Thorns in the
Rose Garden


There are two passions which have a powerful influence on the affairs of men.
These are ambition and avarice; the love of power, and the love of money.

Benjamin Franklin, at the Constitutional Convention, Philadelphia, Pennsylvania – 1787


Sightings from The Catbird Seat

~ o ~

May 8, 2003


Allegations of stock dumping by IPALCO officials investigated

By Mark Jewell, Associated Press

INDIANAPOLIS – Indiana securities investigators have subpoenaed White House budget director Mitch Daniels as part of an inquiry into alleged stock dumping at a Hoosier utility, a regulator said yesterday.

Daniels, who said Tuesday that he is leaving his White House job, is among about 30 former executives of IPALCO Enterprises Inc. asked to provide information about their sales of stock leading up to the utility’s 2001 acquisition by AES Corp of Arlington, Va., said Keith Griffin, deputy commissioner of the Indiana Securities Division.

Griffin said, “We’re looking into the whole transaction to see if any parts of it violated Indiana securities laws.”

Daniels’ resignation sets up a likely run for Indiana governor. He is expected to announce his gubernatorial run by summer.

Griffin declined to comment further on the subpoenas, which were issued Friday in a year-long state investigation of the sale….

IPALCO also is the subject of a lawsuit by former employees who suffered losses in their retirement funds when AES shares plummeted from $49.60 after the merger closed in March 2001. Shares hit 92 cents last October but have since recovered some, closing yesterday at $6.25 on the New York Stock Exchange.

A separate shareholder lawsuit alleges securities violations, claiming that the directors knew or should have known that AES shares were far more volatile than IPALCO stock. Securities rules prohibit execution from trading on information not available to other shareholders.

When Daniels left IPALCO’s board to join the Bush administration in January 2001, he sold millions of dollars worth of stock, including 60,000 shares of IPALCO, for a profit of $552,540….

Daniels is not a defendant in the lawsuit over the retirement fund losses, but is named in the securities lawsuit.


July 19, 2002

Bush Baggage?

His Call for Corporate Responsibility Raises
Questions of His Business Past

By Chris Bury

Since President Bush went to Wall Street demanding, “a new ethic of personal responsibility in the business community,” the stock markets have responded with a resounding “raspberry.” . . .

Bush’s clarion calls for cleaning up corporate corruption have largely fallen on deaf ears, analysts suggest, because Wall Street sees them more as rhetoric than reform. Even that rhetoric has lost steam since it has collided with questions about the president’s own business past.

Bush has insisted, often quite testily, that such questions have long been put to rest. Stories about a Securities and Exchange Commission investigation into his activities in the Harken Energy Company did surface briefly in previous Bush campaigns, including his 2000 race for president.

But the recent wave of corporate scandals has reporters re-examining old SEC documents posted on the Web site of a Washington watchdog group, the Center for Public Integrity. Its director, Charles Lewis, says the documents demonstrate a certain “hypocrisy” in the president’s current calls for corporate reforms.

“Here he is lecturing Wall Street about corporate responsibility, including loans to themselves … when he himself was with a company that was skating on the edge of propriety,” notes Lewis.

Bush Got Loans of Type He Now Condemns

In his Wall Street speech, President Bush called for “an end to all company loans to corporate officers.” But back when Bush was a corporate director at Harken, he got the very loan deals he now condemns.

In 1986 and 1988, those loans allowed him to buy 105,000 shares in the company at interest rates far below the prevailing prime rates. Such loans, while perfectly legal, are surely politically inconvenient in today’s climate.

Other questions involve allegations of insider trading when he sat on Harken’s board of directors. In June, 1990, Bush sold about $850,000 worth of Harken stock. Two months later, the company revealed a quarterly loss of $23 million. The stock temporarily tanked.

For more than two years, the SEC enforcement division investigated whether Bush sold his stock knowing that the company was about to report a huge loss. In the end, the SEC took no action.

One internal memo says, “the vast majority of the [second quarter] loss was unknown to management, let alone to Bush.” But other SEC documents criticize Bush for filing notice of his stock sale 34 weeks late.

Aloha Accounting Maneuvers

Over the years, Bush’s explanations for that late filing — technically a violation of the law — have changed. In 1994, when he was running for governor of Texas, his campaign blamed the SEC for losing the notice.

Now, the White House faults a “mix-up” among Harken’s corporate attorneys; an explanation that government watchdog Lewis derides as a, “dog ate my homework,” excuse. Adds Lewis, “It depends what day you ask him what the reason is why he didn’t report promptly. “

In light of his recent scolding from the bully pulpit, the most troublesome item from the president’s past may be something known as, “the Aloha deal.”

In 1989, Harken Energy sold a big stake in Aloha Petroleum — a chain of gas stations in Hawaii. The buyers? Harken’s own chairman, a company director, and other investors. They put up only $1 million and gave Harken an “IOU,” for the remaining $11 million.

But the company counted its paper profits on the insider deal — profits that were never realized — as income. That accounting maneuver, courtesy of the beleaguered accounting firm Arthur Andersen, allowed Harken to hide $8 million in losses at a time the company was struggling.

PR Problem for President

Albert King, vice chairman of Valuation Research Corp., an independent firm that measures corporate value, compares the Aloha transaction to accounting abuses at Enron.

“At Enron, they did exactly the same thing. They sold assets to ‘independent companies’ that were essentially owned by Enron management and they reported a profit and it wasn’t a real sale.”

The president, in a July 8th press conference, dismissed the Enron comparison. “In the corporate world, sometimes things aren’t exactly black and white when it comes to accounting procedures.” He cited “an honest difference of opinion” between Harken and government investigators.

