American Dynasty: Aristocracy, Fortune, and the Politics of Deceit in the House of Bush
In 1994, as George W. Bush was about to defeat Ann Richards and begin a carefully orchestrated ascent to the White House, the Observer published an account of his use of his father’s name to muscle the Argentine government. The article was written by David Corn, Washington correspondent for The Nation, where the story also appeared. Corn caught George W. Bush calling the Argentine minister of public works and suggesting—in the way Tony Soprano might suggest something to a Newark alderman—that it would be in his best interest if Enron were awarded a multi-million-dollar pipeline contract. The day that the issue arrived in subscribers’ mailboxes, Karl Rove called, screaming that publication of such a baseless story had squandered the integrity of Ronnie Dugger’s Texas Observer.
On the eve of the 2000 presidential election, I was reworking the same story for another publication. My collaborator was an Argentine wire service editor. We found that Rodolfo Terragno, whom Corn had quoted, was the same stand-up guy he had been in 1994. He was standing up even as he was about to become the chief of cabinet for then-president-elect Fernando de la Rua, while George W. Bush was quite likely to become president of the United States. Yes, Terragno told us, George W. Bush had called him in 1988 and warned him that it would be in the best interest of Argentine-American relations if Enron got the contract for a huge natural gas pipeline. Enron had set up a small office in Buenos Aires and delivered a hastily prepared proposal that would lock Argentina into artificially high natural gas prices for at least a decade. Terragno and his previous boss, President Raul Alfonsín, said no to George W. and Enron CEO Ken Lay.
Alfonsín, who wrested the Argentine government from the hands of the military dictators who had terrorized the country, and Terragno, a former journalist who once lived in exile because government death squads had targeted him, were never held in high regard by Bush pere et fils. The Bushes are far more comfortable with the spectacularly corrupt President Carlos Menem: golfing partner of Bush Senior and tennis partner of Neil Bush.
The account of G.W. Bush leaning on Rodolfo Terragno (which is mentioned in American Dynasty) embodies what Kevin Phillips’ book is all about: the corrupt nexus of government and big transnational business and the corrupt nature of political dynasties that recognize no distinction between the public interest, corporate interest, and their own pecuniary interest.
But let us not leave Argentina. For a while, you could turn up a story a day just by beating the Bushes in Buenos Aires. When we were reworking the Enron story in 1999, my Argentine colleague called me with a breathless account of something that one of her reporters had turned up. He thought he had seen Bush Senior at the airport in Buenos Aires. Aware that a visit by the former president was reported nowhere in the press, he smelled a rat. The two reporters ran the numbers on the tail of the private plane and ascertained that the former president was indeed on board. While in Buenos Aires, he paid a visit to Carlos Menem, then joined a group of bankers for dinner. Several days later, international banking fugitive Raul Moneta turned himself over to the Argentine authorities. Moneta had been in hiding for more than a year. While in hiding he had become the business partner of Bush crony Tom Hicks. In one of the queerest deals in the history of international business, the Dallas-based Hicks, Muse, Tate & Frust took control of an Argentine media conglomerate by buying $725 million worth of its shares from Moneta while he was running from the law. The Dallas Morning News had reported, without a hint of irony, an account of Moneta calling Hicks to discuss board matters while Hicks had no idea of the undisclosed location from which his South American business partner was calling. A coincidence? Was a former president of the United States in Argentina to run an errand for a Texas business crony who was also one of his son’s biggest political patrons? I called the senior Bush’s Houston office and asked if he was in Argentina and if so, for what purpose. I was told that he was traveling on personal business, which was none of my business.
The point I’m trying to make with this belabored tango of an introduction is that I was convinced at that moment that the Bush family was part of an international white-collar criminal class. Carlos Menem, Raul Moneta, George H. W. Bush, Ken Lay, Jeff Skilling, et al. Think of Pirandello’s Six Characters in Search of an Author, retooled to fit the presidential paterfamilias and his four sons: Five Defendants in Search of a Prosecutor.
Kevin Phillips is that prosecutor.
