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

by Russ Baker

  Rove at First Sight

  When Rove first met George W. Bush, in 1973 at RNC headquarters in Washington, the circumstances couldn’t have been more humdrum. As the story goes, W. was visiting from Harvard Business School, and Poppy assigned Rove the mundane task of delivering his car keys to the eldest son. But Rove, his eye ever on the main chance, was impressed: One look at W., handsome and brimming with charisma, in his cowboy boots and flight jacket, struck a chord in the pudgy, bespectacled Rove. “Bush is the kind of candidate and officeholder political hacks like me wait a lifetime to be associated with,”13 Rove would muse years later.

  They stayed in touch over the years, as W. served as an adviser to and sometimes surrogate speaker for his father. In 1978, as W. sought the congressional seat from Midland, Rove was already providing guidance. By the late eighties, he was actively touting W.’s political prospects. And by 1994, he was orchestrating the manufacture of a legend.

  So dedicated was Rove to George W. Bush that not only would he labor assiduously to muddy W.’s opponents, from Ann Richards to Al Gore to John Kerry; often he took it upon himself to clean George W. Bush up—sometimes literally. On one occasion, shortly after W. filed to run for governor, when Rove brought his client around for a meeting with Texas Republican Party officials, it soon became apparent to everyone present—apparently excepting W.—that the aspiring candidate had stepped in some dog poop. Eventually, Rove got Bush to the men’s room for some corrective action, which was when political director Royal Masset walked in.

  “Karl’s there on his hands and knees wiping off the dogshit,” Masset recalled with a chuckle.

  The Rainbo Coalition

  In one sense, George W. Bush has led a charmed political life. With a little help from his friends, he has consistently managed to avoid critical scrutiny of dubious public and private behavior. One incident that might have derailed his political rise came while Karl Rove was working as an independent political consultant and W. was using the Rangers to build his political legitimacy.

  In 1991, Bush was invited to buy a house in an exclusive fishing resort— a twelve-hundred-acre lakeside reserve near Athens, about ninety miles from Dallas, called Rainbo Club Inc. Among the members was Harvey “Bum” Bright, a Dallas oil, real estate, banking, and trucking magnate, who owned more than 120 companies, including, for a number of years, the Dallas Cowboys.

  Bright was a member of a group of powerful right-wing businessmen and a friend to Poppy Bush, who had helped pay for a vitriolic, black-bordered anti-Kennedy ad that ran in the Dallas Morning News on the day JFK was assassinated.

  Through an artful arrangement, the Rainbo Club members managed to have their private retreat declared a recreation sanctuary, thereby reducing their property taxes, while keeping the land effectively closed to the public. This neat little dodge, while hardly on the scale of the Arlington stadium deal, epitomizes the double standard that the rich and powerful apply to maintain, and extend, their privileges.

  Press exposure of this arrangement could have been embarrassing to George W. Bush when he ran for president in 2000. But by that time, W. had sold his stake in the Rainbo Club, and the press showed little inclination to pursue this “old” news.

  The Rainbo connection proved useful to W. in another context. In 1994, ten days after gubernatorial candidate Bush laid out a nine-point plan “to prevent frivolous and junk lawsuits,” a former caretaker at the club sued W. and his fellow members over his firing, which he said was on account of “spite and ill will.” W. was concerned enough about adverse publicity to hire Dallas attorney Harriet Miers to represent him. Nothing came of the suit, but Miers soon joined the Bush team to fix other messes, and eventually became his White House counsel. According to a White House speechwriter, Miers once called Bush the most brilliant man she had ever met.14 W. rewarded her loyalty in 2005 by nominating her for a seat on the Supreme Court. She had to withdraw from consideration in the face of a firestorm of criticism from both sides of the aisle, mainly regarding her lack of qualifications.

  When W. assembled his 1994 gubernatorial campaign committee, his chairman was Jim Francis, who had spent most of his adult life as chief political operative for Bum Bright. In that capacity, Francis had played a kind of kingmaker role for a number of Texas politicians: Governor Bill Clements (on whose behalf he hired Karl Rove in 1979), and Senators Kay Bailey Hutchison and Phil Gramm. In the 2000 presidential race, Francis would run W.’s big-money fund-raising effort called the “Pioneers.”

