a bath to help out a Bush. "We wrote the money off the minute we invested," said Stephen Kass, a classmate of Bush's at Harvard Business School. (Center for Public Integrity)

As Arbusto neared collapse, Spectrum 7 Energy Corporation bought it in September 1984.

Here’s Dubya’s take on the Arbusto/Spectrum deal as he told it to the Washington Post in 1999:

Tell us about the [1984] merger with Spectrum 7.

“ We were an ongoing company. We had a lot of upside. I had put an exploration team together, and what the Spectrum deal was, was it gave the Spectrum people an operating arm in the Permian basin. And so did I need to do that merger? No. I didn't need to do it. But I needed it to grow.”


In walked bailout number two in the persons of Cincinnati investors, William DeWitt Jr. and Mercer Reynolds III. Heading up an oil exploration company called Spectrum 7, DeWitt and Mercer contacted George W. about a merger with Bush Exploration. For Bush and his struggling company, the decision wasn’t a hard one to make.

In February 1984, George W. agreed to a merger with Spectrum 7 in which Dewitt and Reynolds would each control 20.1 percent and George W. would own 16.3 percent. George W. was named chairman and CEO of Spectrum 7, which brought him an annual salary of $75,000.(Harper’s Magazine, February 2000.)

Jan. 6, 1984

Bush files with SEC that he owned stock in Lucky Chance Mining, where he also was a director.

On June 25, 1984,

Bush files with SEC disclosing that he was a director of Silver Screen Management Inc., the managing partner of a movie production company, Silver Screen Partners. Silver Screen was founded by Roland Betts, a Yale frat brother of Bush’s. From 1989 to 1998 Mr. Betts was the lead owner of the Texas Rangers. Silver Screen went on to invest over a billion dollars in Disney movies over a 7 year period. Some films were “R” rated and include lots of violence, such as "The Hitcher," which one reviewer in 1986 described as a "massacre about every 15 minutes" and another called "gizzard-slitting depravity." (AP & Wash. Post) ( Note: Mr. Betts has recently[2002] been named a director of the Lower Manhattan Redevelopment Corporation, which is charged with rebuilding the World Trade Center site.)

Interesting that as of June 1998 the Texas Permanent Scool Fund owned 406,000 shares of Disney stock and the Texas Teacher Retirement System and Texas Employee Retirement System own nearly 4 million shares of Disney stock , worth an estimated $289 million. (Houston Chronicle 7-09-98)


By the end of 1985, Spectrum's fortunes had reversed. With oil prices falling, the company was losing money and on the verge of collapse. To save the firm, Bush began negotiations to sell Spectrum 7 to Harken Energy, a large Dallas-based energy firm owned mostly by billionaire George Soros, Saudi businessman Abdullah Taha Baksh and the Harvard Management Corporation. (


In a single six-month period, Spectrum 7 loses $400,000. Partners fear that creditors will foreclose remaining assets. (The Exile)

George W. Bush and partners sell their failing Spectrum 7 Energy Corp. to Harken Energy Corp. Bush receives more than 200,000 shares of Harken stock and is made director and consultant to the company. In addition to his $600,000 stake in Harken, George W. Bush has profited handsomely. As a consultant to the company for "investor relations and equity placement," Bush was paid $80,000 a year until 1989, when his salary jumped to $120,000. With the company suffering, Bush received only $50,000 last year and $42,000 this year. He also receives $2,000 for each board committee meeting and in 1989 was granted, with other directors, options for 25,000 shares of Harken stock. Faulkner declines to say what services Bush has performed as a consultant. (U.S. News & World Report)

SEC documents between 1986 and 1993 show that Bush acquired 212,152 shares of Harken stock on Nov. 1, 1986, at the time he merged his Spectrum 7 company with Harken. But the future governor did not report the transaction until April 7, 1987 -- more than five months later. (Tom Flocco, World Net Daily,2-18-00, Scoop 7-6-2002)

When Harken bought out Spectrum 7, the company was broke and desperately needed a cash infusion. As the talks with Spectrum 7 progressed, Harken officials were lining up a major new financial backer: Harvard Management Company, Inc. The investment firm's only client is Harvard University; it manages the school's multibillion-dollar endowment.

A month after Bush came on board, Harvard Management agreed to invest at least $20 million in Harken. It would eventually come to own some ten million shares of Harken's stock, making it one of the company's largest investors

Michael Eisenson, a partner in Harvard Management Company who sat on Harken's board of directors, said that he and other Harvard officials picked Harken after reviewing several proposals from energy companies. "Harken management seemed capable and honest," Eisenson said.

Scott Sperling, who worked with Eisenson at Harvard said that he doesn't recall Harken as "an investment that had come specifically recommended by any board member."

Harken was Harvard Management's first major investment in Texas wildcat operations, a part of the university's investment history it would rather forget. The investments in oil and gas would eventually generate nearly $200 million in losses for the endowment.

The university's commitment to Harken was surprising in view of the bad shape the company was in. "I took some time and looked at it and I went, god, I don't want to be anywhere near this," a prospective investor in Harken from the late 1980s told the Center For Public Integrity. " This thing looks like a train wreck." (CPI)

Harken’s CEO, Mikel Faulkner, introduces Bush to an old business associate, David Halbert, who is raising seed money to start up Allied Home Pharmacy. Bush becomes one of 30 initial investors who put up a total of $250,000.


When Harken Energy needed an infusion of cash in the spring of 1987, the Bush personally met with [Jackson] Stephens founder of Stephens, Inc, Little Rock, Arkansas, the largest investment banking and brokerage firm outside of New York.

Stephens put a rescue plan in motion: Union Bank of Switzerland, which ordinarily didn't invest in small U.S. firms, would make an exception, giving Harken $25 million in exchange for a stock interest.

As part of the deal, Sheikh Abdullah Bakhsh, who at one time owned nearly 10% of Stephen’s Worthen Bank in Little Rock, joined Harken’s board of directors as a major investor. Bakhsh appointed Talat Othman as his representative on Harken’s board.

Both Stephens and Abdullah Taha Bakhsh, a wealthy and well-connected Saudi real estate investor, signed the financial transaction. The Geneva transaction was paid through a joint venture between the Union Bank of Switzerland and its Geneva branch of BCCI.

Bakhsh has been an investment partner in Saudi Arabia with Gaith Pharoan, identified by the U.S. Federal Reserve Board as a "front man" for BCCI's secret acquisitions of U.S. banks.

At the time, UBS was a joint-venture partner with BCCI in a Geneva-based bank. And although Harken officials, including Messrs. Bush and Quasha, say they were unaware of it, Mr. Stephens was also well acquainted with BCCI. In fact, he suggested to BCCI in the late 1970s that it try to take over what is now Washington, D.C.'s biggest bank company, First American Bankshares Inc., according to court records produced in connection with the takeover attempt. Mr. Stephens was among the defendants in that suit, aimed at preventing a First American takeover by BCCI founder Agha Hasan Abedi, BCCI principal Kamal Adham and Abdullah Darwaish, chief financier for the royal family of Abu Dhabi. Mr. Stephens declined to be interviewed for this article

It was also Union Bank of Switzerland, according to congressional hearings on international money laundering, that helped the now-notorious Bank of Credit and Commerce International skirt Panamanian money-laundering laws by flying cash out of the country in private jets, and that was used by Ferdinand Marcos to stash 325 tons of Philippine gold around the world (WSJ-12-06-91 and Fortunate Son by J.H.Hatfield, p.98-99)

Note: The Texas Observer reports that Bush was present at the meeting in Little Rock, Arkansas when the sale of five percent of Harken to Union Bank of Switzerland was discussed.

Let’s be clear on who it is that George W. Bush is dealing with here when he sought out Jackson Stephen’s help. We know Stephens has strong connections and involvement with BCCI, as did James Bath, whom Bush got help from in Arbusto. First, let’s be very clear on who BCCI was. From A Report to the Committee on Foreign Relations United States Senate by Senator John Kerry and Senator Hank Brown December 1992 102d Congress 2d Session Senate Print 102-140:

“Regardless of what might be shown in the missing material, the remainder is more than adequate to document BCCI's criminality, including fraud by BCCI and BCCI customers involving billions of dollars; money laundering in Europe, Africa, Asia, and the Americas; BCCI's bribery of officials in most of those locations; its support of terrorism, arms trafficking, and the sale of nuclear technologies; its management of prostitution; its commission and facilitation of income tax evasion, smuggling, and illegal immigration; its illicit purchases of banks and real estate; and a panoply of financial crimes limited only by the imagination of its officers and customers.

Among BCCI's principal mechanisms for committing crimes were shell corporations, bank confidentiality and secrecy havens, layering of corporate structure, front-men and nominees, back-to-back financial documentation among BCCI controlled entities, kick-backs and bribes, intimidation of witnesses, and retention of well-placed insiders to discourage governmental action.”

In False Profits authors Peter Truell and Larry Gurwin state that Jackson Stephens played “a crucial role in BCCI’s penetration of the U.S. market.”

On February 7, 1992, New York Post reporter, Mike McAlary reported that Jackson Stephens "brokered the 1970s deals in which BCCI officials secretly acquired control of two American banks... The banks -First American Bankshares and the National Bank of Georgia were used as a financial clearinghouse by a collection of [the] world's most dastardly crooks, drug dealers, dictators and spies....and yet Stephens' ties to principals in the scandal continue to this day....Lance and Stephens are reported to have made a fortune as a result of their involvement with BCCI."

