August 2002 | Hightower Lowdown
Just Another Corporate Greedhead
by Jim Hightower
Here’s yet another story of those at the top of the corporate pyramid getting insider information, then selling-off their own holdings of the company’s stock — just before the stock price crashes. As usual, this big shot walked away with a slick profit and a wink, while small investors and company employees took a bath.
Such stories are commonplace in corporate America these days, but what makes this one so extraordinary is the name of the big shot. It’s not Ken Lay, Bernie Ebbers...or even Martha Stewart. This slick operator is none other than the guy who has lately been so loudly scolding CEOs for being greedheads: George W. Bush!
In 1986, George was a twice-failed businessman, having gone bust in two oil ventures. But a group of New York investors bailed him out of his financial mess by buying his failed company and putting him on the board of their company, Harken Oil and Gas. They liked having the son of the then-vice-president, Bush the Elder, on their board as star power. They gave Little George a batch of Harken stock and paid him $120,000 a year to be a board member.
Four years later, on June 22, 1990, Bush suddenly sold all of his Harken stock for $835,000 in personal profit. Only eight days later, the audit committee of Harken’s board disclosed that the company had suffered huge losses, and the price of Harken’s stock promptly plummeted. When asked later if he had used insider information to enrich himself while common investors were unaware that they were about to get whacked, George W said he "had no idea" that the audit report was going to be awash in red ink.
George’s denial might have been more credible except for one thing: He sat on the board’s audit committee.
While Harken was small compared to Enron, WorldCom and the others, George W. Bush’s personal, self-serving ethical failure was just as big as theirs.
Jim Hightower is a columnist and author. To subscribe to The Hightower Lowdown, send $15, and your name, and address to: Lowdown, P.O. Box 20596, New York, NY 10011. Visit his web site for more info.
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