The Family That Preys Together
From Issue No. 41, Summer, 1992
by Jack Colhoun
GEORGE JR.'S BCCI CONNECTION
"This is an incredible deal, unbelievable for this small
company," energy analyst Charles Strain told Forbes
magazine, describing the oil production sharing
agreement the Harken Energy Corporation signed in
January 1990 with Bahrain.
Under the terms of the deal, Harken was given the
exclusive right to explore for gas and oil off the shores
of the Gulf island nation. If gas or oil were found in
waters near two of the world's largest gas and oil
fields, Harken would have exclusive marketing and
transportation rights for the energy resources. Truly an
"incredible deal" for a company that had never drilled
an offshore well.
Strain failed to point out, however, the one fact that
puts the Harken deal in focus: George Bush, Jr., the
eldest son of George and Barbara Bush of 1600
Pennsylvania Avenue, Washington, DC, is a member of
Harken's board of directors, a consultant, and a
stockholder in the Texas-based company. In light of
this connection, the deal makes more sense.
The involvement of Junior-George Walker Bush's
childhood nickname-with Harken is a walking conflict
of interest. His relationship to President Bush, rather
than any business acumen, made him a valuable asset
for Harken, the Republican Party benefactors, Middle
East oil sheikhs and covert operators who played a part
in Harken's Bahrain deal.
In fact, Junior's track record as an oilman is pretty
dismal. He began his career in Midland, Texas, in the
mid-1970s when he founded Arbusto Energy, Inc. When
oil prices dropped in the early 1980s, Arbusto fell upon
hard times. Junior was only rescued from business
failure when his company was purchased by Spectrum 7
Energy Corporation, a small oil firm owned by William
DeWitt and Mercer Reynolds. As part of the September
1984 deal, Bush became Spectrum 7's president and was
given a 13.6 percent share in the company's stock. Oil
prices stayed low and within two years, Spectrum 7
was in trouble.
In the six months before Spectrum 7 was acquired by
Harken in 1986, it had lost $400,000. In the buyout
deal, George "Jr." and his partners were given more
than $2 million worth of Harken stock for the 180-well
operation. Made a director and hired as a "consultant"
to Harken, Junior received another $600,000 of Harken
stock, and has been paid between $42,000 and
$120,000 a year since 1986.
Junior's value to Harken soon became apparent when
the company needed an infusion of cash in the spring of
1987. Junior and other Harken officials met with
Jackson Stephens, head of Stephens, Inc., a large
investment bank in Little Rock, Arkansas (Stephens
made a $100,000 contribution to the Reagan-Bush
campaign in 1980 and gave another $100,000 to the
Bush dinner committee in 1990.)
In 1987, Stephens made arrangements with Union Bank
of Switzerland (UBS) to provide $25 million to Harken in
return for a stock interest in Harken. As part of the
Stephens-brokered deal, Sheikh Abdullah Bakhsh, a
Saudi real estate tycoon and financier, joined Harken's
board as a major investor. *5 Stephens, UBS, and Bakhsh
each have ties to the scandal-ridden Bank of Credit and
Commerce International (BCCI).
It was Stephens who suggested in the late 1970s that
BCCI purchase what became First American Bankshares
in Washington, D.C. BCCI later acquired First American's
predecessor, Financial General Bankshares. At the time
of the Harken investment, UBS was a joint-venture
partner with BCCI in a bank in Geneva, Switzerland.
Bakhsh has been an investment partner in Saudi Arabia
with Gaith Pharoan, identified by the U.S. Federal
Reserve Board as a "front man" for BCCI's secret
acquisitions of U.S. banks.
Stephens, Inc. played a role in the Harken deal with
Bahrain as well. Former Stephens bankers David and
Mike Edwards contacted Michael Ameen, the former
chief of Mobil Oil's Middle East operations, when
Bahrain broke off 1989 talks with Amoco for a gas and
oil exploration contract. The Edwardses recommended
Harken for the job and urged Ameen to get in touch
with Bahrain, which he did.
