Home About Topplebush.com Contact Us Links
Topple Bush Store Articles about George Bush Bush Resume Bush Humor Contribute

Bush Articles

Past Business Dealings

Support
Topplebush.com!

Bush coin button
Please also visit our own Store to find lots of interesting, unusual, and funny politically-themed products

Topplebush Books
Find all the progressive books featured on our site plus DVDs, and CDs.


Support our web site using PayPal!
Contact Elected Officials

- Write to Congress
- Write to Congress by State
- Write to Senate by state
- White House switchboard: 1-202-224-3121
- Capitol tollfree: 1-888-355-3588
- Complete White House telephone directory

Recommended Reading

View Cart/Checkout

Succeeding in Business
by Paul Krugman
New York Times
July 7, 2002

On Tuesday, George W. Bush is scheduled to give a speech intended to put him in front of the growing national outrage over corporate malfeasance. He will sternly lecture Wall Street executives about ethics and will doubtless portray himself as a believer in old-fashioned business probity.

Yet this pose is surreal, given the way top officials like Secretary of the Army Thomas White, Dick Cheney and Mr. Bush himself acquired their wealth. As Joshua Green says in The Washington Monthly, in a must-read article written just before the administration suddenly became such an exponent of corporate ethics: "The 'new tone' that George W. Bush brought to Washington isn't one of integrity, but of permissiveness. . . . In this administration, enriching oneself while one's business goes bust isn't necessarily frowned upon."

Unfortunately, the administration has so far gotten the press to focus on the least important question about Mr. Bush's business dealings: his failure to obey the law by promptly reporting his insider stock sales. It's true that Mr. Bush's story about that failure has suddenly changed, from "the dog ate my homework" to "my lawyer ate my homework - four times." But the administration hopes that a narrow focus on the reporting lapses will divert attention from the larger point: Mr. Bush profited personally from aggressive accounting identical to the recent scams that have shocked the nation.

In 1986, one would have had to consider Mr. Bush a failed businessman. He had run through millions of dollars of other people's money, with nothing to show for it but a company losing money and heavily burdened with debt. But he was rescued from failure when Harken Energy bought his company at an astonishingly high price. There is no question that Harken was basically paying for Mr. Bush's connections.

Despite these connections, Harken did badly. But for a time it concealed its failure - sustaining its stock price, as it turned out, just long enough for Mr. Bush to sell most of his stake at a large profit - with an accounting trick identical to one of the main ploys used by Enron a decade later. (Yes, Arthur Andersen was the accountant.) As I explained in my previous column, the ploy works as follows: corporate insiders create a front organization that seems independent but is really under their control. This front buys some of the firm's assets at unrealistically high prices, creating a phantom profit that inflates the stock price, allowing the executives to cash in their stock.

That's exactly what happened at Harken. A group of insiders, using money borrowed from Harken itself, paid an exorbitant price for a Harken subsidiary, Aloha Petroleum. That created a $10 million phantom profit, which hid three-quarters of the company's losses in 1989. White House aides have played down the significance of this maneuver, saying $10 million isn't much, compared with recent scandals. Indeed, it's a small fraction of the apparent profits Halliburton created through a sudden change in accounting procedures during Dick Cheney's tenure as chief executive. But for Harken's stock price - and hence for Mr. Bush's personal wealth - this accounting trickery made all the difference.

Oh, and Harken's fake profits were several dozen times as large as the Whitewater land deal - though only about one-seventh the cost of the Whitewater investigation.

Mr. Bush was on the company's audit committee, as well as on a special restructuring committee; back in 1994, another member of both committees, E. Stuart Watson, assured reporters that he and Mr. Bush were constantly made aware of the company's finances. If Mr. Bush didn't know about the Aloha maneuver, he was a very negligent director.

In any case, Mr. Bush certainly found out what his company had been up to when the Securities and Exchange Commission ordered it to restate its earnings. So he can't really be shocked over recent corporate scams. His own company pulled exactly the same tricks, to his considerable benefit. Of course, what really made Mr. Bush a rich man was the investment of his proceeds from Harken in the Texas Rangers - a step that is another, equally strange story.

The point is the contrast between image and reality. Mr. Bush portrays himself as a regular guy, someone ordinary Americans can identify with. But his personal fortune was built on privilege and insider dealings - and after his Harken sale, on large-scale corporate welfare. Some people have it easy.

Previous

Fair Use Notice: This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, economic, democratic, domestic and international issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.

< / 1 / 2 / 3 / 4 / 5 / 6 / 7 / 8 / 9 / 10 / 11 / 12 / 13 / >
Back to Index

Main Sections:
/ Home / About Us / Contact Us / Links / Topple Bush Store / Bush Articles / Bush Resume / Bush Humor / Contribute /

Topple Bush Submenus:
Topplebush Store: / T-shirts / Bush Coins / Bumper Stickers / Peace Magz / Obama08 / Blow-out clearance sale / T-shirt sale / Bumper Sticker sale / Bush Legacy Gear /
Bush Articles: / Past Business Dealings / Military Record / Family History / Record as Governor of TX / Stealing the Florida Election / George G. W. Bush / Record as President / Dick Cheney /
Bush Humor: / Jokes / Cartoons / Photos 1 / Photos 2 / Photos 3 / Animation / Other / Trump Jokes / Trump Limericks /
Contribute: / Candidates / Topple Bush Site /

Other Sections:
/ Books / DVDs / CDs / MP3 Music for Free Download / Free flyers to Print Out & Distribute / Election Fraud Information /

Fun Topplebush Projects:
/ Remove Condi Rice from the Football Playoff Committee /
Find New Slogan for Fox News / Send Pills to Rush / Find a New Slogan for the GOP / Create Better Language for Dems and Progressives / Blame Reagan / What military recruiters say to fill their quotas / Photo Caption Contest - Win a Free Prize! /

Share this web page with like-minded people:
/ digg / reddit / del.icio.us / stumbleupon / google web history /