The Family (52 page)

He also wrote to Republican Representative Barber Conable of New York: “I’m glad it’s over. It got ugly—you saw vestiges of that ugliness. But worth it? You bet!”

Soon the climate would turn even uglier as the Reagan administration came face-to-face with the scandal of Iran-contra—a shorthand term for the illegalities involved in financing the civil war raging in Nicaragua. President Reagan had pleaded with Congress to aid the contras, whom he referred to as “the moral equal of our Founding Fathers.” Congress denied his plea and passed the Boland Amendment, making it illegal to provide funding to overthrow Nicaragua’s duly elected Communist government.

By 1986 Americans had become sadly familiar with names such as the Reverend Benjamin Weir, Father Martin Jenco, and Terry Anderson of the Associated Press, who were among the seventeen Americans and seventy-five Westerners kidnapped in Beirut by terrorists and thrown into hellholes around Lebanon. All the captives were brutally tortured, and some left to die like roadkill. These kidnappings were part of a campaign—in retaliation for Israel’s 1982 invasion, which had been supported by U.S. warplanes and ships from the U.S. Sixth Fleet—by Islamic Jihad or Hezbollah to rid Lebanon of all Americans.

In a misguided effort to free the hostages and finance Ronald Reagan’s war against the Sandinistas, Lieutenant Colonel Oliver North of the National Security Council devised a complex scheme, which he and others later tried to cover up. Until he was fired in 1986, the Marine lieutenant colonel known as Ollie was the White House official most directly involved in secretly aiding the contras, selling arms to Iran, and diverting proceeds from the Iran arms sales to the contras. The deception by North and others led to joint congressional hearings, a presidential commission, an investigation by the Office of Independent Counsel, court trials, and three convictions. In the end, six participants received presidential pardons.

Throughout it all, Vice President Bush, who had attended most of the planning sessions with Oliver North, would proclaim ignorance about what had happened, maintaining, “I was out of the loop.” Yet court documents, congressional reports, transcripts, trial records, and the recollections of others prove otherwise: George Bush knew far more than he ever admitted.

On March 3, 1985, his son Jeb hand-carried to the Vice President’s White House office a letter from the Guatemalan physician Dr. Mario Castejon requesting U.S. medical aid for the contras. George penned a note back to the doctor:

Since the projects you propose seem most interesting, I might suggest, if you are willing, that you consider meeting with Lt. Col. Oliver North of the President’s National Security Council staff at a time that would be convenient for you.

My staff has been in contact with Lt. Col. North concerning your projects and I know that he would be most happy to see you. You may feel free to make arrangements to see Lt. Col. North, if you wish, by corresponding directly with him at the White House, or by contacting Mr. Philip Hughes of my staff.

In January 1985, Jeb Bush had met with Felix Rodriguez, the former CIA operative who served as the chief supply officer for North’s illegal scheme to supply arms to the contras. Later it was suggested that Jeb was his father’s Florida contact in the secret resupply operation.

“That’s crap,” Jeb told
The Boston Globe
. “I believe the freedom fighters should be supported to the maximum and that their cause is noble and just. But I know the difference between proper and improper behavior because I was brought up well. I would never do anything to jeopardize my dad’s career. That would be a dagger in my heart.”

The secret Iran-contra skein started unraveling on October 5, 1986, when the Sandinistas in Nicaragua shot down a cargo plane carrying military supplies with three Americans aboard. One American survived—Eugene Hasenfus. He claimed he worked for a CIA man named “Max Gomez,” the code name for Felix Rodriguez.

Rodriguez, whose home proudly displayed two autographed pictures of himself with Vice President Bush, called his contact, Donald Gregg, who went to work for George Bush in 1982 as his national security adviser, to report the shot-down plane. Gregg, a former CIA operative, had met Rodriguez in Vietnam about the same time he met Bush.

Upon hearing Rodriguez’s report, Bush quickly called a press conference and denied having any connection with the plane that crashed in Nicaragua, although he did admit knowing the man whose code name was Max Gomez.

Several weeks later
The Washington Post
linked Iran’s release of three American hostages to American arms sales to Iran. George went on television to defend the administration. He declared that any arms-for-hostages deal was “inconceivable.”

The next day Secretary of State George Shultz called the Vice President and reminded him that not only had Bush attended the crucial meeting on January 7, 1986, but he had also supported the plan to sell arms to Iran—the same plan that Shultz and Secretary of Defense Caspar Weinberger had opposed. Shultz could have shown George the notes he had taken during that meeting, which proved his point. He later published them in his book. When Bush realized that Shultz had been taking notes, he was flabbergasted, and he wrote in his diary:

Howard Baker in the presence of the President told me today that George Shultz had kept 700 pages of personal notes, dictated to his staff . . . Notes on personal meetings he had with the President. I found this almost inconceivable. Not only that he kept the notes, but that he’d turned them all over to Congress . . . I would never do it. I would never surrender such documents and I wouldn’t keep such detailed notes.

