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 the Bahrainis.

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.

[SNIP] GW'S SPEECH JULY 9, 2002
To expose corporate corruption, I asked Congress four months ago for funding
to place 100 new enforcement personnel in the SEC. And I call on Congress to
act quickly on this request. Today, I announced my administration is asking
Congress for an additional $100 million in the coming year to give the SEC
officers and the technology it needs to enforce the law. [SNIP]

<http://www.cnn.com/2002/ALLPOLITICS/07/09/bush.transcript/index.html>

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 CIA.

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 Saudi Arabia.

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.