-Caveat Lector- <A HREF="http://www.ctrl.org/"> </A> -Cui Bono?- >From MC-L: Kathy: They do not understand "how the money works" If enough understand how Bush's money works, they will shift. The best description so far is Feb Harpers Magazine. Some excerpts below. A perfect example of how to manipulate public and university pension funds (our savings) and combine it with government powers or contracts and financing to rig a "no lose" life. <snip> Here are additions to the first posting of the chronology (with the exception of the Oscar Wyatt story and the E2 Advisory Board story which are from me) from one of the best stories on George W. Bush done so far: NOTES ON A NATIVE SON: The George W. Bush Success Story-A Heartwarming Tale about Baseball, $1.7 Billion, and a Lot of Swell Friends by Joe Conason. The February addition is not up on Harper's website, but it is available at newstands. Well worth the purchase price. The story confirms our previous information about Harvard Endowment's role in financing Harken after Bush's company was acquired by Harken and through the Bahrain deal and Bush's sale at the top of the market. That means when Harvard wanted help in destroying the loan sales program and portfolio reengineering, Bush owed them a lot. If the researchers on the CIA-Drug list can read the flows of money here, my guess is that we will be able to figure out how the money is flowing from drugs into trusts and endowments and into the LBO and venture asset managers who are then financing the Bush campaign. This article provides a fair number of names and dates. 1975 George W. Bush graduates from Harvard Business School 1978 George W. Bush declares his candidacy for the Midland Congressional district. He wins the Republican primary and loses in the general election. 1979 George W. Bush begins operations of his oil firm, Arbusto Energy. With the help of Jonathan Bush, he assembles several dozen investors in a limited partnership including Dorothy Bush, Lewis Lehrman, William Draper, and James Bath, a Houston aircraft broker. 1982 After $3MM has poured into Arbusto with little oil and no profits, just tax shelter George W. changes the company name to Bush Exploration Oil Co. Subsequently he is kept afloat by an investment from Philip Uzielli, a Princeton friend of James Baker III. For the sum of $1 MM, Uzielli bought 10% of the company at a time in 1982 when the entire enterprise was valued at less than $400,000. Subsequently, to save the company George W. merges with Spectrum 7, a small oil firm owned by William DeWitt and Mercer Reynolds. DeWitt had graduated from Yale a few years earlier than Bush and was the son of the former owner of the Cincinnati Reds. 1986 Spectrum 7, with George W. Bush as Chairman and CEO with substantial stock ownership, continues to raise money and lose it. During a six month period in 1986, Spectrum 7 lost $400,000 and the partners feared creditors would foreclose their remaining assets. In September of 1986. Spectrum 7 was acquired by Harken Energy Corporation. After Bush joined Harken, the largest stock position and a seat on its board were acquired by Harvard Management Company (note---the oil & gas, real estate and private equity portion of Harvard Endowment also acquired Buffet's position in NHP, one of the largest owners of HUD Section 8 properties in 1989 and was instrumental in ensuring that HUD loan sales and other reengineering policies were cancelled to ensure their capital gains through IPO and acquisition). The Harken Board gave Bush $600,000 worth of the company's publicly traded stock, plus a seat on the board plus a consultancy that paid him up to $120,000 a year. January 1989 George H. W. Bush becomes President of the United States. March 1989 Two months after his father's inauguration, George W. Bush announces that he and a syndicate of investors have purchased the Texas Rangers. The investors are Edward "Rusty" Rose, Richard Rainwater, Bill DeWitt, Roland Betts (a former Yale frat brother) and Tom Bernstein (Bett's partner in a film investment concern). While Bush appears to lead the group, Rainwater makes clear that Rose is to control the line authority and how the business is run. Bush's stake in the $86 MM deal is 2%, financed with a $500,000 loan from a Midland Bank of which he had been a director and $106,000 from other sources. Rainwater and Rose put up 14.2 MM, Betts and Bernstein invested about $6MM and the balance came from smaller investors, loans and the equity of minority partners in the old Chiles partnership (former owners). 