"In the midst of Harken's talks with Bahrain, Ameen-
simultaneously working as a State Department
consultant-briefed the incoming U.S. ambassador in
Bahrain, Charles Hostler," the Wall Street Journal
noted, adding that Hostler, a San Diego real estate
investor, was a $100,000 contributor to the Republican
Party. Hostler claimed he never discussed Harken with
Harken lacked sufficient financing to explore off the
coast of Bahrain so it brought in Bass Enterprises
Production Company of Fort Worth, Texas, as a partner.
The Bass family contributed more than $200,000 to the
Republican Party in the late 1980s and early 1990s. *9
On June 22, 1990, George Jr. sold two-thirds of his
Harken stock for $848,560-a cool 200 percent profit.
The move was well timed. One week after Junior sold
his stock, Harken announced a $23.2 million loss in
quarterly earnings and Harken stock dropped sharply,
losing 60 percent of its value over the next six months.
On August 2, 1990, Iraqi troops moved into Kuwait and
541,000 U.S. forces were deployed to the Gulf.
"There is substantial evidence to suggest that Bush
knew Harken was in dire straits in the weeks before he
sold the $848,560 of Harken stock," asserted U.S. News
& World Report. The magazine noted Harken appointed
Junior to a "fairness committee" to study possible
economic restructuring of the company. Junior worked
closely with financial advisers from Smith Barney,
Harris Upham & Company, who concluded "only drastic
action could save Harken."
George "Jr." also violated Securities and Exchange
Commission (SEC) regulations which require "insider"
stock deals to be reported promptly, in Bush's case by
July 10, 1990. He didn't file the stock sale with the SEC
until the first week of March 1991.
Meanwhile, a cloak-and-dagger aura surrounds Junior's
business dealings. James Bath, a Texas entrepreneur
who invested $50,000 in Arbusto Energy, may be a
business cutout for the CIA. Bath also acted as an
investment "adviser" to Saudi Arabian oil sheikhs,
linked to the outlaw BCCI, which also has ties to the
Bill White, a former Bath partner, claims that Bath has
"national security" connections. White, a United States
Naval Academy graduate and former fighter pilot,
charges that Bath developed a network of off-shore
companies to camouflage the movement of money and
aircraft between Texas and the Middle East, especially
Alan Quasha, a Harken director and former chair of the
company, is the son of attorney William Quasha, who
defended figures in the Nugan Hand Bank scandal in
Australia. Closed in 1980, Nugan Hand was not only tied
to drug-money laundering and U.S. intelligence and mi-
litary circles, but also to the CIA's covert backing for a
"constitutional coup" in Australia that caused the fall
of Prime Minister Gough Whitlam.
The Harken deal with Bahrain raises another troubling
question: Did the Bahrainis and the BCCI-linked Saudi
oil sheikhs use the production sharing agreement with
Harken to curry favor with the Bush administration and
influence U.S. policy in the Middle East?
Talat Othman's sudden rise to prominence in Bush
administration foreign policy circles is a case in point.
Othman, who sits on the Harken board as Sheikh
Bakhsh's representative, didn't have access to
President Bush before Harken's Bahrain agreement.
"But since August 1990, the Palestinian-born Chicago
investor has attended three White House meetings
with President Bush to discuss Middle East policy," the
Wall Street Journal pointed out. "His name was added
by the White House to a select list of 15
Arab-Americans chosen to meet with President Bush,
[then White House Chief of Staff John] Sununu and
National Security Adviser Brent Scowcroft in the White
House two days after Iraq's August 1990 invasion of
PRESCOTT'S BIG ASIAN ADVENTURE
Prescott Bush, Jr., the president's older brother, also
has a knack for nailing down "incredible deal[s]."
Prescott took advantage of his brother's first
presidential visit abroad in February 1989 to schedule a
business trip to the same countries-China, Japan and
Prescott arrived in Tokyo February 14, 1989, ten days
before President Bush's stop in Japan, to drum up
business for Prescott Bush Resources Ltd., a real estate
and development consulting company. Prescott said he
was dealing with four Japanese companies wanting to
do business in the U.S.
From Japan, Prescott went to China, where he had a
joint partnership with Akoi Corporation to develop an
$18 million golf course and resort near Shanghai.
Prescott had introduced the Tokyo-based Akoi to
Chinese officials in 1988. With a 30 percent stake in
the project, Prescott used his China connections to
pave the way for capital-rich Akoi. Akoi had run into
business obstacles in China because of lingering
Chinese resentment over Japan's brutal occupation of
China in the 1930s and 1940s.
