THE BUSH WATCH

THE GUV'S TRUST IS BLIND BUT HE'S NOT.One of the weaknesses of the concept of a politician's blind trust is that if your holdings are diversified enough or are used by someone whose interests are diversified enough and you are a strong proponent of big business interests in a free market economy, it's nearly impossible to make political judgements without benefiting yourself. Further, since your colleagues have a pretty good idea of your specific business policies and views, there would be nothing to prevent them from anticipating your moves with a fairly high level of probability, thus adding to your coffers. This has been Bush's problem. As you know (see articles below), he's added to this problem by not putting some of his holdings in a blind trust, having the same business partners in both camps, and bringing them or their firms into state government. Here are some decisions he has made as Governor that serve as examples of the above, courtesy of R.G.Ratcliffe in the "Houston Chronicle":

1. He proposed that the state consider privatizing state mental hospitals, which "could have benefitted Magellan Health Services, Inc... controlled by Richard Rainwater," who at that time was co-partner of the Texas Rangers (not in blind trust) and President of Crescent Real Estate Equities (in blind trust).

2."Garry Mauro claims Bush vetoed the Patient Protection Act in l995 because it would have affected the profits of a major hospital chain that Rainwater controlled."

3. He endorsed a property tax reform bill that would have saved a Rainwater investment company $2.5 mil in school property taxes.

4. Bush-signed legislation will provide a $10 million bonus to Texas Rangers partners when a Dallas arena is built.

5. This arena will also enhance the worth of Thomas Hicks' hockey team. Further, Hicks bought the Texas Rangers from the Bush partnership.

6."In the six months after that bill was signed, Bush's political fund received $37,000 from Hicks, $ll,000 from Crescent President Haddock and $5,000 from Ross Perot, Jr. ... majority owner of the Dallas Mavericks basketball team." Crescent owns a share of the Mavericks.

7.Hicks is the chairman of The University of Texas Investment Management Co. which manages the Permanent University Fund. Nearly $9 million of the PUF has been invested in Rainwater's Crescent Equities.

Since these actions have taken place, the Guv has sold his share of the Texas Rangers for around $l5 mil as well as his Crescent holdings for an undisclosed amount. What we're left to consider is four questions: Are any other holdings in a blind trust? If so, what are they and who controls them? Finally, given the inadequacy of the blind trust concept with respect to the Guv, how could he fairly hold anything, in a blind trust or otherwise? (HC,8/l6) Austex, 9/7

BUSH WINS, RETIRED TEACHERS LOSE, PART 2. The next big money deal (see below) between Richard Rainwater's Crescent Equities and the Texas Teachers Retirement System with Richard Steinhart as chairman took place some months later in early 1997. The Guv still owned Crescent stock in a blind trust. In this one, the Trammell Crow family is a new player, but not a stranger, having contributed substantial sums of money to President Bush's campaign in 1988 and his son's gubernatorial effort in l994. It begins in late l994 when TRS and Calper, another retirement system, each lent a Crow partnership $85 million on the Trammell Crow Center in Dallas. In l997 Crow stopped making payments and Calpers wanted to foreclose. Instead, without taking open bids, Crow said it found a buyer in Crescent, providing the Crows could continue its "tax-deferral on the building," Crescent could purchas it for $20 million under the $l82 million asking price, and TRS would write-off $26.4 million in principle and interest still owed by the Crow partnership. It took less than two months from the time the Crows started looking for a buyer until the time the ink dried on the purchase contract. Perhaps the deal went so quickly because TRC chairman Steinhart told fellow TRS directors that the deal was "very generous," and that there was no need to open bidding to anyone other than Crescent. Sterinhart has had experience in this area of banking. His Team Bank "grew rapidly by purchasing the assets of failed banks from the FDIC" while Bush was President. Meanwhile, Rainwater's Crescent has been "rapidly buying up millions of dollars of undervalued commercial real estate across Texas." When confronted with such details, Bush has said, "Any insinuation that I have used my office to help my friends is simply not true." (HC, l/l9/98+8/l6/98) Austex, 8/21

GEORGE MAKES MONEY AT RETIRED TEACHERS' EXPENSE? While an angry Governor Bush has denied feathering his nest at our expense, facts unearthed and reported last week by R.G.Ratcliffe in last Sunday's "Houston Chronicle" suggest that W. made money at the expense of the Texas Teachers Retirement System when, in l996, without public bids, the TRS sold Frost Bank Plaza in Austin to Crescent Real Estate Equties for $35 million, which was $l8.4 million lower than the fair market value determined by the Travis Country Appraisal District. The "Chronicle" estimates that selling the building at that time resulted in a total loss of $44 million to TRS. While the Guv's stock in Crescent was held in a blind trust when he became Governor and was worth around $100,000 at the time of the TRS sale, that stock was sold in January of this year. Critics point out that he didn't put the Texas Rangers in a blind trust and a number of his Texas Ranger partners were the same as his Crescent partners: Richard Rainwater (Chairman of Crescent), John C. Goff (Vice-chairman),and Gerald Haddock (President). Further, William Miller, the Vice-president at Crescent, was secretary/treasurer of Bush's Texas Rangers interests. Blind trusts are set up so officeholders are not aware of any relationship between official actions and private profits, and Bush has been quoted as saying "he had no idea what business transactions Crescent was conducting because his holdings are in a blind trust." Back at Texas Teachers Retirement, Richard Steinhart, Chairman and CEO of BancOne Corp., was appointed Chairman of TRS by Governor Bush prior to the undervalued, closed-bid sale of Frost Bank Plaza. Finally, Richard L. Scott, a member of the BancOne board which oversees Steinhart, was a Texas Rangers partner at the time, and, until last year, was president of Rainwater's Columbia/HCA Healthcare Corp. The "Chronicle" concludes that politicians and businessmen live in a "small world," but in its total study of a number of such dealings, "a pattern emerges: When a Bush is in office, Bush's business associates benefit." (HC 1/19/98 and 8/16/98), Austex 8/20

According to Brian Redman,"George, Jr. owned a tiny 'energy company'named 'Arbusto' (which in Spanish means 'Bush'). Arbusto was purchased in 1988 by Harken Energy. 'Son of Bush' was named director of Harken. Then, Harken Energy got very lucky--they had no offshore drilling experience, yet 'won an offshore drilling concession from the Gulf kingdom of Baharain that was potentially worth billions.' (from "The Outlaw Bank")" Here's a quote from "The Whistleblower" : "Harken Energy, an oil company based in Little Rock, Arkansas and owned by George Bush, Jr., combined with the engineering firm of Ralph M. Parsons to export oil from Kuwaiti and the Gulf region. Accusations of insider trading and violations of security laws were leveled at George Bush, Jr., when, on the eve of the Persian Gulf War, his entire stock in Harken Energy was quickly sold."