American Dynasty, which jumped to the No. 2 spot on The New York Times Best Seller List as Phillips began his book tour, is a scathing indictment of the Bushes. It’s also an important book because it is a carefully researched chronicle of one family’s special place in America’s plundering class. But it’s more than a chronicle of unprosecuted corporate crime. Michael Lind’s Made in Texas was an attempt to define the Bushes by geographical and cultural determinism. It was a fascinating book, but a bit of a stretch. Phillips’ thesis, sustained by the historical and journalistic documentation he pulls together to support it, is spot on. The public policy that four generations of the Bush family have inflicted on the American people is an extension of their family history. The book is also important because of the authority that Phillips brings to his work. Phillips worked in the Nixon White House and then as a Republican political consultant and author who predicted the Republican Party’s electoral lock on the South. He voted for Ronald Reagan and then was left in the fiscally responsible Republican center as his party moved on. Had John McCain been on the ticket in 2000 instead of George W. Bush, Phillips would have been back in the fold. The man is an old-fashioned, fiscally conservative Republican. This, Phillips’ 10th book is, in fact, dedicated to the memory of Dwight Eisenhower and begins with Eisenhower’s 1961 warning about the dangers of the military-industrial complex.
The Bush-Cheney Administration is, of course, a complete fulfillment of Eisenhower’s warning of “the acquisition of unwarranted influence… [and] the disastrous rise of misplaced power” that ultimately will “endanger our liberties or democratic process.” It is also fundamentally corrupt. Had the statutes of limitations not run out, the Bush family might require its own special counsel. Maybe one for each adult male.
While George W. is quietly selling his Harken stock, aware as a board member that it was falling in value, and apparently unconcerned that he was violating federal securities laws, Neil and Jeb were, in Phillips’ words, “busy making money the old-fashioned way: by trading on an influential father.”
Jeb shows up in Florida while his father is vice president and hooks up with wealthy Nicaraguan contras and CIA-connected Cubans. With a Cuban investor, he buys an office building and defaults on the loan as the savings and loan holding the note collapses and is turned over to the Resolution Trust Corporation. Jeb and his partner renegotiate their defaulted loan and agree to pay off $550,000. Taxpayers pick up the remaining $4.1 million that the RTC writes off. Later, two of his business partners are indicted and one flees to Venezuela (where, perhaps, he runs into Argentine fugitive Raul Moneta). By the time his father is in the White House, Jeb is doing business in Nigeria, selling irrigation pumps with $74 million in financing from the U.S. Export-Import Bank—even though the country is considered a bad risk for loans underwritten by the U.S. government. More than a third of the $74 million, it was later learned, was used to pay for bribes to Nigerian officials.
Neil did more than help sack Silverado Savings & Loan in Denver. While the senior Bush is in the White House, Neil forms Apex Energy with a personal investment of $3,000 and a $2.3 million loan from the Small Business Administration. When the company fails, the SBA gets nothing more than the company’s meager assets in lieu of the $2.3 million. Funny how things work out for the Bushes. This followed the $200 million in loans Silverado Savings & Loan made to Neil’s business partners while Neil served on the board of an institution headed for collapse and liquidation at the taxpayers’ expense. Neil, the randy pisswit of the Bush clan, is back in the news. Recently, his wife’s divorce attorney asked him if it’s unusual for a man on a business trip to Asia to “just go to a hotel room door and open it and have a woman standing there and have sex with her?” Even more unusual when it happens four or five times. But it happened to Neil. He agreed that it’s unusual and said he didn’t know if the women were prostitutes, but he didn’t pay them. Maybe it has something to do with his latest paramour: Grace. That would be Grace Semiconductor, a Shanghai company managed by the son of former president of China Jiang Zemin. (Phillips explains the relationship between Jiang and Poppy Bush.) Grace is paying Neil $2 million in stock to consult and discuss business strategies—plus $10,000 for every board meeting he attends. He’s an S&L guy and has no background in semi-conductors, which he obviously is trying to make up for by embracing Chinese culture.
Marvin isn’t quite in the same league as his brothers and might get a no-bill. But he’s not above jumping on the plane with his father, Neil, and James Baker III and traveling to Kuwait on a sales trip, while the former President Bush was being recognized for saving the country from Iraqi domination in the first Persian Gulf War. As a member of the Carlyle Group, the senior Bush—along with fellow Carlyleans James Baker III and Frank Carlucci—continue meeting with the bin Ladens of Saudi Arabia through 1999-2001, despite what was already known about errant son Osama. The contacts continued after September 11, 2001. “We now know,” Phillips said on a radio interview, “that the Bush family had more contacts with the bin Ladens than Saddam Hussein did.”
