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It’s a (Bush) Family Affair

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Back in 1991, shortly after the depleted uranium-flaked dust had settled some from the first Gulf War, there was a minor tempest in the press over influence peddling by members of the President George H. W. Bush’s family, including his son Neil and his brother Prescott, Jr. Both Neil and Prescott, neither of whom had proven to be exceptionally talented businessmen, had made millions by flagrantly trading on their relationship to the president.

Seeking to distinguish himself from his more predatory relatives, William Henry Trotter Bush, the younger brother of Bush Sr. and an investment banker in St. Louis, gave an interview to disclaim any profiteering on his own part. Indeed, he sounded downright grumpy, as if his older brother hadn’t done enough to steer juicy government deals his way. “Being the brother of George Bush isn’t a financial windfall by any stretch of the imagination,” huffed William H.T. Bush.

Well, perhaps being the brother of the president didn’t generate as much business as he hoped, but having the good fortune to be the uncle of the president certainly appears to have padded the pockets of the man endearingly known to George W. Bush as “Uncle Bucky.”

A few months before his selection as president, Bush’s Uncle Bucky quietly joined the board of a small and struggling St. Louis defense company called Engineered Support Systems, Incorporated (ESSI). Since Bush joined the team, ESSI’s fortunes have taken a dramatic turn for the better. This once obscure outfit soon became one of the top Pentagon contractors. By 2006 its revenues topped $1 billion, nearly all of it derived from defense contracts with the Pentagon or with foreign militaries financed by US aid and loan guarantees. Even sweeter, most of these contracts were awarded in no bid, sole source deals.

True to form, Uncle Bucky claimed that ESSI’s amazing transformation had nothing to do with him or his nephew, the president. “I don’t make any calls to the 202 (DC) Area Code,” Bush sneered to the Los Angeles Times.

Uncle Bucky’s characteristic modesty was swiftly undercut by statements made by top executives at grandtheftESSI, who seemed proud that their foresight in inviting Bush on board had paid off so handsomely for all concerned. “Having a Bush certainly doesn’t hurt,” chuckled Dan Kreher, ESSI’s vice president for industrial relations.

Uncle Bucky Bush is 16 years younger than his brother, the former president. According to Kitty Kelley’s gripping history of the Bush clan The Family, Bucky was raised “almost as an only child” by his aging parents Dorothy and Prescott Bush, the senator who traded with the Nazis. Bucky was a sensitive and precocious kid with a peculiar devotion to choral music. In fact, the highlight of his career at Yale University was his starring spot with Whiffenpoofs, an elite choir.

While his older brother headed to Texas to make his name in the oil patch, Bucky returned to St. Louis, the Gateway City where the original Bush fortune had been built. He settled into a modest career as an investment banker and corporate consultant. Then, with his nephew poised to seize the White House, Uncle Bucky was offered a seat on the board of ESSI, a military support and defense electronics firm. ESSI’s company prospectus described it as “a diversified supplier of high-tech, integrated military electronics, support equipment and logistics services for all branches of America’s armed forces and certain foreign militaries.”

Shortly after the attacks of 9/11, ESSI positioned itself to win a series of lucrative Pentagon contracts that would catapult the diminutive firm into the top ranks of defense contractors. Within a few brief months, the company’s shareholders were given the financial ride of their lives.

By the time of the Iraq war, ESSI was a brawny new player on the defense block. In the spring of 2003, ESSI acquired a military communications company called TAMSCO, whose prime activity was in developing military satellite terminals in the Gulf region and in US bases in Germany in anticipation of a US invasion of Iraq. After the ESSI buy-out, TAMSCO swiftly won contracts from both the Air Force and the Army for more than $90 million for the training of troops in the operation of the system and the installation of radar equipment in Kuwait.

Then Pentagon awarded ESSI a $49 million contract to remodel military trailers for use in Iraq.

In 2003, the Defense Department gave ESSI a huge deal to provide the Army with equipment to search for Iraq’s non-existent chemical and biological weapons. Part of this package included a $19 million contract to provide protective tents for US troops from chemical bombs. The tents didn’t arrive in Iraq until after it was evident to nearly everyone that the Iraqi military didn’t have access to such weapons. This didn’t stop the money from flowing into ESSI’s coffers and it didn’t stop ESSI’s executives from playing along in the grand charade. “The potential threat of our troops facing a chemical or biological attack during the current conflict in Iraq remains very real,” huffed Michael Shananan, the company’s former chairman.

