Bush's Bounty HuntersElite Texas Rangers pursue fortunes through team Bush
Andrew Wheat | February 13, 2004 | Features
Three years later, it's still hard to believe that the heavyweight political fundraising champ of the world had to win his POTUS title in a December 2000 split decision rather than a November knockout. George W. Bush could not have won that squeaker but for the 241 elite "Pioneer" fundraisers who supplied at least one-fourth of his record $100 million war chest.
The president all but ensured that he would double his purse this next round when he signed the 2002 McCain-Feingol campaign finance reform. While McCain-Feingold curbs certain abuses, it also doubled the value of Bush's Pioneer fundraising operation overnight by increasing federal contribution limits. A Bush Pioneer who raised $100,000 in 2000 ”by bundling $1,000 checks from 100 people”now can obtain $2,000 from those donors and enter Bush's new elite club of $200,000 "Ranger" fundraisers.
In other Bush advantages this round, Democrats are divided, while Bush lacks a meaningful primary challenge (a la John McCain in 2000). Bush also presides as an incumbent president at a time of skyrocketing federal spending and spectacular corporate corruption. Anyone seeking federal dollars, appointments, or regulatory relief knows that George W. Bush is The Man. And what The Man demands is campaign cash.
By the end of 2003, Bush already was $31 million beyond the record $100 million campaign kitty he amassed during the entire 2000 campaign. The 392 elite Pioneers and Rangers that the campaign had identified by January 2004 easily supplied $54 million of this total, with two-thirds of Bush's money arriving in the new legal maximum amount of $2,000. With nine months more to dial for dollars in campaign 2004, many more high rollers will invest $100,000 in the promise of another Bush Administration, even as current Pioneers upgrade to Team Bush's Ranger class. This Bush campaign is expected to shoot the moon by raising more than $200 million.
In dubbing the new class of super donors Rangers, Bush's campaign evoked the men who extended the long often racist arm of the law across Texas' frontier. More aptly, the term calls to mind the Texas baseball franchise that hit up Arlington taxpayers to help finance Bush's $15 million personal fortune (Stealing Home, T.O. May 9, 1997). Like their candidate who once faced a Harken Energy insider-trading probe the typical elite Bush donor commands money and clout far beyond the reach of ordinary citizens and leverages these assets to amass even more money and clout.
Tax cuts and liability limits are some of the biggest hunks of red meat that Bush throws to these donors en masse. Industry-specific handouts are legion and include gutting pollution controls on utilities, easing mountain-decapitation rules for coal mines, deregulating broadcasters, rejecting prescription price controls, and promoting Social Security privatization for Wall Street.
Big business owners and executives account for 63 percent of Bush's current elite donors, while corporate attorneys or lobbyists account for another 21 percent, according to Texans for Public Justice numbers. The president appointed 52 of his current elite donors to his White House transition team or to subsequent federal posts. Meanwhile, Pioneers from Bush's 2000 race head the departments of Commerce, Labor, Housing, and Homeland Security. Bush nominated a larger herd of them to run 22 foreign embassies. In fiscal 2002 the federal government awarded $2 billion in contracts to 72 companies run by Bush's current elite donors. The companies of more than 40 current elite donors have been implicated in corporate scandals. Not surprisingly, many elite Bush donors have an interest in taking the regulatory cops off their beats.
If Bush is reelected, and if the past is prologue, then his elite 2004 donors represent a who's who replete with people who will run the next administration, do business with that administration, or seek favorable settlements from federal regulators on behalf of miscreant companies. And while Texas still breeds more elite Bush donors than any other state, high-rollers nationwide are heeding the president's latest call for top-dollar donors.
