ALOHA, HARKEN ENERGY!
Welcome to Hawaii
Sightings from The Catbird Seat
~ o ~
December 6, 1996
ENRON and Shell Win Bid in
Capitalization of YPFB's
Transportation Segment
LA PAZ, BOLIVIA – Enron Development Corp. and Shell International Gas Ltd. announced today that the government of Bolivia has named the companies the successful capitalizing company for the transportation segment of the state oil and gas company, Yacimientos Petroliferos...
Business Wire
~ ~ ~
March 30, 1998
The following is an excerpt from a 10-K SEC Filing, filed by TESORO PETROLEUM CORP on 3/30/1998:
ACCESS TO NEW MARKETS
A lack of market access has constrained natural gas production in Bolivia. With little internal gas demand, all of the Company's Bolivian natural gas production is sold under contract to the Bolivian government for export to Argentina.
Major developments in South America indicate that new markets will open for the Company's production. Construction of a new 1,900-mile pipeline that will link Bolivia's extensive gas reserves with markets in Brazil commenced in 1997 and is expected to be operational in early 1999.
The owners of the new pipeline include Petrobras (the Brazilian state oil company), other Brazilian investors, Enron Corp., Shell International Gas Ltd., British Gas PLC, El Paso Energy Corp., BHP, and Bolivian pension funds. When completed, the new pipeline will have a capacity of approximately 1 billion cubic feet ("Bcf") per day.
For more, see...
Googling for the Ghost of Ken Lay
Vultures Up to their Necks in Tesoro Petroleum
July 1, 2006
Bear Stearns: Let’s Throw in the Ace (Greenberg)
The Bear Stearns Companies, Inc. is the parent company of Bear, Stearns & Co. Inc., one of the largest and best-known global investment banksand securities trading and brokerage firms in the world. The company was founded in 1923 and serves corporations, institutions, governments and individuals. The company's business includes corporate finance, mergers and acquisitions, institutional equities and fixed income sales, trading and research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers global clearing services to broker dealers, prime broker clients and other professional traders, including securities lending.
The former CEO of Bear Stearns was Alan (“Ace”) Greenberg, currently chair of the board, and is the cousin of Maurice (“Hank”) Greenberg and part of the AIG group of course.
9/11
Bear Stearns was named one of the inside traders of 9/11. Their stocks were traded 60 times the usual amount as well.
Bush family
Bear Stearns, of course, is where the Bush family, the Cheney family, George Schultz, James Baker, etc. all do business. It is the leading brokerage firm of the great and all powerful Bushonian Cabal.
Harken Energy, Texas Rangers and Clear Channel
by Al Martin
The $7 million that Bush Jr. put into the deal came from the Harken Energy stock fraud. He and his father George Bush Sr. entered into a conspiracy with Bear Stearns and others to artificially manipulate the price of Harken Energy stock, wherein the Bush Family illicitly proceeded to trade their shares "against the box," through the Pilgrim Investment Trust, the Bush Family-controlled Panama-registered investment entity, wherein the price of Harken Energy stock was pumped up from 1-1/ 4 up to 7-3/8 and then dumped all the way back down again.
This whole round trip as it were was accomplished in only about 4 months time. By being long at the bottom through the Pilgrim Investment Trust with shares that they had borrowed from Bear Stearns -- by the way. They didn't even put up their own damn shares. It's one thing to commit a scam, but the Bushes added a new twist. They commit scams with Other People's Money. They take it one step further by using OPM to commit the scams. Thus they generate the money for nothing.
So then Bush Jr. takes the $7 million out of the Harken Energy Stock Swindle that he and his father orchestrated with their longtime ally Ace Greenberg, chairman of Bear Stearns. He then invests in a syndicate to buy the Texas Rangers sports franchise. Then Bush becomes part of the general management of the team and proceeds to run the team into the ground, financially speaking. Then he is allowed to sell his interest back to the syndicate, including his shares in Mays Hicks for 4 times what he paid for them. Despite the fact the franchise was worth only half of the purchase price since he had "managed" it . In order to bail the whole deal out, he as governor of Texas then authorizes the expenditure of $345 million of public monies in order to build the new stadium and surrounding complex for the Texas Rangers....