In December, 1977, Stephens introduced Bert Lance to Agha Hasan Abedi (the founder of the Bank of Credit and Commerce International -BCCI). According to the U.S. Securities and Exchange Commission, they discussed the possibility that Abedi purchase the stock of Financial General Bankshares (later called First American Bankshares) held by Lance, Stephens and others and concocted a plan to take over Lance's stock of the National Bank of Georgia U.S. SEC v Lance et. al.). The SEC found out about the plan and sought a restraining order to prevent a foreign bank from taking over a U.S. bank. Years later it would be revealed that Abedi and accomplise Gaith Pharoan went right ahead anyway succeeding with the takeover in 1982 (Corporate Crime Reporter, July 22, 1991)

“Documents filed in Florida by the Government of Panama indicate that General Manuel Noriega used BCCI during the 1980's to funnel money to UBS that he had apparently stolen from the Panamanian military” (The Independent, U.K., August 14, 1991)

Note: Stephens had extensive dealings with Union Bank of Switzerland(UBS), which also was involved with many of Enron’s business deals. And, of course, UBS was now a major shareholder in Harken Energy, thanks to Bush and Stephens.

In a Sept. 1998 lawsuit (Case No. 98CV11829JLT) filed by Massachusetts attorney Ray Kohlman on behalf of Green Beret Bill Tyree, written testimony of U.S. Colonel Al Carone states, “Jackson Stephens….paid off politicians from Arkansas to look the other way and ignore the CIA cocaine operation at Mena, Arkansas.” (The Bushwhackers by Uri Dowbenko, p. 97)

Mena banks were owned by the Riadys of the Lippo Group and Jackson Stephens. Rose Law Firm did their legal work.

Stephen’s company, Systematics (now a part of Alltel), is alleged to have been involved in money laundering.

"Systematics has had close ties to the NSA and CIA ever since its founding, sources say, as a money-shuffler for covert operations. It is no secret that there were billions of dollars moving around in 'black' accounts--from buying and selling arms to the Contras, Iran, Iraq, Angola and other countries to paying CIA operatives and laundering money from clandestine CIA drug dealing. Having taken over the complete computer rooms in scores of small U.S. banks as an 'outsource' supplier of data processing, Systematics was in a unique position to manage that covert money flow. Sources say the money was moved at the end of every day disguised as a routine bank-to-bank balancing transaction.... .”

And it is Jackson Stephens that George W. Bush takes into his confidence and goes to when he needs money…..Jackson Stephens, a man connected to drug smuggling, money laundering and one of the most colossal and sinister financial frauds of our time, BCCI…this is the man George W. Bush wants to do business with.

Question: Why would any bank accept stock in a failing company that “looks like a train wreck” as collateral for a 25 million dollar “loan”? Go back up a few paragraphs and reread Senator Kerry’s report on the purpose and mechanism of BCCI.

SEC filings show he had purchased another 80,000 shares on March 10, 1987. But strangely, two weeks later, an April 22 filing noted that the 80,000-share purchase was backdated to Dec. 10, 1986. When questioned by the media, Bush's attorney said it was the same 80,000 shares but he could not explain the discrepancy regarding the purchase dates or why Bush even reported the trade two times. (Tom Flocco, World Net Daily,2-18-00, Scoop 7-6-2002)

Oct. 4, 1988

A federal grand jury in Tampa indicted ten current and former BCCI employees.


New Republic Article says that when Bush merged Spectrum 7 with Harken in 1986, Bush got 1.5 million shares of Harken restricted stock, warrants to buy 200,000 more and a seat on Harken's board. At the time of the merger, Harken had annual revenues of just $4.4 million. In 1990, the company took in over $822 million. Despite this rapid growth, however, Harken has not made money since the merger. In 1990 alone, the company lost over $8.3 million. (Texas Observer)

Note: Other sources say Harken lost $40 million in 1990.

Bush’s wages were increased to $120,000; He was also allowed to borrow $180,375 from the company at very low interest rates. In 1989 and 1990, according to the company's Securities and Exchange Commission filing, Harken's board "forgave" $341,000 in loans to its executives. In addition, Junior took advantage of the company's ultraliberal executive stock purchase plan, which allowed him to buy Harken stock at 40 percent below market value. (Mother Jones Sept.1992)

May 1989

A federal grand jury in Tampa returned a superseding indictment that contained new charges as well as sweeping allegations about the BCCI’s practice of collecting dirty money. The indictment included three new defendants. BCCI's legal team would find it hard to fight these charges.....the best outcome from BCCI's point of view would be a plea bargain. (False Profits by Truell & Gurwin, p.266)

Another SEC filing, this from June 6, 1989, showed that Bush purchased another 25,000 shares of Harken but again waited more than four months to report the transaction. (Tom Flocco, World Net Daily,2-18-00, Scoop 7-6-2002)

June 15, 1989

Letter from Harken CEO to George W. Bush

Letter shows Bush's close involvement with the internal workings of the company. Harken President Mike Faulkner tells Bush that he considers Bush’s role with Harken as “very meaningful and significant.” (CPI)

June 30,1989

Harken masked its 1989 losses when in mid-year it sold 80 percent of a subsidiary, Aloha Petroleum, to a partnership of Harken insiders called International Marketing & Resources for $12 million, $11 million of which was through a note held by Harken. By Jan. 1, 1990, IMR, in turn, sold its stake in Aloha to a privately held company called Advance Petroleum Marketing, and the Harken loan was effectively transferred to Advance, though garanteed by IMR. (CPI)

A group of insiders, using money borrowed from Harken itself, paid an exorbitant price for a Harken subsidiary, Aloha Petroleum. That created a $10m phantom profit, which hid three-quarters of the company's losses in 1989.

Bush claims to see nothing wrong about Harken's frauds. However, the goal was to hide real losses and to book fictional income. The people who made the decision and the board of directors stood to gain directly from the fraud, and Bush did benefit - enormously.

Bush is also wrong on the accounting. This was a deliberately complicated transaction for the same reason that Enron's and Lincoln Savings's partnerships were complicated. Complexity makes it hard for regulators to discern fraud. While the transaction was complicated, the underlying fraud is so well known that the accounting rules governing such transactions are not vague. There was no ''honest dispute'' about accounting rules. There was a deliberate fraud structured in a complicated manner in order to claim that it wasn't really deliberate. (Boston Globe )

Anxious to report better numbers, the managers of Harken came up with a plan. Harken would sell 80% of its chain of Hawaiian gas stations--Aloha Petroleum--to a group of investors that included Harken's chairman Alan Quasha and another of its directors. Harken would loan the buyers $11 million and the buyers would kick in an additional $1 million up front for a total sale "price" of $12 million. Since Harken had carried Aloha on its books as worth $5.1 million, this "sale" would produce an immediate $7.9 million profit--$12 million in the sale "price" minus the $4.1 million valuation of 80% of Aloha. For Harken, this was enough to turn a bad loss for the year into a modest loss.

The net effect on Harken's balance sheet? Beforehand, Harken had had Aloha Petroleum as an asset carried as worth $5.1 million. Afterwards, Harken had on its balance sheet:

20% of Aloha Petroleum, carried as worth $1.0 million.

$1 million extra in cash contributed by the insider purchasers of the 80% of Aloha.

An $11 million loan owed to Harken by the insider Aloha purchasers.

So what's the problem? Beforehand, Harken had one asset carried as worth $5.1 million. Afterwards, Harken had three assets whose value summed to $13 million. That's a gain of $7.9 million, right?... Urrr... Wrong.

The problem was the terms of the $11 million loan. It was not collateralized by or subject to recourse through anything other than Aloha.... When you looked beneath the surface of the transaction there was no change in the underlying economics: before the sale, Harken got cash from its equity stake in Aloha if and only if Aloha made the money; after the sale, Harken got cash from the debt it was owed by Aloha's insider purchasers if and only if Aloha made the money. Harken had made no significant change in its underlying businesses and profit potential as an economic organization, and yet was trying to claim that something, somehow had added $8 million in value--in current profits--to the company. (Brad DeLong’s Semi-Daily Journal)

They made a point of seeking the approval of directors who were not participants in the investor group. Bush, a member of the board's audit committee, signed off on the deal, according to Harken documents. So did the company's outside auditor, Arthur Andersen & Co.

Experts on corporate governance say that as an independent director and one of only three members of the audit committee, Bush was in a position to exercise an important oversight role but apparently failed to do so.

An audit committee's primary responsibility is to ensure that the company's outside auditors conduct a thorough examination of the financial records without interference from officers and employees.

"The people at Enron could have gone to school on this thing," said Alfred King, former managing director of the Institute of Management Accountants, vice chairman of Milwaukee-based Valuation Research Corp. and former advisor to the Financial Accounting Standards Board.

"They sold to themselves and recorded a profit," King said. "That's exactly what Enron did on a number of those off-balance-sheet transactions. On this one transaction at least, it's almost identical." (Warren Vieth, LA Times, 7-12-02)

Black’s Law Dictionary defines fraud as:

“A false representation of a matter of fact, whether by words, or by conduct, by false or misleading allegations, or by concealment of that which should have been disclosed, which deceives and is intended to deceive another so that he shall act upon it to his legal injury.”

