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N O R T H C O A S T T IM E S E A G L E , MARPRIL 2004
BUSH FAMILY WAR PROFITEERING
BY MARGIE BURNS
“Profiteering: The acquisition of excessive profits;
usually used as a term of reproach and dishonor."
-BLACK'S LAW LIBRARY (Revised 4th Edition)
“George Bush’s Washington is a study in family
influence."
-THE ECONOMIST
Neil M. Bush, a younger brother of President George W.
Bush, has a $60,000 a year contract with New Bridge Strategies,
a recently formed Washington-based firm that helps generate
contracts for companies seeking reconstruction business in Iraq.
Although New Bridge Strategies is connected to the Bush White
House in several ways,the younger Bush is an important contact
point for the company.
The people who run Houston-based Crest Investment
Corporation, where Neil Bush is a cochairman with light duties
for his $60,000 a year pay, include at least one investor in
Bush's educational software company called Ignitel-Leaming.*
Ignitel-Leaming will be among those companies vying
for contracts dealing with Iraqi education. With Secret Service
protection provided by us taxpayers, Neil Bush has already
traveled to Saudi Arabia, Egypt, China and Japan to generate
interest in his education projects.
Neil Bush's unbecoming contracts, including even more
lucrative arrangements with a Chinese-Taiwanese company,
have come to light through court papers in his scandal-ridden
divorce proceedings. Court documents reveal that Bush has
a consultancy contract for $400,000 a year with the Chinese-
Taiwanese computer chip manufacturer Grace Semiconductor.
That contract was generated while the Bush adminis
tration negotiated with China’s government on sensitive trade,
armament, and human rights issues. The Neil Bush deal, how
ever, is only the most flamboyant recent instance of how Bush
relatives and associates have profited from U.S. foreign policy.
Easily the most profiteering First Family in American
history, the Bushes have consistently benefited from George
W. Bush's war on terrorism and from the invasion of Iraq, as
revealed in regulatory filings, business reports and company
press releases.
One well-connected winner is Engineered Support
Systems, based in St. Louis, where William H.T. ('Bucky') Bush,
an uncle of George W. Bush, joined the board of directors in
March 2000. William H.T. Bush was one of the Bush “Pioneers,"
the campaign contributors who raised more than $100,000 in the
2000 Presidential cqiTipaign,, l r .
,
Engineered Support Systems has three segments: light
military support equipment, heavy military support equipment,
and electronics and automation systems. Long-term contracts
are "substantially all" with the U.S. government, according to the
company. Since 2000, following the Presidential election and the
9/11 attacks, the company’s federal contracts, revenues and its
stock value have all gone up.
Defense Department databases list Engineered Support
Systems as 54th among its top 100 contractors for fiscal year
2001, up from 62nd in 2000. The company received more than
$297.5 million in military contracts in 2001, including $120.5
million from the Army.
Net revenues for the first nine months of 2002, when
the company acquired two new subsidiaries in Washington's
northern Virginia suburbs, increased to $289.7 million. Net
revenues for the full year increased to $408 million.
In 2003, according to a preliminary report, the company
was 93rd among top contractors with $273.5 million in contracts.
A company subsidiary, Radian Inc., was 197th, with $109.2
million in contracts.
Business articles particularly touted the enhanced
prospects for Engineered Support Systems after the attacks
of September 11,2001. A USA Today article on September
25, 2001, headlined “Businesses Stand to Profit Respectfully,"
noted that the company's stock had jumped by 53% in the two
weeks following 9/11 .**
In January 2003, Engineered Support Systems received
an order for $6.1 million from the U.S. Air Force for “Revetment
kits’ — protective armor — in connection with “urgent support
requirements for heightened U.S. military operations in the
Middle East.” Company chairman Michael F. Shanahan said in
a January 6, 2003 press release that the company had received
a total of $15.8 million under that $24 million contract.
Also in January 2003, the Air Force ordered another
$2.2 million worth of power units from the company's subsidiary,
Radian Inc. Engineered Support Systems had received $46.7
million in Air Force contracts in eight months, according to chair
man Shanahan. In March 2003, the Air Force came through with
a $67 million contract for cargo-loader transporters, plus $8.7
million for support. The Navy ordered $2.1 million in parts from
the company in January and spent another $14.7 million on
assault ships in May.
The U.S. Army has been Engineered Support Systems'
largest customer. The company got an Army contract for $75
million in January; one for $36.4 million in March; and another
$7.1 million in April. There have been contracts for generators,
precision targeting systems, and a deployable power system.
