Family of Secrets: The Bush Dynasty, America's Invisible Government, and the Hidden History of the Last Fifty Years

by Russ Baker

  Maybe George W. Bush felt that his father’s election was in the bag. Or maybe he was in a hurry because he thought it was less unseemly for the son of a vice president seeking the presidency to be soliciting funds for personal reasons than for the son of a sitting president to be doing so. Whatever his reason, at that particular moment, baseball was on his mind.

  W. has genuine affection for “America’s pastime,” but his decision to acquire the Texas Rangers baseball team was not just about fun. He was creating a legend that would set him on the path to the presidency. How could a man with so few accomplishments be made into an impressive public figure? How could a fellow who had few prospects of honestly earning a fortune be set up in the sort of lifestyle he and his friends expected?

  Such questions were certainly on the mind of his informal political adviser Karl Rove. Although the Bush forces would claim that W. had not seriously thought about running for higher office until well into the 1990s, as far back as Poppy’s inauguration Rove had been letting reporters know that there was another Bush waiting in the wings.2 In fact, W.’s name was floated as a possibility for the 1990 Texas governor’s race, but W.’s mother publicly opposed his bid because of concerns that a loss would be seen as a referendum on Bush Sr.’s presidency.3

  Even back then, Rove was envisioning a path for him and his friend straight to the White House. The Texas governorship would give W. a base, and a bucketload of electoral votes to start with. So in the final days before his father’s victory over Democrat Michael Dukakis, George W. Bush was looking toward his own future—first, a brief baseball “baptism” as a public figure, then political office. “Mostly he was talking about his plan with the Rangers and governor, back then,” recalled Wead. “It was Rangers and governor, Rangers, governor, Rangerrrrs . . .”4

  ANYONE SEEKING A path to the big leagues could do worse than owning a ball team. George W. Bush and his cadre well understood that a winning sports play, like a steady spot in a forward church pew or an art museum with one’s name on it, accorded instant points—and went a long way toward ameliorating deficiencies (particularly moral ones) on other fronts.

  The Bushes and their friends had ownership stakes in a lot of teams—the Reds, the Mets, the Tigers, and other favorites. It all started with W.’s great-grandfather George Herbert “Bert” Walker, who was a force behind professional golf’s Walker Cup and, in fact, the introduction of golf itself into America. He was also a prominent booster of the New York Yacht Club, professional tennis, and premier horse racing. This family legacy culminated in George W. Bush’s successful effort at capturing a new constituency known as the NASCAR voter. Of course, being associated with sports offers obvious benefits in terms of pleasure and ego, but there is little question that the Bush group was adept at leveraging yet one more beloved American institution.

  As would be demonstrated by the Supreme Court that would decide the 2000 election in W.’s favor, getting a “fair break” for oneself begins with knowing the referee. Peter Ueberroth, the baseball commissioner at the time W.’s group acquired the Arlington, Texas–based Rangers, was known to be looking for opportunities in politics as he left baseball in 1989, the year Poppy took office. One source close to the negotiations told the New York Times that after W. had failed to persuade the wealthy Texan Richard Rainwater to join the investment group, Ueberroth himself had approached Rainwater and suggested that he team up with Bush, at least partly “out of respect for his father.”5 As commissioner, Ueberroth was succeeded by Bart Giamatti, an Andover alum who became president of Yale; he was succeeded by Fay Vincent, another old friend of the Bushes who had roughnecked in the oil business in Midland, and even lived at the Bush house briefly when W. was growing up.

  W. was relentlessly optimistic about his plans to get into baseball. “He’d get off the phone after somebody said no, and there was not even the slightest disappointment or discouragement,” recalled Doug Wead. “You couldn’t even see a whiff of self-doubt. I thought, man, he’d be a great salesman, he doesn’t even have any [sense of ] rejection.”

  Not that there was too much rejection. Smart men—and it was virtually only men who invested—knew that this was a good moment to be in business with George W. Bush, the president’s son.

