Uncle War Bucks: Bush Family Profits

February 25th, 2005 - by admin

Rupert Cornwell / The (London) Independent – 2005-02-25 08:39:37


WASHINGTON (24 February 2005) — The Iraq war has produced many winners and many losers. And one small but significant winner is a certain William “Bucky” Bush, brother of one president and uncle to the current occupant of the White House.

The good fortune of Uncle Bucky, as he is known within America’s ruling family, has been to hold a seat on the board of Engineered Support Systems Incorporated (ESSI), a St Louis-based company that has flourished mightily as a military contractor to the Pentagon.

Last month, ESSI shares hit a record $60.39 (£31.64) apiece more or less exactly the moment the presidential uncle chose to sell 8,438 options worth around $450,000, according to obligatory reports filed with the US Securities and Exchange Commission (SEC) and disclosed by the Los Angeles Times yesterday. William Bush denies that his presence on the board has had anything to do with the company’s success in boosting expected revenues to an estimated $1 billion in 2005, in good part reflecting no-bid contracts relating to the war.

Noting that he joined it in 2000, before his nephew was elected, “Bucky” Bush says he has not lobbied anyone in Washington to send contracts ESSI’s way. “I don’t make any calls to the 202 [Washington, DC] area code,” he told the LA Times.

In fact Mr Bush, aged 66 and 14 years the junior of his brother, the first president George Bush, has long been a prominent member of the St Louis business community and was state chairman in Missouri for the 2004 Bush/Cheney re-election campaign. “Having a Bush doesn’t hurt,” Dan Kreher, a senior ESSI executive, says.

The company has supplied a variety of equipment to the US military effort in Iraq, including a $49 million contract to refurbish military trailers and an $18 million deal to provide communications services to the Coalition Provisional Authority, which ran post-Saddam Iraq until June last year.

Imaginary WMDs: Real Money
In 2003, ESSI was awarded contracts for equipment to help search for, and protect US soldiers from, Iraq’s chemical and biological weapons, which turned out to have been a figment of the imagination of the Bush administration.

But some of that government business is now under scrutiny. The Pentagon has announced that $158m worth of contracts won by ESSI in 2002, including work on a new air cargo loading device called Tunner, is being reviewed by its inspector general for suspected “anomalies”. ESSI responds that the inquiry is a routine examination of work awarded on a sole-source basis. It would have “no effect” on the company, Gerald Potthoff, its president, told stock analysts this week.

Mr Bush says he cashed in the options because they were about to expire, and not because he was unhappy with the company. He told the LA Times that he would have preferred the company was not involved in Iraq, “but unfortunately we live in a troubled world”.

The episode is another illustration of how the Iraq conflict, costing the US $5bn a month, is proving a bonanza for some. A prime example is Halliburton, the oil services group once chaired by Dick Cheney, the Vice-President, whose Iraq operations have been plagued by alleged contract overcharging and other issues.

Some Democrats complain that the Bushes and their associates have been given a virtual free pass on business affairs unlike President Bill Clinton, who was hounded for years over his involvement in Whitewater, a modest Arkansas real estate venture, in which he and his wife Hillary actually lost money.

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