Shareholders and investors in Harken stock acted upon the cooked-book, intentional concealment of major losses by Harken Directors and Officers, to their injury. Also, the banks that had extended Harken millions in credit required that Harken meet certain minimum levels of working capital, net worth, cash flow and debt to equity ratios. In all probability, Harken cooked its books to also meet those loan requirements.

In a December 6, 1990 letter to Harken Energy Corporation, the SEC asked why Harken and the company's independent auditors -- Arthur Andersen -- qualified the sale of Aloha Petroleum as a capital gain. The SEC letter asked Harken to provide additional information about "The financial statement of IMR which were relied upon in the Aloha transaction that enabled the Company and its independent auditors to reach the conclusion that the collection of the note from IMR was reasonably assured at the time of sale." The SEC also asked for Harken to "Describe any plans, arrangements or understandings which obligated Harken to provide financial support to Aloha on an ongoing basis and the consideration that was given by Harken and its independent accountants in determining that full gain recognition was appropriate."

After the SEC discovered Harken's concealment of real losses, Harken was forced to amend its 1989 annual report. The amended filing declared that Harken's 1989 losses were actually $12,566,000, rather than the $3,300,000 loss it had earlier declared. (Mediawhoresonline)

In a June 26, 2002 speech in Canada, Bush said, "We will fully investigate and hold people accountable for misleading not only shareholders but employees, as well." Will he include himself in the Aloha deal?

In its public filings to the SEC, Harken gave conflicting accounts of who sold Aloha, who bought it, and even when the sale occurred.

In its 1989 annual report, for example, it declared that it sold Aloha to IMR on June 30. In one passage of the report, it says that IMR then sold Aloha to Advance on Jan. 1, 1990; in another it says IMR sold on March 30.

But in its 1990 report, Harken declared that it was its subsidiary E-Z Serve Holding Co. that sold Aloha to IMR.

Adding to the confusion, E-Z Serve, which shortly after the transaction was spun off as a separate publicly traded company, claimed in its 1991 annual report that it had sold Aloha to Advance Petroleum—not IMR—in 1989.

Harken was notorious during that period for filing confusing reports. In 1991, Harken founder Phil Kendrick told Time magazine that the company’s annual reports “get me totally befuddled.’’Quoted in the same article, Faulkner had this advice to those trying to figure out the company’s financial statements: “Good luck. They’re a mess.’’ (CPI)

July 1989

Soros sells his 20% stake (6.9 million shares) in Harken back to the company for nearly full market and persuades the company to sell him its 42% stake in Crystal Oil Co. of Shreveport at a deeply discounted rate.

Aug. 31, 1989

Bush files with SEC that he owned shares in Tom Brown, Inc., an energy company on whose board he served.

Sept. 1, 1989

Harken Energy Corporation formed an offshore subsidiary in September 1989 in the Cayman Islands, a tax haven. The subsidiary, Harken Bahrain Energy Company, was set up in anticipation of the company's venture drilling for oil off the coast of Bahrain. When asked if it were for the purposes of avoiding taxes, White House spokesman Dan Bartlett said, “In order to save money [on taxes], you would have to make money, and they didn't make any. They found no oil."

Bartlett later said it was set up for “tax competitiveness”. As Arainna Huffington said, “to his credit, Bartlett didn't even break out laughing after this claim.” And, “Arguing that the crime didn't pay isn't a defense.”

Sept. 13, 1989

Meeting of the Board of Directors. Bush attended.

Board discusses what steps should be taken “in the event that the New York Stock Exchange or any other party should make an inquiry of the Company concerning unusual trading activity of its stock.” They voted that everyone should keep their mouth shut regarding “differences or fluctuations in trading activity or price of the Company’s stock.”

Most curious. What were these “ unusual trading activities” that might prompt questions by the New York Stock Exchange or any other party? Unusual volume? Unusual share price movement? Unusual trading pattern such as multiple sales and purchases by a single entity or entities working together, particularly insiders? More outstanding shares than had been reported? Whatever it was, it warranted concealment and Bush approved.

In that same meeting they discussed a transfer of warrants that had been issued in conjunction with the purchase of Spectrum 7. They approved the transfer of those warrants from the “following described sellers” but none were shown. It had been blanked out! Again what were they trying to conceal?

Note:Warrants are securities that gives the holder the right to purchase securities from the issuer of the warrant at a specific price. Warrants are usually considered long-term instruments, expiration dates are typically years in the future.

They also approved some discounted stock options to the “following named individuals” and no names were shown. Again, they were blanked out.

They also approved a loan to Mikel D. Faulkner, Director, President and CEO. It was secured with stock options that had been given to Mr. Faulkner by the Company. The amount of the loan was blanked out. According to their 1989 10K, Faulkner received $563,730 in loans from Harken in 1989. This brought his outstanding balance owed to the Company to $1,151,270. He had paid nothing on his outstanding loans since 1987 according to their 1989 10K. (CPI)

These minutes were given to the SEC in its investigation of the sale of Aloha Petroleum and/or Bush’s insider stock deal. Did the SEC accept these notes with key information deleted? Did they inquire about the “ unusual trading activity”, which very much sounds like it is referring to illegal insider trading.

After all, they were investigating possible fraud. The SEC is silent on this.

Remember Harken was losing money at this time. They had cooked the books to conceal an actual 12.6 million dollar loss for 1989. Harken obviously had no reserve to fall back on as evidenced by the need to conceal their losses and their need to borrow 25 million to begin drilling in Bahrain. They would even have trouble meeting payroll within a few months. Yet, here the Board of Directors, including George W. Bush, are approving one of many loans to officers of the company which totaled $2,445,426 in 1989, according to their 1989 10K. Bush himself received $84,375 that year.

Obviously the Board on which Bush served was looking after the financial interests and needs of it’s own Directors and Officers above the interests of shareholders, employees and creditors. Sound familiar?

Oct. 5, 1989

Letter to Bush from Harken General Counsel Larry E. Cummings

Harken’s counsel informs Bush that his original loan from the company to cover his stock options would be changed from a full recourse note to a non recourse note, as Bush requested. As Cummings says, this relieves Bush of any “personal liabilty” should he default on theloan. Harken cannot go after his assets under a non recourse note. Those assets include the original 212,152 shares that Bush got when Spectrum 7 merged with Harken....shares he had pledged against the original loan. Thus, those shares are no longer pledged to the loan from Harken. Bush is now free to sell those 212,152 shares.

Another sweetheart deal to Bush from Harken, a company losing money.

Bush is questioned about late filings of SEC forms. In this letter, Harken's top lawyer asks for a missing "Form 4," which was filed to document insider stock sales for 25,000 shares purchased under Director’s Option in June, 1989.. (CPI) Note: The responsibilty for filing this form 4 with the SEC rest solely with George W. Bush, not his or Harken’s lawyer.

Dec. 6, 1989

The minutes of 12-06-89 clearly state that the Board "unanimously approved HEX'S proceeding towards finalization of a formal agreement with the state of Bahrain"... It seems to indicate that the agreement with Bahrain was then only subject to the "final approval of the President of the Company." HEX is Harken Exploration Company.

Bush was shown to be in attendance at that meeting. (CPI)

So, if Bush was going to object, it would appear that he should have done it right then and there. There’s nothing in the minutes about any objections from anyone. Bush was there. He voted approval. Here's a direct quote from Bush at his 8-01-02 press conference:

"I think there was an issue over a arrangement with Bahrain, a drilling venture there, which I opposed, as you may recall, when I was a director of the company."

(Summary of press conference at

And then there’s this from a Harken company “insider” as quoted in Mother Jones, Sept. 1992: But the company insider says, to the contrary, that Junior was excited about the Bahrain deal. "Like any member of the board, he was thrilled," the associate says. "His attitude was, 'Holy shit, what a great deal!'"

Also at the December 6 meeting, the Board of Directors adopted and approved an amendment to the Non- Qualified Plan that would allow a participant to make a "cash-less exercise" of options. The participant would forfeit back to the company sufficient shares subject to the participant's option with an aggregate "appreciated value" equal to the aggregate option price for all of the shares subject to the option that the participant is electing to exercise. The "appreciated value" is the amount by which the closing market price for one share of common stock on the date the participant makes the election exceeds the option price of one share of the shares subject to the option that are being forfeited back to the company. It was anticipated that the directors would seek approval of this amendment at the company's 1990 Annual Meeting of Stockholders. (Harken 10K)

What the company appears to be doing is giving the directors the profit from exercising the options without their having to put up the money and buy the stock.......even though the company is losing lots of money.

Harken 1989 Proxy

Bush owns 345,426 shares, less than 1.1% of Harken. (Texas Observer)


Harken loses $16.6 million on bad bets on commodity futures. (The Exile)


“Carlyle appointed W. in 1990 to the board of its Caterair subsidiary, an airline catering company. W. stepped down from this board in 1994, the year he was elected governor. With W. as governor, Carlyle landed at least two business deals involving Texas government funds” (Texas Observer, 11-09-01)

Being appointed instead of being elected to the Board of Caterair would indicate that he was not brought on board for his business expertise but simply to be a “yes man”, getting directors fees to vote as other board members or controlling stockholders tell him.....and, of course, there’s the name value.