  Family and friends understood the plan: turn a nobody with a famous name into a “somebody,” and, while you’re at it, use the famous name, insider connections, and the implied glamour of the project to make a bundle.

  According to Comer Cottrell, a black Republican hair products entrepreneur who put up half a million dollars to become a limited partner, “George brought a lot to the table just by being the president’s son and running for governor . . . Everybody wanted to know him.”6

  Bush paid six hundred thousand dollars in borrowed money for a 2 percent stake in the Rangers. However, he secured the generous proviso that his share would jump to 11 percent once the partners had gotten their investment out. Thus, the entire deal seemed designed to benefit Bush.

  Inside Baseball

  For about eighty-six million dollars, Bush and seventy investors bought the team.7 Among the investors were William O. DeWitt Jr. and Mercer Reynolds III, the fellows who had bailed out W.’s Arbusto Energy. This new deal was certainly a natural for DeWitt, who grew up around baseball and whose father served as general manager of the Detroit Tigers and later owned the Cincinnati Reds. Other Rangers investors included the much-investigated Nixon administration “Jew-counter” Fred Malek, who managed Poppy Bush’s 1992 presidential campaign. Malek, who by 2008 was making a bid for the Chicago Cubs, has long been a kind of Bush family handyman. It was he who arranged a job for W. on the board of Cater Air, a subsidiary of the secretive global holding company the Carlyle Group.8

  Typically, sports team ownership is a badge of pride. Yet, as with so many other ventures involving George W. Bush, many of the people who invested in the Rangers with him preferred to remain below the radar. “The city went berserk when I got a list of owners,” said attorney Glenn Sodd, who represented plaintiffs suing the city of Arlington and the team owners over private land seizures to make way for the new stadium that would exponentially increase the value of the franchise. “They got the court order to prevent names from coming out. The team was desperate to keep it secret . . . The list didn’t tell you a whole lot, because there were some partnerships [hiding] who the actual people were. For all you and I know, there were Saudis.”9

  There certainly were Saudi connections, including the attorney representing Bush as he pursued the Rangers. James R. Doty was a partner with Baker Botts, which represented major Saudi interests, as well as many American companies doing business with the kingdom. Doty had also represented W.’s old friend and Saudi financial agent Jim Bath when Bath sued his business partner Bill White, a saga described in chapter 14. Shortly after handling Bush’s Rangers deal, Doty was named general counsel to the SEC under Poppy Bush’s administration, and though he recused himself, he was there when the agency investigated the possibility of insider trading on W.’s Harken stock sale—and closed the file with no action.10

  Roland Places His Betts

  If Harvard deserves much of the credit for the boost Harken Energy provided George W. Bush on his path to the White House, then Yale deserves some credit for the boost that the Texas Rangers provided. With Yale, however, it was not the school’s money so much as the clubby milieu the school created for private arrangements.

  The largest investor in the Rangers deal was Bush’s Yale friend Roland Betts, who put in a hefty $3.6 million. “I’m George’s biggest fan,” Betts once told the New York Times. Betts, who served as rush chairman of Delta Kappa Epsilon at Yale while Bush was the fraternity’s president, would subsequently play a unique role over the years in persuading the media that W. was really quite a moderate fellow. As the Times wrote in 2005:

  When people ask Roland Betts how a New York Democrat can be such a good friend of President Bush, he whips out a ready answer. “Which would you
prefer: my being close to him, or some right-wing zealot being close to him?” Mr. Betts said in a recent interview. “Who do you want to have his ear? So it’s not a bad thing. Maybe I give him a little balance. . . . I don’t think he’s as conservative a person as the media generally characterizes him as,” Mr. Betts said.11

  The media loved Betts: not only was he a Democrat friend of Bush’s, but he had also worked for a while in an inner-city school, and he had a black wife. Moreover, Betts was founder and chairman of Chelsea Piers, a popular sports complex on Manhattan’s West Side. After Yale, and after a spell as a teacher and assistant principal during the Vietnam War, Betts moved on to Columbia Law School and then became an entertainment lawyer with the white-shoe Manhattan firm of Paul, Weiss, Rifkind, Wharton & Garrison.

