by Russ Baker
Amid the upheaval, William Quasha issued a statement of support for Marcos. The disputed election, he declared, was “the least dishonest and least bloody” since the Philippines gained in dependence from the United States.43
On the Home Front
If all this gold was going somewhere, we have to ask: Was some of it going into Harken Energy, where George W. Bush was deeply involved? Certainly, Alan Quasha had a relationship with his father that somewhat paralleled that of W. and Poppy’s.
Having remained in the Philippines after the war, William Quasha eventually attained the rarefied status as the only American licensed to practice law there. He also picked up some intriguing clients, including the CIA-tied Nugan Hand Bank.44
Quasha and some American expat friends living in Manila also established a trail of disbursements outside the Philippines in the carefree manner of people who seemed to be spending someone else’s money. The peculiar approach that this group brought to investing was described, almost in passing, in a Portland Oregonian profile of a local developer who received funding from them. In 1972, according to the article, Homer Williams was fretting about his lack of funding for a desirable real estate purchase when out of the blue he received a call from halfway across the world. Soon, Bill Quasha himself was flying in, making an offer for the property on the back of an envelope. A few weeks later, as the option was about to expire, Quasha’s lawyer called Williams and flatly reported: “We just had $600,000 wired into your trust account.”45
After three years of facing various legal hurdles relating to the property, Quasha dispatched his partner Lou Sheff to Portland. What struck Williams— and apparently the Oregonian reporter—was the man’s slightly indelicate approach, perhaps the result of a few too many years living under Marcos.
“Homer,” Sheff asked, “who do we have to pay off?”
“Lou, this is Portland,” Williams replied. “You don’t pay anyone off. It’s not the way it works here.”
Two years later, Sheff passed through Portland again. He had a different question.
“Homer,” he asked. “Who do we kill?”46
This is not, one hopes, normal investment behavior.
Quasha senior himself was a far smoother operative. He was well-off and well connected with capital sources. In the final days of the Marcos reign, after nearly all the expatriates had abandoned him, Quasha continued to stick by his man, leading the American Chamber of Commerce to condemn his “partisan approach.”
He also may have been a Marcos money man, just as Phil Kendrick had heard. Philippine investigators seeking to track the billions Marcos had embezzled from the Philippine treasury or obtained as bribes found that most of the money had been moved overseas through intermediaries. In 1986, the New York Times reported that Marcos-connected transactions involving tens of millions of dollars went through U.S. institutions such as the Rockefellers’ Chase Manhattan Bank.47 During a federal racketeering trial against Imelda Marcos in New York in 1990, the New York Times reported that Imelda’s lawyer Gerald Spence said, “President Bush had urged Mr. Marcos to invest in United States real estate.”48
During the years William Quasha was living in Manila and conducting his law practice, his son Alan attended Harvard Law School and Harvard Business School—even studying in years that overlapped W.’s time there. Then Alan Quasha set up a law practice specializing in the alchemy of corporate restructuring. News reports have characterized his approach to acquiring companies on the cheap as bottom-feeding,49 and noted that the provenance of the funding was not always clear. Additionally, at the time of the Harken purchase, Poppy Bush, a former CIA director, was vice president, with the portfolio for managing covert operations—an empire that was undergirded by laundered intelligence funds.
When Alan Quasha took control of Harken in 1983, he was essentially an unknown and a small-timer. Several years later, he appeared to be on top of the world. Did gold and/or Marcos’s billions have anything to do with this? What about Harvard’s role? It is possibly a coincidence that Robert G. Stone of the Harvard Corporation also served on the board of the Gold Fund of the investment giant Scudder Investments. The Gold Fund was established in 1988, shortly after Stone brought Harvard’s money into Harken. Four years later, Harken chairman Alan Quasha joined the board of American Express’s AXP Precious Metals Fund.50
By 1994, the once little-known New York lawyer had advanced so far up the ladder that he became a governor of the American Stock Exchange. And in May 2002, he joined the board of American Express Funds, the mutual fund arm of Amex. And fittingly, Quasha joined the board of Harvard University’s foreign affairs center.