Jan. 16,1990

BCCI trial set to begin in Tampa but a plea bargain is reached by BCCI defendants and U.S. Attorney Mark V. Jackowski. The U.S. Attorney not only drops the indictments but agrees not to pursue any other charges related to the BCCI empire of fraud.

Jan.19, 1990

Presiding judge William Terrell Hodges accepts plea bargain….despite harsh criticism by U.S. Senator Kerry and three other democrats investigating BCCI. (False Profits, Truell & Gurwin, P.268)

The Bahrain contract was signed on January 30, 1990 exactly two weeks after the BCCI plea bargain was announced. Although no proof has emerged that the Bahrain deal influenced the drug money case, it is worth noting that an extraordinary number of people connected to Harken or the oil deal have ties to BCCI. (False Profits, Truell & Gurwin, P.267)

Through the Bahrain deal, the ties between BCCI and Harken Energy grew tighter. Sheikh Khalifah, the prime minister of Bahrain and brother of the emir, was also a shareholder in BCCI -- and it was Khalifah who played the key role in selecting Harken for the job. Sheikh Abdullah Bakhsh, in turn, was a business associate of BCCI front man Ghaith Pharoan; he bought a chunk of Harken's stock and placed his representative, Talat Othman, on Harken Energy's board of directors.

After the Harken-Bahrain deal was settled, Othman was added to the list of fifteen Arabs who met with President George Bush and National Security Adviser Brent Scowcroft three times in 1990 -- once just two days after Iraq invaded Kuwait -- while serving on Harken's board of directors. (Mother Jones-Sept. 1992)

Sheik Khalifah bin-Salman al-Khalifah, the prime minister of Bahrain and a brother of the country's ruling emir, is identified on an October 1990 shareholder list as one of the 45 investors who own parent company BCCI Holdings (Luxembourg) S.A. The emir played a role in approving the Harken transaction.

-- Sheik Abdullah Bakhsh, a major Harken shareholder represented by Mr. Othman on the company's board, has been a co-investor in Saudi Arabia with alleged BCCI front man Ghaith Pharaon, and used Khalid bin-Mahfouz, until recently a principal BCCI shareholder, as his banker.

Harken's consultant on the Bahrain deal counts Kamal Adham, a principal owner of BCCI, as a close friend and has had a long acquaintance with BCCI's Mr. Pharaon. (Wall St. Journal, 12-06-91)

And there was no stronger connection to the infamous fraud empire called BCCI than the people who brokered the Bahrain deal for Harken, Stephens, Inc.

Under the terms of the agreement Harken will drill up to six exploratory wells over a three-year period. The sharing %'s are not disclosed. Analysts say that the cost of drilling six wells could range as high as $50MM. At least 30 eligible suitors come forward, including 5 major oil companies. (Texas Observer)

Harken Energy had fewer than a thousand employees, and no experience whatsoever in international oil production. The company had confined its activities entirely to the domestic production of oil, and to expanding itself through the acquisition of troubled U.S. oil producers at bargain-basement prices. And it was so cash poor that it didn't even have enough capital to drill for oil without bringing in well-heeled partners to finance the exploration.

Even more surprising, Harken hadn't even actively sought the deal.

"It was not our intention to seek out international opportunities," Monte Swetnam, the president of Harken Exploration Company, the Bahrain-based subsidiary of Harken, told World Oil, another industry trade publication. (CPI)

To finance the Bahrain venture, Harken got $25 million from the oil-rich Bass family. Two of the Bass brothers were part of "Team 100," the elder Bush's elite 1988 fundraising squad that was the model for the younger Bush's more ambitious fundraising "Pioneers" (Lee Bass also is a Pioneer).

Bass money and Bush connections did not lead Harken to oil in Bahrain. The company's stock tanked after it reported huge losses in August 1990. (Multinational Monitor)

Harken Energy became the talk of the Texas oil industry. The company with no offshore-oil- drilling experience beat out a more-established international conglomerate, Amoco, in bagging the exclusive contract to drill in a promising new offshore oil field for the Persian Gulf nation of Bahrain. The deal had been arranged for Harken by two former Stephens, Inc., brokers.

And then there is this very revealing letter from the Minister of Development and Industry in Bahrain:

In the late 1980s, after decades of unsuccessful drilling by Chevron, Texaco and other oil companies, Bahrain began looking for a small company with no other concessions in the Middle East that might be willing to gamble on further exploration. In selecting Harken Energy, our government had no illusions about the company's financial abilities, and we agreed from the start that it could bring in partners to share the risk. Our tiny state, with its very limited amount of oil and offshore areas, has experienced 12 dry holes in recent years, so we are neither looking for nor expecting a bonanza from the Harken effort.

Yousuf A. Shirawi

Minister of Development and Industry


(Time Magazine, Nov.18,1991)

The Bahrain deal was a long, long shot from the very beginning. Bahrain, a small emirate with strong ties to Saudi Arabia, hadn't made a significant new oil find since 1932....and they still haven’t as of 2002. It fit right in with a company that specialized in long shots and losing situations. Harken wasn’t after the bonanza in oil. They were after the appearance of a likely bonanza. That’s how pump and dump works.

The Bahrain deal was about things other than oil. After all, this was being financed by the Bass brothers of Ft. Worth whose shrewdness kept them from betting on long shots. If the big time players, with more money, more equipment and more expertise, floundered in striking it big in Bahrain why would the business-savvy Bass brothers throw $25 million into a company that had no offshore experience whatsoever, was struggling financially and needed a refinery? What was going on here under the radar screen?

Note: The Bass boys are currently under investigation by the SEC and IRS for dumping a lot more stock in Disney than they had reported to have owned.

Al Martin alleges that the Bass brothers of Ft. Worth gave $5 million dollars to Oliver North in 1985 to help finance an Iran-Contra military project called Operation Cordoba Harbor....a project designed to blow up Soviet ships in a Nicaraguan shipping port. (“The Conspirators” by Al Martin, p.59)

And to bring us up to date on the Harken/Bahrain deal there is this report from the Jan. 1999 issue of Gulf Business:

"The deal guarantees the continued involvement of Chevron in Bahrain's oil industry. And it follows the failure of Harken Energy of the United States, a company associated with one of the sons of former US President George Bush, to carry out serious work to look for oil.”

Note the wording, “The failure of Harken Energy….to carry out serious work to look for oil.” Harken had other priorities in Bahrain.

A January 19, 1990 memo from Harken counsel Larry Cummings to you(Bush) emphasized the importance of the filing: "[p]robably the most outstanding feature of changes in this rule will be the requirement that a disclosure be made by the company in its proxy or 10K concerning late Form 3 or 4 filings ... Please examine your records and files to be certain that this information is current concerning your beneficial ownership of Harken stock and there have been no other transactions since such date which have not been disclosed." (U.S. House Committee on the Judiciary letter to President Bush, 7-24-02)

March 14, 1990

Shareholders Notes presented to the board of directors, March 14, 1990. Bush is proposed as the chairman of a board committee to investigate $12 million in secured notes held by Intercontinental Mining & Resources Limited (IMR), Atherstone Corporation, N.V. and Galata Associates. The document advises the board to “appoint and empower a Special Independent Committee with full authority to review, negotiate, authorize and approve the terms and provisions” of a restructuring of the $12 million of debt. IMR was the group of Harken insiders who, in 1989, purchased the Aloha subsidiary from Harken. Harken’s treatment of that sale, and the subsequent sale of Aloha to Advanced Petroleum Marketing, was challenged by the SEC, which forced Harken to restate its earnings for 1989.(CPI)

Public Common Stock Offering presented to the board of directors, March 14, 1990. "In working and planning toward the public offering which will be priced based on the market price for the Company's common stock established on or about Closing, it is appropriate for the Company to take reasonable steps and measures to avoid fluctuations in the market price," the document notes. Among those steps: " Exercise caution regarding insider and related party transactions." (CPI)

March 1990

Harken allows select executives and directors like Bush, who exercise their options, to purchase stock at a 40 percent discount; most U.S. companies allow executives to purchase their companies stock at current market value. Harken says it is because the stock is not registered and therefore cannot be traded. But in March 1990 Harken registered 1.8 million option shares. "Unusual," says Paula Todd of Towers Perrin, a compensation consulting firm, when asked about Harken compensation. "This definitely is not a cookie-cutter plan." Graef Crystal, a vocal critic of excessive executive pay, has harsher words: "This is a tremendous package for a little tiny company. Their stock has been growing at 4.9% per year when the market is growing at 15 percent. That is rotten performance." (U.S.News & World Report: March 16,1992)

Note: This apeared to be the company policy to continuously reward its Directors and Officers way above and beyond what their earnings performance dictated. Stephen Hedges of U.S. News emphsized this even further:

Harken is a small oil company, but it pays big league benefits. Estimates based on company documents show that Quasha and Harken President Mikel Faulkner each received compensation worth more than $400,000 a year between 1986 and 1990, including stock options. In addition, Faulkner has borrowed $1.1 million from Harken, using stock as collateral. Quasha has borrowed $631,270 from the company, and Harken has paid his law firm $1.3 million in fees since 1988. At least three other Harken executives had six-figure compensation when Harken posted its $40 million loss. Faulkner says the compensation is based on "incentives and performance." He does not consider Harken’s pay excessive (U.S.News & World Report: March 16,1992)

Such lavish executive compensation would suggest a company doing quite well indeed. But in reality, Harken had little going for itself. One Wall Street analyst called Harken's web of insider stock deals and mounting debt "a lot of jiggery- pokery." (Mother Jones)

But Harken made sure it gave its Directors and Officers superb compensation regardless of the company’s performance, even in the face of $40 million dollar losses!!! And Quasha had a clear conflict of interest with his law firm providing the legal services for Harken and enriching himself from the expense end too. The Board approved it all. Bush approved it.