But in 1991, the SEC, in a rare move, forced Harken to restate its earnings — minus most of the Aloha transaction.

The public relations problem for the president? He served on Harken’s audit committee at the time.

The White House and Harken Energy have so far refused to release minutes of meetings that Bush attended.

Says Charles Lewis, “He either had knowledge of something that was essentially a shady transaction” as a member of the audit committee, “and if he didn’t know, he should have known.” . . .

For more, GO TO > > > Aloha, Harken Energy!


November 5, 2002

SEC Chairman Pitt Resigns

Embattled Chairman Resigns, Faced Criticism Throughout Tenure

The Associated Press

W A S H I N G T O N — Securities and Exchange Commission Chairman Harvey Pitt resigned under fire tonight.

“The chairman tendered his resignation to the president,” Christi Harlan, SEC spokeswoman said.

Three administration officials, speaking on condition of anonymity, said the White House welcomed the resignation of a regulator who had created a host of political problems for President Bush in the runup to tonight’s elections.

The latest came when Pitt failed to share with fellow commissioners information about William Webster, the newly named chairman of an accounting industry oversight board, before the agency voted last week to put the former CIA and FBI director in charge of the panel.

The revelation led SEC commissioners, including Pitt, to request an internal investigation Thursday of Webster’s selection — and renewed the almost daily drumbeat of calls from Democrats and other Pitt critics for his resignation.

Political Thorn for Bush

Pitt, who first worked at the SEC in the late 1960s and built his career as an attorney in appearance-conscious Washington, has been criticized for meeting with the heads of companies under SEC investigation and for his close ties to the accounting industry — at a time when the SEC is investigating major accounting fraud at big corporations. Pitt represented the Big Five accounting firms while in private practice.

In this latest instance, Pitt withheld information about Webster’s lead role on the auditing committee for U.S. Technologies, a company facing investor lawsuits alleging fraud. Webster told The New York Times that Pitt assured him that SEC staff had looked into the issue and it would not pose a problem.

Last month, Democrats asked Bush to remove Pitt, whom they accused of bowing to the accounting industry by opposing the appointment of John H. Biggs to head the oversight board.

Supporters of Biggs, a pension fund administrator, believed he would advocate tough regulation of the accounting industry….

Copyright 2002 The Associated Press. All rights reserved.

* * *

November 12, 2002

Webster Resigns From Oversight Panel

The Associated Press

Former FBI Director William Webster resigned Tuesday as head of a special accounting oversight board, saying he wanted to avert “new distractions” as the congressionally created agency seeks to rebuild public confidence after a series of business scandals.

The move capped nearly two weeks of speculation regarding Webster’s future in a debacle that already has brought the resignations of Bush appointee Harvey Pitt, chairman of the Securities and Exchange Commission, and the SEC’s head accountant.

Webster declined Tuesday to blame Pitt for not informing fellow SEC commissioners that Webster had headed the audit committee of a company now under investigation for fraud. But he acknowledged that the information should have been shared. Pitt, a Bush appointee, resigned a week ago over that. . . .

Pitt, whose 15-month tenure has been marked by a series of political missteps, has remained in office pending President Bush’s naming a replacement to be confirmed by the Senate.

Bush last week voiced confidence in Webster’s integrity, although the president also said he wanted to see the outcome of an investigation of the circumstances surrounding Webster’s selection. . . .

Pitt is facing investigations into whether he concealed from other SEC members Webster’s role for a company that is under investigation. The SEC voted 3-2, along party lines, to appoint him on Oct. 25. Pitt and the other two Republicans approved Webster and the two Democrats opposed his appointment.

In a statement accepting the resignation, Pitt made no mention of the controversy surrounding Webster’s appointment. “I continue to believe that investors would have benefited from Judge Webster’s dedication to the best interest of the American people,” he said.

News of Webster’s resignation came a day before the oversight board was scheduled to have its first meeting. His letter to Pitt was dated Monday and released Tuesday afternoon. . . .

The turmoil comes at a time when the government is trying to bolster the confidence of investors and consumers shaken by corporate scandals over the past year and the SEC is investigating questionable accounting at dozens of big companies.

Webster’s appointment was pushed by Pitt and endorsed by the Bush White House. Democrats preferred John Biggs, head of the largest teachers’ pension fund, whom they believed would be tough on the accounting industry.

Creation of the oversight board was mandated by Congress last summer in legislation responding to the wave of accounting scandals at Enron, WorldCom and other big companies. The five-member board, to be independent of the accounting industry, will be armed with subpoena authority and disciplinary powers and financed by fees from publicly traded companies.

The SEC inspector general and Congress’ auditing arm, the General Accounting Office, are investigating the circumstances surrounding Webster’s appointment and the Senate Banking Committee plans hearings.

Webster has said he told Pitt that he headed the audit committee at U.S. Technologies, which is considered insolvent and has been sued by shareholders alleging fraud. The office of the chief accountant, Robert Herdman, then told Pitt that information did not create a problem for Webster’s selection.

Webster fired U.S. Technologies’ outside auditors last year when he headed the board of directors’ auditing committee.

The auditing firm, BDO Seidman, recently alleged that Webster had made “false and misleading statements” about how much he knew about the company’s financial problems.

BDO Seidman also released documents showing that in a July 13, 2001, conference call with the audit committee, its accountants warned the committee members of “material weaknesses in internal accounting control.”

Webster said last week that the auditors did voice concerns, but not in an urgent, “house on fire” way. He continued to insist that BDO Seidman was fired because the audit committee believed it was charging too much and taking too long to do its audits —— not because of a warning about the company’s financial controls.