Some of Prescott's most controversial business deals
have been with Asset Management International
Financing & Settlement Ltd., a Wall Street investment
firm which has been in bankruptcy proceedings since
fall 1991. Prescott was hired by Asset Management,
which paid him a $250,000 fee for consulting in its
joint venture with China to set up its internal
communications network. Asset Management enlisted
Prescott's services soon after President Bush imposed
economic sanctions in June 1989 in response to
Beijing's brutal crackdown on anti-government
demonstrators in Tienanmen Square.
Under the sanctions, United States export licenses
were suspended for $300 million worth of Hughes
Aircraft satellites, a key component of Asset
Management's joint venture with the Chinese
government. The satellites would beam television
programming to broadcasters in China and provide
telecommunications links for the country's far-flung
provinces. In November 1989, Congress passed
additional sanctions specifically barring the export of
U.S. satellites to China unless the president found the
sale "in the national interest."
On December 19, 1989, President Bush lifted the
sanctions that blocked the satellite deal, citing "the
national interest." Two months earlier, the Bush
administration had granted Hughes Aircraft
"preliminary licenses" to exchange data with Chinese
officials to ensure that the satellites met the
technical specifications of the Long March rockets
which would launch them into space.
Meanwhile, Prescott was hard at work in the summer of
1989 as middleman in the takeover of Asset
Management by West Tsusho, a Tokyo-based
investment firm linked to one of Japan's biggest mob
syndicates. Prescott, as head of Prescott Bush & Co.,
received a $250,000 "finder's fee" from West Tsusho
when the deal was closed and was promised an annual
retainer of $250,000 over the next three years as a
"consultant." Asset Management, however, went
bankrupt in March 1991. In May 1992, West Tsusho filed
a $2.5 million lawsuit against Prescott claiming that he
reneged on his promise to protect the mob-linked
firm's $5 million investment in Asset Management.
According to Japanese police, West Tsusho is controlled
by the Inagawakai branch of the Yakuza, the Japanese
equivalent of the Mafia crime syndicate. By the
mid-1980s, the Yakuza were buying up real estate and
investments in Japan and overseas to launder their
ill-gotten profits from drug sales, prostitution,
gambling and extortion. Yakuza's annual income is
estimated at $10 billion.
Like George Jr., Prescott combined business with secret
operations. He offered his services to the covert
operations of the Reagan-Bush campaign in 1980, and
later to the Reagan administration.
A September 3, 1980, letter from Prescott to James
Baker indicates Prescott was part of the Reagan-Bush
campaign's secret surveillance of the Carter
administration's efforts to obtain release of U.S.
hostages held in Iran. Prior to inauguration, the
Reagan-Bush campaign recruited retired military and
intelligence officers to monitor activities of the CIA,
the Defense Department, the National Security Council,
the State Department, and the White House. This
operation later became known as the "October
"Herb Cohen-the guy that offered help on the Iranian
hostage situation-called me yesterday afternoon,"
Prescott wrote in a letter designated "PRIVATE AND
CONFIDENTIAL." "Herb has a couple of reliable sources
on the National Security Council, about whom the
[Carter] administration does not know, who can keep
him posted on developments."
Prescott continued, "He cannot come out now and say
that Carter is going to do something on Iran in October
because he said everything is a contingency plan that
is loose and fluid from day to day.... Herb says,
however, that if he and others in the administration
who really care about the country and cannot stand to
see Carter playing politics with the hostages, see
Carter making a move to politicize the release of the
hostages, he and they will come out at that time and
Prescott's covert associations continued while his
younger brother was vice president. He appears to have
aided the Reagan administration's clandestine support
of the Nicaraguan Contras. In the 1980s, he served on
the advisory board of Americares, the U.S.-based relief
organization with ties to prominent right-wing
Republicans and the intelligence community. Bush's
other son, Marvin, also helped the family's pet charity
and accompanied a flight of medical supplies to
Nicaragua three days after Chamorro's inauguration.
