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USA: Can Bush Scold Wall Street with a Straight Face?

by Robert ScheerLos Angeles Times
July 9th, 2002

For President Bush to pretend to be shocked that some of the nation's top executives deal from a stacked deck is akin to a madam feigning surprise that sexual favors have been sold in her establishment. Dubya may have gaps in his education, but ignorance of "aggressive accounting" techniques and other scams they don't teach in Biz 101 is not one of them.

Not only was the prez and ex-businessman himself a pro at milking failed corporations he made look good on paper, but too many family members, friends and members of his administration have been implicated in scandals of the sort he now condemns. For Bush to argue that the unraveling of corporate America is the work of a "few bad apples" is a dangerous line of reasoning for him because an embarrassing number of those apples have fallen very close to the tree of his presidency.

For example, the troubles of Vice President Dick Cheney are just beginning; the dubious accounting practices initiated at Halliburton when he was CEO are now the focus of a Securities and Exchange Commission investigation. The SEC is forced to investigate this and other potential business outrages despite the extreme reluctance of its chairman, Harvey L. Pitt -- who was selected for the job by George W. himself after a career as a top lobbyist for stock brokers and accounting firms that opposed tough SEC regulation. Cheney has also steadfastly refused to turn over the names of energy corporation officials, including Enron executives, who guided him in the secret meetings in which Bush's energy plan was crafted. Bush still seems not the least embarrassed that Enron's chairman, Kenneth Lay, was a personal friend and the largest contributor to his presidential campaign.

Enron alums remain safely ensconced at the top of the Bush administration. Special prosecutor, anyone? Clearly, the antics of the Texas crowd make the petty shenanigans of the Clintons and those Arkansas boys look like the work of small-time hustlers.

When the president once referred to himself as the black sheep of the Bush family, it was a joshing, self-congratulatory admission that he was even more rascally than the rest. That ever-charming "what me worry'' quality stood him in good stead as he ran through the money of numerous family friends who invested in a long string of his losing ventures.

George W. was saved from repeated financial disaster by one merger after another, business maneuvers that made no economic sense to the new partner beyond the acquisition of the presumed clout of the son of a Central Intelligence Agency chief turned vice president turned president.

The final such deal was with Harken Energy, a firm that bailed out Bush's Spectrum 7 Energy Corp., which owed the banks $2 million. Bush's political connections appeared to pay off when Harken, which had zero experience drilling in water, suddenly won a contract with the Persian Gulf sheikdom of Bahrain for offshore oil exploration, which in turn boosted Harken's stock.

However, the company failed to find oil in Bahrain, and insiders like Bush knew that banks were refusing to continue to carry Harken's considerable debt.

Bush cashed out for nearly $850,000 before the company reported a $22-million loss and the stock lost 75% of its value.

Bush, who failed to properly report the transaction to the SEC until eight months after the deadline, was on the audit committee of Harken's board of directors but denied knowing of the upcoming negative quarterly report. He also claimed ignorance of a shell game in which Harken insiders purchased one of the company's major subsidiaries with money provided by Harken, fabricating a $10-million profit.

In the end, Bush was spared the fate of some other free-wheeling financial hustlers -- insider trading charges -- by a compliant SEC. It certainly couldn't have hurt that the SEC's then-chairman was appointed by Bush's father and that the SEC general counsel had been Dubya's own lawyer in 1989.

How can Bush now, with a straight face, tell the nation that he will order the SEC to brand as criminals those guilty of the same sorts of actions? As a matter of consistency, he should in the very least demand that Martha Stewart, a comparative innocent when judged by Bush family standards, be treated no more harshly than he was.

Indeed, if justice were consistent, Stewart, and perhaps even Lay, might be planning a run for the presidency.

Robert Scheer writes a syndicated column.





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