Pitt announced Tuesday that the SEC commissioners had unanimously chosen Jackson Day, the agency’s deputy chief accountant, as acting chief accountant until a permanent replacement is named.



(*Editors Note | This page contains two stories. The first, yesterday’s Reuters news wire report of Dick Cheney’s call for the overthrow of Saddam Hussein. The second is an account his business dealings with the Iraqi government. Cheney originally denied that Halliburton under his tenure as CEO had in fact circumvented US law to do business with Hussein’s Iraqi government. He was later forced to retract his denials when presented with evidence of Halliburton’s dealings.)

June 20, 2002

Cheney Sees ‘Gathering Danger’ in Iraq

By Reuters | New York Times

DETROIT (Reuters) – Iraqi President Saddam Hussein represents a “gathering danger” to the United States, Vice President Dick Cheney said on Thursday, while warning that Washington will act preemptively against threats of terrorism.

“We are greatly concerned about any possible linkup between terrorists and regimes that have or seek weapons of mass destruction,” said Cheney. “In the case of Saddam Hussein, we’ve got a dictator who is clearly pursuing and already possesses some of these weapons,” he said.

“A regime that hates America and everything we stand for must never be permitted to threaten America with weapons of mass destruction,” the vice president added, referring to Saddam and the Iraqi forces he fought as defense minister under President Bush’s father during the Gulf War in 1991.

Cheney, who spoke at a political fund-raiser here, stopped short of saying there were any established ties between Baghdad and the al Qaeda network, or the Sept. 11 attacks that took about 3,000 U.S. lives.

But he said the possibility of such links was too great to ignore, especially in light of Saddam’s defiance of U.N. weapons inspection programs and international oversight.

“This gathering danger requires the most urgent, deliberate and decisive response,” he said.

“It is very clear that our enemies are determined to do further significant damage to the American people,” Cheney said, citing recent intelligence reports.

“Wars are not won on the defensive,” he added. “We must take the battle to the enemy anywhere necessary, to preempt greater stress to our country,” he said.

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)


November 13, 2000

Cheney Made Millions Off Oil Deals with Hussein

by Martin A. Lee / San Francisco Bay Guardian

Here’s a whopper of a story you may have missed amid the cacophony of campaign ads and stump speeches in the run- up to the elections.

During former defense secretary Richard Cheney’s five-year tenure as chief executive of Halliburton, Inc., his oil services firm raked in big bucks from dubious commercial dealings with Iraq. Cheney left Halliburton with a $34 million retirement package last July when he became the GOP’s vice-presidential candidate.

Of course, U.S. firms aren’t generally supposed to do business with Saddam Hussein. But thanks to legal loopholes large enough to steer an oil tanker through, Halliburton profited big-time from deals with the Iraqi dictatorship. Conducted discreetly through several Halliburton subsidiaries in Europe, these greasy transactions helped Saddam Hussein retain his grip on power while lining the pockets of Cheney and company.

According to the Financial Times of London, between September 1998 and last winter, Cheney, as CEO of Halliburton, oversaw $23.8 million of business contracts for the sale of oil-industry equipment and services to Iraq through two of its subsidiaries, Dresser Rand and Ingersoll-Dresser Pump, which helped rebuild Iraq’s war-damaged petroleum-production infrastructure. The combined value of these contracts exceeded those of any other U.S. company doing business with Baghdad.

Halliburton was among more than a dozen American firms that supplied Iraq’s petroleum industry with spare parts and retooled its oil rigs when U.N. sanctions were eased in 1998. Cheney’s company utilized subsidiaries in France, Italy, Germany, and Austria so as not to draw undue attention to controversial business arrangements that might embarrass Washington and jeopardize lucrative ties to Iraq, which will pump $24 billion of petrol under the U.N.-administered oil-for-food program this year.

Assisted by Halliburton, Hussein’s government will earn another $1 billion by illegally exporting oil through black-market channels.

With Cheney at the helm since 1995, Halliburton quickly grew into America’s number-one oil-services company, the fifth-largest military contractor, and the biggest nonunion employer in the nation. Although Cheney claimed that the U.S. government “had absolutely nothing to do” with his firm’s meteoric financial success, State Department documents obtained by the Los Angeles Times indicate that U.S. officials helped Halliburton secure major contracts in Asia and Africa. Halliburton now does business in 130 countries and employs more than 100,000 workers worldwide.

Its 1999 income was a cool $15 billion.

In addition to Iraq, Halliburton counts among its business partners several brutal dictatorships that have committed egregious human rights abuses, including the hated military regime in Burma (Myanmar).

EarthRights, a Washington, D.C.-based human rights watchdog, condemned Halliburton for two energy-pipeline projects in Burma that led to the forced relocation of villages, rape, murder, indentured labor, and other crimes against humanity.

A full report (this is a 45 page pdf file – there is also a brief summary) on the Burma connection, “Halliburton’s Destructive Engagement,” can be accessed on EarthRights’ Web site

Human rights activists have also criticized Cheney’s company for its questionable role in Algeria, Angola, Bosnia, Croatia, Haiti, Rwanda, Somalia, Indonesia, and other volatile trouble spots.

In Russia, Halliburton’s partner, Tyumen Oil, has been accused of committing massive fraud to gain control of a Siberian oil field.

And in oil-rich Nigeria, Halliburton worked with Shell and Chevron, which were implicated in gross human rights violations and environmental calamities in that country. Indeed, Cheney’s firm increased its involvement in the Niger Delta after the military government executed several ecology activists and crushed popular protests against the oil industry.