As the invasion transformed into a military occupation of Iraq, ESSI continued to pluck off sweet deals. In late 2003, the Coalition Provisional Authority, whose contracts passed across the Pentagon desk of arch neocon Douglas Feith, awarded ESSI an $18 million deal to engineer a communications system for the CPA offices, barricaded inside Baghdad’s Green Zone.

Its executives openly clucked at the likelihood for protracted war. “The increasing likelihood for a prolonged military involvement in Southwest Asia by US forces well into 2006 has created a fertile environment for the type of support products and services we offer,” gloated Gerald L. Daniels, the company’s Chief Executive Officer. Rarely has corporate glee over the prospects of war profiteering been expressed so brazenly.

But Daniels had a point. Even as things began to go sour for the US in Iraq, ESSI stood to make lots of money. One of its biggest no-bid contracts came in 2004 in the wake of mounting causalities in light-armored vehicles hit by roadside bombs. ESSI won a deal to upgrade the armor of thousands of vehicles in or bound for Iraq. The company’s annual report for 2005 forecast that ESSI might make as much as $200 million from this bloody windfall alone.

As the flood of new contracts poured in, ESSI’s stock soared. In January of 2005, it reached its all-time high of $60.39 per share. A few days before the stock hit this lofty peak, Uncle Bucky quietly exercised his option to sell 8,438 shares of ESSI stock. He walked away from that transaction with at least $450,000. The stock sale occurred a few days after ESSI announced that the Pentagon had awarded it $77 million in new contracts for the Iraq war and a few days before word leaked to the press that the company was under investigation for its handling of older Pentagon contracts. The timing of the trade was perfect.

In a February 2005 filing with the Securities Exchange Commission, ESSI discreetly disclosed to its shareholders that the inspector general of Pentagon had launched an inquiry into a series of contracts awarded to the company in 2002 for work on the Air Force’s troubled automated cargo loading machine called the Tunner.

While the company’s chief financial officer dismissed the probe as “routine” and assured investors that it would have “no effect” on ESSI’s fortunes, the Pentagon held to a more restrained assessment of the potential liability. Michael Wynne, acting undersecretary of Defense, said he had referred ESSI contracts valued at $158 million to the Pentagon’s inspector general because the deals “appear to have anomalies in them.” Many of the contracts were awarded on a no-bid basis and much of the probe appears to focus on the role Pentagon insiders played in steering the contracts to ESSI.

Much of the thrust behind ESSI’s dramatic rise was been fueled by no-bid or source deals with the Pentagon. These no risk deals are part of a corporate strategy cooked up in part by none other than Uncle Bucky himself. In a profitable bit of self-dealing, ESSI hired its board member, Bucky Bush, as a consultant in 2002. Bush, who pulled in about $45,000 a year in director’s fees, was paid an additional $125,000 for his advice on ESSI’s buyout of other military contractors. The acquisition strategy outlined by Bush was to train the company’s appetite on the gobbling up of companies that held no-bid or sole source deals with the Pentagon.

In January of 2005, ESSI spent $37.6 million to buy a New York electronics testing firm called Prospective Computer Analysis, Inc. In defending the purchase to shareholders, executives at ESSI emphasized that the company held “a lot of source contracts.”

This was swiftly followed by ESSI’s acquisition of Spacelink, Inc, a Virginia-based defense company, for $150 million. Spacelink, which supplies parts for military satellites, was poised to cash in on the $80 billion missile defense bonanza.

ESSI isn’t the only defense-oriented company to acquire the services of Uncle Bucky. The banker from St. Louis was also retained as a trustee for the global investment firm Lord Abbott, one of the primary financial underwriters of Halliburton. Lord Abbott is both one of the top 10 shareholders in Dick Cheney’s former company, as well as one of its top mutual fund holders. It’s all in the family.

Uncle Bucky didn’t unload all of his ESSI stock. He held on 45,000 shares valued at more than $2.5 million, using the profits from the sale to purchase a vacation home in Florida near his other nephew nourishing presidential ambitions, Jeb Bush.

Who knows if the Bucky will finally stop there?

This article is excerpted from Grand Theft Pentagon: Tales of Corruption and Profiteering in the War on Terror.

Jeffrey St. Clair is editor of CounterPunch. His new book is Killing Trayvons: an Anthology of American Violence (with JoAnn Wypijewski and Kevin Alexander Gray). He can be reached at: sitka@comcast.net.

 

 

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Jeffrey St. Clair is editor of CounterPunch. His new book is Bernie and the Sandernistas: Field Notes From a Failed Revolution. He can be reached at: sitka@comcast.net or on Twitter  @JSCCounterPunch

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