The Bush Family: A Continuing Criminal Enterprise?
W. Potter, PhD.
Professor, Criminal Justice
Eastern Kentucky University
the Mob and the Bushs
During the 1980's hundred of Savings and Loan Banks failed.
Those bank failures cost U.S. taxpayers over $500 billion
to cover federally insured losses, and
much more to investigate the bank failures (Pizzo, Fricker, and Muolo, 1989;
Brewton, 1992; Johnston, 1990). More than 75% of the Savings and Loan insolvencies
where directly linked to serious and often criminal misconduct by senior
financial insiders (Pizzo, Fricker and Muolo, 1989: 305).
In fact, less than 10 percent
of bank failures are related to economic conditions, the rest are caused
by mismanagement or criminal conduct (Pizzo, Fricker and
Muolo, 1989: 305).
A good example of the Savings and Loan failures can be found in the activities
of Mario Renda, a Savings and Loan insider who often worked in close collaboration
with organized crime (Pizzo, Fricker and Muolo, 1989: 123-126;302). Renda
served as a middle man in arranging about $5 billion a year in deposits into
and Loans, all of which failed (Kwitny, 1992: 27). Many of these deposits
were made contingent on an agreement that the Savings and Loan involved would
money to borrowers recommended by Renda, many of whom were organized crime
figures or people entirely unknown to the banking institution involved (Kwitny,
good examples of financial misconduct in the Savings and
Loan scandal is found in the activities of the Bush
family. In some cases
members helped skim Savings and Loan funds which were delivered to
outsiders as a part
of deals involving lucrative payoffs to bank directors. In other
cases, members of the Bush family intervened to influence
and unsound investments involving loans that would not be repaid
if the venture was not profitable. And finally, the Bush
political connection served to protect those guilty of misconduct
in the Savings
and Loan scandal
(Kwitny, 1992: 24).
Neil Bush: Taking Down Silverado
federal bank regulators filed a $200 million lawsuit against
the officers of Silverado Banking, including
Neil Bush, brother of
The lawsuit accused them of gross negligence which resulted in
a loss of $1 billion by Silverado and the bank’s ultimate collapse (Los Angeles Times, 1990).
According to the Federal Deposit Insurance Corporation: “Our conclusion
is that Silverado was the victim of sophisticated schemes and abuses by insiders
and of gross negligence by its directors and outside professionals” (Johnston,
1990). Neil Bush was reprimanded by the Office of Thrift Supervision for pervasive
conflicts of interest while serving as a paid director of the bank Of particular
concern was his role in a serious of loans totaling $132 million from the bank
to two businessmen, Bill Walters and Kenneth Good (Los Angeles Times, 1990: 1;
Isikoff, 1992: A1). Walters and Good, after securing the loans from Silverado,
lent Neil Bush $100,000 and later forgave the loan entirely. In addition, Walters
and Good owned a company which paid $550,000 in salaries to Neil Bush (Los Angeles
Times, 1990: 1; Isikoff, 1992: A1). In the end Walters and Good lost a total
of $330 million loaned to them by Silverado. They also received instructions
from a member of Silrverado’s board of directors on the establishment of
family trusts to prevent the government from seizing the money they owed the
bank (Kwitny, 1992: 32). The shutdown of Silverado was postponed from October
to December 1988 so that it would happen after President Bush, Sr.’s
election campaign had ended. Neil Bush had to pay only $50,000
to settle the federal lawsuit
against him and he was able to avoid any legal costs because
a senior banking industry lobbyist formed a legal defense fund
pay the legal
Neil Bush also profited enormously from another company on verge
of bankruptcy. Apex Energy paid him over $2000,000 in salary and
oil deed compensation payments
while teetering on the edge of bankruptcy (Failing firm paid Neil
Bush big salary, 1992).
Bush’s small oil company also seemed to profit from its political
connections when it was awarded a 1987 contract to drill for oil in Argentina
(Bush 's Son Misses Deadline For Reporting “Inside” Sale,1991).