Halliburton also had business dealings in Iran and Libya, which remain on the State Department’s list of terrorist states. Brown and Root, a Halliburton subsidiary, was fined $3.8 million for reexporting U.S. goods to Libya in violation of U.S. sanctions.

But in terms of sheer hypocrisy, Halliburton’s relationship with Saddam Hussein is hard to top. What’s more, Cheney lied about his company’s activities in Iraq when journalists fleetingly raised the issue during the campaign.

Questioned by Sam Donaldson on ABC’s This Week program in August, Cheney bluntly asserted that Halliburton had no dealings with the Iraqi regime while he was on board.

Donaldson: I’m told, and correct me if I’m wrong, that Halliburton, through subsidiaries, was actually trying to do business in Iraq?

Cheney: No. No. I had a firm policy that I wouldn’t do anything in Iraq even arrangements that were supposedly legal.

And that was it! ABC News and the other U.S. networks dropped the issue like a hot potato. As damning information about Halliburton surfaced in the European press, American reporters stuck to old routines and took their cues on how to cover the campaign from the two main political parties, both of which had very little to say about official U.S. support for abusive corporate policies at home and abroad.

But why, in this instance, didn’t the Democrats stomp and scream about Cheney’s Iraq connection? The Gore campaign undoubtedly knew of Halliburton’s smarmy business dealings from the get-go.

Gore and Lieberman could have made hay about how the wannabe GOP veep had been in cahoots with Saddam. Such explosive revelations may well have swayed voters and boosted Gore’s chances in what was shaping up to be a close electoral contest.

The Democratic standard-bearers dropped the ball in part because Halliburton’s conduct was generally in accordance with the foreign policy of the Clinton administration. Cheney is certainly not the only Washington mover and shaker to have been affiliated with a company trading in Iraq. Former CIA Director John Deutsch, who served in a Democratic administration, is a member of the board of directors of Schlumberger, the second-largest U.S. oil-services company, which also does business through subsidiaries in Iraq.

Despite occasional rhetorical skirmishes, a bipartisan foreign-policy consensus prevails on Capital Hill, where the commitment to human rights, with a few notable exceptions, is about as deep as an oil slick.

Truth be told, trading with the enemy is a time-honored American corporate practice or perhaps “malpractice” would be a more appropriate description of big-business ties to repressive regimes.

Given that Saddam Hussein, the pariah du jour, has often been compared to Hitler, it’s worth pointing out that several blue-chip U.S. firms profited from extensive commercial dealings with Nazi Germany.

Shockingly, some American companies – including Standard Oil, Ford, ITT, GM, and General Electric – secretly kept trading with the Nazi enemy while American soldiers fought and died during World War II.

Today General Electric is among the companies that are back in business with Saddam Hussein, even as American jets and battleships attack Iraq on a weekly basis using weapons made by G.E.

But the United Nations sanctions committee, dominated by U.S. officials, has routinely blocked medicines and other essential items from being delivered to Iraq through the oil-for-food program, claiming they have a potential military “dual use.”

These sanctions have taken a terrible toll on ordinary Iraqis, and on children in particular, while the likes of Halliburton and G.E. continue to lubricate their coffers.

© : t r u t h o u t 2002


December 11, 2001

The White House connection: Saudi ‘agents’ close Bush friends

by Maggie Mulvihill, Jonathan Wells and Jack Meyers, Boston Globe

A powerful Washington, D.C., law firm with unusually close ties to the White House has earned hefty fees representing controversial Saudi billionaires as well as a Texas-based Islamic charity fingered last week as a terrorist front.

The influential law firm of Akin, Gump, Strauss, Hauer & Feld has represented three wealthy Saudi businessmen – Khalid bin Mahfouz, Mohammed Hussein Al-Amoudi and Salah Idris – who have been scrutinized by U.S. authorities for possible involvement in financing Osama bin Laden and his terrorist network.

In addition, Akin, Gump currently represents the largest Islamic charity in the United States, Holy Land Foundation for Relief and Development in Richmond, Texas.

Holy Land’s assets were frozen by the Treasury Department last week as government investigators probe its ties to Hamas, the militant Palestinian group blamed for suicide attacks against Israelis.

Partners at Akin, Gump include one of President Bush’s closest Texas friends, James C. Langdon, and George R. Salem, a Bush fund-raiser who chaired his 2000 campaign’s outreach to Arab-Americans.

Another longtime partner is Barnett A. “Sandy” Kress, the former Dallas School Board president who Bush appointed in January to work for the White House as an “unpaid consultant” on education reform.

In September, a federal grand jury issued subpoenas for Holy Land records around the same time terrorist investigators froze the assets of a North Texas Internet firm hired by Holy Land.

Holy Land shared office space with that firm, InfoCom Corp., which was raided by police on Sept. 5, just days before the World Trade Center and Pentagon attacks.

Holy Land has denied any link to Hamas.

According to Akin, Gump, the firm represents Holy Land in a federal lawsuit filed against the charity and another suspected Hamas entity by the parents of a man allegedly murdered by Hamas operatives in the Middle East.

In a statement issued Friday, Akin, Gump said it decided last week to decline a request to represent Holy Land in its defense of terrorism-related charges made by the U.S. Treasury Department.

Akin, Gump, which maintains an affiliate office in the Saudi capital of Riyadh, is also a registered foreign agent for the kingdom. It was paid $77,328 in lobbying fees by the Saudis during the first six months of 2000, public records show.