1990 George W. Bush is asked by Carlyle Group to serve on the board of directors of Caterair, one of the nation's largest airline catering services which it had acquired in 1989. The offer is arranged by Fred Malek, long time Bush associate who is then an advisor to Carlyle. January 1990 To the astonishment of the oil industry, Bahrain announces that it has awarded exclusive offshore drilling rights to Harken oil. This is a surprise as Harken is in very shaky financial condition, has never drilled outside of Texas, Louisiana and Oklahoma and had never drilled undersea at all. The Bass brothers are brought in by Harken for sufficient equity to proceed with the effort. Harken's stock price increases from $4.50 to $5.50. (CAT---MAKE SURE WE ADD TO THE CHRONOLOGY THE CANCELLATION OF BCCI MONEY LAUNDERING INDICTMENTS CITED IN FALSE PROFITS AS PART OF TH E BAHRAIN DEAL WITH HARKEN). June 22, 1990 Six months after the Bahrain contract is announced, George W. Bush sells off 212,140 shares, or two-thirds of his interest, grossing him $848, 560. He used most of the proceeds to pay off the bank loan he had taken a year earlier to finance his portion of the Texas rangers deal. At the time of his sale, Bush is a member of the board's three member audit committee and also on a special "fairness" committee appointed that spring to consider how a corporate restructuring would affect the value of the company's outstanding shares. August 1990 Saddam Hussein invades Kuwait. Harken's stock price drops substantially. Two months after Bush sells his stock, Harken posts losses for the 2nd quarter of well over $20MM and is shares fall another 24 %, by year end Harken is trading at $1.25. Bush has insisted that he did not know about the firm's mounting losses and that his stock sell-off was approved by Harken's general counsel. October 1990 Arlington, Texas Mayor Richard Greene signs a contract that guarantees $135 MM toward the new Texas Ranger Stadium's estimate price of $190MM. The Rangers put up no cash but finance their share through a ticket surcharge. From the team's operating revenues, the city would earn a maximum of $5MM annually in rent, no matter how much the Rangers reaped from ticket sales and television (a sum that rose to $100MM a year). The most remarkable provision, however, permitted the franchise to buy the stadium after the accumulated rental payments reached a mere $ 60MM. The property acquired so cheaply by the Rangers included not just a fancy new stadium with a seating capacity of 49,000 but an additional 270 acres of suddenly valuation land. After a local sales tax referendum, legislation is passed and signed that authorizes the Arlington Sports Facilities Development Authority with power to issue bonds and exercise eminent domain over any obstinate landowners. Never before had a Texas municipal authority been given the license to seize the property of a private citizen for the benefit of other private citizens. This is exactly what happened to a recalcitrant Arlington family that refused to sell a 13 acre parcel near the stadium site for half its appraised value. The ensuing lawsuit revealed that before any of the enabling legislation had been passed, the Rangers management had planned to wield condemnation as a weapon to drive down the price, and an outraged jury awarded more than $4MM to the Arlington family whose land had been expropriated. April 1991 The Wall Street Journal reveals that the Securities and Exchange Commission was not notified about Bush's Harken stock sale until eight months after the legal deadline. The regulatory agency commenced an investigation that concluded in 1991 with no action against George W. Bush. The SEC Chairman, Richard Breedan, was a Bush loyalist, and the agency's general counsel was the same Texas attorney who had handled the sale of the Rangers baseball team for Bush and his partners in 1989. November 8 1993 With the new Ranger stadium being readied to open the following spring, George W. Bush announced that he would be running for governor. He didn't blush when he proclaimed that his campaign theme would demand self-reliance and personal responsibility rather than dependence on government. November 1994, George W. Bush is elected Governor of Texas, defeating Ann Richards 53 to 46 %. December 6, 1994 One month after his election, George W. Bush receives a large but belated campaign contribution from Thomas Hicks, the chief executive of Hicks. Muse, Tate & Furst, and investment firm that he founded ten years before that is now among the largest in the country. Hicks is an important player in the leveraged buy out business. Among the largest sources of capital available to players in the private equity sweepstakes are public pension funds and university endowments (as George W. Bush himself surely must have noticed during the 1980's when the Harvard Management Company sank millions into Harken Energy limited partnerships). While considerably more dangerous than ordinary stocks or mutual funds, these so-called alternative equity placements often promise much higher returns. The University of Texas had done some private equity deals since 1987, averaging six a year. Caution had usually predominated the handling of the university's legacy of oil wealth. Hicks had been appointed to the University of Texas Board of Regents the year before. His appointment had not been confirmed by the Senate before the election. After pocketing Hick's $25,000 contribution, Governor Bush does not withdraw Hick's nomination. The prolific Hicks had conceived an ambitious plan for the University financial assets---more than $13 billion. With the governor's support, he parlayed his appointment into a position of unprecedented control over the University Funds. 