Bush: Influence Peddling for a “Bust-Out” Scam
Neil Bush was not the only Bush brother involved in the
Savings and Loan collapses. Jeb Bush’s, the current Governor of Florida, curious relationship
with Miguel Recarey is another illustration. Recarey was a long-time business
associate of Tampa organized crime figure Santos Trafficante. Recarey also fled
the U.S. facing three separate indictments for labor racketeering, illegal wiretapping
and Medicare fraud (Freedburg, 1988: A1). Recarey’s business, International
Medical Centers, was the largest health maintenance organization for the elderly
in the U.S. and had been supported from $1 billion in payments from the Medicare
program. International Medical Centers went bankrupt in 1988 (Freedburg, 1988:
A1; Royce and Shaw, 1988: 4). When International Medical Centers went under it
left $222 million in unpaid bills and was under investigation for $100 million
in Medicare fraud (Freedbrug, 1988: A1; Frisby, 1992: G1). The U.S. Office of
Labor Racketeering in Miami referred to Recarey and his company as “the
classic case of embezzlement of government funds ... “a bust-out operation” (Freedburg,
Jeb Bush’s role in this saga being in 1985 when Recarey’s attempt
to create his “bust-out scam” corporation ran into a federal regulation
that said no HMO could get more that 50% of its revenue from Medicare (Freedburg,
1988: A1; Royce and Shaw, 1988: 4). Jeb Bush intervened on Recarey’s behalf
with Helath Human Services Secretary Margaret Heckler and one of her top aides.
Convincing them to waive the regulation in the case of Recarey’s company
(Freedburg, 1988: A1; Royce and Shaw, 1988: 4). In addition to Jeb Bush’s
intervention, Recarey had paid $1 million to senior Republican lobbyists in Washington,
who were also working the staff of Health and Human Services in pursuance of
a waiver (Freedburg, 1988: A1; Royce and Shaw, 1988: 4). In addition, Jeb Bush
had contacted Secretary Heckler earlier about complaints from doctors over the
quality of International Medical Centers’ care and allegations that Recarey
had embezzled funds form another hospital (Royce and Shaw, 1988: 4). Jeb Bush
told an aide to Secretary Heckler that “contrary to any rumors that were
floating around concerning Mr. Recarey, that he was a solid citizen from Mr.
Bush’s perspective down there [in Miami], that he was a good community
citizen and a good supporter of the Republican Party” (Royce
and Shaw, 1988: 4).
Not surprisingly, in 1988 Recarey’s company gave Jeb Bush’s
real estate company $75,000 to help it find a site
for a new corporate headquarters
(Freedburg, 1988: A1; Royce and Shaw, 1988: 4). It
was a bad investment because International Medical
selected a corporate
location when it hired Jeb Bush (Royce and Shaw, 1988:
had a role in yet another Savings and Loan fiasco when
he defaulted on a loan from Broward Federal
(LaFraniere , 1990: A24).
Broward Federal loaned $4,565.000 to J Edward Houston,
a real developer in February,
1985. The loan was secured only by Houston’s personal guarantee. On the
same day, one of Houston’s company lent the same amount to a partnership
made up of Jeb Bush and Armondo Codina for the purpose of purchasing a building
in Miami. The Bush-Condina partnership was required to repay the loan only if
revenues from the building were sufficient to cover the repayment. Bush and Condina
made no payments on the loan at all and in 1987 Houston defaulted on the Broward
Federal loan and the Bank sued both Houston and the Bush-Condina real estate
partnership. In a sweetheart settlement with the Federal Deposit Insurance Corporation,
Bush and Codina only had to repay $500,000 of the $4.5 million loan and got to
retain ownership of the building which had been the collateral on the loan. In
1991, the FDIC sued the officers and directors of Broward Federal charging that
the loan ultimately used by Bush and Codina was an example of the bank’s
negleient lending practices (Frisby, 1992: G1). The
Bush-Codina loan played a key part in the failure
of Broward Federal
which cost taxpayers
million (LaFraniere , 1990: A24).
George Bush, Jr.: Insider Information, Oil, and Baseball
The present President Bush has also reaped significant benefits from
some highly questionable business practices:
sold $828,560 worth of Harken stock [on June 20, 1990]
just one week before the company stock
unusually poor quarterly
plunged sharply. Shares lost more than 60% of their
value over 6 months. When Bush sold
his shares, he was a member of a company committee
studying the effect of Harken’s
restructuring, a move to appease anxious creditors. According to documents on
file with the Securities and Exchange Commission, his position on the Harken
committee gave Bush detailed knowledge of the company’s deteriorating financial
condition. The SEC received word of Bush’s
trade eight months late. Bush has said he filed
but that is
was lost (Hedges,
time of the stock sale President Bush was fully aware that
Harken Energy was in a serious cash
was about to
(Yost, 2000). Bush was investigated for insider trading,
but on October 18, 1993, Bruce
A. Hiler, the SEC’s associate director for enforcement, wrote a letter
to Bush’s lawyer stating that “the investigation has been terminated
as to the conduct of Mr. Bush, and that, at this time, no enforcement action
is contemplated with respect to him” (Lardner and Romano, 1999: A1). Hiler’s
official letter went on to say that it “must in no way be construed as
indicating that the party has been exonerated or that no action may ultimately
result from the staff’s investigation” (Lardner and Romano, 1999:)
It is instructive to note that head of the SEC at the time of investigation was
a supporter of then-President Bush, as was the SEC’s general counsel (who
later acted as George W. Bush’s private attorney)
(Yost 2000). In addition, Harken, despite its poor
performance and large losses,
salaries and benefits to President Bush (Hedges,
Bush was allowed to purchase
stock options at a 40% discount, paid for by company
loans that were frequently forgiven (Hedges, 1992:
Energy was awarded a contract to drill offshore oil wells
for the government of Bahrain in 1990.