In addition to the royal family, the firm’s Saudi clients have included bin Mahfouz, who hired Akin, Gump when he was indicted in the BCCI banking scandal in the early 1990s. In 1999, the Saudi’s placed bin Mahfouz under house arrest after reportedly discovering that the bank he controlled, National Commercial Bank in Saudi Aabia, funneled millions to charities believed to be serving as bin Laden fronts.

A bin Mahfouz business partner, Al-Amoudi, was also represented by Akin, Gump. When it was reported in 1999 that U.S. authorities were also investigating Al-Amoudi’s Capitol Trust Bank, Akin, Gump released a statement on behalf of their client denying any connections to terrorism. One year earlier, the firm had co-sponsored an investment conference in Ethiopia with Al-Amoudi.

Akin, Gump partner and Bush fund-raiser Salem led the legal team that defended Idris, a banking protege of bin Mahfouz and the owner of El-Shifa, the Sudanese pharmaceutical plant destroyed by U.S. cruise missiles in August 1998.

The plant was targeted days after terrorists – allegedly on the orders of bin Laden – bombed two U.S. embassies in Africa. The U.S. Treasury Department also froze $24 million of Idris’ assets, but Akin, Gump filed a lawsuit and the government later chose to release the money rather than go to court. Idris, who insists he has no connection whatsoever to bin Laden or terrorism, is now pursuing a second lawsuit with different attorneys seeking $50 million in damages from the United States.

Charles Lewis, executive director of the Center for Public Integrity, a Washington, D.C.-based non-partisan political watchdog group, said Akin, Gump’s willingness to represent Saudi power-brokers probed for links to terrorism presents a unique ethical concern since partners at the firm are so close to the president.

The concern is more acute now, Lewis said, because Bush has faced stiff resistance from the kingdom in his repeated requests to freeze suspected terrorist bank accounts.

“The conduct of the Saudis is just unacceptable by international standards, especially if they are supposed to be one of our closest allies,” Lewis said.

Speaking of Akin, Gump partner Kress’ office in the White House, Lewis added: “That’s not appropriate and frankly it’s potentially troublesome because there is a real possibility of a conflict of interest. Basically you have a partner for Akin, Gump . . . inside the hen house.

But another longtime Washington political observer, Vincent Cannistraro, the former chief of counter-intelligence at the Central Intelligence Agency, said the political influence a firm like Akin, Gump has is precisely why clients like the Saudis hire them.

“These are cozy political relationships . . . If you have a problem in Washington, there are only a few firms to go to and Akin, Gump is one of them,” Cannistraro said.

Cannistraro pointed out that Idris hired Akin, Gump during the Clinton presidency, when Clinton confidante Vernon Jordan was a partner at the firm. “He hired them because Vernon Jordan had influence . . . that’s a normal political exercise where you are buying influence,” he said.

Akin, Gump is not the only politically wired Washington business cashing in on the Saudi connection.

Burson-Marsteller, a major D.C. public relations firm, registered with the U.S. government as a foreign agent for the Saudi embassy within weeks of the Sept. 11 terror attacks.

One of Burson-Marsteller’s first public relations efforts for the Saudis was to run a large advertisement in the New York Times reading: “We Stand with You, America.”

The Washington chairman for Burson-Marsteller, which also maintains an office in Saudi Arabia, is Craig Veith, who ran communications for the Republican Party in the 1996 elections.

Other GOP heavyweights who have held top positions at the PR giant include Sheila Tate, the campaign press secretary for the elder George Bush; Leslie Goodman, deputy director of communications for the 1992 Bush-Quayle campaign; Craig L. Fuller, chairman of the 1992 Republican National Convention and elder Bush’s vice presidential chief-of-staff.

~ ~ ~

PART II – Bush advisers cashed in on Saudi gravy train

By Maggie Mulvihill, Jack Meyers and Jonathan Wells

Many of the same American corporate executives who have reaped millions of dollars from arms and oil deals with the Saudi monarchy have served or currently serve at the highest levels of U.S. government, public records show.

Those lucrative financial relationships call into question the ability of America’s political elite to make tough foreign policy decisions about the kingdom that produced Osama bin Laden and is perhaps the biggest incubator for anti-Western Islamic terrorists.

Nowhere is the revolving U.S.-Saudi money wheel more evident than within President Bush’s own coterie of foreign policy advisers, starting with the president’s father, George H.W. Bush.

At the same time that the elder Bush counsels his son on the ongoing war on terrorism, the former president remains a senior adviser to the Washington D.C.-based Carlyle Group. That influential investment bank has deep connections to the Saudi royal family as well as financial interests in U.S. defense firms hired by the kingdom to equip and train the Saudi military.

Last year, former President Bush visited Saudi Arabia’s King Fahd bin Abdul Aziz Al-Saud, but a Carlyle spokesman said the two did not discuss Carlyle business as previously reported. The elder Bush is reportedly paid between $80,000 and $100,000 for each Carlyle speech he makes. The company declined comment on the former president’s pay.

The Carlyle Group has also served as a paid adviser to the Saudi monarchy on the so-called “Economic Offset Program,” an arrangement that effectively requires U.S. arms manufacturers selling weapons to Saudi Arabia to give back a portion of their revenues in the form of contracts to Saudi businesses, most of whom are connected to the royal family. A company spokesman said yesterday that arrangement was ended “a few months ago,” but said he did not know whether it was terminated before or after the Sept. 11 attacks.

A spokesman for former President Bush, reached yesterday, had no immediate comment on his work for the Carlyle Group.

These intricate personal and financial links have led to virtual silence in the administration on Saudi Arabia’s failings in dealing with terrorists like bin Laden, said Charles Lewis, executive director of the Center for Public Integrity, a Washington, D.C.-based government watchdog group.