On November 13, 1986, President Reagan announced on national television that he had authorized the sale of arms to Iran, but he denied that it was a trade for hostages.

A few days later Attorney General Ed Meese undertook an investigation to determine how much of a problem the U.S. arms shipment to Iran was going to be for the administration. Within four days Meese found that $10–$30 million from the arms sale to Iran had been diverted to the contras through Swiss bank accounts. The President was forced to fire Oliver North, but he told him, “One day this will make a great movie.”

The Iran-contra scandal continued to unfold over the next two years, but the Vice President, who had become adroit at what he called “bending” and “stretching” the truth, ducked and dodged and fenced and hedged. He lied more than once to reporters during press conferences and frequently equivocated. He stonewalled the Office of Independent Counsel, and he withheld all of his personal diaries until after he left government service and was outside the reach of the special prosecutor.

During the 1986 Christmas holiday Donald Gregg and his wife threw a party, which the Vice President and Barbara attended along with Bush’s staff lawyer, C. Boyden Gray, and his beautiful new young wife, Carol.

“What has always stuck out about that particular night is the memory of those men, who seemed very playful and a little more tipsy than usual,” recalled Carol Gray. “They were kind of huddled together in that good-old-boy sort of way. The Vice President, Boyden, and Donald Gregg were laughing together very smugly.

“Someone had made buttons for them. The buttons were a mustard color with black writing. Printed on the buttons was a question: ‘WHO IS MAX GOMEZ?’

“I asked Boyden what it all meant, but he just laughed it off and said it was an inside joke that they had. He never shared with me the exact meaning of the question on the buttons, but I always felt the meaning was part of a serious mission they were involved in . . . They really felt pleased with themselves that evening. They had usurped the powers that were in place. They were above the law. They were going to pull their plan off. They enjoyed the secret they had together. It was a huge rush for them.”

CHAPTER TWENTY

T
o heir is human, even more so in the Bush family.

Vice President of the United States, George H.W. Bush greatly enhanced his family’s fortunes. During those years (1981–89), and the presidential years that followed (1989–93), he enabled his brothers and his sons—women in the Bush family are not breadwinners—to make millions of dollars. It is debatable—at best—whether any of them would have attained their high net worths without George’s high office, even though they vigorously assert that they are all self-made men and have never exploited the family name.

“I resent the implication that because George is my brother, I’m getting business,” said Jonathan Bush, a Wall Street investor who has run J. Bush and Company since 1980. He was barred from trading with the general public for one year—July 1991 to July 1992—for violating Massachusetts registration laws, fined thirty thousand dollars, and ordered to buy back stocks sold to clients during the preceding forty-three months. Jonathan shrugged it off. One dismayed regulator said: “Anyone who has been notified that he is violating state law and continues to do so certainly exemplifies a cavalier attitude.” Jonathan had done the same thing in Connecticut and was fined four thousand dollars in December 1990 for conducting business without registering in the state.

“Being the brother of George Bush . . . is not a financial windfall by any stretch of the imagination,” said Bucky Bush, a banker in St. Louis.

George’s son Neil said, “We know to say no, and keep to the straight and narrow.”

“You avoid sleazeballs, people who have quick-fix solutions, people who want you because your name is Bush,” said Neil’s brother Marvin, a venture capitalist in Alexandria, Virginia.

A glimpse into the business dealings of the Bush family shows that they acquired their wealth through the intermingling of public policy and private interests. “There’s always been a good connection between the political side of our family and the business side,” Marvin said.

The family’s business transactions, most of which can be described as “international consulting,” were frequently conducted in the ethical twilight zone of murky deals and shady dealers. The Bushes usually walked away enriched from these transactions, but they left in their wake the jiggery-pokery of failed banks, fleeced stockholders, bankruptcies, convictions, and lawsuits charging mismanagement, stock manipulation, and fraud. Upon examination, each and every Bush transaction serves as a textbook example of how to exploit the family name lucratively.

“What you’ve got with George Herbert Walker Bush is absolutely the largest number of siblings and children involved in what looks like a never-ending hustle,” said the Republican commentator Kevin Phillips.

When George held the highest and second-highest offices in the land, he allowed his family to take full financial advantage of his high political position. In that sense, he threw open the barnyard door and yelled, “Suey Suey Suey,” while his brothers and his sons snuffled up to the trough.

