August 14, 2000
The Bush Family "Oiligarchy"
Part One: The Early Years
By Sam Parry
The news media has made note of the curious ties between the oil business and three of the four major party candidates for president and vice president: George W. Bush, Richard Cheney and, to a lesser extent, Al Gore. In one column, David Ignatius referred to “the bizarre prospect of a presidential campaign in which three of the four candidates” have ties to oil. [WP, July 30, 2000]
But these stories have not detailed for the American people how strong – how fundamental – are the business and political connections between the Bush family and the oil industry, a relationship dating back at least 50 years and inextricably tied to the family’s wealth and power. Gore’s ties to Occidental Petroleum – through family stock ownership and his father’s work for the company – and even Cheney’s five years at the helm of Halliburton, the giant oil-service company, pale by comparison.
Also left unexplored in the press accounts is how a restored Bush family’s “oiligarchy’’ would deal with the environment and its defenders – at odds with oil drillers from Texas to Nigeria, from the Arctic Ocean to the Persian Gulf. Another untapped question is how an oil-friendly George W. Bush presidency would treat the New Economy, whose technologies cut demand for energy and thus pose a long-term threat to the oil industry, a pillar of the Old Economy.
An examination of these relationships finds that the Bush family network of close associates, business partners, political supporters and advisers are so intertwined with the oil industry that to understand the Bush family legacy – and its emerging political dynasty – you must start at its confluence where politics and oil meet. Those interconnections spread out like the countless rivulets of a fertile delta, one that has nurtured and sustained the Bush family’s power and influence for half a century.
Former President George H.W. Bush’s personal ties to the oil industry date back to 1950 when the Bush family encountered the first of many forks linking oil and politics. That fall, banker Prescott Bush, President Bush’s father, ran for the U.S. Senate from Connecticut, mounting a strong but unsuccessful challenge to a popular Democratic incumbent. At about the same time, his son, a decorated World War II veteran and newly minted Yale graduate, launched his first oil company in Midland, Texas.
With financial backing from Wall Street connections cultivated by his uncle, Herbert Walker, the 26-year-old George H.W. Bush joined an associate, John Overbey, to establish the Bush-Overbey Oil Development Co.
According to one of the few serious biographies about the 41st president, George Bush: The Life of a Lone Star Yankee by Herbert S. Parnet, the new company received $350,000 in startup money from Uncle Walker’s connections, including $50,000 from Prescott Bush. Washington Post publisher Eugene Meyer chipped in more than $50,000, some of which he put up in the name of his son-in-law, Phil Graham, who had married Katharine Graham, today the chairman of the executive board at the Washington Post Co. A web of influential connections was already forming.
At this pivotal moment, a father and a son had launched new careers: one in oil and one in national politics, surrounded by allies who would come to exercise broad power in the last half of the 20th Century.
Through hard work and a dependable line of Wall Street investors provided by Uncle Walker, Bush-Overbey company remained in the black, if barely. For his first experience in the oil business, Bush touted a successful record, if not one of blockbuster deals or million-dollar profits.
In those heady days, Midland had not yet become the capital of the Permian Basin oil industry. Midland was a small, close-knit community where people knew each other and pulled together. In this setting, Bush honed his skills as a professional oilman while building his own network of close personal associates. When Bush and Overbey were ready to expand their business in March 1953, they tapped their Midland network of oilmen friends to establish a new partnership, Zapata Petroleum Corp.
Like Bush-Overbey, Zapata received generous startup contributions from Uncle Walker’s East Coast money connections. Establishing Zapata also pulled Bush out of the grinding work of buying and selling oil rights leases into the more glamorous work of contract drilling for major suppliers. Bush was now in the big game, and by the end of 1954, Zapata had 71 wells producing 1,250 barrels of oil per day. [See Parmet’s George Bush.]