An undisclosed amount of the $680,000 in Americares
aid to Honduras was delivered to Nicaraguan Miskito
Indian guerrillas. Based in Honduras, they were aligned
with the CIA-funded Contras, according to Roberto Ale-
jos, a Guatemalan sugar and coffee grower who
coordinated the Americares project in Honduras. In
1960, Alejos had permitted the CIA to use his
plantations to train right-wing Cubans in preparation
for the Bay of Pigs invasion of Cuba.
In 1985 and 1986, after Congress cut off U.S. aid to the
Contras, Americares donated more than $100,000 worth
of newsprint to the pro-Contra newspaper La Prensa in
Managua. Americares supplied $291,383 in food and
medicine and $5,750 in cash to Mario Calero, New
Orleans-based quartermaster and arms purchaser for
the Contras, and brother of Contra leader Adolfo
Calero. In this same period, groups associated with Lt.
Col. Oliver North's off-the-shelf Contra arms network
provided covert support for La Prensa.
Jeb: Liaison to Anti-Castro Right
George Herbert Walker Bush's second eldest son, John
Ellis or Jeb, was also linked to clandestine schemes in
support of the Contras. Soon after congressional
prohibition in late 1984, Jeb helped put a right-wing
Guatemalan politician, Dr. Mario Castejon, in touch
with Oliver North. Jeb acted as the Reagan
administration's unofficial link with the Contras and
Nicaraguan exiles in Miami.
Jeb was contacted in February 1985 by a friend of
Castejon, who gave him a letter from Castejon to be
passed on to then Vice President Bush. In his letter
Castejon, a pediatrician and later an unsuccessful
National Conservative Party presidential candidate,
requested a meeting with George Bush to discuss a
proposed medical aid project for the Contras. Jeb
forwarded the letter to his father. In a March 3, 1985,
letter, Vice President Bush expressed interest in
Castejon's proposal to create an international medical
"I might suggest, if you are willing, that you consider
meeting with Lt. Colonel Oliver North of the President's
National Security Council Staff at a time that would be
convenient for you," Bush wrote. "My staff has been in
contact with Lt. Col. North concerning your projects
and I know that he would be most happy to see you.
You may feel free to make arrangements to see Lt.
Colonel North, if you wish, by corresponding directly
with him at the White House or by contacting Philip
Hughes of my staff."
Castejon later met with North in the White House,
where he also saw President Ronald Reagan. When
Castejon returned to Washington for a second visit, he
was introduced to members of North's secret Contra
support network, including retired Maj. Gen. John Sing-
laub and Contra leader Adolfo Calero. Castejon also met
with a group of doctors working with Rob Owen, North's
liaison with the Contras.
"He [Castejon] was offering us a pipeline into
Guatemala," said Henry Whaley, a former arms dealer
who said he was asked by his intelligence community
connections to help Castejon. Whaley was optimistic
about opening a new shipping route to the Contras
through Guatemala. "If you can move Band-Aids," he
reportedly said, "you can move bullets."
With Castejon, Whaley prepared a proposal to the State
Department for the purchase of medical supplies for
the Contras from the Department's newly established
Nicaraguan Humanitarian Assistance Office. The
document included requests for mobile field hospitals
and light aircraft to evacuate wounded Contra
guerrillas. Congress approved $27 million in
"humanitarian" aid to the Contras in 1985.
The Castejon proposal was hand-delivered to TGS
International Limited in the Virginia suburbs of
Washington. Whaley said he sent the report to TGS so it
would be "quietly" forwarded to the CIA. TGS
International is owned by Ted Shackley, who was CIA
Associate Deputy Director of Operations when Bush Sr.
headed the Agency in 1976-77.