The syndicate was composed of the Hicks Muse crowd essentially. James Baker was an investor in it and so was Dick Cheney. Then how this ties in to Clear Channel Communications is that Hicks was the regent of the University of Texas, which is another whole scam. This is a scam within a scam. The regents of the University of Texas is an infamous scam....
Everybody promoted Clear Channel stock then, not only Bear Stearns, but Merrill Lynch and JP Morgan, and they ran it up. They got everybody to promote the stocks. so it got as wide as possible distribution. All these stocks were coming out of Clear Channel, and there was an enormous amount of money coming in with virtually no accountability as to how they have to spend that money. Then they can start paying 2 or 3 times what radio stations are worth just to own them. It was simply for the ownership of the market. It doesn't have anything to do with making any money. And yet the stock, which is now in the 40s, still trades in what is over a 35 P/E I think. It is still considered a high P/E stock....
http://sci.rutgers.edu/forum/archive/index.php/t-23809....
http://journals.democraticunderground.com/DrDebug
July 23, 2002
Bush's Role in Corporate Fraud
by Bill Black and James Galbraith, Boston Globe
PRESIDENT George W. Bush has reassured us that ''From the antitrust laws of the 19th century to the S&L reforms of recent times, America has tackled financial problems when they appeared.''
But the savings & loan reforms came seven years and 150 billion taxpayer dollars late. Nor did that problem merely ''appear.'' It was created by a deregulation bill in 1982 overseen at that time by Vice President George Bush.
From 1981 to 1988, the Reagan-Bush administration covered up the S&L debacle. It forced reductions in S&L examiners and fought against the top federal regulator, Ed Gray, who sounded the alarm. Charles Keating, the felon who drove Lincoln Savings into the most expensive S&L failure in history ($3 billion) considered Vice President Bush an ally in his efforts to force Gray from office. Only after he was safely elected president did Bush propose to reregulate the S&L industry in 1989.
Meanwhile, Neil Bush, private citizen, was getting a ''loan'' from a business partner. The partner invested the loan for the president's son with the agreement that if the investment succeeded Neil would get all the profits and repay the debt, but if it failed he would not have to repay. Neil knew that this business partner was not creditworthy and yet was borrowing over $100 million from Silverado S&L, where Neil was a member of the board. Neil did not warn Silverado that the borrower was not creditworthy. When Silverado failed, the Office of Thrift Supervision proposed a minor enforcement action against Neil, which the Bush administration then attempted to block.
George W. Bush, private citizen, emulated his brother Neil. He became rich through a buyout of his interest in the Texas Rangers at a huge profit. How did he purchase that interest in the first place? He got a very large loan from a very friendly bank. How was the bank able to justify the loan? If at all, because of the market's valuation of Bush's shares in Harken. Why was he on Harken's board of directors and also a well-paid consultant? Because his name was Bush. Why was he able to sell his Harken shares for a profit? Because Harken committed a financial fraud that hid real losses and created fictional income.
What was the nature of that fraud? It was a variant on the Enron and Lincoln Savings frauds. Harken insiders formed a entity which ''purchased'' Harken's bad assets for a grossly excessive price. But Harken financed almost all of the sale. If the bad assets had stayed on the books, Harken would have had to report severe losses, threatening its survival and causing its stock values to plummet. George W. Bush is a wealthy man today because his business friends were willing to stoop to fraud to make him rich.
George W. Bush is in trouble, in part, because of his clumsy coverups of this fraud. Knowing of the severe problems at Harken, Bush sold around 200,000 shares of stock for around $4 a share. (We do not know who purchased Bush's shares, but was it the ever-friendly Harvard Management Corp., which had started buying Harken when Bush joined it and had, by 1990, become one of its largest holders?) He then failed to file required notice of these sales. When challenged on that point, he first claimed that the SEC ''lost'' his filing. His second story was to blame the failure on Harken's lawyers. But that won't wash. Bush was selling his own stock, and was therefore personally responsible for filing the documents.