Austin singer Jerry Jeff Walker once told an NPR interviewer that his song “Mr. Bojangles” tells the story of how it was written. Walker was arrested in New Orleans and thrown into the drunk tank, where he “met a man Bojangles.” The songwriter was in his early twenties at the time, which led the interviewer to ask if he wasn’t concerned about being arrested at that age. “No,” Walker said. “You only start to worry when there’s a pattern.” With the Bush family there’s a pattern. While much of what Phillips tells us about the two generations of Bushes still involved in politics has been reported previously, Phillips finds a pattern in the business practices of four generations of the Bush family. His archival and historical reporting provides the underpinning of the book. Both the grandfather and father-in-law of Bush Senior became involved in finance and industry at a time when finance and industry became more and more entangled with government as a result of the two great wars fought in the first half of the last century. Senator Prescott Bush, the father of Bush Senior, would follow his father and father-in-law into investment banking and international finance.
“The point,” Phillips writes, “is that over four generations, the vocation of the Bushes has been essentially financial, sometimes with a flow of petroleum or whiff of natural gas. This background, transcending their Texas experience alone, explained much of their economic worldview, what they perceived to be a good economy, and what policies they pursued in the White House to promote the necessary outcomes.”
The family’s deep roots in finance explain the two “investment-driven” presidencies. “Reduction of the capital gains tax rate became a recurrent Bush drumbeat. Low interest rates were good because they reliquified investors and financial institutions. Federal budget deficits, although troubling, were acceptable as an alternative to raising taxes or squelching investment-friendly tax cuts.” What we are getting as government policy is essentially the accumulated business acumen of four generations of crony capitalists. According to Phillips, it is “primarily the product of upper-class bias rather than the expression of a coherent ideology.”
If the Bush business history shapes our domestic policy, the family’s business and government geopolitical adventures inform our foreign policy. Phillips quotes Texas Senator Ralph Yarborough using the senior Bush’s business ties to Kuwait to defeat Bush in the 1964 Senate race. At the time, Bush’s Zapata Offshore was in its third year of a drilling contract with Kuwait. As Yarborough saw it, Bush was a “carpetbagger from Connecticut who is drilling oil for the sheikh of Kuwait to keep that harem going.” The harem, Yarborough reminded monogamous Christian voters in Texas, consisted of “four wives and 100 concubines.” Cultural insensitivity aside, it could be that Yarborough was onto something. At least Phillips thinks so. He characterizes our current Middle East policy as being “swayed by a single family’s entanglements, mistakes, financial alliances, and commitments.”
Add to this mix the Bush family’s involvement in intelligence and covert operations and you have one terrifying tale. Senator Prescott Bush was present at the creation and very much involved in the nascent CIA. And Poppy Bush’s Zapata Offshore oil company worked with the CIA in the run-up to the Bay of Pigs invasion. Then the Zapata CEO was named director of the CIA. Phillips reminds readers that historical fact (Defense Secretary Casper Weinberger’s notes) disputes the senior Bush’s claim that, as Reagan’s vice-president, he was “out of the loop” on the Iran-contra scandal. And that it should be no surprise that there was an “October Surprise” that defeated Jimmy Carter and elected Ronald Reagan—in which George W. Bush was very much involved.
The Bay of Pigs. Illegal money for contras in Nicaragua. Two presidents leading the country into four wars. A stolen election in Florida. An abiding hatred for Fidel Castro because he nationalized family sugar holdings in Cuba. Gringo negocios muscling their way into Argentina. It somehow makes sense that American Dynasty shares space on the bestseller list with Gabriel García Márquez’s Living to Tell the Tale. Phillips has written the chronicle of the same American corporate buccaneers who took control of banana production in Colombia and slaughtered the striking bananeros the plaza. If it’s not exactly great lit, it’s not unlike García Márquez’s chronicle of the Buendía family in One Hundred Years of Solitude.
The Buendías get blown away. The Bushes are still with us.
Lou Dubose is in Washington, D.C., working on a biography of House Majority Leader Tom DeLay for PublicAffairs books. This article was written with support from the Maury Maverick Junior Fund for Cantankerous Journalism.