Jeb had another Contra connection in his involvement
with Miguel Recarey, Jr., a right-wing Cuban who
headed the International Medical Centers (IMC) in
Miami. In 1985 and 1986, Recarey and his associates
gave more than $25,000 in contributions to political
action committees controlled by then Vice President
Bush. In 1986, Recarey hired Jeb, a real estate
developer, to find a new headquarters for IMC. Jeb was
paid a $75,000 fee, even though he never located a new
In September 1984, two months after IMC's $2,000
contribution to the Dade County Republican Party,
which was headed by Jeb, the vice president's son
contacted several top HHS (Department of Health and
Human Services) officials on behalf of IMC. "Contrary
to rumors, [Recarey] was a good community citizen and
a good supporter of the Republican Party," one official
of the HHC remembered Jeb telling him in late 1984. Jeb
successfully sought an HHS waiver of a rule so that
IMC could receive more than 50 percent of its income
Leon Weinstein, an HHS Medicare fraud inspector,
worked on an audit of IMC in 1986; he has charged that
IMC used Medicare funds to treat wounded Contras at
its hospital. *31 The transaction was arranged by IMC
official José Basulto, a right-wing Cuban trained by the
CIA, who arranged for Contras to receive treatment in
Miami. Basulto was praised for his commitment by Felix
Rodriguez: "He has been active for a decade in
supporting the Nicaraguan freedom fighters ever since
the Sandinistas took power, and is constantly
organizing Contra support among Miami's Cuban
community. He has even been to Contra camps in
Central America, helping to dispense humanitarian
At the same time as Recarey was providing medical
assistance to the Contras, he was embezzling Medicare
funds. IMC, one of the largest health maintenance
organizations in the United States, received $30 million
a month for its Medicare patients, clearing $1 billion in
federal monies from 1981 to 1987. While he headed
IMC, Recarey's personal wealth jumped from $1 million
to $100 million, U.S. investigators believe.
"IMC is the classic case of embezzlement of
government funds," according to Robert Teich, the
head of the Drug Enforcement Administration's Office
on Labor Racketeering in Miami. Reich described IMC's
skimming Medicare funds as a "bust-out" where money
was "drained out the back door." A Florida state
investigator concluded in a 1982 report that some
federal funds IMC received "are being put in banks
outside the country."
Recarey's links to the Mafia also raised eyebrows in
Washington. "As far back as the 1960s, he had ties with
reputed racketeers who had operated out of pre-Castro
Cuba and who later forged an anti-Castro alliance with
the CIA," the Wall Street Journal reported. The Journal
added that the late Santos Trafficante, Jr., the Mafia
boss of Florida, "helped out when Recarey needed
business financing." Trafficante, a major drug
trafficker, joined a failed CIA effort to assassinate
Cuban President Fidel Castro in the early 1960s.
Recarey's access to Republican circles was probably
one reason he was able to rip-off U.S. tax dollars for so
long. He hired former Reagan aide Lyn Nofziger, the
public relations firm Black, Manafort, Stone and Kelly,
which was close to the Reagan White House, and
attorney John Sears, a former Reagan campaign
manager, to look out for his interests in Washington.
Recarey fled the United States in 1987 to avoid a
federal indictment for racketeering and defrauding the
U.S. government. The Bush administration has made no
effort to extradite him from Venezuela where he is
JEB LINKED TO SMUGGLERS AND THIEVES
Jeb Bush has also been linked to Leonel Martinez, a
Miami-based right-wing Cuban-American drug
trafficker. Martinez, who was linked to Contra
dissident Eden Pastora, was involved in efforts to
smuggle more than 3,000 pounds of cocaine into Miami
in 1985-86. He was arrested in 1989 and later convicted
for bringing 300 kilos of cocaine into the U.S. He also
reportedly arranged for the delivery of two
helicopters, arms, ammunition, and clothing to Pasto-
ra's Costa Rica-based Contras.
Federal prosecutors in Miami have a photograph of Jeb
and Martinez shaking hands but won't release the
photo to the public. Whether Jeb was aware of
Martinez's drug trafficking activities is not known, but
it is known that Leonel and his wife Margarita made a
$2,200 contribution to the Dade County Republican
Party four months after Jeb became the chair of the
It is also known that Martinez wrote $5,000 checks to
then Vice President Bush's Fund for America's Future in
both December 1985 and July 1986 and made a $2,000
contribution to the Bush for President campaign in
Martinez's construction company gave $6,000 in
October 1986 to Bob Martinez (no relation), the GOP
candidate for governor in Florida; he was governor from
1987 to 1991. At that time, Vice President Bush was
serving as head of the South Florida Drug Task Force and
later as chair of the National Narcotics Interdiction
System, both set up to stem the flow of drugs into the
U.S. While Bush was drug czar, the volume of cocaine
smuggled into the U.S. tripled.