It was a curious
had never drilled
an oil well in water. While Bahrain government officials
denied that the fact that the President’s son was on Harken’s board had any impact on
the contract, the Wall Street Journal quoted an official of Harken Energy as
saying there was “never any question” about George W. Bush’s
involvement (Morrison, 1999: A26).
Energy also had links to the infamous Bank of Credit and
Commerce International (BCCI). BCCI
bank in the world. It
had over four hundred branch offices operating in
seventy-three countries. Among
its many criminal activities was the laundering of
at least $14 billion for the Colombian cocaine cartels;
transactions for Panamanian
president Manuel Noriega and international arms merchant
Adnan Khashoggi; the funneling of cash to the contras
arms deals and contra-backed
trafficking; and the assisting of Phillipine President
Ferdinand Marcos in
transferring his personal fortune, accrued through
and graft, out of the Philippines.
Despite the enormity of BCCI's crimes and its vital
role in drug trafficking, the U.S. Justice Department
In fact, the Justice Department had complete information
on BCCI's drug
and arms operations
and its illegal holdings in the United States for
over three years before it even initiated an inquiry.
enforcement to interfere with such a major organized
crime entity can be explained
proliferation of what some have perceived as BCCI's "friends" in
the U.S. government holding high office (Castro,
1988; Beaty and Gwynne, 1991).
Street Journal commented extensively on Harken’s links to BCCI
saying: “The mosaic of BCCI connections surrounding Harken Energy may prove
nothing more than how ubiquitous the rogue bank’s ties were ... But the
number of BCCI-connected people who had dealings with Harken -- all since George
W. Bush came on board -- likewise raises the question of whether they mask an
effort to cozy up to a presidential son” (Morrison,
Bush’s relationship with the Texas Rangers
shows a similar pattern of curious business dealings. In
investigating his purchase of the Texas Rangers,
the Wall Street Journal commented that following “a
pattern repeated through his business career, Mr.
Bush’s play did not quite make the grade” (Morrison,
1999: A26). In 1989, an investment group Bush led
was given preferential treatment to buy the Texas
Rangers baseball team by its seller, a friend of
Sr. (Morrison, 1999: A26; Sack, 1999: 1). When they
underbid for the team baseball commissioner Peter
Ueberroth brought another financier into the deal, “out
of respect for his father,” President Bush
(Morrison, 1999: A26; Sack, 1999: 1). Bush later
promoted a controversial
the City of Arlington provided a $135 million subsidy
for a new ballpark, funded by a sales tax increase,
the team to repurchase
at a vastly reduced price (Milbank, 2000, A1; Romano
1999: A1). The
present President Bush realized $15 million on a
$600,000 investment when he sold his share of the
team in 1998
Jonathan Bush: An Unregistered Broker
Bush rounds out this discussion of brotherly financial
chicanery. Jonathan was cited for carrying
out stock transactions
in the Commonwealth
of Massachusetts. While he was settling the complaint
against him he continued to violate Massachusetts
who handles security
trading issues for the Massachusetts Secretary
of State expressed his
created great concern for us. We were dismayed
... Anyone who has been notified that he is violating
state law and continues to do so certainly exemplifies
cavalier attitude toward the registration laws.” Jonathan
Bush is a veteran stockbroker who, of course, knows
about registration requirements. As Mr. Sullivan
went on to comment: “Any time you have 880
transactions over several years, I wouldn’t
characterize that as minor” (Phillips,
Bush: The Yakuza’s Frontman
and perhaps most seriously, the Bush family pioneered the
practice which has now become commonplace
Prescott Bush, uncle of the current President
and brother of the former President, played a key role
their financial and
real estate holdings to the United States. In
Prescott Bush made arrangements for a front company
to buy into two U.S.
corporations and to make a sizeable real investment
in the U.S. (Helm, 1991a: 1; Isikoff, 1992: A1).
Japanese corporation, was identified
Japanese police officials as a front company
for one of that country’s
largest organized crime syndicates. Prescott Bush was paid a fee of $500,000
for his help in negotiating West Tsusho’s
purchase of controlling interest in Assets Management,
corporation (Helm, 1991a:
1; Isikoff, 1992: A1).