RANGER DANGERS AND PERILOUS PIONEERS
Bush Pioneer and East Texas poultry kingpin Lonnie "Bo" Pilgrim is the founder of Pilgrim's Pride Corp., which was fingered in the 2002 Listeria meat infection that killed eight people and caused three miscarriages. A federal meat inspector said USDA superiors previously had overruled inspector recommendations to close the implicated Pennsylvania plant, which had mold and algae growing on its walls, as well as ducts that dripped onto processing tables. The Consumers Federation of America said the outbreak indicted the Bush Administration's failure to adopt meat inspection rules that President Clinton proposed shortly before leaving office.
Ranger and ex-Congressman Tom Loeffler had a good ride lobbying for Metabolife International, the No. 1 vendor of ephedra weight-loss remedies. Because ephedra triggers far more U.S. health complaints--including fatal ones--than any other herbal remedy, industry lobbyists (including Bush 2004 Pioneer Ron Kaufman) scrambled in recent years to thwart clampdowns by state and federal regulators.
The Texas Health Department postponed new ephedra labeling rules in 2001, citing the "advice" of Bush's Department of Health. Bush's FDA belatedly announced its intention to seek an ephedra ban in late 2003. Yet any ephedra ban will come only after this $3-billion-a-year industry bought itself added years of killer sales.
George W. Bush should know as well as anyone how the influence of elite donors such as Tom Loeffler and Bo Pilgrim can put American lives at risk. Indeed, few living people have come closer to being killed by a lawless Pioneer corporation than George W. Bush. Jogging in Austin in 1999, then-Governor Bush had to dive out of the way of a capsizing trash truck. The truck--which had faulty brakes and was 50,000 pounds over its legal weight limit--was owned by a subsidiary of Houston-based Waste Management (WMX).
Shortly before Bush's brush with death, Bush Pioneer John Drury resigned as WMX CEO after investors learned that the company had claimed $1 billion in bogus earnings. Demonstrating a corporate commitment to recycling, new WMX CEO Maurice Myers is a Pioneer in Bush's latest campaign.
While Bush's elite funding operation continues to attract wealthy people on the make, the composition of these donors has shifted over time. Notably, corporate scandals have knocked some Bush 2000 Pioneers out of circulation, with aftershocks of the 2001 implosion of Bush's all-time biggest donor--Enron--draining a major swamp of Bush support. Starting with Enron, elite Bush 2000 donors who ran scandal-rattled Houston energy companies repeatedly had to walk the plank (including Enron's Ken Lay, Dynegy's Chuck Watson, Reliant's Steve Letbetter, and El Paso Energy's William Wise). Also gone but not forgotten is 2000 Bush Pioneer Stephen Goddard. He ran the Houston office of Arthur Andersen, which was euthanized after signing off on the cooked books at Waste Management and Enron. Nonetheless, Enron survivor Vinson & Elkins is still around to employ repeat Pioneer Thomas Marinis (a member of Bush's Justice Department transition team), despite the firm's infamous legal opinion that Enron's book-cooking partnerships were "creative and aggressive" but not "inappropriate."
As president, Bush has geographically diversified his donor base. Texas' share of Bush's elite-donor network fell from 27 percent in 2000 to 13 percent currently. The state registering the biggest gain in Bush elite is New York, which already has tripled the nine top-dollar Bush backers that it claimed in 2000. In fact, the New York-based finance industry has supplanted lawyers and lobbyists as the No. 1 spawning ground for Bush's fundraising.
Regulators delving into the post-Enron wreckage have discovered that conflict-ridden New York investment banks played a key role in ravaging the energy industry. Merrill Lynch--now headed by Bush Ranger Stanley O'Neal-- helped Enron cook its books through sham energy transactions and sacked an analyst who questioned the value of Enron's stock. The $432,000 that Bush received from Merrill Lynch employees in 2003 was the biggest pile of bundled checks that any presidential candidate received last year, according to the Washington-based Center for Responsive Politics. Credit Suisse First Boston (CSFB), which claims a Ranger and a Pioneer, helped Enron hide mountains of debt, with two CSFB executives serving on the board of a trust that Enron used to hide debt from investors. A 2002 congressional probe found that Goldman Sachs--a firm that boasts a Ranger and two Pioneers--rewarded Ken Lay for Enron's investment banking business by showering him in lucrative initial public offerings of hot Internet stocks. (Texas Rangers Dan Cook and Peter Coneway are ex-Goldman bankers.)