“It’s good old fashioned ‘I’ll scratch your back, you scratch mine.’ You have former U.S. officials, former presidents, aides to the current president, a long line of people who are tight with the Saudis, people who are the pillars of American society and officialdom,” said Lewis.

“So for that and other reasons no one wants to alienate the Saudis, and we are willing to basically ignore inconvenient truths that might otherwise cause our blood to boil. We basically look away,” he said. “Folks don’t like to stop the gravy train.”

Some foreign policy observers said as long as American power brokers in lucrative business deals with the Saudis do not simultaneously craft U.S. foreign policy, there is no conflict of interest.

“To have Bush Sr. on the board of Carlyle is not necessarily a significant problem because Carlyle has interests all over the world,” said Vincent Cannistraro, a former counter-intelligence chief for the Central Intelligence Agency.

Companies regularly entice powerful political figures to work for them, he said.

“It’s kind of business as usual. Where it really affects things is when someone with a financial interest in a company also has a policy position in the administration,” Cannistraro said.

Insiders trading

A significant portion of the millions of dollars U.S. companies and their politically influential executives have earned in deals with the Saudis has been through military contracts.

The Carlyle Group had a major stake in the large defense contractor B.D.M., which has multimillion-dollar contracts through its subsidiaries to train and manage the Saudi National Guard and the Saudi air force, U.S. Department of Defense records show. In 1998, Carlyle sold its controlling interest in B.D.M. to defense giant TRW International.

Meanwhile, the boards of directors of the Carlyle Group, B.D.M. and TRW are all stocked with high-level Republican policy makers.

Frank C. Carlucci, a former secretary of defense under President Reagan, was chairman of B.D.M. for most of the 1990s. Carlucci, who also served as Reagan’s national security adviser and a deputy director of the CIA, now heads the Carlyle Group.

Along with former President Bush, other officials from past Republican administrations now at the Carlyle Group include: former Secretary of State James A. Baker III; ex-budget chief Richard Darman; and former Securities and Exchange Commission chairman Arthur Levitt.

President Bush is himself linked to the Carlyle group: He was a director of one of its subsidiaries, an airline food services company called Caterair, until 1994. Six years later, when Bush was governor of Texas, the board of directors of the Texas teachers’ pension fund – some of whom were his appointees – voted to invest $100 million with the Carlyle Group.

The president of B.D.M. is Philip A. Odeen, a former high-level Pentagon official in the Nixon administration. During the Clinton administration, Odeen chaired the Pentagon task force that planned the restructuring of the U.S. military for the 21st century. Currently, he is the vice-chair of the Defense Science Board, which advises the Pentagon on emerging threats.

TRW, the new owner of B.D.M., has its own noteworthy board members, including former CIA director Robert M. Gates and Michael H. Armacost, who served as undersecretary of state under President Reagan and as ambassador to Japan for former President Bush.

Big Saudi money also makes its way back to Texas and the Bush family. The family of Saudi Arabia’s longtime U.S. ambassador, Prince Bandar bin Sultan bin Abdul Aziz, gave $1 million to the Bush Presidential Library in College Station, Texas.

The revolving door

Another example of the complex web connecting U.S. and Saudi powerbrokers is Dick Cheney, who moved from the Pentagon to the international oil business and back as vice president last year.

After serving as the elder Bush’s secretary of defense, Cheney was hired to run oil-services giant Halliburton Co., where he worked until he resigned last year to campaign with the younger Bush. In 2000, his last year with Halliburton, Cheney received $34 million when he cashed out from the company.

Not surprisingly, Halliburton’s links to Cheney and other Washington power brokers appear to have helped the company’s business prospects in the Middle East.

Just last month, Halliburton was awarded a $140 million contract to develop an oil field in Saudi Arabia by the kingdom’s state-owned petroleum firm, Saudi Aramco, and a Halliburton subsidiary, Kellogg Brown & Root, along with two Japanese firms, was hired by the Saudis to build a $40 million ethylene plant.

Cheney isn’t the only member of President Bush’s inner circle whose work for firms connected to the Saudis has paid big dividends.

The current national security adviser, Condoleezza Rice, is a former longtime member of the board of directors of another giant oil conglomerate with business in the Saudi desert, Chevron, which merged with Texaco this year. Rice even has a Chevron oil tanker named after her.

Substantial profits received by U.S. leaders in private sector deals with the Saudis have helped to squelch criticism of the royal family’s refusal to address the role its country has played in fueling Islamic terrorism, Lewis said.

“There’s a disconnect there,” Lewis said. “I’m fascinated that we don’t lay this at Saudi Arabia’s doorstep. But the chances to cash in and the amount you can cash in for are starting to become absolutely astronomical. Who wants to look like the Boy Scout complaining about it and potentially jeopardize their own post-employment prospects?”

Former advisers to the president’s father also hold key positions with U.S. firms which have teamed up with the Saudis on major oil deals.

Former Bush Secretary of the Treasury Nicholas Brady and a former Bush assistant, Edith E. Holiday, are both on the board of directors of Amerada Hess, an American petroleum firm currently teaming up with several powerful Saudi families to develop oil fields in Azerbaijan.

Another company that has done business with wealthy Saudis is international energy firm Frontera Resources Corp. based in Houston. Until recently, Frontera was a 30 percent investor in a $900 million project to develop oilfields in Azerbajian. Also investing in the project were Azerbaijan’s state-run oil company and Delta-Hess, a joint-venture created by the Saudis’ Delta Oil and Amerada Hess.