April 1990

U.S. Ambassador, April Gillespie, informs Saddam Hussein that the U.S. would not take a side in an intra-Arab dispute.

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. Note: He sold 212,140 shares less than 3 months later.

April 20, 1990 Letter

From Mikel D. Faulkner, President of Harken Energy, to the board of directors. The letter notes that new conditions on a loan Harken sought "greatly intensifies our current liquidity problem and mandates the infusion of equity into the company." (CPI)

April 30, 1990

Letter to the Board of Directors from Faulkner. Cover letter sent with the companies February 1990 financial statements. Faulkner wrote, "Harken's February consolidated balance sheet does not reflect the reclassifications of the major shareholders' notes to equity or the reclassification of the IMR note to other assets based upon its March sale to Advance."(CPI)

Once again Harken is trading shares for its debt. No money, no problem...use stock.

May, 1990

Smith Barney produced a hand-wringing report voicing alarm at the company's rapidly deteriorating financial condition. (A former company official told Mother Jones that Harken owed more than $150 million to banks and other creditors at the time.) Since Harken wasn't producing anything, it was hard to find a revenue stream, unless you count the river of fees, stock options, and salaries running into the pockets of Junior and other top Harken executives. Junior, as a member of Harken's restructuring committee, could not have been ignorant of the report, since the board had met in May and worked directly with the Smith Barney consultants.(Mother Jones Sept.-1992)

One informed source says Harken’s creditors had threatened to foreclose on the company if substantial debt payments were not made. (U.S. News & World Report, March 16,1992)

May 8,1990

Minutes of a meeting of the Executive Committee which did not include Bush but he was informed of the discussions of this meeting as the 5-11-90 Board meeting minutes show.

The minutes show that Chad Weiss of Smith Barney, via a telephone conversation, gave his opinion that “until the Company restructured its equity situation and resolved its restrictive covenants with its Banks, that there was no potential for it to raise equity money through a public offering.” (CPI)

In short what Chad Weiss was saying to Harken was to clean up your act or I can’t sell your stock. What would scare potential investors when they looked at the “equity situation”? The ownership situation? Was it the Saudi-BCCI connection via Talat Othman who sat on the Board and controlled almost 20% of the stock?

Was it the fact that approximately 75% of their stock was held by insiders with most of it pledged to the company and to loans?

Was it the large amount of warrants and stock options possessed by insiders?.... a million warrants being held by the Union Bank of Switzerland, another BCCI connection.

Or was it the heavy borrowing from affiliated companies and stockholders, as reflected in their 10K?

Did Mr. Weiss also notice the tendacy of Harken officers to consider their stock as an unlimited source of funds....using it to lavish compensation on Directors and Officers; to acquire other companies; to move their debt around by swapping stock for notes; for collateral for that were over $12 million dollars and charged up to 16% interest. (See their 1989 10K)

And why were the bank loan agreements so restrictive?. Did the bankers finally say no to Harken’s use of its stock to solve every financial problem?

If the company’s situation was so bad that it couldn’t make a public offering of its stock, would that have influenced Bush to seek a private buyer to unload 2/3 of his stock, while it was still worth something?

May 11,1990 Board Meeting

Giving up on one stock remedy to solve their critical financial situation...the pubic offering of common stock....Harken’s Board, including Bush, pursues another stock-cure-all solution with a Rights Offering of shares of two of its subsidiaries, Harken Marketing Corp. and Tejas Power Corp. This is discussed at length. The Board appoints a “Special Committee” to pursue the Rights Offering. Bush is appointed to this 3 person committee. (CPI)

Make no mistake about it, Bush was well aware of the company’s dire financial straits. That was the purpose of all of these meetings and letters, the purpose of assigning him to the “Special Committe of the Board of Directors” and bringing in Smith find a way to raise lots of money fast and hold off the banks.

Note: A Rights Offering is the issuing of rights to existing shareholders of a security to buy a proportional number of additional securities at a given price (usually at a discount) within a fixed period. In other words, sell the current shareholders even more stock, but at a discount.

May 1990, the U.S. State Department sent a chilling but still classified report to National Security Advisor Scowcroft. The report warned that Iraqi president Saddam Hussein was out of control and was threatening his neighbors:

May 16, 1990


Attached is a paper containing a list of options for responding to recent actions and statements by the Government of Iraq. ...We ask that you pass this paper to Robert Gates [CIA] for his review.”

Under "options" the memo suggested:

Ban Oil Purchases: The largest benefit Iraq receives from the US is through our oil purchases...

PRO -- A total ban on oil purchases would have some short- term impact.

CON -- Such action might also have an impact on US Oil prices. (Mother Jones Sept.-1992)

May 17, 1990 Special Committee Meeting

Chaired by Bush, the committee discusses the details of the Rights Offering and votes to approve “the general structure and framework of the Rights Offering.” As part of this package, the banks required that Harken’s major shareholders provide the banks with certain guarantees or note purchase agreements “in order to extend certain new credit to HMC and to waive certain non compliance matters under its existing loan agreement.” In other words, the banks, First City-Texas and First National Bank of Boston, were not having anymore stock-cure-all remedies. They wanted some solid backing this time. (CPI)

May 18,1990 Letter to Special Committee from Bruce Huff, Senior VP

In a sense of urgency, one day after its first meeting, Huff called for another due to "several events which have occurred." "It is [sic] become evident that it will be necessary to reach a conclusion regarding the fairness of the proposal by the Major Shareholders" to help Harken obtain more favorable treatment from its creditors. "Such waivers and extensions [from the company's major banks] will allow the Company to properly report the substantial portion of its debt facilities as long-term and thereby avoid any negative repercussions that might otherwise occur if the Company remains in a state of non-compliance with regard to loan covenants."

The urgency is also shown by the mention of working all weekend on the Major Shareholder proposal. The real urgency is not the Rights Offering itself but the extension of credit and a loan that is part of the whole bail out package with the banks. Harken is barely meeting payroll at this time. This letter is directed to Faulkner, Watson and Bush. These are the guys on the line make sure that Harken survives this financial crisis.

Huff also makes these points in this letter that the Major Shareholder proposal:

“Provide for immediate funding to the Company.

Satisfy the immediate cash needs of the Company which begin to mature May 20, 1990. Provide the banks with no risk loan.

Clarify the confusing story and perception of what Harken is.”


“No other source of immediate financing is available to the Company. Failure to secure immediate financing will have material negative impact to trade credit and operations.”

There it is. That’s as clear and as strong as it gets, in plain English, that Harken is in desperate financial straits. Bush gets this letter. He acts on it. How can he possibly say he was unaware of Harken’s deep financial problems? How can the SEC possibly say that Bush possessed no material inside information concerning Harken’s serious financial problems? The copy of this letter and all those other meeting minutes came from the SEC!

“The Center for Public Integrity has obtained internal Harken Energy documents that were part of the SEC investigation, including minutes of board meetings, meeting agendas, and memos, all of which cast more light on Harken's financial crisis in 1990.”

May 20, 1990

Memo to Bruce N. Huff from Jeff Tarplin and Gary Vibbard, "Subject: Summary of Bridge Process from May 21, 1990 to December 31, 1990"

This internal memo shows graphically how difficult Harken's financial situation was in the spring of 1990, shortly before Bush sold his stock. It is unknown from available documents whether Bush was sent a copy of the memo. Harken having trouble making payroll. (CPI)

On May 21, 1990, less than ten weeks before Saddam Hussein's troops invaded Kuwait to initiate the Middle East hostilities - - but just four weeks before Bush unloaded the bulk of his Harken stock -- a renegotiated corporate loan agreement featured an unusually high interest rate of 12 percent, less credit for acquisitions, a $750,000 debt fee and even requirements by some of Harken's major stockholders to guarantee $22.5 million in debt, according to Associated Press. (Tom Flocco, World Net Daily,2-18-00, Scoop 7-6-2002)

According to J.H. Hatfield these strict loan terms were because Harken had violated the terms of a $115 million loan package with their bankers. (Fortunate Son by J.H. Hatfield, p. 103) This might be the failure to disclose to the bankers vital or pertinent infomation regarding Harken’s stock trading or true financial condition.

May 25, 1990

Letter to the Board of Directors from Faulkner, with the agenda for the company's next board meeting. The agenda lists several objectives: "Improve consolidated and subsidiary financial information," " avoid default under existing bank lines," "monitize [sic] assets to raise cash," “prepare a listing of possible assets to be sold,” “identify appropriate crisis issues regarding the Bank of Boston,” and "resolve open accounting issues." (CPI)

Again, Bush got this letter as it was directed to the Board of Directors.

