Who Bought Bush's Stock?

"How can Mr. Bush crack the whip on Big Business," asks The New York Times' Maureen Dowd, "when he's a wholly owned subsidiary of it?" Before we journalists batter our way into the crack den that is American business corruption, can we come to an agreement that we won't deploy cliches? When people say "wholly owned subsidiary," what on earth do they mean? If one entity is "wholly owned" by another, isn't it by definition subsidiary to it?

But not even bad prose can obscure that the corporate scandals are hatching a catastrophe for Republicans. They will probably destroy this administration. Let's dispose of the red herrings first. The President's sale of $850,000 in Harken Energy stock, just days before it tanked in 1990, is not going to get him in trouble for insider trading. Yes, his sale came just eight days before Harken announced a weak quarter?but for an insider-trading rap to be proved, it must be shown that President Bush had "material information." He is not criminally culpable for having known, as a board member, that his company was spiraling down the toilet. And, yes, the stock's value fell from $4 a share when he sold it to a dollar and change just weeks later. But it also later rose to $8. Harken see-sawed enough that it will never be certain whether Bush bailed out or "sold into good news," as his spokeswoman Karen Hughes has always insisted.

What kills the President is that every time Harken comes up, Democrats get to retell the story of how he made his money. And this, basically, is the story of the spectacular unfairness with which moneymaking opportunities are lavished on the politically connected. It is the story of a man who has been rewarded for repeated failures by having money shot at him through a fire hose. It is the story of a man who talks with a straight face about having "earned" a fortune of tens of millions of dollars, without having ever done an honest day's work in his life.

Let's retell that story as briefly as we can. Bush started an oil company called Arbusto in the late 1970s. He was driving it into the ground when, in 1982, he was rescued by Philip Uzielli, a Princeton crony of his dad's troubleshooter James Baker. Uzielli invested a million dollars in Arbusto, which was then worth less than $500,000. In return, he got 10 percent interest in the company. No, that's not a misprint. Mismatches between equity and ownership?always in Dubya's favor?are a hallmark of our President's financial rise.

Even after Uzielli's turbocharging, Arbusto was going under. Before it did, it "merged" with a company called Spectrum 7, which took on Bush as head executive. As that company, too, nose-dived, Harken Energy proved unaccountably eager to "merge" with it. It offered a half-million dollars in stock and $120,000 a year to get the Vice President's son on the board. It also "loaned" Bush hundreds of thousands of dollars below prime rate.

Weeks after his father was elected president, Bush got involved in the purchase of the Texas Rangers. He would eventually sell his Harken shares to cover the loan that allowed him to help buy the team. He put up under 2 percent of the purchase price ($606,000 out of $46 million), but the deal called for him to be given almost 12 percent of the stock, once the other partners cleared their initial investments. Generous of them! In 1998 Bush sold his stake in the team?pumped up by a $135-million publicly-financed-but-privately-owned stadium, bestowed as a gift from the taxpayers of Arlington, TX?for $15 million.

For decades now, the "small government" Republican Party has been slamming the corrupt conduct of, say, trial lawyers who just suck money out of the economy and put it in their pockets in the name of the ideal of "representing the little guy." When they talk this way, I'm all ears. But, Jesus, this is what they have to offer in its place?

It is no use to say this is an old story and that people don't care about this stuff. In the flush times leading up until the 2000 elections, it's true, voters were indifferent. But as soon as people start seeing their pension funds decimated by collapsing stock values, they simply cannot get enough of it. Don't take my word for it. CBS polled voters last week and found 42 percent paying "a lot" of attention, and 37 percent paying "some." That's a total of 79 percent, a huge number?higher than the 70 percent who paid attention to the Clinton sex revelations in the very first days the news broke in January 1998.

What's more, Americans believe the corruption is not a matter of a few bad apples but a society-wide state of affairs. While it's certainly true that Martha Stewart has been scapegoated by bourgeois-hating radicals and feminist hags, who see in her punctiliousness and house-pride an assault on their lifestyle, the message Americans take from her insider-trading troubles is that if you scratch a rich person?any rich person?you'll find some kind of game-rigging and corporate corruption. To CBS' question, "Do you think U.S. executives are honest?" the answer was No, by 67 percent to 27.

Where institutional dishonesty is suspected, a particular kind of political outrage results?the kind that is resistant to sweet talk. Last week, President Bush tried to tell us that corporate corruption might have had the silver lining of making us a more ethical people. "I believe people have taken a step back," he said, "and asked, 'What's important in life? You know, the bottom line and this corporate America stuff, is that important? Or is serving your neighbor, loving your neighbor like you'd like to be loved yourself?'" No decent human being could disagree. But no half-intelligent human being could fail to note that such things are a lot easier to say when you've already banked your own 30 or 50 mil.

There is no end to the political hay Democrats can make with corporate corruption. Ron Brownstein of the Los Angeles Times suggests this as a campaign line: "Do you want to turn over your Social Security to the same people who gave us WorldCom and Enron?" Howard Wolfson, the former Hillary campaign flack who's now the head of the Democratic Congressional Campaign Committee, is tutoring his candidates on ways to link the finance scandals to everything?schools, prescription drugs, Social Security, you name it.

There is nothing protecting the President from electoral vulnerability except the fact that we're at war. And this is where Bush's sale of Harken stock takes an interesting twist. The important issue might not be when he sold it but who bought it. This is information that Senate Democrats are seeking desperately; Bush refuses to reveal it, and it is not even clear if the Securities and Exchange Commission knows the buyer's identity from its insider trading investigation. If they know, they haven't released it.

But let's speculate. An editorial on Harken in last week's Wall Street Journal noted "interesting Saudi connections on the finance side." One of Bush's early investors in Arbusto was James Bath, agent of Salem bin Laden (Osama's half-brother) in the United States. (This is not proof, as certain left-wing publications have implied, that Bath's money was the bin Ladens' to begin with.) In the months after Bush came onto the Harken board, according to a 1999 Journal report, a Saudi financier named Abdullah Taha Bakhsh bought a 17 percent stake in the company. Bakhsh's American representative Talat Othman was given a seat on the board and met with then-President Bush at the White House. And the "good news" into which now-President Bush claimed to be selling his Harken shares was an oil-exploration deal with the government of Bahrain?a total (but lucrative) flop that was arranged despite Harken's never having done any foreign oil exploration before. In fact, the ex-president's ne'er-do-well son appears to have been used by the Harken board as "Arab bait," much as Democrats sold the promise of photographs with Clinton family nobodies for cash from Asian businessmen. ("Rook! That's me with Lodger Crinton!")

To be fair (if only for a moment), back in the early 1990s, Saudi Arabia was known as our unsavory but solid longtime ally against communism, not as the gang of rich fascists who spawned Al Qaeda and are now obstructing our war against it. But until the identity of the Harken purchaser is revealed, probing the issue will be a no-lose situation for the Democrats. They can ask whether George Bush's fortune has its roots in Arab oil money. They can ask whether the corrupt Bank of Credit and Commerce International was involved. They can ask why it was that the entire bin Laden clan was allowed to be flown out of the country in the immediate aftermath of the Sept. 11 attacks. They won't accuse Bush of intentionally bungling the war on terror to please the Saudis. But they may note that it was tragic that, at a time when thousands of Americans were murdered by extremists whose only ultimate means of support was oil, we had an oil man in the White House.