  For his campaign manager, W. turned to Brian Berry, the man who had just managed Hutchison’s successful 1993 special-election campaign. Though he would run W.’s 1994 primary campaign until March of that year, Berry was never admitted to the true inner circle. “There was a compartmentalization,” he told me. “You literally had a senior level team—Francis, Karl, etc.—and I was left to be the mechanic.” As for W.’s liabilities, Berry said, “That kind of stuff was rarely discussed, if ever.”15 Francis, a, bullish guy who had been Hutchison’s campaign chairman and didn’t seem to trust Berry, soon replaced him with Joe Allbaugh.

  Allbaugh’s name to this day is largely unknown, but he is an essential character in the George W. saga. They first met in 1984, when Allbaugh was serving as deputy regional coordinator for the Ronald Reagan–Poppy Bush reelection campaign, responsible for eleven western states. Allbaugh became in steady succession Bush’s gubernatorial campaign manager, gubernatorial chief of staff, presidential campaign manager, on-the-ground leader of the Bush team during the Florida recount battle of 2000, and finally, the head of the Federal Emergency Management Agency (FEMA)—which would become infamous following Hurricane Katrina under Michael Brown, a friend whom Allbaugh brought to Washington and installed as his successor.

  When Allbaugh entered W.’s inner circle, he was little more than an Oklahoma apparatchik with a spotty record. He’d started in college as a driver for Senator Henry Bellmon (Republican of Oklahoma and longtime friend of George H. W. Bush), then climbed his way up the political ladder. He worked in government, politics, and business while pursuing deals of questionable ethical probity. In 1987, as a top aide to then-governor Bell-mon, he worked closely with state highway officials. But he also took a thirty-thousand-dollar bank loan guaranteed by a large road contractor who was engaged in a steady stream of disputes with the state over shoddy work practices.

  Allbaugh’s ability to hop back and forth between the letting and the getting of contracts was clear to all—including Allbaugh himself. When a reporter from the Daily Oklahoman observed to Allbaugh that he had gone from serving as Bellmon’s Oklahoma Turnpike Authority liaison to working for a bond underwriter that was hoping to do business with the authority, Allbaugh replied, “Golly, what a coincidence.”

  On the side, Allbaugh started an oil-and-gas partnership called Great American Resources. The secretary and treasurer of that firm was Allbaugh’s then-wife Gypsy Hogan, a former journalist who grew increasingly upset about the fact that she had no idea what the business was about. She also wasn’t comfortable with large amounts of unexplained cash flowing in— and with Allbaugh’s request that she sign a series of blank checks. When she began to demand answers, she said, Allbaugh got angry and warned her to mind her own business. Hogan, whom I interviewed at the University of Central Oklahoma, where she is publications editor, also remembered that, shortly before she asked him for a divorce, Allbaugh claimed to be in the CIA.16 Maybe he was. But there is no doubt that Allbaugh was a loyal soldier in the Bush machine, whose devotion was amply rewarded.

  In 1988, Allbaugh left government and took a job with the Little Rock investment banker Jackson Stephens.17 Stephens had repeatedly shown up in intelligence-tinged, Bush-related operations, including Harken Energy and BCCI; at the time he employed Allbaugh, the banker was one of Poppy Bush’s key fund-raisers. That Poppy Bush was keeping an eye out for Joe Allbaugh was suggested again in 1992 when the president appointed him to an obscure regional entity called the Arka
nsas-Oklahoma Arkansas River Compact Commission. That entity’s jurisdiction included the movements of oil barges.

  One manager from the Stephens bank told me that Allbaugh produced little for the firm. But by the time he arrived in Texas in 1994 to run W.’s gubernatorial campaign, he had settled into his ultimate persona: the enforcer. In newspaper articles, Allbaugh explained his role in the Bush gubernatorial campaign was making sure the trains ran on time, and mediating the strong personalities of Karl Rove and communications director Karen Hughes. If Rove was Bush’s brain and Hughes was Bush’s mouth, Big Joe Allbaugh, at six foot four and 275 pounds, was Bush’s muscle.

