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Bush Family Dipping Into Security Pie
Published on Wednesday, November 27, 2002 by the Prince George's Journal (Maryland)
Bush Family Dipping Into Security Pie
by Margie Burns
 

The full effects of the 2001 so-called ``USA Patriot Act'' have not yet been felt, fortunately. But one of its first effects has been to benefit the president's brother, Marvin.

Marvin P. Bush, one of George W. Bush's three younger brothers, is co-founder and partner in Winston Partners, a private investment firm in Alexandria, Va. Winston Partners in turn is part of a larger venture capital entity called the Chatterjee Group, headed by venture capitalist Purnendu Chatterjee. (Venture capital firms provide money to start-up businesses and other companies, usually in return for equity and some managerial say in the company.)

Through this and other business relationships, this Bush sibling is positioned to do very well in high-tech activities as a result of provisions of the Patriot Act.

Securities and Exchange Commission filings show that the Chatterjee Group consists of Winston Partners, L.P.; and a half-dozen other entities with addresses in the Cayman Islands, the Netherlands Antilles, the Isle of Man and Delaware.

Bush's partner is Scott Andrews, with whom he went to school. Winston Partners has two branches, hedge funds and private equity funds, engaged in a variety of investments, including global ``outsourcing'' and offshore information technology.

H.R. 3162, called ``The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act'' (or USA Patriot), was designed to prevent money laundering and requires banks to ``know their customers.''

Inevitably, many companies are aggressively marketing services to make businesses ``Patriot Act''-compliant: that is, they sell computer systems to enable banks to argue successfully to Uncle Sam that they're not laundering money for terrorists. One of the most aggressive is Sybase Inc., which developed a ``Sybase PATRIOT compliance Solution'' months ago. Sybase, which said it wanted foreign banks as customers (it already had a deal with the People's Bank of China), landed Sumitomo Mitsui Bank in time for the October 2002 compliance deadline.

This is where Winston Partners comes in. The Chatterjee Group, including Winston Partners, owns 5.5 million shares in Sybase (Chatterjee businesses also have been paid thousands more shares in Sybase). SEC filings show that Winston Partners LP owns 1,036,075 shares in Sybase; Winston Partners LDC holds 1,317,825 shares; and Winston Partners LLC owns 1,221,837 shares. The shares owned by the subsidiaries are collectively managed in funds for Winston Partners by Pernendu Chatterjee. There is also a Chatterjee Charitable Foundation.

Business for Sybase is business for Bush, and the Patriot Act boosted business.

Not that the Patriot Act is Sybase's only federal conduit. The company is also a significant government contractor (especially nowadays), with contracts from the Agriculture Department, the Navy ($2.9 million in 2001), the Army ($1.8 million in 2001), the Defense Department ($5.3 million in 2001), Commerce, Treasury and the General Services Administration among others. The federal procurement database lists Sybase's total awards for 2001 as $14,754,000.

Sybase is only one of the companies with federal contracts from which Marvin Bush's firm derives financial benefit. Winston Partners' portfolio also includes Amsec Corp., which got Navy contracts worth $37,722,000 in 2001.

The potential for abuse here can hardly be overstated. A branch of the military or other government agency that risked funding cutbacks, for example, could throw up a buffer by awarding a contract benefiting the First Family. Why spend money on a lobbyist in the industry, when you might have one in the White House?

Now let's step back and look at the big picture. The president's brother is marketing to offshore customers (shipping out American jobs, be it noted). He is closely linked to entities marketing ``outsourcing'' and ``global alternative investments'' yet more aggressively. Companies associated with them are doing other high-end versions of the same. And some companies in which they have a stake are involved in the most sensitive technology outside nuclear weapons - being marketed simultaneously to the U.S. government, to foreign banks and to the states (Colorado, Texas, Oklahoma, New Jersey and New York also purchase from Sybase). This is ``security"?

Nor is Marvin Bush the only family member in this picture. His brother Jeb Bush, Florida's governor, is also an investor in the Winston Capital Fund, managed by Marvin Bush's firm. And Indigo Systems Corp., another federal contractor ($2,629,000 in 2001 from Defense and NASA), is substantially backed by The Carlyle Group, the global finance company connected to George H.W. Bush.

As we used to say in Texas, son of a gun.

There is a crying need for oversight and accountability, but the need has yet to be met.

Burns, a writer and teacher, lives in Cheverly, Maryland.

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