1995 Thomas Hicks with Governor George Bush's support arranges passage and signing of the "privatization" of $9 billion of University financial assets by transferring all of its diverse holdings into a new not-for profit corporation. The entity, separate from the regents but still under their purview, was to be known as the University of Texas Investment Management Company, or UTIMCO. The UTIMCO play provides for higher salaries for staff and provides for the flexibility and confidentiality to do deals with venture capital and limited partnerships. The new organization is not subject to state laws that mandate open meetings and public records. The privitized corporation would not be listed in the Texas State Directory now would the non-regent appointees to the nine member UTIMCO board be required to file personal financial disclosure documents like other appointees to state commissions and agencies. March 1, 1995 The University of Texas Endowment votes to place $10MM with The Carlyle Group, a Washington-based merchant bank that is chaired by Frank Carlucci. The specific fund was Carlyle Partners II, described on the firm's website as pursuing "an investment strategy focused on the intersection of government and business." James Baker III and Richard Darmen are partners of Carlyle and George H. W. Bush has a variety of business dealings with the firm. Early 1996 UTIMCO officially takes over investment of the endowment from the University of Texas Regent's investment committee with Thomas Hicks as the first Chairman. . Hick's, as Chairman of UTIMCO, enjoys a substantial flow of information about what deals are in the marketplace, who is investing how much and in what and what competitors of Hicks, Muse are doing. This allows Hicks, Muse to "trade" on "inside information" in other areas of its business. Monthly board meetings are held at the offices of Hicks, Muse, Tate and Frust in Dallas rather than at UTIMCO's quarters in an Austin building. Freed from public accountability, UTIMCO embarked on a series of private deals that raise serious questions about conflict of interest. The legality of all important decisions were vetted by UTIMCO's attorneys, Vinson & Elkins. From the time of Governor Bush's inauguration one, the private equity volume in the University of Texas Endowment grows rapidly. In all of 1994, the university had placed a total of $36 million in three limited partnerships. In February 1995 alone, it invested almost twice that amount. The regents financial plan restricted new private equity commitments for 1995-96 to $144 MM or one fourth of the funded portfolio for the year. Yet according to a review by the Texas state auditor's offices, the actual commitments made in 1995-96 nearly doubled that amount, reaching $285 MM. Early 1996 Oscar Wyatt, Chairman of Coastal Energy headquartered in Houston, contacts Secretary Cisneros and the White House insisting that Hamilton be fired by HUD. Assistant Secretary Nicholas Retsinas is asked to call Wyatt to solicit his concerns. He later reports to Deputy Assistant Secretary in charge of loan sales that his objection is that Catherine Austin Fitts, the President of Hamilton, is a woman. HUD and Hamilton later learn that his son, Steve Wyatt is providing consulting services to NHP. 1996 UTIMCO, with Hicks as Chairman, invests $50MM in the KKR 1996 Fund, a Kohlberg Kravis Robers buy out fund. Kravis was a financial co-chairman for Bush-Quayle 1992. Both Kravis and his wife are substantial donors of "soft money" to the Republican Party. In the spring of 1996, they gave $125,000 to the Republican National Committee. This investment was followed 15 months later by the announcement of an unprecedented joint venture between the Kravis firm and Hicks, Muse. June 1996 UTIMCO commits to an investment in Beacon Energy's Focus Value Fund. This and later investments with Roger Altman's Evercore Partners and investments with former Hick's classmates involved evolving conflicts with and in some instances with subsequent activities with Hick, Muse. April 1997 At an E2 advisory board (a subsidiary of Hamilton Securities) meeting held at SafeGuard Scientific, the President of CalPERS, the California employee pension fund, expresses concern that the Neighborhood Stock Corporation investment concept (a critical component of the Solari Investment Model) needs to be communicated to US investment leadership quickly. He says that a decision has already been made to move substantial amounts of US pension fund money out of the country starting at the end of 1997.. The implication is that investment leadership believes that Asian and foreign investment is substantially more productive; the US government and economy can not and will not reengineer in a healthy and timely manner. The question remains at to whether decisions by banks and others in the financial community to not roll over financing for Asian companies and in other emerging markets was intended as part of the effort to move equity to Asia at prices that were highly attractive to income equity funds, such as Carlyle Asia Partners set up in 1997, with George H. W. Bush as a senior advisor or similar investment efforts in South America and the emerging markets. June 1997 Governor George W. Bush signs legislation that permits Texas cities to impose new taxes for the financing of sports facilities. Within months, the citizens of Dallas approved construction of a $230 MM hockey and basketball arena, increasing the value of the hockey team owned by Hicks and profiting Richard Rainwater's real estate company. 