  “It was clear he wanted to use his size to project a strong or menacing sense of himself,” said Wayne Slater, senior political writer for the Dallas Morning News.18 Indeed, Allbaugh’s propensity to turn bright red when enraged led Bush to give Allbaugh the nickname “Pinky.” But if anyone other than W. dared to call him by that name, Allbaugh would whirl around and growl, “I will pinch your head off,” and make pinching motions with his fingers.

  W. prized loyalty above all, and Allbaugh’s was unquestioned, even fanatical. “There isn’t anything more important than protecting him and the first lady,” Allbaugh once told the Washington Post from the governor’s office. “I’m the heavy, in the literal sense of the word.”

  BUSH’S RUN FOR Texas governor in 1994 was the first big test for his crew of handlers and enablers. The methods they used foreshadowed those employed in W.’s two presidential campaigns. His opponent, Democratic governor Ann Richards, was characterized as an effete Austin liberal. Beyond this, there were rumors of uncertain provenance that Richards was a lesbian. No one could doubt that the Bushes had a grievance with her. At the 1988 Democratic convention, she ridiculed the malapropism-plagued Poppy for having been “born with a silver foot in his mouth.”

  For W. himself, the main task was to shed the vestiges of the Eastern Establishment that still clung to him. To achieve this, he talked fondly of his days at the public San Jacinto Junior High, neglecting to mention that he had transferred to the exclusive private Kinkaid School, and from there to that most un-Texan institution, Andover.

  The issues, such as they were, involved popular fare such as improving education and getting tough on crime. Perhaps most important, W. benefited from good timing—as one of many Republicans swept into office nationally on the wave of the Newt Gingrich revolution. Bush beat Richards with 53 percent of the vote to her 46.

  Tough on (Some) Crime

  From the moment Bush was inaugurated, everything he did seemed calculated to boost him to an even higher stage. His upward trajectory benefited from the unique structure of Texas government. By design, Texas’s governor has limited say in state affairs; curiously, the lieutenant governor wields more influence. This dispersal of power among elected officials, called a plural executive, enabled W. to selectively associate himself with issues that would boost his appeal, while distancing himself from unpleasant ones. Such a system was tailor-made for a neophyte politician with national ambitions.

  The issues W. and Rove chose were rather predictable: W. would be for children and against criminals. Bush received requests from the highest levels that he commute the death sentence of the killer Karla Faye Tucker, who had expressed remorse and, like W. himself, found religion. But for Tucker, there would be no second chance, and she became the first woman executed in Texas since the Civil War. Journalist Tucker Carlson later claimed that during an interview for a print article, the governor had been particularly callous toward the late convict, even mocking her stated fear of death.

  Bush also withheld compassion from first-time drug offenders. His approach was in stark contrast to that of his predecessor, Ann Richards, under whom first-timers received automatic probation with counseling. In W.’s campaign against her, he disparaged this approach as “Penal Code Lite.” Once in office, he signed a law ensuring that first-time offenders and those caught with under a gram would face six months to two years of jail time.

  Many of those apprehended under this system have been people of color to whom the state provided only the most minimal legal representation. In Texas, being stopped by police on suspicion of using drugs often leads inexorably to prosecution and incarceration. Bush parroted the conventional tough-guy line: “Incarceration is rehabilitation.”

  The release rate for parole for first-time, nonviolent offenders dropped from nearly 80 percent of eligible inmates under Richards’s predecessor, Bill Clements (high largely because of prison overcrowding) to about 20 percent under Bush. “Below 30 percent is a crime,” Bill Habern, cochair of the parole and prison committee of the Texas Criminal Defense Lawyers’ Association, told Salon. “This ‘compassionate conservative’ line is horse shit. It may be conservative but it sure ain’t compassionate.”19 It also didn’t make a lot of sense, considering the nature of their crimes and their pasts, to treat such offenders so harshly—at least not from a practical or fiscal standpoint. But it did make sense politically.