President Bush later appointed Bob Martinez in 1991
head of the U.S. Office of National Drug Control Policy-
the drug czar to succeed the controversial William
JEB GETS IN ON THE BCCI ACTION
In 1988, Jeb was mentioned in a deposition taken by a
Senate Foreign Relations subcommittee, chaired by Sen.
John Kerry (D-Mass.), which was investigating drug
money laundering operations in the U.S.
"I saw Jeb Bush two or three times over there with
[Abdur] Sakhia," stated Aziz Rehman, a junior
BCCI-Miami official in the 1980s. "This was all part of
the bank's trying to cultivate public officials and
prominent individuals." *38 Rehman said BCCI's
practice was to "bribe" government officials in the
"Jeb Bush, V.P. George Bush's son," Sakhia noted in a
1986 BCCI document, was a "name…to be
Most of Rehman's testimony focused on his role in
BCCI-Miami's money laundering operation. Rehman said
it was his job, in the mid-1980s, to chauffeur and
entertain BCCI-Miami's big clients when they came to
the city from the Caribbean and Latin America. Rehman
described how he deposited large amounts of cash for
these clients, ranging from $100,000 to $2 million, in
other Miami banks at which BCCI-Miami had accounts.
To disguise the money trail, BCCI transferred the cash
electronically from Miami to BCCI banks in Panama and
the Grand Cayman Islands.
Jeb's name also shows up in a September 1987 BCCI
document written by Amjad Awan, then a senior
BCCI-Miami official. The memorandum planned a BCCI
breakfast meeting with a senior level delegation from
the People's Republic of China and high Florida state
government officials, including Secretary of Commerce
Jeb Bush. Among the Chinese delegation was Ge Zhong
Xue, Deputy Division Chief of the Ministry of Public
Security, a top police official.
Meanwhile, Jeb and his business partner Armando
Codina profited handsomely when the Bush
administration bailed out Broward Federal Savings and
Loan in Sunrise, Florida, which went belly up in 1988.
The Federal Deposit Insurance Corporation (FDIC)
absorbed $285 million in bad loans, including a $4.6
million loan by the Bush-Codina partnership. According
to the deal struck by federal regulators, the
Bush-Codina partnership wrote a check for $505,000 to
the FDIC, and the government paid off the remaining
$4.1 million of the loan for an office building on which
Jeb and Codina defaulted. As a result of the bailout,
the Bush-Codina partnership retained possession of its
office building at 1390 Brickell Avenue in Miami's posh
Currently, Jeb is involved in a number of joint ventures
with Codina, a Miami real estate developer who is also
a leader of the right-wing Cuban American National
Foundation (CANF). The Brickell Avenue office building
is owned by IntrAmerica Investments. Jeb was listed in
business documents in 1985 and in 1986 as the
president of IntrAmerica Investments, and the building
is managed by one of Jeb's real estate companies.
Codina owns 80 percent of the building, while Jeb owns
the remaining 20 percent.
Jeb has acted as the Reagan and Bush administration's
liaison with the politically influential Cuban exile
community in South Florida. Jorge Mas Canosa,
president of CANF, succinctly described Jeb's role as
the ultra-right Cuban-American community's liaison
with the White House: "He is one of us."
Jeb Asks Dad To Free Terrorist
As a link to that powerful and wealthy South Florida
community, Jeb has been a tireless supporter of some
of the most reactionary Cuban-American political
causes -from promoting CANF projects like Radio and TV
Marti & acute;, to lobbying for the release of anti-Castro
terrorist Orlando Bosch from a Miami jail. TV
propaganda broadcasts into Cuba, considered by legal
experts a violation of the International
Telecommunications Convention, are fully subsidized
by U.S. taxpayers.
Anti-Castro terrorist Orlando Bosch was paroled in
1990 after Jeb lobbied the Bush administration for his
release from prison in Miami. Bosch had been jailed in
1988 for jumping bail on a 1968 conviction for shooting
a bazooka at a Polish freighter in the Miami harbor. He
is better known as the mastermind of the explosion of
a Cuban commercial airliner over Barbados on October 5,
1976, in which 73 passengers were killed. A U.S. District
Court judge revealed in 1988 that secret U.S.
documents concluded Bosch was a leader of the
Coordination of United Revolutionary Organizations
(CORU), which was responsible for more than 50
anti-Castro bombings in Cuba and elsewhere in the
The Cuban government filed an order for his extradi-
ction in May 1992.