Randy Theilig, a Frontera spokesman, said the company relinquished its interest in the project in July because it was no longer “economically viable,” and has no current business dealings with the Saudis or in Azerbajian.

Members of Frontera’s board of advisers, which includes former CIA director John Deutch and former Secretary of the Treasury and U.S. Sen. Lloyd Bentsen, have been active financial supporters of the Democratic Party.

Shining a bright light on the web of financial connections between the power elite in the U.S. and Saudi Arabia is critical, Middle Eastern foreign policy experts said.

“I think the fact that they have these connections makes it important for this information to be made public,” said Henry Siegman, a senior fellow on the Middle East at the Council on Foreign Relations.

Larry Noble, executive director of the Center for Responsive Politics in Washington, D.C., a non-partisan group that examines money and politics, said the Bush-Carlyle connection is a concern.

“It is well known that the father is a close adviser to his son and therefore it does raise concerns,” Noble said.

“It’s not necessarily that the father has been compromised, but the danger is that it leads people to question George W. Bush. The public has a right to feel their leaders are making independent judgments without the influence of private interests.

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

© : t r u t h o u t 2001

For more on THE CARLYLE GROUP, GO TO > > > Birds that Drink from Cesspools

For more DUBIOUS DUBYA connections with EVIL TERRORISTS, GO TO > > > The Nests of Osama bin Laden

For more on the CIA connection, GO TO > > > The Secret Nests

For more on the MILITARY-INDUSTRIAL COMPLEX connections, GO TO > > > Nests in the Pentagon

For more on the MONEY / RACKETEER connections, GO TO > > > Apollo



“The state is resuming its right and its prestige as the sole and supreme interpreter of the needs of society.”

– Benito Mussolini, 1934


December 14, 2001

Bush rejects subpoena in two House probes

President’s claim of executive privilege angers lawmakers

by Ellen Nakashima, The Washington Post

WASHINGTON, D.C. – President Bush invoked executive privilege for the first time yesterday, rejecting a congressional subpoena for prosecutors’ records related to the Clinton administration campaign finance probe and a 30-year-old Boston mob case.

The flexing of executive muscle angered lawmakers from both parties, who called it an unprecedented effort to deny Congress access to records that in the past had been routinely disclosed.

But it drew approval from some GOP legal experts who lauded Bush’s attempt to restore the notion of executive privilege, badly eroded during the Clinton administration.

Disclosure, Bush wrote in a memo telling Attorney General John Ashcroft not to release the documents, would “inhibit the candor necessary” to the deliberative process in the executive branch and would be “contrary to the national interest.” (Hunnh? Does this sound like the same Dubya who said, “Is your children learning?”)

“This is not a monarchy,” Rep. Dan Burton, an Indiana Republican who is chairman of the House Government Reform Committee, said at a hearing yesterday focusing on the Boston case. “The legislative branch has oversight responsibility to make sure there is no corruption in the executive branch.”

Burton’s committee had subpoenaed documents regarding the FBI’s handling of mob informants in Boston dating to the 1960s, excluding those relating to open cases. The panel had also subpoenaed records dealing with former attorney general Janet Reno’s decision not to appoint a special counsel to investigate charges of campaign finance abuses by then-Vice President Al Gore.

Burton is particularly incensed about the now-closed case of Joe Salvati, a man the FBI knew was innocent when he went to prison for 30 years on murder charges. Burton said Salvati was convicted on the basis of lies told on the stand by Joe “The Animal” Barboza, an FBI informant who had a grudge against Salvati.

The committee had also subpoenaed Ashcroft himself. Originally scheduled to appear on Sept 13, the Sept 11 terrorist attacks postponed the hearing until yesterday. Justice Department Criminal Division Chief of Staff Michael Horowitz appeared in his stead. . . .

Joseph diGenova, a former U.S. attorney, praised Bush’s move as one that begins to restore the principle of executive privilege after its “profligate use” by former president Clinton. . . .

But Mark Rozell, author of the 1994 book “Executive Privilege,” said he thought the White House had picked poor cases for establishing the principle. A better argument would involve protecting national security, he said. . . .

Rozell and diGenova said Clinton had abused executive privilege by invoking it in inappropriate cases, for instance, to conceal wrongdoing or matters unrelated to government business, such as an affair with a White House intern.

But even Clinton did not assert executive privilege over the types of prosecutorial records that panel is seeking, Burton said.


December 16, 2001

The President’s Papers Are the People’s Business

By Steven L. Hensen

How can a democratic people have confidence in elected officials who hide the records of their actions from public view?

On Nov. 1, with no announcement, President Bush signed Executive Order 13233, overriding the 1978 Presidential Records Act, which provides that a president’s papers will be made available to the public 12 years after he leaves office.

Bush’s new order gives the White House, as well as former presidents, the right to veto this release of documents, thereby taking the responsibility for administering presidential papers away from the archivist of the United States. By forcing citizens to go to court to obtain the right to view an administration’s records, the order effectively blocks access to information that enables Americans to hold our presidents accountable for their actions. . . .

Bush’s executive order is titled “Further Implementation of the Presidential Records Act.” But rather than “implementing” that law, the order abrogates the core principles of the act and violates both its spirit and letter.

The Presidential Records Act was created out of the legal morass surrounding the Watergate scandals and legitimate congressional fears that former president Nixon would never allow public access to the records of his administration. The legislation established once and for all — or so we thought — the principle that presidential papers represent the official records of activity by the highest office in our government of, by, and for the people — and that they therefore belong to the U.S. government and, by extension, its citizens. . . .

