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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