  Even better, Betts started his own limited partnership, which cut a deal with the company that is practically synonymous with Hollywood entertainment culture—the Walt Disney Company—and put George W. Bush on the board. Betts’s Silver Screen Management financed nearly every Disney movie made between 1985 and 1991, including Pretty Woman, Beauty and the Beast, and The Little Mermaid. The company also backed The Hitcher, with Rutger Hauer as a psycho-killer hitchhiker, which was derided for its “gizzard-slitting depravity.”

  Asked why he brought W. into the film-financing business (Bush remained on the board from 1983 to 1992), Betts told the Times it was to benefit from his friend’s common sense. If anyone had common sense, it was Betts himself. Silver Screen got its start-up funding courtesy of the investment house E. F. Hutton. In that period, E. F. Hutton was being run by W.’s uncle Scott Pierce. Before coming to E. F. Hutton, Pierce had worked for the “other” Bush-Walker clan investment firm, G. H. Walker and Company. And the man who preceded Pierce at Hutton and brought him into the company, George Ball, was both a funder of W.’s Arbusto oil venture, and, as noted in chapter 15, presided over Hutton in a period when it engaged in a major check-kiting scheme; the firm later pleaded guilty to two thousand counts of mail and wire fraud.

  The Betts family, meanwhile, turns out to mirror the Bushes in many respects: Yale legacy, employment in the Walker brokerage, roots in the spy world.12

  The most visible Rangers investors, including Betts, were thought of not just in terms of the financial resources they could provide, but also of demographics. “The first time I met George, he came up to my office and wanted to meet me and told me that he was wanting to have a true American diverse team partnership,” recalled Cottrell, one of Bush’s co-investors. “He says, I would be his black partner, Afro-American. Then he had some Jewish people, and he had some European Americans from Yale. Half the guys were from Yale.”13

  Besides Betts, another strong Yale connection was the Bass family of Fort Worth, famously right-wing heirs to the vast Richardson-Bass oil fortune. The man who is generally characterized as putting the baseball financing deal together, the brilliant Texas investment manager Richard Rainwater, had been the investment manager for the Basses. Rainwater was a Wall Street legend for transforming a Bass inheritance of about fifty million dollars in 1970 to more than four billion dollars by the time he went out on his own in 1986. At the time Rainwater partnered with W., the Basses were involved with W. through Harken’s Bahrain drilling deal.

  Bush, Betts, and Ed Bass had all been at Yale at the same time, and Bass Brothers Enterprises—Lee, Ed, Sid, and Robert Bass—would be the fifth-largest donor to W.’s Texas gubernatorial and 2000 presidential campaigns, and ninth among his 2004 presidential campaign donors.

  Betts’s good fortune with regard to Silver Screen—and W.’s as well—may have come courtesy of the Bass family, who were Disney’s largest stockholder, having saved Disney from a hostile takeover and selected Michael D. Eisner to run the studio.14

  The Basses shared the ideological and cultural interests of the Bush clan and their secret society confreres. In 1991, Ed Bass’s brother Lee donated twenty million dollars to Yale, his alma mater, and specified that the money—one of the largest donations ever made to the school—was to be used for revitalizing the Western civilization program. In fact, Bass hoped to limit the growing emphasis on multiculturalism; he was worried that the study of Toni Morrison and Malcolm X was pushing out the “classics.” A controversy ensued, and Yale returned Lee Bass’s money. To some, the problem with the Basses’ gambit was not their ideology, but rather their apparent belief that money, rather than vigorous open debate, should be the deciding factor in a matter of broad public concern. As if to confirm this, when Lee Bass’s effort backfired, Lee’s father, Perry (Yale ’37), offered five hundred million dollars to the school to formally declare that his son had done nothing wrong; Yale president Richard C. Levin refused that deal.