Executive Order 13233 directly subverts the intent of the Presidential Records Act by placing ultimate responsibility for decisions regarding access to presidential papers not only with President Bush, but with any sitting president in the future, as well as every ex-president, and, even further, the family members and heirs of former presidents, apparently without limit.

Administration officials have acknowledged that the new order is intended to prevent the release of records from the Reagan administration, which the White House has been delaying by various means since January. This has led to speculation that the administration is trying to shield members of Bush’s own administration, as well as his father, from a variety of uncomfortable revelations, including possible connections to the Iran-contra scandal.

But it should be noted that this executive order also fits a pattern suggesting that the Bush administration may be hostile to the basic ideals that the public has a right to know what its elected officials are doing, and that the records of government are in fact owned by the people.

Last January, Bush, as outgoing governor of Texas, shipped his official records to his father’s presidential library at Texas A&M University. By doing so, he succeeded in removing his gubernatorial papers not only from the custody of the Texas State Library and Archives, but also, possibly, from the ownership, oversight and right of access of the people of Texas.

The Texas archives law does permit the designation of “an institution of higher learning or alternate archival institution” as the repository for gubernatorial records (the records of former governor John Connally, for instance, are at the Lyndon B. Johnson presidential library, and those of Bill Clement are at Texas A&M). But the bill requires that any governor seeking to place his records elsewhere consult fully with the Texas State Library and Archives Commission to develop clear policies regarding processing of and access to the records.

While there was some preliminary consultation over Bush’s papers, no final agreement was reached. The records were simply packed up and shipped off — to the great surprise of many, including officials at the Bush presidential library.

Under no circumstance does the Texas bill permit the transfer of the records’ “ownership” from the people of Texas to any other entity. The Connally and Clement records, though not technically in the archives, are still administered according to Texas records law.

But the confusion likely to reign over the question of who “owns” the Bush gubernatorial records may be sufficient to keep them out of public sight until well after the conclusion of George W.’s presidency. In the meantime, requests from journalists, historians or others to view the documents could be delayed indefinitely, denying the public potentially valuable insight into how Bush’s policies as Texas governor on matters from energy to the death penalty may be informing current decisions.

And there’s more.

On Oct. 16, Attorney General John Ashcroft issued a memorandum telling federal agencies that when they decide to withhold records in response to Freedom of Information (FOIA) requests, they can “be assured” that the Department of Justice will defend their decisions.

The memorandum supersedes a 1993 directive by then-Attorney General Janet Reno, directing federal agencies to resolve ambiguous situations in favor of openness. Though Ashcroft’s memo suggested that the present reversal on FOIA requests was necessary for protecting “national security, enhancing the effectiveness of our law enforcement agencies, protecting sensitive business information and, not least, preserving personal privacy,” the fact is that these categories of information are already exempted from release under our freedom of information laws.

Like Bush’s executive order, Ashcroft’s FOIA memorandum has the effect of limiting our ability as citizens to know what our government is doing, and why. . . .

Engaged as we currently are in a struggle against terrorism and totalitarianism, it does us no credit to adopt policies that reflect the principles of our enemies more than they do our own democratic traditions. Bush should demonstrate the values and openness of our government and of his administration by canceling this order and directing the attorney general to revoke his memorandum.

It shouldn’t have to take legal proceedings, congressional action or public pressure for Bush to come to the understanding that the president’s papers are not in fact the president’s papers, but rather the records of the people’s presidency.

– Steven Hensen, director of planning and project development at Duke University’s Rare Book, Manuscripts and Special Collections Library, is president of the Society of American Archivists.

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.)

© : t r u t h o u t 2001


December 16, 2001

Radical in the White House

by Marc Ash

George W. Bush has embarked on perhaps the most radical course of any president in US history.

Without consulting or even informing Congress, Mr. Bush this week terminated the landmark 1972 Antiballistic Missile Treaty that has been the cornerstone of global nuclear arms control for three decades.

And that was just for openers.

While the entire country was obediently watching the Osama bin Laden video Mr. Bush was quietly invoking for only the third time in U.S. history Powers of Executive Privilege.


Don’t be. Amidst the chaos, destruction and distraction of the past year Mr. Bush has set about, by “whatever means necessary,” reshaping America to conform to a vision that is — his to know — and ours to find out.

A fundamental redefinition of the entire U.S. tax structure, fast track authority to unilaterally formulate U.S. trade agreements world-wide, plans to privatize social security, a sweeping overhaul of the entire U.S. justice system… and this is only the ninth month.

Any one of these social and political developments in years gone by would have set off a whirlwind of controversy. Today, while TV broadcast news keeps the nation transfixed on the hunt for bin Laden, Mr. Bush is presiding over a truly radical 180 degree reversal of America’s fortune. In little more than a year we have gone from enjoying peace and the most prosperous economy in our history, to a nation plunged into war, recession and fear. This is a nation being transformed before our very eyes.

Democratic resistance to the Bush agenda is not surprising, but to put into perspective the enormity of these events, consider the reaction from many prominent republicans: Dan Burton, the Republican Chairman of the powerful House Ways and Means Committee, said in reaction to Mr. Bush’s invocation of Executive Privilege, “This is not a monarchy.”

Arch Republican conservative New York Times columnist William Safire titled his essay on the subject of Mr. Bush’s order authorizing secret military tribunals: “Seizing Dictatorial Power.”

Senate Republican Stalwart Arlen Specter titled his Op-Ed in the New York Times; “Questioning the President’s Authority.”

Questioning the President’s Authority indeed, now might be a very good time — while the opportunity still exists.

© : t r u t h o u t 2001

# # #





















Last Update January 3, 2005 by The Catbird