1997 CalPERS, the California employee pension fund, invests $100MM with Hicks, Muse after a positive recommendation from an outside consultant, Christopher J. Bower. A furor arises after it is revealed that Hicks had also purchase a yacht for $300,000 from Bower. That price was $45,000 more than Bower had originally paid for the used 47-fott boat, and Hicks had paid the higher price without actually seeing the vessel. Fortunately for Hicks, the giant California pension fund's lawyers took an indulgent view of the matter. They ruled that there was no serious conflict, because the boat sale had taken place nine months after Bower's recommendation and twelve months before a second $100 MM investment was approved by the CalPERs board. Federal investigators take a dimmer view and the FBI briefly examines the circumstances of the transactions. The investigation was inconclusive, however, and no charges were brought. Early 1998 George H. W. Bush becomes a senior advisor to Carlyle Asia Partners, a fund set up in 1997 to buy distressed businesses in the Far East). A source close to the firm says that Bush senior enjoys "carried interests" in one or more Carlyle partnerships---meaning that he was awarded a share of profits without putting up any equity. April 1998 UTIMCO, with Hicks as Chairman, invests $20MM in Prime Enterprises II, a limited partnership of Bass Brothers Enterprises. Later in 1998, UTIMCO placed $96MM with Maverick Capital. Among Maverick Capital's main investors and general partners are the Wyle family, the principal stockholders in Sterling Software and long time friends of the Bushes. Between 1993 and 1998, various Wyle family members gave well over $300,000 to Republican candidates and committees. Hick's, as Chairman of UTIMCO continues to enjoy a substantial flow of information about what deals are in the marketplace, who is investing how much and in what and what competitors of Hicks, Muse are doing. 1998 Hicks pays $250 MM to acquire the Texas Rangers, three times the price paid by Bush and his partners in 1989. The other members of the Rangers partnership fattened Bush's payout six times over, by awarding him additional shares in the team at the time of the sale that brought is 1.8 percent share up to 12%. Without that extra consideration, his investment would have earned much less. What went unmentioned during the celebration of the governor's good fortune were the public benefits conferred upon Hicks by Bush. Hicks had enjoyed dominion over some $13 billion of the University of Texas investment portfolio, putting some $1.7 billion in private investments. February 1999 Hicks resigns as Chairman of ITIMCO after his term as regent expired. A review of private equity deals made during his leadership is hard to do as valuations depend on those who invested. However for those on which returns are available, the investment performance appears substantially below stock market averages for the period, as opposed to a return above stock market averages expected for risky private equity. 1999 A list of the first 115 "pioneers" who met their pledge to raise $100,000 for George W. Bush's candidacy include Steve Hicks, Thomas Hick's brother, three Vinson & Elkins partners, former Texas Ranger partners Mercer Reynolds, William DeWitt, Rusty Rose, and Roland Betts. Also joining them were Adele Hall, Charles Wyly, and Lee Bass whose partnershps had received investments from UTIMCO, and Wayne Berman, the lobbyist and consultant who represents Carlyle. 1999 Various concerns are raised about investment of public pension funds. In New York both the current state comptroller, a Democrat, and his Republican predecessor were plausibly accused of favoring major contributors with pension fund investment deals. In California similar accusations erupted last year over the investment of public employee retirement funds. In Connecticut, the former state treasurer pleaded guild to racketeering and money laundering in a wide-ranging probe of what federal authorities have called "the shady world of bribes, kickbacks, and improper campaign contributions" connected with more than $500MM in state pension fund investments. In connection with the Connecticut investigation, the FBI is reportedly interested in determining whether millions of dollars were illicitly steered from the Connecticut fund to Carlyle in 1998 through Park Strategies, a Washington lobbying and consulting firm. The director of Park Strategies is Wayne Berman, former Assistant Secretary of Commerce in the Bush Administration, and one of the Republican parties top national fund raisers. Berman was one of the first George W. Bush supporters to qualify as a "Pioneer" by raising more than $100,000. Cat: One or two of these may be duplicative with current Harken entries. Can you make sure we do not overlap. Feel free to send me any questions on how to revise. Thanks. ===== <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are not allowed. Substance�not soap-boxing! These are sordid matters and 'conspiracy theory'�with its many half-truths, misdirections and outright frauds�is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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