August 15, 2000
The Bush Family "Oiligarchy"
Part Two: The Third Generation
George W. Strikes Success
After the acquisition, George W. was named to the Harken board of directors. He was given $600,000 worth of Harken stock options and landed a job as a consultant that paid him $120,000 a year. By any account, this was not bad for an oilman who had never made any money in the oil business and had lost investors fortunes, large and small. [Harper’s Magazine, February 2000.]
But Harken’s investment in George W. appreciated. In 1986, the company had acquired the son of a vice president. By 1989, it had in its camp the son of a president. Harken began looking for oil investments in the Middle East where business and family connections also are very important.
In 1989, the government of Bahrain was in the middle of negotiations with Amoco for an agreement to drill for offshore oil. Negotiations were progressing until the Bahrainis suddenly changed direction.
Michael Ameen, who was serving as a State Department consultant assigned to brief Charles Hostler, the newly confirmed U.S. ambassador to Bahrain, put the Bahraini government in touch with Harken Energy. In January 1990, in a decision that shocked oil-industry analysts, Bahrain granted exclusive oil drilling rights to Harken, a company that had never before drilled outside Texas, Louisiana, and Oklahoma and that had never before drilled offshore. [Harper’s Magazine, February 2000.]
In a matter of weeks, the stock of Harken Energy shot up more than 22 percent from $4.50 to $5.50.
While George W. was finally finding some success in the oil business, President George H.W. Bush was experiencing the high point of his presidency. In August 1990, the forces of Iraqi leader Saddam Hussein invaded the oil-rich sheikhdom of Kuwait, choosing to settle a simmering border dispute over oil lands by force. President Bush responded with a denunciation of Saddam for violating international law, though Bush himself had ordered the invasion of Panama less than a year earlier to capture Panamanian Gen. Manuel Noriega on drug charges.
Yet, with the Middle East’s vast oil reserves at risk, international law gained new respect as an inviolable principle. President Bush vowed that the Iraqi invasion “will not stand” and dispatched 500,000 U.S. troops as part of an international force to drive Iraqi forces from Kuwait. In the early months of 1991, the United States led first an aerial assault on Iraqi military and civilian targets, followed by a 100-hour land assault that routed the overmatched Iraqi army and restored the Kuwaiti royal family to power. Bush saw his popularity ratings soar above 90 percent among the American people.
Public Face for the Texas Rangers
Back in Texas, George W. was winning acclaim himself as the popular new owner of the Texas Rangers. The beginning of that deal traced back to an idea of George W.’s Spectrum 7 partner, Bill DeWitt, who wanted to make a play for the purchase of the baseball team. DeWitt understood that he needed a native Texan in his group of investors. George W. fit the bill. George W. also brought with him family connections to the owner of the Rangers, Eddie Chiles. An aging Midland oilman, Chiles’s ties to the Bushes dated back to George W.’s father’s days in the Midland oil business. [Harper’s Magazine, February 2000.]
George W., who had never given up his political aspirations, recognized at once the opportunity this would bring. He could establish his name in his own right and do so as part owner of a highly visible organization. What story line could be better for an aspiring politician than to be part of the old American pastime, baseball?
The group of investors was missing only one thing – money. To address this need, George W. tapped a Yale fraternity brother, Roland Betts, who brought with him a partner from a film-investment firm, Tom Bernstein. Betts and Bernstein were from New York, which became a problem when Major League Baseball Commissioner Peter Ueberroth insisted on more financial backing from Texas-based investors.
Commissioner Ueberroth, eager to put together a deal for the son of the President, brought in a second investment group headed by Richard Rainwater, who had made much of his fortunes working for the Bass family of Fort Worth. From 1970 to 1986, Rainwater had turned a modest family fortune of nearly $50 million into a stunning $4 billion empire.
Rainwater agreed to join Betts, Bernstein, and George W., who borrowed $600,000 for his share of the $86 million purchase. But Rainwater did not join without imposing a strict limitation on George W.’s role. George W. was granted 2 percent ownership of the Rangers and was named one of two “managing partners.” But George W. would have effectively no say in running the team. He would be the handsome public face. Rainwater and his lieutenant Rusty Rose would be the brains. [Harper’s Magazine, February 2000.]
George W.’s connections to Harken and his investment in the Rangers – which had been made possible by his ties to the oil industry – soon made him a millionaire. At last, he had a record of accomplishment to point to. George W. finally was ready to make the leap he had been waiting for. In 1994, George W. ran for and won the governorship of Texas.