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.
Now Bush tells us that the Securities and Exchange Commission needs to be strengthened. But he appointed an SEC head, Harvey Pitt, who as a lawyer for the accountants led the campaign to block the Clinton administration's effort to clean up the accounting profession. Back in Texas, then-Governor Bush was proud that he had made it extremely difficult for securities fraud victims to receive compensation through lawsuits. When the Enron scandal broke, Bush continued this line, suggesting that victims of fraud who bring suits are ''extort[ionists].'' He, and Republicans in the House, have fought vigorously to stop real accounting reform.
President George W. Bush is right to bring up the S&L debacle as an analogy. He is following in his father's footsteps: First, create the problem by taking actions that encourage fraud. Second, do nothing while the frauds become epidemic. Finally, when the scandal breaks, claim like Claude Rains in ''Casablanca'' that he is ''shocked, shocked'' that gambling is going on. In Bush's case, the winnings from gambling were safely pocketed long ago.
Bill Black and James Galbraith teach at the University of Texas at Austin. Black was counsel to the Federal Home Loan Bank Board in the early 1980s; Galbraith is an economist.
© Copyright 2002 Globe Newspaper Company
www.commondreams.org/views02/0723-02.htm
Oct. 28, 1991
A Mysterious Mover of
Money and Planes
By Jonathan Beaty
The Harken Energy folks are not the only Texas-based colleagues of George W. Bush with fortuitous, if not extraordinary, Arab connections. Another is the mysterious Houston businessman James R. Bath, a deal broker whose alleged associations run from the CIA to a major shareholder and director of the Bank of Credit & Commerce International.
The President's son has denied that he ever had business dealings with Bath, but early 1980s tax records reviewed by TIME show that Bath invested $50,000 in Bush's energy ventures and remained a stockholder until Bush sold his company to Harken in 1986.
Bath's penchant for secrecy has been frustrated by a feud with a former business partner, Bill White, who claims that Bath was a front man for CIA business operations. White contends that Bath has used his connections to the Bush family and Texas Senator Lloyd Bentsen to cloak the development of a lucrative array of offshore companies designed to move money and airplanes between the Middle East and Texas.
White, an Annapolis graduate and former Navy fighter pilot, claims it was Bentsen's son Lan who suggested that White go into the real estate development business with Bath, a former Air Force fighter pilot. The partners prospered together at first, but since their falling out they have dueled in five lawsuits in which Bath has kept the upper hand, White claims, by privately asserting to the court that he had "national security" connections.
White now claims in court that Bath wanted to borrow $550,000 from their real estate venture to cover funds that Bath had "misappropriated" from an aircraft company he controlled.
Bath, 55, acknowledges a friendship with George W. Bush that stems from their service together in the Texas Air National Guard, and says he is "slightly" acquainted with the President. But Bath vehemently denies White's accusations. "I am not a member of the CIA or any other intelligence agency," he says, describing White's portrayal as a "fantasy."
Even so, Bath, while insisting he is nothing more than a "small, obscure businessman," is associated with some of the most powerful figures in the U.S. and Middle East. Private records show, and associates confirm, that Bath is a "representative" for several immensely wealthy Saudi families, an unusual position for any small-time Texas businessman.
Bath got his start in real estate in 1973 by forming a partnership with Lan Bentsen. One purpose, sources tell TIME, was to find investments for the Senator's blind trust. Bath and Bentsen have said they have not been partners for years, but secretaries at Bath's office still answer the phone with a cheery "Bath Bentsen Interests." Bath says he simply hasn't got around to changing the name of his company.