An Alpine Rescue
By joining the Harken board of directors in late 1986, George W. Bush was entering this dense financial web. The next year he took time out from his father’s presidential campaign to travel to Little Rock, Arkansas, where he met with Jackson Stephens, head of Stephens Inc., the largest private investment bank outside Wall Street. Stephens, as noted earlier, had a proclivity for befriending presidents and would-be presidents of both parties. He had previously established financial ties to Jimmy Carter—and would later do so with his fellow Arkansas native Bill Clinton, for whom he was a particularly crucial savior. The Stephens family rode to Clinton’s rescue both during his 1990 reelection bid for governor of Arkansas and in March 1992, when his presidential campaign was broke. Noted the investigative magazine Mother Jones: “It may not be too much to say that their Worthen Bank’s emergency $3.5 million line of credit saved the [Clinton] presidential campaign from extinction.”51
Following W.’s visit in 1987, Stephens brought in the Union Bank of Switzerland (UBS), the largest financial institution in that secretive Alpine enclave. According to Harken filings, the London branch of that Swiss bank underwrote Harken’s twenty-five-million-dollar stock offering. The bulk of the UBS shares, in turn, went to a Saudi operating through a Caribbean shell company.52
In the final analysis, George W. Bush, Stephens, and even UBS appear to have been midwives to create an arm’s-distance between Harken and its U.S. intelligence connections and some ultimate funders: the Saudis.
The Marcos clique and the Saudis were not the only international elites connected with the Harken-Quasha group while George W. Bush was involved. The South African white apartheid regime was also a bulwark in America’s global anti-Soviet strategy, and like the Marcos government, looked to the Reagan-Bush and then Poppy Bush administrations for protection from the growing demands of home-grown insurgents—in this case, black anti-apartheid activists. Through its gold trading activities on behalf of South Africa, the Union Bank of Switzerland was influential in preserving the African apartheid system for many years.
In 1983, as Alan Quasha was taking over Harken, UBS chairman Niko-laus Senn publicly expressed doubts about democracy in South Africa, reflecting a general sentiment among Swiss bankers that the black majority was not capable of self-governance.53 At the time, UBS was providing banking services for funds from South Africa, the Philippines, and Saudi Arabia. When a Swiss referendum proposed in 1984 to lift the veil on bank secrecy, threatening to reveal the criminal origins of so much money sloshing through that pristine country, Senn was quoted as warning that it could lead to the withdrawal of so many funds as to cause the collapse of the Swiss economy.54
In an unapologetic 1988 acknowledgment of the mutual obligations incurred, P. W. Botha, the president of the South African apartheid regime, personally bestowed a medal of honor on a UBS official for services rendered to the regime.55
Around this time, with Poppy Bush running for president and George W. Bush sitting on the board at Harken, the company received an infusion from the billionaire Rupert clan of South Africa, which had important holdings in diamonds, gold, liquor, and cigarettes and close ties to the apartheid regime. The Ruperts also invested with Quasha in an American petroleum refiner, Frontier Oil, and became involved in the takeover of the Swiss company Richemont—whose top-drawer l
uxury brands included Cartier, Mont-blanc, and Dunhill—and put both Alan Quasha and Senn on the board.56
FOR PART OF George W.’s term on the Harken board (during which time he also received a consultant’s fee from the company), he was living in D.C. and working full-time on his father’s presidential campaign, where he was both one of his father’s top advisers and his “enforcer” on the campaign staff. Poppy would certainly have known about his son’s principal business activities at the time. And yet, as far as can be ascertained, neither of the George Bushes has been pressed to explain the geopolitical ramifications of Harken—or even to address the transparent illogic of it as a business enterprise.