As luck would have it, Engineered Support Systems
also manufactures Field Deployable Environmental Control
Units (FDECUs) to deal with weapons of mass destruction.
On January 17, 2003, the company announced that it had
received an order of $19.7 million for these devices from the
U.S. Air Force, and a similar order from the USMC for $2 million
worth of these units, complete with Nuclear Biological Chemical
Kits. That was all in preparation for finding the secret arsenals of
WMDs that the White House insisted had been hidden in Iraq by
Saddam Hussein.
“Questions e-mailed to the two companies employing Neil
Bush were not answered.
"Engineered Support Systems responded with "No com
ment" to telephoned and e-mailed questions for this article
" “The White House has not responded to our e-mailed and
telephoned questions
""M a rv in Bush did not respond to requests for comment
MICHAEL DAVID BROWN
On January 28, 2003, George W. Bush delivered his
State of the Union address, linking Saddam’s Iraq to biological
and chemical warfare, including Bush’s now-famous misstate
ment about Saddam’s possession of nuclear weapons and some
illicit material allegedly purchased from the country of Niger in
Africa.
On March 26, Engineered Support Systems announced
an order of $19 million from the Army for 52 of its Chemical
Biological Protected Shelter (CBPS) systems, under an existing
contract. That brought Army orders for this product to a total of
204 units. The company describes the product as follows:
“CBPS, designed for use in chemically or biologically
contaminated areas, is a self-contained, environmentally-
controlled and contamination-free work area that can serve
as a mobile medical aid station, field command post or
emergency facility. The CBPS can be deployed and fully
operational in less than 20 minutes. Once completed, both
newly produced and retrofitted CBPS units are being actively
deployed in support o f U. S. forces abroad "
“The potential threat of our troops facing a chemical or
biological attack during the current conflict in Iraq remains very
real," chairman Shanahan commented. “Should this occur, our
CBPS system is quite capable of providing soldiers or medical
personnel with collective protection against these dangerous
weapons of mass destruction.”
Students of current events may recall that on March
25, the Bush administration had requested supplemental funding
from Congress “to cover military operations, relief and recon
struction activities in Iraq, and ongoing operations in the global
war on terrorism."
On May 1,2003, Engineered Support Systems announ
ced the acquisition of Maryland-based Technical & Management
Services, TAMSCO. May 1 was the day that President Bush
appeared in a flight suit on the aircraft carrier Abraham Lincoln
under the banner “Mission Accomplished,” to announce the ces
sation of combat in Iraq
The following week TAMSCO announced that it had
“implemented a leading edge communications technology to
support U.S. Army logistics operations in the Middle East upon
the successful fielding of two Time Division Multiple Access
(TDMA) satellite terminals as part of the Coalition Forces Land
Component Command (CFLCC) project in Iraq.” According to
the company, “This marked the first time TDMA technology had
been utilized by the U.S. Army for satellite communications."
TAMSCO seems to have hit the ground running.
It also had a running start. It began its satellite commun
ications network linking Germany, Iraq and the U.S. in February
2003.
BANKROLLING BUSH
With the Bush family's manipulations in the business
world, it is no surprise that the President’s top campaign finance
patron over the course of his political career has been the
crooked and bankrupt Enron Corporation Enron has provided
George W Bush with gifts totaling $602,626 to help finance his
runs for Congress, Governor and President. (Enron’s former
CEO, Ken Lay, is a close friend of W.)
That is the finding of the Center for Public Integrity, the
Washington watchdog group In the course of scouring computer
ized government and corporate data for information, it discover
ed that brokerages, banks and credit card companies have been
six of Bush’s top-10 campaign contributors over the years. As
the champion of cuts in dividend and capital gains taxes, Wall
Street likes him
On the Bush contributor list, with gifts ranging from
$342,949 to $505,500 are Merrill Lynch & Co.; Crédit Suisse
First Boston; Bass Brothers Enterprises; the International Bank
of Commerce. UBS Financial Services; and the Goldman Sachs
Group.
These details are in the Center’s new book, The Buying
o f the President 2004, now in bookstores and available at the
Center’s website www publicintegrity org
-B E N A FRANKLIN
Editor, The Washington Spectator
In a period of less than two and a half months,TAMSCO
identified the most cost-effective technology; procured, integra
ted, tested and shipped the equipment; trained soldiers on its
installation and maintenance; installed an antenna hub site in
Germany; installed the network equipment; and established a
help desk operation in Kuwait. For anyone inclined to believe
that the Bush administration was ever less than fully determined
to go to war in Iraq, these early and longstanding preparations
made by companies with high-level connections may lead to
second thoughts.