Bath opened his own aircraft brokerage firm in 1976, but his Middle East connections first surfaced two years later, when he became a shareholder and director of Houston's Main Bank. His fellow investors were former U.S. Treasury Secretary John Connally; Saudi financier Ghaith Pharaon, an alleged B.C.C.I. front man; and Saudi banker Khaled bin Mahfouz, who subsequently became a major B.C.C.I. shareholder.
Pharaon later sold his Main Bank holdings and bought the National Bank of Georgia, allegedly on behalf of B.C.C.I. Unusual transactions involving Main Bank in the late 1970s came to light last year when a researcher discovered that the small community bank, at a time when it held only $58 million in deposits, had been buying $10 million a month in new $100 bills. Purpose: unknown.
Bath controlled a fleet of companies connected to his aircraft business, and he enjoyed unusual carte blanche to direct the U.S. investments of several wealthy Middle Easterners. Associates confirm that Bath has brokered more than $150 million in private plane deals in recent years, concentrated in sales and leases to Middle Eastern royalty and other influential figures. Pharaon is believed to have bought several expensive jets for his construction company.
One Bath entity, Skyway Aircraft, leased a $10 million Gulfstream II to the Abu Dhabi National Oil Co., which is controlled by Sheik Zayed bin Sultan an- Nahayan, the President of the United Arab Emirates and the current owner of B.C.C.I. Bath's partners in Skyway, one of four similarly named companies he controls, are artfully hidden. The firm that incorporated Bath's companies in the Cayman Islands is the same one that set up a money-collecting front company for Oliver North in the Iran-contra affair.
Even if Bath is a clandestine public servant, the U.S. may not always get a bargain. The Houston Post reported last year that the U.S. had spent millions of dollars more than necessary by fueling military aircraft, including Air Force One, at privately owned Southwest Airport Services at Ellington Field rather than using a government fuel station there.
Bath operates and holds a majority ownership stake in Southwest Airport Services, which the Post said was charging a markup of as much as 60% on the fuel. So far, the paper's charges have prompted no official investigations.
www.time.com/time/magazine/article/0,9171,974114,00.html
From AMERICAN DYNASTY - Aristocracy, Fortune, and the Deceit in the House of Bush, by Kevin Phillips:
INDIANA BUSH AND THE AXIS OF EVIL
As president, Bush senior gloried in the Gulf War and the 1989 invasion of Panama, both cast as strikes for democracy–even if the dictators attacked were former friends. Over a decade...his web of covert international relationships prompted charges of his participating in and covering up in three actual or alleged illegalities: the Republican Party’s “October Surprise” negotiations with Iran in 1980, supposedly undertaken to ensure that no hostages taken in Iran would be released before the election; the Iran-Contra scandal; and “Iraqgate,” secretly arming Iraq from 1984 to 1990 before hurriedly changing course after Saddam Hussein took Kuwait. Two catchphrases recur in the family resume: “arms deals” and “clandestine operations.” A third recurring association would be “cover-up.”
George W. Bush was a willing recipient of the inheritance–witness the CIA and BCCI ties of some who finance him, from Arbusto to Harken Energy a decade later. For example, James Bath, who invested fifty thousand dollars in the 1979 and 1989 Arbusto partnerships, probably do so as U.S. business representative for rich Saudi investors Salem bin Laden and Khalid bin Mahfouz (Osama bin Laden’s brother-in-law). Both men were involved with the Bank of Credit and Commerce International, the rogue bank and occasional CIA front known for financing arms deals – indeed, bin Mahfouz owned 20 percent of its stock.
Bath, who made his fortune investing for the two Saudis, was a colorful Texan – and then some. According to former Houston Post reporter Pete Brewton, Bath was “an asset of the CIA, reportedly recruited by George Bush himself” in 1976 to keep the Agency up to date on Saudi activities.
A decade later, Harken Energy, the company willing to handsomely buy out George W.’s crumbling oil and gas business, had its own CIA connections. Chairman Alan Quasha was the son of a Philippine lawyer connected to the Nugan Hand Bank, a notorious Australian bank closely linked to the CIA.