"Tell Him...The Vice President's Son" Called
"There was no conflict of interest," third Bush son Neil
told reporters after the Office of Thrift Supervision
(OTS) in Washington issued a notice of intent in January
1990 to hold a hearing on the failure of Silverado
Banking Savings and Loan. Neil had been a member of
Silverado's board of directors from 1985 to 1988. *45
Federal regulators shut down Silverado shortly after
George Bush was elected president in 1988. The federal
bailout cost U.S. taxpayers $1 billion.
Neil was responding to charges made in an OTS report
that he had "breached his fiduciary duty" to Silverado
by engaging in unethical business deals while a board
member of the Denver savings and loan. The report
documented that Neil personally profited from
questionable Silverado loans to his business partners,
Ken Good and Bill Walters. Good and Walters later
defaulted on $132 million in loans to Silverado, leaving
the taxpayers to pick up the tab.
The OTS report alleged that Neil failed to disclose his
business connections to Good and Walters when he
voted to approve a $900,000 line of credit to Good
International, Inc. Neil got Silverado to write a letter
of recommendation to authorities in Argentina, where
Good International, in partnership with Neil's JNB
Exploration Company, was exploring for gas and oil.
Good also gave the President's third son a $100,000
loan to invest in the commodities market, which Bush
was never required to repay.
Neil failed to inform Silverado that Walters had
contributed $150,000 to the initial capitalization of
JNB Exploration, or that Walters' Cherry Creek National
Bank in Denver extended a $1.5 million line of credit to
JNB Exploration. Neil put up a paltry $100 in start-up
funds in 1983 when he founded JNB Exploration, but
over the next five years was paid $550,000 in salary
drawn from the Cherry Creek National Bank line of
Neil brought few business skills to his job at JNB
Exploration but he was adept at cashing in on his
family name. "Tell him Neil Bush called," Neil once told
the secretary of a wealthy Denver oil entrepreneur.
"You know, the vice president's son."
"Neil knew people because of his name," acknowledged
Evans Nash, one of Neil's partners at JNB Exploration.
"He's the one that got us going. He's the one that made
it happen for us."
When Neil left JNB Exploration in 1989, the company
had yet to discover a profitable gas or oil well.
Neil: The Sensitive One
Neil's business partners also included shady characters
with ties to the world of covert operations. In 1985,
Good received an $86 million loan from the Dallas
Western Savings Association, which was tied to Robert
Corson, a Texas developer and reputed CIA operative,
and Herman Beebe, Sr., a convicted Mafia associate of
Louisiana mob boss Carlos Marcello.
Neil profited from the Western Savings loan to Good,
because the loan helped Good buy Gulfstream Land and
Development, a Florida real estate company. Good made
Neil a board member of one of Gulfstream's subsidiaries
in 1988. Bush was paid $100,000 a year to attend
occasional Gulfstream board meetings before it went
out of business in 1990.
Investigative reporter Pete Brewton identified Corson
as a CIA operative in a long Houston Post series on CIA
links to organized crime and failed savings and loans.
"One former CIA operative told the Post that Corson
frequently acted as `a mule' for the agency, meaning
he would carry large sums of money from country to
country," Brewton wrote.
Corson's Vision Banc Savings in Kingsville, Texas, loaned
about $20 million to Mike Atkinson, a Corson associate,
for a Florida land deal put together by Lawrence
Freeman. Freeman, who laundered money for Santos
Trafficante, Jr., was also tied to veteran CIA operative
Paul Helliwell. In the Bahamas, Helliwell set up Castle
Bank and Trust Ltd., which was the CIA's primary
financial front in Latin America and the Caribbean
during the 1960s and 1970s. Castle laundered funds for
the Agency's covert operations against Cuba.
Walters had ties to Richard Rossmiller, a Beebe
associate. In the mid-1970s, Walters was a part-owner
with Rossmiller, of Peoples State Bank in Marshall,
Texas, at the same time as Rossmiller was doing
business with Beebe.