George Bush was certainly not the first man in history whose family cashed in on his high office for personal gain. Richard Nixon’s brother Donald tried to start a fast-food chain of “Nixonburgers” and accepted, but never repaid, a $200,000 loan from the billionaire Howard Hughes. Jimmy Carter’s brother, Billy, marketed “Billy Beer,” wrote a book titled
Redneck Power
, and took $200,000 from the government of Libya to facilitate oil sales at a time the United States had branded Libya a terrorist country. Bill Clinton’s half-brother, Roger, accepted $400,000 to lobby for presidential pardons. But George Bush’s siblings and sons have surpassed them all, making the errant relatives of other high-office holders look like hummingbirds alongside vultures. (That feathered analogy was inspired by Prescott Bush Jr.’s comment to the
Chicago Tribune
about his various business dealings in Asia: “We aren’t a bunch of carrion birds coming to pick the carcass.” His choice of words, while unfortunate, proved to be descriptive.)

Shortly after George became Vice President, his older brother, Prescott junior, or P2, left the insurance business (Johnson and Higgins) and started his own firm in New York City, Prescott Bush and Company, described in a court document as a consulting firm that “helped foreign companies invest in the United States and elsewhere.” Prescott’s foreign clients soon included corporations in China, Japan, Brazil, South Korea, and the Philippines, all hungry to do business with the brother of the Vice President of the United States. In every country he dealt with, Prescott was treated like a head of state. Doors flew open and favors rained down. In the Philippines, President Corazon Aquino gave him a private audience. In South Korea, he met with the speaker of the National Assembly, Kim Chae Soon.

“The tradition in the Far East is for officials to see close linkage between the private business a person is involved in and who his relatives are,” said Dennis Simon, an associate professor of international business relations at Tufts University’s Fletcher School of Law and Diplomacy. In such circumstances, merely being the brother of a Vice President—a Vice President who might become President—is enough to give one immense consideration by foreign business executives and government officials interested in maintaining good relations with the United States. Consequently, Prescott traveled throughout Asia like a pasha without portfolio. By the time George became President, his brother’s business dealings, especially in China, had raised so many problems within the State Department that George finally insisted an official cable be sent to all diplomatic and consular posts, telling them not to give favorable treatment to any members of his family. The cable was meant not to restrain his sons—George would never do that—but to reel in his brother Prescott. “His work in China has always worried me,” George wrote in his diary.

The cable had no effect. Embassies treated it as nothing more than a self-protective measure by an American President who needed political cover in case his relatives got caught picking the locks. “It was simply a phony piece of paper that the President could wave in public, saying that he had gone to great lengths to ensure that his family did not use his high office for personal gain,” said a Foreign Service officer who worked in the State Department from 1966 to 1996. “There was no way any of our people would not or could not respond to members of the Bush family on their various global plunders . . . Cable or no cable, do you want to be the government employee who bars the door to the President’s brother or, God forbid, one of the President’s sons?”

Prescott Bush was particularly smooth in circumventing the cable’s instructions. On the eve of his trips, he simply wired ahead, alerting the appropriate embassy to his arrival and departure, and insisted that nothing special be done for him during his in-country stay, thereby ensuring that everything—introductions, receptions, arrangements—would be done.

“Prescott knew how to work the system,” said Stephen Maitland-Lewis, formerly a consultant with Lazard Frères and a senior vice president of Salomon Brothers in New York. “I met him during the fiasco of AMIFS [Asset Management International Financing and Settlement] . . . His office on Lexington Avenue was close to the offices of Charles Abrams and Albert Shepard, who had combined their companies to form AMIFS. Shepard was instrumental in putting together a highfalutin board that included Admiral Elmo Zumwalt, former Ambassador Maxwell Raab, a few others, and me. But the most important by far was Prescott S. Bush Jr., for the plain and simple reason of who his brother was . . .

“When Prescott started scouting business opportunities in China, he didn’t have to drop his brother’s name every five minutes, because the Chinese were smart enough to make the connection. Plus, the physical resemblance between the two brothers then was such that you almost thought you were doing business with the Vice President himself.

“Prescott began his China prowls with Charles Abrams, who was close to Prescott’s brother Bucky in St. Louis. Charles made a career of assembling prominent figures to lend credibility to his ventures, many of which have failed. He introduced Prescott to Albert Shepard, who lived in Manhattan but also had a home in Greenwich. Shepard was a neighbor of Prescott, but I doubt Prescott ever extended hospitality to Albert . . . He would’ve been embarrassed if Albert had been sporting his usual collection of diamond rings, flashy gold jewelry, and mink coats . . . Prescott was a thumping snob and a bit tedious . . . I remember sitting next to him at a dinner at the Harvard Club, where he was more boring and pompous than amusing. He was not unpleasant, but it was a long evening, and he was more work than pleasure, if you know what I mean. But that made no difference to Abrams and Shepard . . . They only cared that he was the brother of George Herbert Walker Bush. But for that, Prescott could just as easily have been the janitor.”