Equally to the point, 17.6 percent of Harken’s stock was owned by Abdullah Bakhsh, another Saudi magnate reported by some to be representing Khalid bin Mahfouz.
A U.S. Senate subcommittee investigating BCCI in 1992 reported on how the bank bought friendship and favors from politicians around the world; details of the investigation were published in two books: False Profits: The Inside Story of BCCI, the World’s Most Corrupt Financial Empire, by Peter Truell, and The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI, by Jonathan Beaty and S.C. Gwynne. According to the latter, the story of the Bush involvement in the BCCI scandal involved the “trails that branched, crossed one another or came to unexpected dead ends.”...
As we have seen, Jeb Bush began his business career in Miami collaborating with Cubans tied to the CIA or to kindred intelligence agencies in pre-Castro Cuba. He socialized with Adbur Sakhia, BCCI’s Miami branch manager and later its top U.S. Official. Jeb Bush’s partners and early associates included a number of Cuban emigres with CIA, Nicaraguan ‘contra, or Batista-era Cuban intelligence connections.
To say that armaments, clandestine operations, and money-laundering banks recur in the history of the Walker-Bush family is no exaggeration at all. No other presidents have been so caught up in this kind of foreign policy. And the Bushes’ preoccupations are not clear until you consider the whole dynasty. It is the dynastic aspect that truly reveals the pattern – the clandestine behavior over multiple generations....
October 10, 1997
‘Most people would run for cover’ from...
Bishop Estate’s
legal army
The estate employs a host
of well-connected, top attorneys
By Rick Daysog, Star-Bulletin
When it comes to its legal armament, few can match the arsenal that Kamehameha Schools/Bishop Estate can bring to the courtroom.
The $10 billion charitable trust -- the state's largest private landowner -- employs an army of well-connected attorneys that includes a former governor, two former state attorneys general and the former chairman of Hawaii's Republican Party.
The estate's outside legal team also lists House Judiciary Chairman Terrance Tom and Bill McCorriston, a former assistant U.S. attorney who has represented former Mayor Frank Fasi and was on the city Charter Commission.
"With this kind of legal cannon pointed at you, most people would run for cover," said Beadie Dawson, attorney for Na Pua a Ke Ali'i Pauahi, which has criticized trustees' management of Kamehameha Schools.
"They've (hired) every good litigation attorney in town."
The estate maintains that it hires attorneys for their expertise. Waihee and Tom were hired because they are good attorneys and not because of their political ties, the estate said.
McCorriston, who is representing the estate in Attorney General Margery Bronster's investigation of the trust, added that the trust is like any major corporation that hires lawyers to represent its diverse legal interests.
For instance, for leasehold and litigation matters, the estate relies on Mike Hare and the Cades Schutte Fleming & Wright law firm. The Verner Liipfert firm conducts much of its Washington, D.C., lobbying, while McCorriston's firm, McCorriston Miho Miller Mukai, has done mostly land-use work, McCorriston said.
Bishop Estate trustee Gerard Jervis considered joining the McCorriston Miho firm several months ago as an outside counsel. But Jervis said he decided against the move because of his heavy workload with the estate.
Jervis denied any conflict since he didn't join the firm.
Jon Miho, one of the firm's founders and a friend of Jervis', added that if Jervis had joined McCorriston Miho, it would have made it more difficult for the firm to do work for the estate.
Jervis also shares close political ties with Washington, D.C.-based Verner Liipfert through its local partner Waihee. Jervis served on the Judicial Selection Commission during the Waihee years.
Verner Liipfert -- whose mainland offices lists former U.S Treasury Secretary Lloyd Bentsen, former Republican presidential candidate Robert Dole and former Texas Gov. Ann Richards on its roster -- also employs prominent labor-relations attorney and former Hawaii GOP head Jared Jossem and Renton Nip, who served as state Land Use Commission chairman during the Waihee years, in its local office.
Former Attorney General Warren Price and his successor, Robert Marks, through their firm serve as outside counsels to Verner Liipfert and have conducted legal work for the estate.