A week later, the company also announced a $26.1
million order from the Saudi Arabian military. There has been
no word on whether Attorney General John Ashcroft has acted
to prevent information seepage, in cyberspace or elsewhere,
through corporations that service foreign militaries along with
ours. TAMSCO also has a contract with the Saudis.
Back on the home front, branches of the armed services
seemed to be vying for which of them could award bigger
contracts to the company. The Air Force awarded TAMSCO
a $44.2 million contract for a radar system in June 2003, another
$11.7 million in orders in July, and more than $21,8 million in
contracts in August. The Army, spending heavily in Iraq, lagged
slightly behind — $700,000 for a development project in June,
and $12.8 million in contracts for August.
There can be little doubt about the political halo of good
will generated by the Bush connection with Engineered Support
Systems, especially given George W. Bush’s frequent trips to
St. Louis, its home base. On April 16, 2003, Bush gave a speech
at Boeing’s F-18 Super Hornet assembly factory in St. Louis, on
how the Iraqi people were making a good start. On September
26, 2003, he returned to St. Louis for another speech, to the
annual American Legion Convention, sandwiched between two
fund-raising events.
By any measure, Engineered Support Systems’ enter
prises are profitable for top management. As a director of the
company, William H.T. Bush is on its audit committee and
received consulting fees of $2,500 a month in 2002, as well
as options to buy thousands of shares of stock at $28.42 a
share. The stock now trades at $62.50 a share. As of January
this year, he owned 33,750 shares, along with his portion of 3.3
million shares owned by all the firm ’s officers and directors as a
group. The company paid him another $125,000 in fees.
According to one financial source who prefers not to be
named, the stock adviser service VectorVest, which puts out a
daily list of 7,500 American stocks ranked by value, safety and
timing, listed Engineered Support System’s stock "in very first
place" last October 26, with a rating of 1.6.The next stock had a
rating of 1.57. “Certainly an interesting coincidence," the source
adds. On October 27 the company’s stock was once again in
first place and had gained 3%.
A single company’s track record does not constitute a
pattern. But it does point to a larger picture, in which the closest
associates of a sitting U.S. President share in financial benefits
generated by the decisions, including foreign policy, of our
highest office.
Former President George H.W. Bush only recently
resigned as a board member of the finance giant The Carlyle
Group, heavily associated with military and security contracts.
The Carlyle Group was 43rd among federal contractors in 2002,
with $676.5 million in contracts. In 2003, The Carlyle Group
moved up to 11th place, with $2.1 billion in contracts, partly
from the war on terrorism and partly from Iraq. Insiders at the
company also cashed in millions of dollars worth of options in
2003.
George H.W. Bush has not sold shares individually,
according to insider trading filings. However, The Carlyle Group
itself, through its holding company, has sold more than $334.6
million worth of shares in its United Defense subsidiary during
the past six months.
William H.T. Bush is a trustee for the investment firm
Lord Abbott, one of Halliburton's top 10 shareholders and also
a top-10 mutual fund holder in Halliburton, which has obtained
prime contracts in Iraq. Vice President Richard Cheney, the
former CEO of Halliburton, still has between $18 million and
$87 million invested through Vanguard, another top-10 holder
in Halliburton stock.
Marvin P. Bush, the youngest brother of George W.
Bush, shares an interest in federal contracts held by companies
in his firm's portfolio. Marvin Bush is also an adviser at HCC
Insurance, formerly called the Houston Casualty Company, one
of the biggest insurance carriers for the World Trade Center.
Marvin Bush was a director at HCC,which has benefited
from the 9/11 insurance bailout legislation passed by Congress
at the instigation of the White House. The departure of Marvin
Bush from the HCC was announced the same day, November
22, 2002, as the passage of the bill.****
Never before in our country’s history has a President
started a war from which his own relatives profited. Nor has
any executive branch so zealously selected its own people to
replace the usual watchdogs. The Bush-appointed head of the
Office of Management & Budget, the overseer of federal spend
ing, is Josh B. Bolten, a Bush supporter whose father worked for
George W .’s father.
For now, the privatizing’ of Iraq’s businesses has been
put on hold However, the White House still has an obligation to
disclose to the public the financial benefits of Bush's policies to
the President's own kinsmen.
Margie Bums wrote this article for The Washington
Spectator, which is published monthly by the Public Concern
Foundation. Ms Burns is a Ph D. in English Literature and
teaches at the University of Maryland's Baltimore campus;
she is also a freelance writer who has written about Vice
President Dick Cheney and his ties with Halliburton. Much of
her research is on the Internet where she scrutinizes corporate
and government sites most newsrooms apparently don’t know
exist.
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