Ten major banks agreed in 2002 to pay a record $1.4 billion settlement with New York Attorney General Eliot Spitzer, who accused their analysts of hyping companies that agreed to shower the banks with lucrative stock-underwriting contracts. With Spitzer now ripping into mutual fund conflicts, the finance industry is eager for Bush to put this watchdog on a leash. Bush's Securities and Exchange Commission has advocated proposals to rein in state regulators. Bush's Comptroller of the Currency recently proposed rules to preempt states from regulating nationally chartered banks. Meanwhile, 10 top New York bankers recently became elite Bush donors for the first time (including top executives of Bear Stearns, Credit Suisse, Fidelity Investments, Goldman Sachs, Lehman Brothers, and Merrill Lynch). While these bankers have an interest in perennial issues that Bush first raised in the 2000 campaign (such as Social Security privatization and tax cuts), it is only now that they have joined the ranks of Bush's elite donors.
Several Texas energy lions have weathered the Enron storm to again fill Bush's campaign coffers. Bush Ranger and petrochemical veteran Fred Zeidman joined the board of Houston's Seitel, Inc. in 1997. After Enron's collapse, Seitel--which sells oil-detection technology--disclosed that it had exaggerated its revenues over the past couple of years by more than 20 percent. The company appointed Zeidman chair to clean up the mess. While Bush's Securities and Exchange Commission charged Seitel's ex-CEO with pilfering corporate funds for such expenses as paying off an ex-girlfriend, it let the company off easy. In a 2003 SEC settlement, Seitel admitted no guilt, paid no fine, and merely agreed not to break securities laws in the future.
President-elect Bush appointed TXU head Erle Nye, a two-time Bush Pioneer, to his secretive Energy Department transition team. Two years later, TXU would be battered by reports that Enron had invested in a secret partnership that TXU created to hide mountains of debt from investors. Having to liquidate billions of dollars of investments to keep TXU afloat, Nye said at the time, I'm disappointed that our reputation and credibility have not counted for any more than they apparently have.
Bush Ranger Nancy Kinder is the wife of ex-Enron President Richard Kinder, who later founded Kinder-Morgan Energy. Observer contributor Robert Bryce's book Pipe Dreams depicts Richard Kinder as a no-nonsense, hard-assets guy whose 1996 resignation marked the beginning of Enron's fraudulent end. Billionaire Kinder has a different reputation in Tucson, where one of his pipelines spewed an estimated 16,000 gallons of gasoline into a neighborhood last year, prompting Arizona's top environmental regulator to say, â€œWe narrowly averted a disaster.
Before he was sacked as El Paso Corp.'s CEO in a corporate scandal last year, elite Bush 2000 donor William Wise faced just such a disaster. An El Paso Corp. pipeline explosion in 2000 killed 12 vacationing campers in New Mexico. After the Bush Administration fined El Paso Corp. $2.5 million for this tragedy in 2001, Bush's Office of Pipeline Safety recently told the Austin American-Statesman that it never collected a dime of the fine.
Bush's nomination of Ranger and conservative cattle rancher Senator Teel Bivins as ambassador to a Scandinavian welfare state is not as much of a mismatch as it may seem at first blush. Data compiled by the Environmental Working Group reveal that, from 1995 through 2002, the Amarillo-based Bivins family and its Corsino Cattle Co. consumed a smorgasbord of $265,681 in federal agricultural subsidies.
MEN IN SUITS
Dallas-based Cardinal Investment Co. is one of the craftier Texas finance companies backing Bush. Cardinal partners Edward â€œRustyâ€ Rose (who co-managed the Texas Rangers with Bush) and Marshall Payne were Bush Pioneers in 2000. Payne is a Pioneer again this round.