To be sure, the legal work for the estate can be lucrative. According to its tax filings, the estate's nonprofit unit paid nearly $4.2 million in legal fees during the year ending June 30, 1996.
More than half, or $2.75 million, went to Cades Schutte, which does the legal work for the estate's leasehold conversions and some of its real-estate litigation.
Waihee's firm, Verner Liipfert, earned $844,245, while the Ching Yuen & Morikawa firm -- whose partners include longtime Waihee friend Bill Yuen -- was paid $580,603.
The estate paid McCorriston Miho $223,079 in legal fees for the fiscal year 1995 and another $235,050 for the 1993 fiscal year.
Randall Roth, University of Hawaii law professor and co-author of a scathing report that helped launch Bronster's investigation of the estate, criticized the large amount of legal fees that the estate pays each year -- especially since it is a nonprofit organization.
While the estate's attorneys are among the top in town, Roth believes that political connections probably play a key role in who gets selected for its legal work.
"This strikes me as an exorbitant amount of money for a charity to be spending on legal fees, especially when it has its own legal department," said Roth. "We can only wonder if the money is well-spent."
And the spending doesn't include legal bills wracked up by Bishop Estate's for-profit subsidiaries.
The estate declined to disclose the amount of legal fees that its for-profit units incur each year. But recent news reports said the estate spent $500,000 to defend an $86.7 million lawsuit that film producer Frederick Field filed in 1995 over soured real-estate investments on the mainland.
An estate subsidiary, Royal Hawaiian Shopping Center Inc., wracked up at least $500,000 in legal bills in the McKenzie Methane Corp. legal battle.
The estate sued the Houston-based natural gas company's founder Mike McKenzie in 1992, alleging that fraud and mismanagement led them to lose some $60 million in the venture.
The company filed for bankruptcy protection in 1994 and was sold to the estate, which now says it has been able to recoup much of its losses in McKenzie Methane.
McKenzie denied the estate's fraud allegations, saying its hardball tactics have made his life a legal nightmare.
He said the estate wrongly accused him of stealing money from Hawaiian children and that the estate's attorneys hired private investigators -- two former FBI agents -- to harass him.
"It's been five years of hell," said McKenzie.
"They've used their money, power and influence to beat the heck out of me."
~ ~ ~
Suer of estate finds it
tough to hire a lawyer
When Bobby Harmon filed a wrongful termination suit against Bishop Estate in February, he couldn't find a lawyer to take his case.
The former president of the estate's in-house insurance company, P&C Insurance Co., was turned down by eight local law firms because they either did business with the estate or wanted to, said John Goemans, Harmon's attorney.
Some were just afraid to oppose them, he said.
"The reality is that it's virtually impossible to take on the estate," said Goemans.
Harmon sued the estate after the estate sued him for releasing confidential information.
The estate said Harmon was fired for cause and that the firing was upheld by a state Department of Labor review, which denied him unemployment benefits.
Documents released by Harmon contained false and defamatory allegations, the estate has also said.
A Circuit Court judge recently ruled that Harmon violated a court order not to disclose estate information. The court also said that Harmon did not act in bad faith since he was acting on advice of his lawyer.
For Goemans, the Harmon case underscores the estate's clout in Hawaii's legal community and the difficulties of opposing it. Goemans said his client has run up about $20,000 in legal bills.
"Few have the capability of resisting a $10 billion behemoth with an unlimited supply of lawyers who have a clear modus operandi of deluging opponents with paper," Goemans said.
www.starbulletin.com/97/10/20/news/story3.html
July 12, 2002
The Insider Game
By PAUL KRUGMAN, The New York Times
The current crisis in American capitalism isn't just about the specific details —— about tricky accounting, stock options, loans to executives, and so on. It's about the way the game has been rigged on behalf of insiders.
And the Bush administration is full of such insiders. That's why President Bush cannot get away with merely rhetorical opposition to executive wrongdoers.
