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CounterPunch
December
5, 2002
Marvin Dips
into the Security Pie
Another Fortunate Bush Brother
by MARGIE BURNS
The full effects of the 2001 so-called "USA
Patriot Act" have not yet been felt, fortunately. But one
of its first effects has been to benefit the president's brother,
Marvin.
Marvin P. Bush, one of George W. Bush's
three younger brothers, is co-founder and partner in Winston
Partners, a private investment firm in Alexandria, Va. Winston
Partners in turn is part of a larger venture capital entity called
the Chatterjee Group, headed by venture capitalist Purnendu Chatterjee.
(Venture capital firms provide money to start-up businesses and
other companies, usually in return for equity and some managerial
say in the company.)
Through this and other business relationships,
this Bush sibling is positioned to do very well in high-tech
activities as a result of provisions of the Patriot Act.
Securities and Exchange Commission filings
show that the Chatterjee Group consists of Winston Partners,
L.P.; and a half-dozen other entities with addresses in the Cayman
Islands, the Netherlands Antilles, the Isle of Man and Delaware.
Bush's partner is Scott Andrews, with
whom he went to school. Winston Partners has two branches, hedge
funds and private equity funds, engaged in a variety of investments,
including global "outsourcing" and offshore information
technology.
H.R. 3162, called "The Uniting and
Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act" (or USA Patriot),
was designed to prevent money laundering and requires banks to
"know their customers."
Inevitably, many companies are aggressively
marketing services to make businesses "Patriot Act"-compliant:
that is, they sell computer systems to enable banks to argue
successfully to Uncle Sam that they're not laundering money for
terrorists. One of the most aggressive is Sybase Inc., which
developed a "Sybase PATRIOT compliance Solution" months
ago. Sybase, which said it wanted foreign banks as customers
(it already had a deal with the People's Bank of China), landed
Sumitomo Mitsui Bank in time for the October 2002 compliance
deadline.
This is where Winston Partners comes
in. The Chatterjee Group, including Winston Partners, owns 5.5
million shares in Sybase (Chatterjee businesses also have been
paid thousands more shares in Sybase). SEC filings show that
Winston Partners LP owns 1,036,075 shares in Sybase; Winston
Partners LDC holds 1,317,825 shares; and Winston Partners LLC
owns 1,221,837 shares. The shares owned by the subsidiaries are
collectively managed in funds for Winston Partners by Pernendu
Chatterjee. There is also a Chatterjee Charitable Foundation.
Business for Sybase is business for Bush,
and the Patriot Act boosted business.
Not that the Patriot Act is Sybase's
only federal conduit. The company is also a significant government
contractor (especially nowadays), with contracts from the Agriculture
Department, the Navy ($2.9 million in 2001), the Army ($1.8 million
in 2001), the Defense Department ($5.3 million in 2001), Commerce,
Treasury and the General Services Administration among others.
The federal procurement database lists Sybase's total awards
for 2001 as $14,754,000.
Sybase is only one of the companies with
federal contracts from which Marvin Bush's firm derives financial
benefit. Winston Partners' portfolio also includes Amsec Corp.,
which got Navy contracts worth $37,722,000 in 2001.
The potential for abuse here can hardly
be overstated. A branch of the military or other government agency
that risked funding cutbacks, for example, could throw up a buffer
by awarding a contract benefiting the First Family. Why spend
money on a lobbyist in the industry, when you might have one
in the White House?
Now let's step back and look at the big
picture. The president's brother is marketing to offshore customers
(shipping out American jobs, be it noted). He is closely linked
to entities marketing "outsourcing" and "global
alternative investments" yet more aggressively. Companies
associated with them are doing other high-end versions of the
same. And some companies in which they have a stake are involved
in the most sensitive technology outside nuclear weapons - being
marketed simultaneously to the U.S. government, to foreign banks
and to the states (Colorado, Texas, Oklahoma, New Jersey and
New York also purchase from Sybase). This is "security"?
Nor is Marvin Bush the only family member
in this picture. His brother Jeb Bush, Florida's governor, is
also an investor in the Winston Capital Fund, managed by Marvin
Bush's firm. And Indigo Systems Corp., another federal contractor
($2,629,000 in 2001 from Defense and NASA), is substantially
backed by The Carlyle Group, the global finance company connected
to George H.W. Bush.
As we used to say in Texas, son of a
gun.
There is a crying need for oversight
and accountability, but the need has yet to be met.
Margie Burns, a writer and teacher, lives
in Cheverly, Maryland.
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