POLITICS LOS ANGELES TIMES
Bush Family Values: War, Wealth, Oil
Four generations have created an unsavory web of links that could prove an election-year Achilles' heel for the president.
By Kevin Phillips
Kevin Phillips' new book, just published, is "American Dynasty: Aristocracy, Fortune and the Politics of Deceit in the House of Bush."

February 8, 2004

WASHINGTON — Despite February polls showing President Bush losing his early reelection lead, he's still the favorite. No modern president running unopposed in his party's primaries and caucuses has ever lost in November.

But there may be a key to undoing that precedent. The two Bush presidencies are so closely linked, especially over Iraq, that the 43rd can't be understood apart from the 41st. Beyond that, for a full portrait of what the Bushes are about, we must return to the family's emergence on the national scene in the early 20th century.

This four-generation evolution of the Bushes involves multiple links that could become Bush's election-year Achilles' heel — if a clever and tough 2004 Democratic opponent can punch and slice at them. Massachusetts Sen. John F. Kerry, the clear Democratic front-runner, could be best positioned to do so. In the late 1980s and early 1990s, he investigated the Iran-Contra and Bank of Credit and Commerce International scandals, both of which touched George H.W. Bush's Saudi, Iraqi and Middle Eastern arms-deal entanglements.

Washington lawyer Jack Blum, the ace investigator for Kerry's subcommittee back then, is said to be advising him now, which could be meaningful. Ironically, the Bush family's century of involvement in oil, armaments and global intrigue has never been at the center of the national debate since the Bushes starting running for president in 1980.

The reason? Insufficient public knowledge. The only Bush biography published before George H.W. Bush won election in 1988 was a puff job written by a former press secretary, and the biographies of George W. Bush in 2000 barely mentioned his forefathers. Millions of Republicans who have loyally voted for Bushes in three presidential elections simply have no idea. Here are circumstances and biases especially worth noting.

The Bushes and the military-industrial complex: George H. Walker and Samuel Prescott Bush were the dynasty's founding fathers during the years of and after World War I. Walker, a St. Louis financier, made his mark in corporate reorganizations and war contracts. By 1919, he was enlisted by railroad heir W. Averell Harriman to be president of Wall Street-based WA Harriman, which invested in oil, shipping, aviation and manganese, partly in Russia and Germany, during the 1920s. Sam Bush, the current president's other great-grandfather, ran an Ohio company, Buckeye Steel Castings, that produced armaments. In 1917, he went to Washington to head the small arms, ammunition and ordnance section of the federal War Industries Board. Both men were present at the emergence of what became the U.S. military-industrial complex.

Prescott Bush, the Connecticut senator and grandfather of the current president, had some German corporate ties at the outbreak of World War II, but the better yardstick of his connections was his directorships of companies involved in U.S. war production. Dresser Industries, for example, produced the incendiary bombs dropped on Tokyo and made gaseous diffusion pumps for the atomic bomb project. George H.W. Bush later worked for Dresser's oil-services businesses. Then, as CIA director, vice president and president, one of his priorities was the U.S. weapons trade and secret arms deals with Iran, Iraq, Saudi Arabia and the moujahedeen in Afghanistan.

In his 1961 farewell address, President Dwight D. Eisenhower warned about how "we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex." That complex's recent mega-leap to power came under George H.W. Bush and even more under George W. Bush — with the post-9/11 expansion of the military and creation of the Department of Homeland Security. But armaments and arms deals seem to have been in the Bushes' blood for nearly a century.

Oil: The Bushes' ties to John D. Rockefeller and Standard Oil go back 100 years, when Rockefeller made Buckeye Steel Castings wildly successful by convincing railroads that carried their oil to buy heavy equipment from Buckeye. George H. Walker helped refurbish the Soviet oil industry in the 1920s, and Prescott Bush acquired experience in the international oil business as a 22-year director of Dresser Industries. George H.W. Bush, in turn, worked for Dresser and ran his own offshore oil-drilling business, Zapata Offshore. George W. Bush mostly raised money from investors for oil businesses that failed. Currently, the family's oil focus is principally in the Middle East.