AMIFS began as a company for counter trade—a brokerage that traded stocks over the counter—for which Prescott was paid to bring in stockholders. As an AMIFS consultant, he also was paid to provide introductions and make connections with foreign clients interested in U.S. investments. When Prescott became a member of AMIFS’s senior advisory board and a director of its Asian subsidiary, he negotiated a $5 million deal with Japan’s West Tsusho to buy 40 percent of AMIFS. For this, Prescott received a $250,000 finder’s fee, plus $250,000 from AMIFS and a renegotiated contract from AMIFS that was to pay him $250,000 a year for three years. If AMIFS failed within five years, Prescott Bush and Company guaranteed one-half of West Tsusho’s investment.

“I can assure you that the only reason that West Tsusho sat down with Prescott Bush Jr. was that he was the brother of George Herbert Walker Bush,” said Maitland-Lewis. “In the early days Prescott was treated like God. His arrival in the office was akin to the Second Coming of Jesus Christ. Corporate culture was to genuflect before him . . . then much later it became clear that the Japanese group he had brought in was connected to the Japanese Mafia. We found all that out through news stories, but there was some speculation at the time when we saw the kind of people flying into New York City for our board meetings . . . They looked like Sapporo Sopranos, if you will, or Asian GoodFellas . . . definitely not top drawer.”

There is no indication that Prescott Bush Jr. deliberately sought to do business with Japan’s Mafia. “At first, he was defensive,” said Maitland-Lewis. “His embarrassment came later.”

Before humiliation set in, Prescott led West Tsusho to invest $3.8 million in Quantum Access, a Houston-based software-development company headed by Draper Kauffman, one of Prescott’s nephews on his wife’s side. Prescott received another $250,000 for this transaction and joined the board of Quantum Access, for which he was paid additional money. Kauffman claimed that West Tsusho soon seized control of his company, fired the management, and put in their own people. Within two years Quantum Access was forced to file for bankruptcy.

The same thing happened at AMIFS. “The company had a significant burn rate,” said Maitland-Lewis. “Corporate salaries were competitive with Wall Street investment banks; rent was high; and, of course, Abrams and Shepard spent money like drunken sailors . . . The company was forced into bankruptcy, most of us who invested lost our shirts, and Prescott, who was unable to bring in the balance of the committed funds, fell out with everyone and became embroiled in several years of litigation with West Tsusho.”

The Japanese company sued Prescott Bush and Company for reneging on the $2.5 million repayment Prescott had guaranteed when West Tsusho pledged its initial investment. Prescott dissolved Prescott Bush and Company in April 1991, presumably so West Tsusho could not collect—but West Tsusho sued him personally for the amount. Prescott countersued for $8 million, charging West Tsusho with fraud. West Tsusho argued in court papers that Prescott’s allegation of their organized-crime connection was immaterial: “Bush would have signed the guarantee even if these alleged facts had been true and had been disclosed because of Bush’s desire to obtain hundreds of thousands of dollars for himself and five million for AMIFS with whom both Bush and his nephew [Draper Kauffman] were associated.” After three years of litigation, the court dismissed Prescott’s countersuit, and West Tsusho’s suit was sent to arbitration. The parties finally settled privately.

Draper Kauffman defended his Uncle Prescott to
The Wall Street Journal
: “They [West Tsusho] set him up as a fall guy and tried to use his name and rip him off. He did make an effort to check these people out and got nothing but favorable reports . . . As a front organization they kept [their crime connections] secret.”

The publicity of Prescott’s involvement with the Japanese Mafia embarrassed George, who was Vice President at the time, and caused a rift within the family that was never repaired. “I think everyone had a strong feeling of disapproval,” said Caroline Bush “Teensie” Cole, the eldest child of James Smith Bush by his first wife. “It was using the Bush name.”

“Pres was just so damn stubborn about it,” Gerry Bemiss said. “You couldn’t even discuss it with him. It was very frustrating for George.”

“They were never as close as they had once been,” Nancy Bush Ellis said. “Sadly, they probably never will be.”

The closeness the two brothers shared in childhood had been sorely tested when Prescott attempted to run for the Senate from Connecticut in 1982 against the incumbent Lowell Weicker. George did not like Weicker, but as Vice President he was obliged to support him, and Prescott’s challenge within the party was an embarrassment. George finally prevailed on his mother to intervene. She called Prescott and asked him to withdraw, which he did.

Prescott resented the charge that his business dealings were an embarrassment. And he did not understand why he should take the brunt of the blame when George’s sons had done just as much, and sometimes more, to embarrass their father and shame the family. So despite George’s political discomfort, Prescott continued wheeling and dealing.