  Nevertheless, by the time George W. Bush had become president, Ed Bass was one of Yale’s nineteen trustees, along with Roland Betts.15 Capping it off, in 2005, the Yale Athletic Department presented Betts with a George H. W. Bush Lifetime of Leadership Award.

  Probably the most interesting thing of all is that the top men at America’s top two universities would have a hand in enriching George W. Bush. W.’s apparent secret friend on the Harken transaction, Robert G. Stone, was the most powerful board member at Harvard, while Betts, the largest single investor in W.’s next enterprise, the Rangers, would become Stone’s equivalent as senior fellow of the Yale Corporation.

  W.’s Domain

  Financially, the Rangers deal was basically about real estate. By getting the city to build them a new stadium, Bush and his partners increased the team’s book value from $83 million to $138 million. This required convincing the city’s taxpayers that they would lose the team if they did not pay up for the stadium. To raise the $191 million it would cost to build the Ballpark at Arlington, residents were asked to add a half cent to what was already one of the nation’s highest sales tax rates.

  According to attorney Glenn Sodd, W.’s group helped egg along Arlington by leaking a story that Dallas was competing for the team and had offered to build them a stadium. “We found out that this was untrue,” said Sodd. In any case, Arlington mayor Richard Greene used the supposed threat to rush a deal through.

  Bush put aside his much-touted antitax, free-market principles just long enough to get the city of Arlington to increase taxes on ordinary people there in order to build a stadium for—and then give both the stadium and the land underneath it to—Bush and his partners.

  This subsidized land and stadium windfall was engineered at a time when Poppy was president and the savings and loan industry was in a free fall, with real estate being dumped for a pittance. To get the land, the new owners went to governmental agency liquidators and banks handling land liquidations and snapped up property. “Essentially, Bush’s daddy sold him property for pennies on the dollar,” said Sodd. What they couldn’t get on the market, they grabbed with government assistance.

  Bush and his partners wanted over two hundred acres of land to develop an entertainment complex around the seventeen-acre stadium. So they used the state’s power of eminent domain to force out landowners without the inconvenience of free market negotiation. As New York Times reporter David Cay Johnston discovered, the Texas Republican Party had already expressed official disapproval of such activity, having stipulated: “Public money (including taxes or bond guarantees) or public powers (such as eminent domain) should not be used to fund or implement so-called private enterprise projects.”16

  W. would later campaign for governor as a defender of property rights. Speaking to the Texas Association of Business, he said: “I understand full well the value of private property and its importance not only in our state but in capitalism in general. And I will do everything I can to defend the power of private property and private property rights when I am the governor of this state.”17

  So the Rangers deal was essentially predicated on public funding through a tax increase and the seizure of private land through eminent domain. One attorney called it “welfare for billionaire
s.”18 To make money, the owners needed a new stadium, and they needed someone else to pay for it.

  To engineer the crucial land deal, the Bush team found an inside man and an inside-inside man. The inside man was Tom Schieffer, brother of CBS News correspondent Bob Schieffer. A former Texas state representative once dubbed one of the “ten worst legislators” in Texas by Texas Monthly, Schieffer had already been involved with a competing group seeking to buy the team, but was persuaded to transfer his allegiance, as well as to bring in a $1.4 million investment.19 As president, W. would appoint Schieffer ambassador to Australia and then to Japan.

  Along with Bush’s lawyer in the Rangers deal, James Doty, the Baker Botts lawyer working for the Saudis, the person who recruited Tom Schief-fer also represented both the American oil industry and the Saudis. James C. Langdon Jr. was a Washington attorney who ran the energy practice for the prominent Dallas firm of Akin, Gump.20 Langdon would give $3,500 to Bush during his gubernatorial campaign and become a principal fundraiser in 2000; he and his wife would be overnight guests at Camp David, and Langdon would be named to President George W. Bush’s Foreign Intelligence Advisory Board. Again that board. It is not a certainty that Saudi money was involved, but as in past deals, the smoke suggested a fire of some kind.