  This judgmental tendency did not extend to his own circle. Putting aside W.’s own apparently murky record with drugs, he had friends who partied with impunity. James Bath’s extensive use of cocaine emerged in a divorce proceeding. So did that of W.’s friend Jerry Chiles, a major party-giver at Chateaux Dijon, whose father, Eddie Chiles, would sell his Texas Rangers baseball team to W.’s investor group.

  In a well-publicized divorce case, Chiles’s wife accused him of abusive behavior and claimed that her addled spouse had snorted cocaine with a prostitute on the marital bed. A Houston jury awarded her five hundred thousand dollars for emotional distress, in a verdict that National Law Journal said, “blazes new legal compensatory ground for divorcing couples.”20 None of this estranged W. from Chiles, who remained a major donor and supporter throughout Bush’s political career.

  While crime was a hot issue at the polls, W. also needed something that would bring in money from the deepest pockets. Tort reform filled that bill. Tort law serves two purposes: to compensate victims for the negligence of others and to deter such negligence—including, for example, the manufacture of shoddy and unsafe products. Reforming the law sounded reasonable enough—stop greedy lawyers from shaking down the system and driving up insurance rates. But many claims turn out to be valid. Indisputably, manufacturers sometimes do make shoddy products and employers do not always consider the well-being of their workforce or the public. In fact, tough financial penalties are broadly considered the single most effective form of corporate rehabilitation. With the political system heavily influenced by corporations, the courts are often the only resort for ordinary people. Which is why, of course, corporations seek to restrict the courts’ power, and thus end the one form of accountability to which they are still subject.

  W. chose to champion the cause of a corporate front group called Texans for Lawsuit Reform (TLR), and as governor greatly curtailed the rights of the injured. For would-be plaintiffs, the legal system became a bureaucratic morass. Thanks to “tort reform,” reported Texas Monthly, “if you go to an emergency room [in Texas] with a heart attack and the ER doctor misreads your EKG, you must prove, in order to prevail in a lawsuit, that he was both ‘wantonly and willfully negligent.’ ”21

  By the time he left for Washington, W. had played a key role in eliminating deterrence. Thus, his legacy was to be spectacularly tough on individuals, even single mothers with a first-time narcotics-possession offense, while going easy on enormously wealthy and powerful interests whose practices—like dumping toxic waste—were an integral part of how they did business. Karl Rove, meanwhile, built a big part of his political consulting practice around weakening consumer protections. In Alabama, he helped engineer a takeover of the state’s judicial system by Republican judges sympathetic to the corporate take on tort reform.22

  Business showed its appreciation. Houston-based home builder Bob Perry, a major bankroller of tort reform efforts in Texas, remained so loyal to W. that when Jo
hn Kerry ran against Bush in 2004, Perry donated millions of dollars to the so-called Swift Boat Veterans for Truth in their fact-challenged attack on Kerry’s military record.

  Sophisticated Hicks

  One of the investments Bush had not shed until well into his gubernatorial years was his stake in the Rangers. It was a wise move, financially speaking. Bush’s personal stock rose with the value of the team, and when he and his group sold out in 1998 for $250 million, Bush took out $15 million—not bad for an initial $600,000 investment, which was borrowed money to begin with.

  The buyer was a financier named Tom Hicks, a man who embodied the values that would come to the fore when W. captured the White House. Hicks made his fortune using other people’s money, through leverage, political connections, and hardball. In 1977, he left his job as president of First Dallas Capital Corporation, an affiliate of First International Bancshares—the company where Poppy Bush first worked after leaving the CIA directorship—to begin a career in leveraged buyouts.

  Hicks would eventually become a billionaire. Besides the Texas Rangers, he would come to control the National Hockey League’s Dallas Stars as well as the Mesquite Championship Rodeo. He also bought 50 percent of the Liverpool Football Club, an English soccer team. Hicks’s most controversial play came in the early nineties, when he became enraged after the University of Texas refused to invest part of its endowment in a dental company he owned. Not one to take defeat lightly, Hicks launched a concerted effort to secure control of university investments.