June, 1990

Harken director E. Stuart Watson said both he and Bush were aware of Harken's finances. "You bet we were. ... We were both trying to keep that company on the straight and narrow," Watson said. According to the Dallas Morning News, Watson said, "they [ Watson and Bush] were kept current on the company's finances and knew that losses were to be announced." Watson added that earnings reports at Harken "were never a surprise to us." Watson said that, as members of the audit committee, he and Bush were briefed by the company treasurer and the inside and outside auditors. (mediawhoresonline, 7-02-02)

On June 7, 1990, just two weeks before your stock sale, another memo from Faulkner warned of a " Harken International shutdown effective June 30, unless third party funding [is] obtained," and discussed plans to lay off 40 employees. The memo said the company had lost $28.5 million in trade credit since Jan. 1, and another $11.8 million was "in jeopardy," and said "most companies that have seen [the company's annual report] are nervous."

There are concerns that you knew that any stock sale based upon insider information was a serious offense because you were so informed in a June 15, 1990 memorandum, one week before your stock sale, by Harken’s attorneys at the firm of Haynes and Boone, with the subject line "Liability for Insider Trading and Short-Swing Profits." The memo states the following: " If the insiders presently possess any material non-public information, a sale of any of their shares could be viewed critically."

Defending against these allegations, your representatives have asserted that you always intended to sell the Harken stock, an assertion which is also contradicted by documentary evidence. In fact, you signed a letter of intent, a so-called “lockup letter,” promising not to sell any Harken stock for at least six months, but then sold it two and a half months later.

(U.S.House Committee on the Judiciary letter to President Bush, 7-24-02)

June 11, 1990 Minutes of the Audit Committee:

The 3 member Audit Committee met, which included Bush, with representatives of Arthur Andersen, the firm's auditors. Mike Faulkner and Bruce Huff attended also. Richard Ellis of Arthur Andersen “stressed the fact that there was a potential write down that might occur in one or more of the subsidiaries”... and “indicated that adjustment[write down] could be potentially significant...” and would keep the audit committee advised. (CPI)

So here we see notice being given to Bush and others that a “potentially significant” write down was possible. A significant write down, when added to the crisis situation with the banks, credit and cash flow, would mean Bush’s stock was about to tank. Time for Bush to act.

June 22, 1990 Bush sells 212,140 shares @$4 for a total of $848,560 (Texas Observer)

"That was $318,430 more than it was worth," Dr. Arthur F. Ide, author of George W. Bush: Portrait of a Compassionate Conservative, said. "George W. broke the law to do this since the transaction was an insider stock sale."

Charles Lewis (Center for Public Integrity) believes "the available evidence" shows that the mystery institutional buyer of Bush's 212,000 Harken shares in June 1990 was Harvard. The university increased its Harken holdings around that same time, according to him. And although the broker involved, Ralph Smith of Sutro & Company, has steadfastly refused to name the buyer, Lewis reports that "at the bottom of a spreadsheet Smith used to record his calls to Bush was the name of Michael Eisenson, along with the telephone number of Harvard Management." In 2000 when Lewis was working on his book, Eisenson didn't return his calls. As of March 30, 1990, Harvard was the single-largest owner of Harken stock, with 29.4 per cent of the outstanding shares. (Joe Conason,, 7-11-02)

A former business associate says that Junior's motivation was his desire to buy an expensive new house in Dallas, for which he wanted to pay cash.(Mother Jones Sept.-1992)

It has also been reported that at this time Bush paid off the $500,000 loan from a bank on whose board he had served as a director during 1984 –86 that he had taken out to secure his portion of the $86 million purchase of the Texas Rangers. Eight days later, Harken finished the second quarter with losses of $23 million, and the stock went into a nosedive, losing nearly 75% of its value, finishing the year at a little over $1 a share. Ultimately, Bush’s profit from the sale of his stake in the Rangers was $14.9 million (on his total investment of $606,000), owing in large part to the sweet deal the team got when the voters of Arlington, Texas approved a sales-tax increase in a special referendum to cover the $135 million cost of a new stadium. Bush’s partners in the team, who were brought into the original deal, included Bill Dewitt, Mercer Reynolds, …

July 10, 1990

Last date for Bush SEC filing on sale to be in compliance

July 1990

Harken announces that Bass Enterprises will fund the first three exploratory wells in Bahrain Current plans call to being drilling in the fall. Bass will earn 50% of Harken's share. (Texas Observer)

July 11, 1990

Letter to the Board of Directors from Dale R. Valvo, president of Harken Marketing Company, a subsidiary of Harken Energy. Valvo describes terms of the deal struck with Advance Petroleum Marketing over the restructuring of the Aloha purchase. "The very significant disadvantage of this deal is that HMC will likely have to take a write down of approximately $1,000,000 to $7,000,000 in the second quarter of 1990…" (CPI)

July 26, 1990

Presentation to the Executive Committee Contains detailed information on how Harken attempted to cope with its financial crisis. The document includes information on savings from salary cuts and staff reductions, estimates and allocations of costs related to the company's rights offering, the terms of a loan agreement for Harken Marketing Company, and an analysis of the company's ownership structure after the proposed rights offering had been completed. Among the costs Harken incurred were legal fees and salary expenses of more than $930,000 owed to Quasha, Wessely & Schneider. Alan Quasha, a partner in the firm, sat on the board of directors; his North American Resources was one of major shareholders in Harken. Bush was not a member of the Executive Committee. (CPI)

August 2, 1990

Iraq invades Kuwait

August 2 + 7 days---One week following invasion (per Texas Observer)

Harken trading at $3.03

August 22,1990

Harken files a second quarter report disclosing for the first time that it is hemorrhaging. Total losses for that quarter are $23.2 million. Stock plunges to $2.37 a share.

August 29, 1990

Minutes of the Board of Directors Meeting Reference was made to a change in the minutes of a May 21, 1990 board meeting. Quasha proposed the change, which was seconded by Bush. The Center does not have minutes of the May 21 meeting. The audit committee, of which Bush was a member, reported that it had met "earlier in the morning with the Company's auditors, Arthur Andersen & Co. It reviewed the items which had been discussed with the Company's auditors being the second quarter write-off and the Aloha Transaction and various accounting and auditing issues relating to it."

This is also the meeting in which another Enron like transaction was hatched. President Mike Faulkner proposed forming a new partnership between Harken and Aeneas Venture Corp., Harvard Management’s venture capital arm. Bush motioned "to approve the Company continuing its discussion and review of [the partnership] and authorized management to proceed in negotiations with[Harvard] toward formulating a letter of intent to be subsequenly presented to the Board outlining the specific terms of this transaction for its consideration." (CPI)

.Note: "Harvard proposed and set the terms of the partnership," White House spokesman Scott McClellan said. "Independent reports note that it was fully disclosed and complied with accounting rules, so there really is no comparison.". (Boston Globe 10-08-02)

But the 8-29-90 minutes cited above show that Faulkner and Bush are introducing and initiating the discussion and movement for this partnership and, in fact, Harvard’s two board members, Eisenson and Beane abstain from the vote.

And here is what Harvard Watch has to say about the partnership being “fully disclosed.”

—The partnership between Harvard University and Harken Energy Company, uncovered by the student and alumni group HarvardWatch, was conducted in secret and was not disclosed to the public or the university community. The partnership was apparently used to bail out Harken, which is tied to President Bush. Although Harvard claims in a statement to have disclosed the deal “openly and properly,” Harvard avoided disclosing information about the partnership even to its own officials and still withholds information on the finances of the partnership, students say.

From the beginning, this partnership was structured to avoid public scrutiny,” said Harvard senior Matthew Skomarovsky. “ Harken needed to improve its financial figures, but rather than improving its business practices it set up this partnership with Harvard to hide debt and losses. The partnership, created when Harvard was Harken’s largest investor, was a black box under complete control of Harken insiders: it's impossible to tell what was really going in and out of it.

This new off-the-books partnership was formed in Dec., 1990 and call Harken Anadarko Partnership and it was designed and set up to hide Harken’s debt thus increasing the value of Harken’s stock.

The partnership allowed Harvard to subsidize covertly Harken's struggling business by effectively shouldering a large percentage of the company's loss-generating assets and debts. This maneuver transformed the public perception of Harken’s financial state: the company's reported losses and liabilities were drastically reduced over the next two years. These brighter financial figures allowed Harken's stock price to temporarily reverse its precipitous decline and reach its historical high in 1991, indicating that the Anadarko partnership misled investors about the future profitability of the company. With its insider access to information about the performance of HAP and Harken’s long-term sustainability, Harvard used this bubble as an opportunity to sell 1.6 million Harken shares.

HAP bears striking resemblance to the partnerships Bush has condemned at Enron: it was controlled by and transparent only to Harken insiders, and likely was used to artificially brighten the company's business prospects. With Harken meeting minutes revealing that Bush gave his personal approval of the creation of HAP, he should now face serious questions about the propriety of such maneuvers.

In December 1990, Harken shifted its substantial domestic operations into an off-the- books partnership owned by Harken and its largest shareholder, Harvard University.