Bush also assisted the Japanese mob in investing
in Quantam Access, a U.S. software company, which
taken over by the
1991b: 10; Isikoff,
1992: A1). Both companies ultimately went into
A1; Moses, 1992).
George Bush Sr.: Shutting Down the Organize Crime Strike Forces
assessments from senior law enforcement officers and experts
on organized crime that
efforts to control
organized crime would
be crippled, in December
1989, the administration of George Bush, Sr.
abolished all 14 regional organized crime strike
1990). The organized
crime strike had been created as independent
entities so they
would not be subject to political influences
or bureaucratic wrangling
In the two decades of their operation the strike
forces had secured convictions of major organized
cities (Struck out,
It is at the very least curious to note that
the federal strike force in Miami had
been responsible for indicting Miguel Recarey,
the man for whom Jeb Bush had intervened with
Mario Renda, the organized crime liaison to
the S& L’s,
as well as several other key figures in the
Savings and Loan Fiasco (Pizzo,
Mulolo, 1989: 112, 120-123, 303, 337).
Beaty, J. and S. Gwynne. 1991. The dirtiest bank of all. Time. July
Brewton, P. 1992. Untold Story. New York: SPI Books.
Castro, J. 1988. The cash cleaners. Time. October 24: 65-66.
Failing firm paid Neil Bush big salary. 1992. San Francisco Examiner.
(September 15): A9.
Freedberg, S, 1988. Contras, “Bugs” and
the Mob. The Wall Street Journal. (August 9).
Frisby, M. 1992. Bush sons' ventures expose him to scrutiny. Austin
American-Statesman. (May 17): G1.
Fritz, S. 1992. Bush Kin: Trading on the Name? Evidence suggests
the President's relatives may be exploiting their relationship. But
they hotly deny impropriety,
saying such accusations are spinoffs of the Bill Clinton scandals.
Los Angeles Times. (May 10): 1.
S. 1992. The color of money: The president’s
eldest son and his ties to a troubled Texas
firm. U.S. News and World
Helm, L. 1991a. Japanese Wise Up to Gangsters: Yakuza have long been
tolerated and even romanticized. But with financial scandals and
violent tactics, lawmakers
and residents are saying enough is enough. Los Angeles Times. (August
Helm, L. 1991b. Bush Brother Was a Consultant to Company Under Scrutiny
in Japan Finance: Prescott Bush gave investment advice to a firm
ties and of exchange violations, police investigators say. Los Angeles
Times. (June 11): 10.
Isikoff, M. 1992. As Race Heats Up, So Does Scrutiny of Bush 's Family;
Relatives' Business Affairs Become Target. The Washington Post. (July
O. 1990 . Seidman Puts S&L Bailout
at $500 Billion. Los Angeles Times. (July 31):
J. 1992. The Real S&L Scandal:
How Bush's Pals Broke the Banks. Village Voice.
S. 1990. S& L bailout involved
Jeb Bush partnership: Federal government paid
investment loan issued
by Florida thrift.
The Washington Post. (October 15): A 24.
Lardner, G. and L. Romano. 1999. The Life of George W. Bush: The
Turning Point; After Coming Up Dry, Financial Rescues. The Washington
Times. 1990. FDIC Sues Neil Bush in Silverado S&L's
Failure. (September 23): 1.
McAlister, B. 1989. Organized crime fighters losing independence
in Thornburgh plan. Washington Post. December 28: A21.
Milibank, D. 2000. Dispelling Doubts With the Rangers. The Washington
Post. (July 25): A1.
Morrison, M. 1999. Vetting the Frontrunners I -- George W. Bush:
From Oil to Baseball to the Governor's Mansion. The Wall Street Journal.
Moses, J. 1992. Prescott Bush Faces Inquiry Over Pay Received in
Arranging Investment Deal. The Wall Street Journal (September 9):
F. 1991. State fines Bush’s
brother in stock case. Boston Globe. (July
S.; M. Fricker; and P. Muolo. 1989. Inside Job: The Looting
Savings and Loans. New York: McGraw- Hill.
Romano, L. and G. Lardner. 1999. Moving Up to the Major Leagues;
Father's Campaign, Baseball Provide Foundation for Own Run. The Washington
Royce, K. and G. Shaw. 1988. The Jeb Bush Connection: Bush son steered
funds to Miami businessman. Newsday. (October 3): 4.
Sack, K. 1999. George Bush the Son Finds That Oil and Blood Do Mix.
New York Times. (May 8): 1.
Struck out. 1990. San Diego Union Tribune. January 1: B8.
Yost, P. 2000.Crisis at Bush 's Oil Company. Associated Press Online.
Street Journal. 1991. Bush 's Son Misses Deadline For Reporting “Inside” Sale.
(April 4): A4.