To give the most extreme example (so far), how can we take his moralizing seriously when Thomas White —— whose division of Enron generated $500 million in phony profits, and who sold $12 million in stock just before the company collapsed —— is still secretary of the Army?
Yet everything Mr. Bush has said and done lately shows that he doesn't get it.
Asked about the Aloha Petroleum deal at his former company Harken Energy —— in which big profits were recorded on a sale that was paid for by the company itself, a transaction that obviously had no meaning except as a way to inflate reported earnings —— he responded, "There was an honest difference of opinion. . . . sometimes things aren't exactly black-and-white when it comes to accounting procedures."
And he still opposes both reforms that would reduce the incentives for corporate scams, such as requiring companies to count executive stock options against profits, and reforms that would make it harder to carry out such scams, such as not allowing accountants to take consulting fees from the same firms they audit.
The closest thing to a substantive proposal in Mr. Bush's tough-talking, nearly content-free speech on Tuesday was his call for extra punishment for executives convicted of fraud. But that's an empty threat. In reality, top executives rarely get charged with crimes; not a single indictment has yet been brought in the Enron affair, and even "Chainsaw Al" Dunlap, a serial book-cooker, faces only a civil suit. And they almost never get convicted. Accounting issues are technical enough to confuse many juries; expensive lawyers make the most of that confusion; and if all else fails, big-name executives have friends in high places who protect them.
In this as in so much of the corporate governance issue, the current wave of scandal is prefigured by President Bush's own history.
An aside: Some pundits have tried to dismiss questions about Mr. Bush's business career as unfair —— it was long ago, and hence irrelevant. Yet many of these same pundits thought it was perfectly appropriate to spend seven years and $70 million investigating a failed land deal that was even further in Bill Clinton's past. And if they want something more recent, how about reporting on the story of Mr. Bush's extraordinarily lucrative investment in the Texas Rangers, which became so profitable because of a highly incestuous web of public policy and private deals? As in the case of Harken, no hard work is necessary; Joe Conason laid it all out in Harper's almost two years ago.
But the Harken story still has more to teach us, because the S.E.C. investigation into Mr. Bush's stock sale is a perfect illustration of why his tough talk won't scare well-connected malefactors.
Mr. Bush claims that he was "vetted" by the S.E.C. In fact, the agency's investigation was peculiarly perfunctory. It somehow decided that Mr. Bush's perfectly timed stock sale did not reflect inside information without interviewing him, or any other members of Harken's board. Maybe top officials at the S.E.C. felt they already knew enough about Mr. Bush: his father, the president, had appointed a good friend as S.E.C. chairman.
And the general counsel, who would normally make decisions about legal action, had previously been George W. Bush's personal lawyer —— he negotiated the purchase of the Texas Rangers. I am not making this up.
Most corporate wrongdoers won't be quite as well connected as the young Mr. Bush; but like him, they will expect, and probably receive, kid-glove treatment. In an interesting parallel, today's S.E.C., which claims to be investigating the highly questionable accounting at Halliburton that turned a loss into a reported profit, has yet to interview the C.E.O. at the time —— Dick Cheney.
The bottom line is that in the last week any hopes you might have had that Mr. Bush would make a break from his past and champion desperately needed corporate reform have been dashed.
Mr. Bush is not a real reformer; he just plays one on TV....
DISPATCHES
TOOTHLESS WATCHDOG BARKS
As we go to press, George W. Bush was scheduled to give a speech on his administration's newfound probity toward business wrongdoing. His spin doctors are trying to present him as the reincarnation of Teddy Roosevelt, but his actions so far are not encouraging.
Bush shows no signs of clearing out an administration filled with people who succeeded in business by ignoring ethical boundaries, from Army Secretary Thomas White, the vice chairman of Enron Energy Services when it allegedly hid $500 million in losses and manipulated the California energy crisis, to Vice President Dick Cheney, who presided over the cooking of books at Halliburton (and also doing business with evildoer Iraq), White House counsel