Harvard contributed $64.5 million worth of property. Harken contributed drilling operations valued at $26.1 million, which also carried $20 million of bank debt and liabilities. Harken held a 16% interest in the Harken Anadarko Partnership (HAP); Harvard owned the remaining 84%. The actual operation remained under Harken’s control, however. From 1990 until 1993 the Harvard-run HAP paid Harken about $1 million per year to operate the partnership's oil and gas properties. Additionally, Harken reported contract drilling revenues of $1.3 million and well servicing fees totaling $2.2 million in 1991. Any portion of these revenues could have been paid by Harvard, through HAP, for operations related to the partnership.

This speaks for itself. Clearly George W. Bush was involved in and approved a Harvard-Harken partnership identical to the hundreds of fraudulent partnerships created by Enron. Off-the-books partnerships designed to fraudulently deceive stockholders, investors and creditors, to the benefit of Harken, Harvard and President George W. Bush.

As a last defense against charges of insider trading violation Bush has claimed that Harken’s stock price went back up shortly after his June 22, 1990 sale. Now we know why.

October 1990

Story by Pete Brewton. Texas Observer article indicates that Brewton had questioned Bush about Harken's deal with Bahrain, which was then threatened by hostilities in the Persian Gulf. Bush told the Post it would be "inappropriate to say the US armed forces in the Persian Gulf are protecting Harken's drilling rights off Saudi Arabia." " I don't think there is a connection, "Bush said. "I don't feel American troops in Saudi Arabia are preserving George Bush Jrs' drilling prospects. I think that's a little far fetched." In the course of his interview with the Post, Bush mentioned that he'd sold a large portion of his Harken stock sometime "in June or July" 1990, just weeks before Iraq's invasion of Kuwait last August 2. Within days of the invasion, the value of Harken shares dropped dramatically. Although armed with the knowledge of the transaction, Brewton could find no record of it on file with the Securities and Exchange Commission (Texas Observer)

January 1991

Village Voice article reports "Harken's investments in the area will be protected by a 1990 agreement Bahrain signed with the US allowing American and Multinational forces to set up permanent bases in that country. (Texas Observer)

January 9, 1991 Letter

From Bruce N. Huff, senior vice president of Harken Energy, to Edmund Coulson, chief accountant of the SEC. Huff describes in detail Harken’s position on the Aloha sale, and how it was restructured. Huff notes that in April 1990, "The immediate focus of the Company was at that time redirected to raising cash." He also notes, "By June, 1990, the Company was constrained by its worsening cash and credit situation." (CPI)

February 1991

War in Middle East ends

March 1991

Bush reports stock sale to SEC (Texas Observer)

April 4, 1991

Wall Street Journal reports that Bush failed to report the insider stock sale until March of that year. The sale on June 22, 1990 represents 66 percent of the Bush holdings (Texas Observer)

In April 1991 the SEC launched an insider-trading investigation of Bush. The outcome of the probe raised more questions than it answered.

When the investigation began, the chairman of the SEC was Richard Breeden, who had been appointed by President Bush. Before joining the SEC, Breeden had for several years been the President's economic policy adviser. Bush even thanked Breeden by name in several speeches. Breeden's office at the SEC was adorned with so many pictures of President and Mrs. Bush that a reporter for the New York Times observed, "George Bush is Breeden's Mao." Before going to the White House, Breeden had been a partner in Baker & Botts, the law firm started by the grandfather of James A. Baker III, President Bush's Secretary of State.

The SEC's general counsel at the time, who would be ultimately responsible for any litigation the commission would initiate, was James Doty. Doty had also worked at Baker & Botts, where he represented the younger Bush in business related to his stake in the Texas Rangers baseball team.

In addition to collecting reams of documents, investigators for the SEC interviewed Harken's lawyer as well as the broker who'd sold Bush's stock. (CPI)

April 9,1991

Internal SEC memo shows:

• Bush was a director of a Harken subsidiary, Tejas Power Corp., for which no directors had filed required forms, the SEC said.

• Bush was three days late disclosing in 1984 that he was a director and stockholder of Lucky Chance Mining Co.

• SEC records showed Bush was a director of three motion picture-financing partnerships for which the required ownership forms had not been filed. The filings related to Silver Screen Management Inc., founded by Roland Betts, who was Bush's fraternity brother at Yale University and remains a close friend. The memo said it was "uncertain" whether Bush was required to file the forms.

The memo was addressed to "The Files" from three SEC lawyers and was dated April 9, 1991. The memo said Bush became a Harken director in November 1986, and said he filed late reports for four transactions totaling $1,028,935.” (Washington Post July 3, 2002)

April 12, 1991 Letter

From Herbert Janick, assistant director of the SEC Enforcement Division, to George W. Bush. The letter requests, "Copies of all Forms 3, 4 and 144, cover letters and attachments thereto that were transmitted by you, or on your behalf, to the Commission during the period September 1, 1986 through the present." (CPI) . June 21, 1991 Fax

From Herbert Janick to Joseph A. Cialone 2nd, a Baker & Botts attorney who represented both George W. Bush and Harken Energy. The fax requests that "Harken voluntarily provide copies of all documents concerning, referring, or relating to any policies or procedures of Harken, in effect during the period of January 1, 1990, to the date of Harken’s response to this request, concerning the purchase, sale or ownership of Harken securities by any officer or director of Harken." The fax requests that Bush "voluntarily provide" any documents in his possession received from Jan. 1, 1990 to June 30, 1990 related to, among other things, "unusual charges" stemming from the Aloha transaction. (CPI)

July 17, 1991, SEC Memorandum

From Herbert Janick and Paul Gerlach of the Enforcement Division, the memorandum notes "Harken has asserted attorney-client privilege and refused to produce documents concerning its policies covering the purchase, sale or ownership of Harken securities by officers or directors. Bush has produced a small amount of additional documents which provide little insight as to what Harken nonpublic information he knew and when he knew it." (CPI)

Sept. 1992

Junior is stepping away from a company in deep trouble. Harken stock is trading near its all-time low. Recently, test wells in Bahrain turned up dry and the company has not produced anything else. "Harken is not hard to understand -- it's easy," says Charles Strain, an energy-company analyst in Houston. "The company has only one real asset -- its Bahrain contract. If that field turns out to be dry, Harken's stock is worth, at the most, 25 cents a share. If they hit it big over there, the stock could be worth $30 to $40 dollars a share. It's a pure crapshoot." (Mother Jones Sept. 1992)

George W. Bush violated federal securities laws at least four times when he was a director of a Texas oil firm in the late 1980s and early 1990s, according to an internal government report. Bush, the SEC memo noted, had on four occasions filed late Form 4s involving Harken stock worth more than $1 million. (CPI)

Press accounts note that Bush requested a letter from the SEC, issued in October 1993, The letter, signed by SEC Associate Director Bruce A. Hiler, said that "the investigation has been terminated as to the conduct of Mr. Bush and that, at this time, no enforcement is contemplated with respect to him." But the letter also stated that "it must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result."

On Oct. 18, 1993, the Bush administration SEC said it would not bring a case against George W. Bush.

Retired U.S. Navy Lt. Commander and former officer in the Office of Naval Intelligence, Al Martin claims the SEC would stand down on a lot of potential securities frauds in the 80’s and 90’s. Asked about how rhe SEC typically handled the security fraudsters Martin said, “Either they had no idea or they were told to look the other way.

Asked about those cases where certain individuals were prosecuted and other were not Martin said , “…most of the securities fraud prosecution you saw, particularly in those years[80’s & 90’s], were people who were not ‘connected.’ They were not on the inside. They were just, as Charlie Harper used to say, regular garden variety scamscateers. They didn’t have government connections.” (Bushwhacked by Uri Dowbenko, p. 161-162)

Bush obviously had the government connections.

Oct. 26, 1993

Bush resigns at Harken.

November, 1994

George W. Bush is elected Governor of Texas, defeating Ann Richards with 53% of the vote compared to her 46%.


Feb. 2002

Richard Breeden was head of the SEC when Dubya was investigated for insider trading violations. He was asked twice by Tony Snow of Fox News if he would give Bush a “clean bill of health, yes or no.” He pleaded ignorance and ducked the question.

Allegations Concerning False Statements Made Under Oath

Moreover, there are concerns that the Form 4 itself contains indicia of a possible attempt to conceal its late filing which may constitute a violation of 18 U.S.C. § 1001 (false statements)–among other things, this covers in any matter within the jurisdiction of the federal Executive, Legislative or Judicial Branches, knowingly and willfully falsifying, concealing, or covering up by any trick, scheme, or device a material fact; making any materially false, fictitious, or fraudulent statement or representation; or making or using any false writing or document, knowing that it contains a materially false, fictitious, or fraudulent statement or entry. Maximum penalties include imprisonment of not more than 5 years, a fine under Title 18, U.S.C.5 or both. The fact is that the only form that has come to light that you failed to inscribe with the appropriate date, was this belated Form 4. Other forms submitted to the SEC by you on June 22, 1990; April 13, 1987; April 12, 1987 and October 6, 1989 were all dated. In context, such an omission appears to be an intentional effort to conceal the trade.