Enron is another family connection. The company's Kenneth L. Lay made his first connections with George H.W. Bush in the early 1980s when the latter was working on energy deregulation. When Bush became president in 1989, he gave Lay two prominent international roles: membership on the President's Export Council and the task of planning for a G-7 summit in Houston. Lay parlayed that exposure into new business overseas and clout with Washington agencies. Family favoritism soon followed. When Bush senior lost the 1992 election, Lay picked up with son George W., first in Texas and then as a top contributor to Bush's 2000 presidential campaign. Before Enron imploded in late 2001, it had more influence in a new administration than any other corporation in memory.

The intelligence community: Bushes and Walkers have been involved with the intelligence community since World War I. The importance of Sam Bush's wartime munitions-regulating role was obvious. During the 1920s, when George H. Walker was doing a lot of business in Russia and Germany, he became a director of the American International Corporation, formed during the war for purposes of overseas investment and intelligence-gathering. Prescott Bush's pre-1941 corporate and banking contacts with Germany, sensationalized on many Internet sites, appear to have been passed along to officials in government and intelligence circles.

George H.W. Bush may have had CIA connections before the agency's unsuccessful Bay of Pigs invasion of Cuba in 1961. A number of published sources suggest that Zapata Offshore was a CIA front long before he went on to become director of Central Intelligence in 1976. As for George W. Bush, his limited ties are said to have come through investments in, and buyouts of, several of his oil businesses by CIA- and BCCI-connected firms and individuals.

Top 1% economics: Over four generations, the Bush family has been involved with more than 20 securities firms, banks, brokerage houses and investment management firms, ranging from Wall Street giants like Brown Brothers Harriman and E.F. Hutton to small firms like J. Bush & Co. and Riggs Investment Management Corp. This relentless record of handling money for rich people has bred a vocational hauteur. In their eyes, the economic top 1% of Americans are the ones who count. Investors and their inheritors are favored — a good explanation of why George W. Bush has cut taxes on both dividends and estates, where most of the benefit goes to the top 1%. Over the course of George H.W. Bush's career, he was close to a number of the merger kings and leveraged-buyout specialists of the 1980s who came from Oklahoma and Texas: T. Boone Pickens, Henry Kravis and Hugh Liedtke. "Little guy" economics has almost no niche in the Bush economic worldview.

Debt and deficits: Whenever a Bush is president, private debt and government deficits seem to grow. Middle- and low-income Americans borrow to offset the income squeeze of recessions. The hallmark of Bush economics during both presidencies has been favoritism toward capital over workers. Federal budget deficits have soared because of a combination of upper-bracket tax favors, middle-income job shrinkage, big federal spending to hype election-year economic growth, huge defense outlays and overseas military spending for the wars in Iraq and elsewhere. Imperial hubris costs a lot of money.

Politically, over four generations the Bush past has been prologue. Despite George W. Bush's new good ol' boy image — cowboy boots and born-again ties to the religious right — his basic tendencies go in the same directions — oil, crony capitalism, top 1% economics and military-industrial-establishment loyalties — that the previous Bush and Walker generations have traveled. The old biases and loyalties seem ineradicable; so, too, for old grudges, like the two-generation fixation on Saddam Hussein.

The presidency is an old Bush ambition. As early as the 1940s, Barbara Bush talked to friends about becoming first lady. The current president's grandfather, Prescott Bush, told his wife before he retired in 1962 that he wished he'd been president. By 1963, George W. Bush, a student at Andover Academy, was talking about his own father's desire to be president.

In short, the word "dynasty" fits the Bushes all too well. They have had plenty of time to sort out their ambitions, loyalties and intentions. They know what they're in politics for — although this year may pose a new problem. The American people are also starting to find out.





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