Why are George W. Bush's business dealings relevant? Given that his aides tout
his "character," the public deserves to know that he became wealthy entirely through
patronage and connections. But more important, those dealings foreshadow many
characteristics of his administration, such as its obsession with secrecy and
its intermingling of public policy with private interest.
As the unanswered questions about Harken Energy pile up — what's in those
documents the White House won't release? Who was the mystery buyer of Mr. Bush's
stock? — let me now turn to how Mr. Bush, who got by with a lot of help from his
friends in the 1980's, became wealthy in the 1990's. He invested $606,000 as part
of a syndicate that bought the Texas Rangers baseball team in 1989 — borrowing
the money and repaying the loan with the proceeds from his Harken stock sale —
then saw that grow to $14.9 million over the next nine years. What made his investment
First, the city of Arlington built the Rangers a new stadium, on terms extraordinarily
favorable to Mr. Bush's syndicate, eventually subsidizing Mr. Bush and his partners
with more than $150 million in taxpayer money. The city was obliged to raise taxes
substantially as a result. Soon after the stadium was completed, Mr. Bush ran
successfully for governor of Texas on the theme of self-reliance rather than reliance
Mr. Bush's syndicate eventually resold the Rangers, for triple the original
price. The price-is-no-object buyer was a deal maker named Tom Hicks. And thereby
hangs a tale.
The University of Texas, though a state institution, has a large endowment.
As governor, Mr. Bush changed the rules governing that endowment, eliminating
the requirements to disclose "all details concerning the investments made and
income realized," and to have "a well-recognized performance measurement service"
assess investment results. That is, government officials no longer had to tell
the public what they were doing with public money, or allow an independent performance
assessment. Then Mr. Bush "privatized" (his term) $9 billion in university assets,
transferring them to a nonprofit corporation known as Utimco that could make investment
decisions behind closed doors.
In effect, the money was put under the control of Utimco's chairman: Tom Hicks.
Under his direction, at least $450 million was invested in private funds managed
by Mr. Hicks's business associates and major Republican Party donors. The managers
of such funds earn big fees. Due to Mr. Bush's change in the rules, these investments
were hidden from public view; an employee of Utimco who alerted university auditors
was summarily fired. Even now, it's hard to find out how these investments turned
out, though they seem to have done quite badly.
Eventually Mr. Hicks's investment style created a public furor, and he did
not seek to retain his position at Utimco when his term expired in 1999.
One last item: Mr. Bush, who put up 1.8 percent of the Rangers syndicate's
original capital, was entitled to about $2.3 million from that sale. But his partners
voluntarily gave up some of their share, and Mr. Bush received 12 percent of the
proceeds — $14.9 million. So a group of businessmen, presumably with some interest
in government decisions, gave a sitting governor a $12 million gift. Shouldn't
that have raised a few eyebrows?
All of this showed Mr. Bush's characteristic style. First there's the penchant
for secrecy, for denying the public information about decisions taken in its name.
So it's no surprise that the proposed Homeland Security Department will be exempt
from the Freedom of Information Act and from whistle-blower protection.
Then there's the conversion of institutions traditionally insulated from politics
into tools for rewarding your friends and reinforcing your political control.
Yesterday the University of Texas endowment; today the Federal Energy Regulatory
Commission; tomorrow those Social Security "personal accounts"?
Finally, there's the indifference to conflicts of interest. In Austin, Governor
Bush saw nothing wrong with profiting personally from a deal with Tom Hicks; in
Washington, he sees nothing wrong with having the Pentagon sign what look like
sweetheart deals with Dick Cheney's former employer Halliburton.
So the style of a future Bush administration was easily predictable, given
Mr. Bush's career history.
Copyright 2002 The New York Times Company