Wayne Reeder, another Beebe associate, a big borrower
from Silverado, defaulted on a $14 million loan. Reeder
was involved in an unsuccessful arms deal with the
Contras. Reeder accompanied his partner, John Nichols,
in 1981 to a weapons demonstration attended by
Contra leaders Eden Pastora and Raul Arana, both of
whom were interested in buying military equipment
"Among the equipment were night vision goggles ... and
light machine guns," according to the book, Inside Job:
The Looting of America's Savings and Loans. "Nichols ...
had a plan in the early 1980s to build a munitions plant
on the Cabezon Indian Reservation near Palm Springs,
California, in partnership with Wackenhut, the Florida
security firm. [But] the plan fell through."
There was another Silverado-Contra connection,
however, that didn't fall through. E. Trine Starnes, Jr.,
the third largest Silverado borrower, was a major donor
to the National Endowment for the Preservation of
Liberty (NEPL), directed by Carl "Spitz" Channell, which
was a part of Oliver North's Contra funding and arms
support network. A NEPL document, "Top 25
Contributors as of October 3, 1986," showed Starnes
contributed $30,000 to NEPL's Central America Freedom
Program. Starnes closed a deal with Silverado on
September 30, 1986, for three business loans totaling
$77.5 million, on which Starnes later defaulted.
The Central America Freedom Program was a
propaganda effort in conjunction with the Reagan
administration's campaign in 1986 to win congressional
support for resuming arms aid to the Contras. When the
administration wooed potential NEPL donors, Starnes
was invited to a January 30, 1986, White House
briefing, which included Reagan, National Security
Adviser John Poindexter, White House Chief of Staff
Donald Regan and Assistant Secretary of State Elliott
Abrams. Congress resumed U.S. arms aid to the Contras
In a final ironic Silverado-Contra connection, NEPL
banked at the Palmer National Bank in Washington, a
bank with ties to Vice President Bush and Herman
Beebe. Palmer National was also linked to North's
Contra arms network.
Palmer National was established in 1983 by Stefan
Halper and Harvey McClean, Jr., two former aides in
Bush's unsuccessful presidential campaign in 1980.
Halper, who had links to the intelligence community,
became deputy director of the State Department's
Bureau of Politico-Military Affairs in the Reagan
administration. McClean was a Beebe associate. Beebe
supplied the majority of the capitalization for the
start-up of Palmer National.
"Palmer National lent money to individuals and
organizations that were involved in covert aid to the
Nicaraguan Contra rebels," Brewton wrote in the
Houston Post. "Money was channeled through Palmer
National to a Swiss bank account used by . . . North to
provide military assistance to the Contras."
George Herbert Walker Bush is the first former CIA
director to serve as president. The implications for U.S.
politics of Bush's move from CIA headquarters to the
White House are profound and chilling, but seldom the
subject of mainstream political discussion. The
corruption of the Bush family, however, is a good
The Bushes' shadowy business partners come straight
out of the world in which the CIA thrives-the
netherworld of secret wars and covert operators, drug
runners, mafiosi and crooked entrepreneurs out to
make a fast buck. What Bush family members lack in
business acumen, they make up for by cashing in on
their blood ties to the former Director of Central
Intelligence who became president. In return for
throwing business their way, the Bushes give their
partners political access, legitimacy, and perhaps
protection. The big loser in the deal is the democratic
Recommended by MediaFilter!
More on Bush Family Nefariousness:
Fortunate Son: The Making of an American President
By J. H. Hatfield
After a media trashing of the author, this book was pulled by its former publisher and BURNED.
SOFT SKULL PRESS has republished it and put it back in circulation!.
This book will certainly become a collectors item!
Get it from the SHADOW Shop!
GEORGE BUSH: The Super-Spy Druq-Smuqqlinq President
By Bill Weinberg
A well-researched history of George Bush and his family includes:
Where Was George Bush on November 22, 1963?; Global Power Broker;
CIA Man; October Surprise; Contragate; Panamagate; Hinckleygate and
Other Mysteries; Nazigate; The New World Order; Afghanigate;
The BCCI Octopus; Quaylegate; Kuwaitgate; Was "Desert Storm" Smoke and Mirrors?
Get it from the SHADOW Shop!