Bahrain, in Vain
What W. got out of it—and why he was put into it—gradually became clearer. In December 1988, after Poppy Bush won the election, Harken’s board gave W. an option to buy twenty-five thousand shares of stock. W. exercised the option immediately with the help of a low-interest loan from the company. This was the same type of loan that W.’s own White House would later criticize in regard to Enron and other malfeasance-driven corporate collapses.
The following June, Harken extended W.’s consulting agreement, citing the “positive image” the younger Bush helped create for the company. Who perceived that “positive image” was not clear. It certainly was not the investing public. That year, the company’s problems grew grave. Its petroleum commodities trading subsidiary suffered seventeen million dollars in losses.
In January 1990, Harken, which had never drilled overseas or in offshore waters, came out of nowhere and beat the oil giant Amoco for the rights to drill in the offshore waters of the Persian Gulf island nation Bahrain.57
Asked how Harken got the deal, Quasha, who back then apparently took press calls, replied, “It was not some sort of fix.” But he did not offer a persuasive explanation of what exactly it was instead. Eventually, Harken claimed that Bahrain picked the company because of its inexperience, arguing inventively that the emirate wanted a small outfit that could give the project all of its attention.58
The actual drilling work was assigned to major political backers of the Bushes. Harken Energy, of course, lacked not only the experience but also the capital to finance the Bahrain exploration. So it chose, from dozens of suitors, a Fort Worth company owned by the politically wired billionaire Bass family, major GOP donors and friends of the Bushes—who will soon show up in connection with other George W. Bush financial matters, including the Texas Rangers baseball team and a film financing company called Silver Screen.
Lurking in the background of Harken’s activities was the shadow of the Saudi royal family and of BCCI, the intelligence-connected global banking laundry. Indeed, three key figures associated with the drilling deal—the Houston oil consultant who put Bahrain together with Harken, the U.S. ambassador to Bahrain, and Bahrain’s prime minister—all had connections to BCCI.59
Timing Is Everything
Harken may have been an unlikely candidate to look for oil off Bahrain— none was found anyway, but W. did nicely regardless. The announcement of the Bahrain deal sent Harken stock soaring. In April, Bush signed a “lockup” letter requested by underwriters of a planned public stock sale, pledging not to sell his shares for six months after a proposed public offering. Nevertheless, two months later, he cashed out his Harken shares for nearly $850,000.
This transaction, which enabled him to cover a loan he earlier used to join a group in purchasing the Texas Rangers baseball team, was another example of Harvard appearing to take steps to benefit the president’s son.60 The broker who handled the deal has steadfastly refused to identify the institution that bought Bush’s stock. But a former Harvard Management Company accountant, Steve Rose, told me that he found an SEC filing on which the broker had written on a trade ticket “Michael Eisenson,” the name of Harvard Management Company’s president—and also a Harken board member.
Further, Rose found an inexplicable gap of 212,750 shares in Harvard’s total Harken holdings, or almost exactly the 212,140 shares sold by Bush. “That is evidence that Harvard bought Bush’s stock,” he said.61 So there was Harvard, having already come into Harken at a crucial moment to save the company in 1986, secretly coming to the rescue of George W. Bush personally, and helping him make a bundle. If Harvard did that, it would seem to be a rather bold use of university funds for some kind of private game well outside the purview of Harvard’s trustees and money managers—and certainly an egregious conflict of interest in the truest sense of the term.
A week after Bush sold his stock (and the day a largely favorable Forbes magazine profile of the company appeared), Harken announced a second-quarter loss of $23.2 million. The stock plunged 20 percent. In 2002, it came out that Bush and other insiders had received internal warnings of impending financial collapse just sixteen days before Bush sold his own shares.62 The company’s problems, according to an internal memo, were mostly caused by losses from impenetrable Enron-type transactions that may or may not have signified true losses.63 They came also from Harken’s repurchase of the shares held by George Soros, who himself came out with a handsome profit.