The San Francisco Chronicle reported last year that Cardinal "shorted" Terayon Communications by placing an $80 million bet that its stock price would fall. In 2000, after Cardinal badmouthed the high-tech company to financial reporters and federal regulators, Terayon's stock did indeed plummet more than 25 percent. The very next day, Cardinal had the audacity to join other investors in filing a lawsuit against the company to recover their stock losses. In an apt motto for many elite Bush donors, Cardinal had played "heads I win, tails you lose. " Calling Cardinal's gamesmanship "utterly amazing," a federal judge handling the case last year said, "It disturbs me that the people who are going to drive the litigation are in fact the people who are betting on the stock going down."
Even though President Bush has made a career out of railing against frivolous lawsuits, he has embraced artful litigant and Pioneer Rusty Rose just the same, inviting him to Camp David and appointing his wife to the National Council on the Arts. Rose's fashion-designer daughter designed the Bush twins' inaugural gowns and gave the good twin a summer job.
Lawsuit warrior and Bush Pioneer Allan Bud' Shivers, Jr., seems to have developed a distaste for lawsuits the usual way by being on the receiving end of them. After having a hand in two failed Texas banks, Shivers chaired Waste Recovery, Inc. (WR). A Texas tire tax in the early 1990s paid WR to shred junked tires into fuel to fire giant cement kilns. (Pioneer Gaylord Hughey lobbies for this polluting industry.) WR's Baytown tire dump burned for days in 1994, spewing "tremendous smoke billows containing toxic chemical compounds," according to a Harris County lawsuit seeking $836,250 in damages. Settling the lawsuit without paying regulators a dime, WR promised to clean up its dumps and to obey the law in the future. After this intrusive litigation, Shivers became a consultant who demands liability limits on behalf of Texans for Lawsuit Reform (TLR) and HMOs. Sitting on the TLR-heavy panel probing A&M's tragic 1999 bonfire, Shivers helped A&M dodge the awkward question: Did the $500,000 liability cap that Texas grants to state entities make A&M blind to the foreseeable risks of letting hundreds of students work around the clock erecting huge towers of over-sized Lincoln Logs?
CONTRACT ON AMERICA
Dallas-based Affiliated Computer Services (ACS) is the biggest federal contractor employing a current elite Bush donor. ACS had $525 million in federal contracts in fiscal 2002, led by contracts with the Department of Education. That agency announced last year that it will pay ACS $2.3 billion over 10 years to process student loans. ACS will subcontract one-fifth of this work to Plano-based EDS, which produced two 2000 Pioneers: EDS President Jeff Heller and ex-Michigan Governor John Engler, whom EDS hired to oversee its state and local government contracts. ACS's Bush Ranger, Stephen Goldsmith, is the ex-mayor of Indianapolis and was a Pioneer and top advisor in Bush's 2000 campaign. Right after the campaign, Congress' General Accounting Office appointed Goldsmith to a panel studying government â€œoutsourcingâ€ and ACS hired Goldsmith as its senior vice president for e-government. Texas' other major federal contractors run by elite Bush donors include: TXU ($94 million in fiscal 2002 federal contracts); SBC Communications ($61 million); PricewaterhouseCoopers ($39 million); Waste Management ($15 million); and Pilgrimâ€™s Pride ($12 million).
Coveted White House perks like federal contracts, appointments, regulatory relief, and favorable policies are powerful motivators. But these inducements cannot perform their magic if donors believe that a president will withhold such goodies from cronies in order to avoid gross appearances of conflicts of interest, in other words, if the White House is worried about a perception that special interests are driving policy. This president offered the ultimate proof that he has an iron stomach for such perceptions when his administration awarded federal contracts worth up to $8.2 billion to his running mate's old company Halliburton.
Let there be no mistake: The White House is open for business and corporate America is lining up for a bigger cut of "the people's" money and power.