Lack of Investigation of Harken

Contrary to your assertion that “[t]his was fully looked into by the SEC, and there’s nothing there,” there are concerns that the SEC investigation of Harken can be characterized as cursory, charitably speaking. You were never interviewed, nor were other prominent Harken officers and the Chairman of the SEC was appointed by your father and the General Counsel, James A. Doty, was your attorney in your purchase of the Texas Rangers baseball team. It is, therefore, alleged that a clear that a fair, impartial and complete investigation has yet to occur. (U.S. House Committee on the Judiciary letter to President Bush, 7-24-02)

Bush claims that he did file SEC form 144 to notify them of his intent to sale restricted stock. Bush had nothing to do with that filing. Filing form 144 is strictly the broker's responsibility and brokers get into trouble with the SEC if they don't file it.

Bush also claims that either the SEC lost his form 4 filing or his lawyers made a mistake and forgot to file it. Nonsense. To begin with, the responsibility for that form 4 filing was solely George W. Bush’s, not any lawyer’s. Any business-savvy person will send a mandatory filing with the SEC by registered or certified mail and request a signed receipt acknowleging it was received. Besides, all securities lawyers always ask the SEC for a date-stamped copy of any mandatory filing. That's basic 101 filing procedure. That sale was meant to be kept secret to protect the value of Harken's stock and divert attention away from the timing of the sale. It was an insider trading violation.

Nationally syndicated columist Molly Ivins sums up it up this way in her 2-15-02 article for the Texas Observer when she states "Although the SEC does prosecute flagrant violators of insider-reporting rules, according to The Wall Street Journal, first-time violators usually get only a warning letter."

Where’s the warning letter?

So Bush got his get-out-of-jail-free card, passed go and collected $848,560, and moved on to his next sweetheart deal...The Texas Rangers....where his ownership interest went from 1% to 12% thanks to Roland Betts, “Rusty” Rose and Richard Rainwater, who said the increased shares for Bush were a gift. Wonder who, if anyone, paid the gift taxes on that?

And what was the incentive for Betts, Rose, Rainwater and other partners to “gift” Bush with a huge increase in equity? Were they returning a favor of being gifted with large investment funds from the University of Texas Endowment Fund courtesy of Tom Hicks, the man put in control of those funds by Bush.

Incidentally, “Bush's general partnership interest in the Texas Rangers never went into the trust, and that interest, known as GWB Rangers Inc., was involved in negotiations for the team's sale.

So through GWB Rangers Inc., Bush always knew he was in partnership with Rainwater, Rose and others. And Texas Rangers President Tom Schieffer kept Bush abreast of negotiations between Rose and Tom Hicks for the team's sale when Hicks bought the Rangers this year for $250 million.” (Abilene Reporter-News)

So Bush was actively engaged in a private business deal, as governor of Texas, to sell his share of the Texas Rangers to a man he appointed to oversee the investments of billions of dollars in the University of Texas Endowment Fund...Tom Hicks. And, Bush approved an arrangement to “privitize” billions of dollars from that endowment fund so that Hicks would not have to consult with anyone in how he invested that public money. Wonder how much of that $250 million came from the University of Texas Endowment Fund? Tom Hick’s fees for “managing” the Endowment Fund could have easily reached $250 million. Fees which were public monies put in Hick’s hands by Bush’s political actions.

So why was a well connected oil drilling operation with access to plentiful funds thru BCCI, Harvard Endowment, Tom Hicks, Richard Rainwater, the Bass brothers and others constantly struggling? Was it the nature and condition of the market or as Al Martin alleges:

"George Bush, Sr. and James Baker and Senator Tower would heavily short Harken stock. I have a list of everybody because I was one of them but to a much smaller extent. Harken stock was trading at 7-3/4 or 8, when George Jr, was put in charge of it. A year later, the stock was trading at 1-1/8 bid, 3/8 offer. They pumped the stock back up through a lot of bogus press releases and by using essentially worthless leases in Bahrain and essentially worthless South American oil leases and through sympathetic geologists making them appear to be really worth something and making it appear that Harken's about to make a strike when in fact it's all made up. It's all fictitious. And through carefully crafted broker releases and broker statements and press releases, you can pump the stock back up. This has happened sixteen times to my knowledge. Harken would get pumped back up from the dead, from say a buck, buck and a half, back to seven, seven and a half, then it would get dumped again. Originally George Jr. had control of the company. He stayed on the board." (Al Martin Raw : The Man Who Knows Too Much)

Although this is unprovable at this point, it does offer a plausible explanation for Dubya’s failed and struggling business ventures. Especially when you consider the nature of the oil business made it perfect for pump and dump schemes. And, it’s a strategy very much in practice and prominance in today’s corporate world.

Says Harken founder Phil Kendrick, still a small shareholder: "Their annual reports and press releases get me totally befuddled. There's been so much promotion, manipulation and inside dealmaking. It's been a fast- numbers game." Some former executives charge the firm with routinely inflating its assets to make its balance sheets look better. (The Wackiest Rig in Texas by Richard Behar, Time Mag., Oct.28,1991)

Inflating the assets? Sound familiar? Pump the stock up...then dump it.

Maybe we should not think of President Bush’s business ventures as failures but more like a cow milked dry.

And is there a connection between Bush joining the Harken Board and Harvard Endowment joining the major shareholder team at about the same time? As Michael Kranish of the Boston Globe asks, “What did the investment arm of the nation's most prestigious university see in a troubled little oil company from Texas that justified such attention and a $30 million investment?

It was 1986 when Harvard started to pour millions of dollars into Harken. Harken founder Phil Kendrick, an Abilene oilman, vividly remembers the day when the small oil drilling and trading company learned that the most prestigious university in the country wanted to invest millions of dollars in the company.

"All of a sudden the name 'Harvard' turned up," Kendrick said.” (Harvard Watch)

Bear in mind this previous assessment of Harken at the time Harvard started pumping millions into it:

“The university's commitment to Harken was surprising in view of the bad shape the company was in. "I took some time and looked at it and I went, god, I don't want to be anywhere near this," a prospective investor in Harken from the late 1980s told the Center For Public Integrity. "This thing looks like a train wreck." (CPI)

Harvard’s Mike Eisenson says they looked at Harken and "Harken management seemed capable and honest" (A management team that loans millions of the company’s money to it’s own executives while having trouble paying bills and meeting payroll)....This is the standard used by the nation’s largest endowment fund to invest millions? Eisenson is not that naive. He works with sure deals. He made that clear to the former Assistant Secretary of HUD, Catherine Austin Fitts. See this:

As Uri Dowbenko puts it “Eisenson was obviously quite at home with the proverbial "fix.”

So what was he doing dumping millions of Harvard Endowment’s money into a loser like Harken?...a loser on paper anyway.

In fact, is appears that Harvard bailed Harken out. “Harvard Management Co. poured a total of $30 million into Harken, keeping it afloat and helping sustain Bush's career.”( Michael Kranish, Boston Globe)

What’s going on here? Current Harvard Management chief executive Jack Meyer claims Harvard made a “small profit” on it’s investment in Harken. Really? Seems the only investors who made money on Harken are the ones who did inside deals and/or short sold its stock.

Harvard Endowment made millions from the Enron collapse via its investment fund manager, Highfields Capital which “short sold several million shares of Enron stock for an estimated profit of $50 million dollars”

Of course it helped that “Pug” Winokur was a member of the Harvard Corporation, the university’s governing body, at the same time that he was on the Board of Directors at Enron and chaired the Board’s Finance Committee.

Did we see a trial run of this insider dealing/short selling with Harvard and Harken? Harvard not only invested millions in Harken they had two of its own Harvard Management people on Harken’s Board of Directors. Harken’s 1989 10K shows that Harvard’s Michael R. Eisenson and Donald D. Bean sat on the board and each personally held 35,000 shares in Harken. Even the Harvard Crimson criticized this situation saying "traders cannot be trusted to make objective decisions about Harvard's investments when their personal interests are tied to the same companies."

Didn’t seem to bother Harvard Management at the time....nor Harken...nor Bush.

Bush made money at Harken. And, it seems, that maybe Harvard did too.

And how about Harken today? Has anything really changed? Apparently not. Andy Serwer’s Street Life column of 7-18-02 has this to say:

Turns out that this now infamous oil and gas company, which as you may remember was in declining health when W. made his stock sale in 1990, is in even worse shape today. A little digging reveals a company that has lost hundreds of millions of dollars over the past half decade. Harken's stock, (ticker HEC-ASE) currently trades for just pennies. Its CEO, chief accounting officer, and CFO, all worked in the energy audit division of Arthur Andersen, the CFO as recently as the mid-90s. The COO was also an Andersen auditor. Continuing a practice that was in place when W. was in residence, the company made loans (and forgave at least one of them) to senior management and directors.


"It was always suspected that something was fishy, but not because of the Bush connection," says Gheit of Fahnestock. "That for a small company like Harken to be involved in foreign drilling operations getting concessions from foreign governments, things just didn't add up. A lot of people had suspected that this was a CIA front."

And the show goes on.


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CREDITS: Thank you Lois, Carolyn, Linda and Catherine!!

DISCLAIMER FROM UQ.ORG: does not necessarily endorse all of the views expressed in the above article. We present this in the interests of research -for the relevant information we believe it contains. We hope that the reader finds in it inspiration to work with us further, in helping to build bridges between our various investigative communities, towards a greater, common understanding of the unanswered questions which now lie before us.

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