Six weeks after Bush sold his shares, the plans to begin exploratory drilling off Bahrain got a jolt. On August 2, Iraq invaded Kuwait over disputed oil lands. Saddam Hussein had received what he interpreted—or at least said he interpreted—as assurances from the U.S. ambassador that the United States would not object. Eight days later, Harken board member Talat Othman, who had been part of a three-man delegation along with Quasha sent from Harken for the Bahrain signing ceremony, joined a small group of Arab Americans in a private meeting with President George H. W. Bush and his top aides.
Another person attending the meeting was A. Robert Abboud, head of First City Bancorp of Texas, one of Harken’s principal banks. Days after that White House meeting with Poppy Bush, the other Harken creditor, Bank of Boston, demanded Harken’s immediate repayment of its loan because of a technical default—and Abboud stepped into the breach by agreeing to assume the Boston bank’s loan. If Abboud had not shown up when he did, Harken might have collapsed, and certainly its stock would have plummeted further. A Poppy Bush supporter with three degrees from Harvard, Abboud claimed he was moved to play white knight based on Harvard’s involvement, not Bush’s. Certainly, the continued Harken rescue operations, even as W.’s own ties to the firm were being severed, suggest the overall importance of the largely unprofitable venture to some larger purpose.
As for George W. Bush, he was never seriously held to account for any of these dealings. Along the way, W. not only accepted remuneration from dubious characters for work he scarcely performed, but he also committed repeated acts of gross negligence. He had seemingly ignored two warnings from Harken’s attorneys: about insider trading and about filing forms relating to insider trades in a timely fashion. Eight months would pass before W. filed the required forms. Bush claimed at the time that the SEC had lost his original filing; White House spokesman Ari Fleischer said the delayed filing had been caused by Harken’s lawyers; and at a press conference, Bush himself said he hadn’t “figured it out completely.”64
An inquiry by the SEC under the Poppy Bush administration raised questions about the circumstances of the trade. But somehow no investigators ever spoke with W.; they concluded that he and other company officials were probably unaware of the extent of the losses. Thus, the president’s son faced no consequences for his actions, and the peculiar activities of Harken and its affiliates drew no serious governmental scrutiny. By October 1993, with Bill Clinton in the White House, an SEC memo declared the investigation terminated with regard to Bush’s conduct. It noted, however, that this did not mean that he had been exonerated or that future action was ruled out. Needless to say, there has been no further action.
A month after that SEC memo, Bush resigned as a Harken board member and consultant. He was now a baseball team owner and running for governor of Texas. Asked in 1994 about the Bahrain deal, candidate George W. Bu
sh dismissed speculation about it as “all a giant conspiracy theory.”65
But Alan Quasha and Harken are still around. And Quasha is still interested in relationships with presidents and would-be presidents of both parties. In the period leading up to the 2008 elections, Quasha and his business partner Hassan Nemazee hired Terry McAuliffe, the former chairman of the Democratic Party, to work for them. From there, McAuliffe went on to be Hillary Clinton’s campaign chairman in 2008, with Nemazee serving as a major campaign adviser.66
Like Quasha, UBS retains its own strong interest in people on the path to the White House irrespective of party affiliation: UBS America raised more than one million dollars for Barack Obama’s presidential bid. After a sit-down chat with Obama, the firm’s CEO pronounced himself delighted with the candidate, whom he called “unbelievably smart and refreshing and thoughtful.”67
CHAPTER 17
Playing Hardball
W. WAS NOT QUITE THE BASEBALL player his father and grandfather had been—but he was the master of a certain kind of pitch.1 In the days leading up to the 1988 election, W. was on the phone constantly making sales calls, though not for his father’s candidacy. As Bush family adviser Doug Wead recalled: “It was interesting to sit and listen to him pick up the phone again and again and say: ‘Well, we’re gonna buy a baseball team. Want to buy a baseball team?’ ”
