Confessions of an Economic Hit Man

For those of us interested in oil and the international scene, there was another frequently discussed topic: the vice president’s son, George W. Bush. His first energy company, Arbusto (Spanish for bush) was a failure that ultimately was rescued through a 1984 merger with Spectrum 7. Then Spectrum 7 found itself poised at the brink of bankruptcy, and was purchased, in 1986, by Harken Energy Corporation; G. W. Bush was retained as a board member and consultant with an annual salary of $120,000.²

We all assumed that having a father who was the U.S. vice president factored into this hiring decision, since the younger Bush’s record of accomplishment as an oil executive certainly did not warrant it. It also seemed no coincidence that Harken took this opportunity to branch out into the international field for the first time in its corporate history, and to begin actively searching for oil investments in the Middle East. Vanity Fair magazine reported, “Once Bush took his seat on the board, wonderful things started to happen to Harken—new investments, unexpected sources of financing, serendipitous drilling rights.”³

In 1989, Amoco was negotiating with the government of Bahrain for offshore drilling rights. Then Vice President Bush was elected president. Shortly thereafter, Michael Ameen—a State Department consultant assigned to brief the newly confirmed U.S. ambassador to Bahrain, Charles Hostler—arranged for meetings between the Bahraini government and Harken Energy. Suddenly, Amoco was replaced by Harken. Although Harken had not previously drilled outside the southeastern United States, and never offshore, it won exclusive drilling rights in Bahrain, something previously unheard of in the Arab world. Within a few weeks, the price of Harken Energy stock increased by over twenty percent, from $4.50 to $5.50 per share.⁴

Even seasoned energy people were shocked by what had happened in Bahrain. “I hope G. W. isn’t up to something his father will pay for,” said a lawyer friend of mine who specialized in the energy industry and also was a major supporter of the Republican Party. We were enjoying cocktails at a bar around the corner from Wall Street, high atop the World Trade Center. He expressed dismay. “I wonder if it’s really worth it,” he continued, shaking his head sadly. “Is the son’s career worth risking the presidency?”

I was less surprised than my peers, but I suppose I had a unique perspective. I had worked for the governments of Kuwait, Saudi Arabia, Egypt, and Iran, I was familiar with Middle Eastern politics, and I knew that Bush, just like the Enron executives, was part of the network I and my EHM colleagues had created; they were the feudal lords and plantation masters.⁵

CHAPTER 29. I Take a Bribe

During this time in my life, I came to realize that we truly had entered a new era in world economics. Events set in motion while Robert McNamara—the man who had served as one of my models—reigned as secretary of defense and president of the World Bank had escalated beyond my gravest fears. McNamara’s Keynesian-inspired approach to economics, and his advocacy of aggressive leadership, had become pervasive. The EHM concept had expanded to include all manner of executives in a wide variety of businesses. They may not have been recruited or profiled by the NSA, but they were performing similar functions.

The only difference now was that the corporate executive EHMs did not necessarily involve themselves with the use of funds from the international banking community. While the old branch, my branch, continued to thrive, the new version took on aspects that were even more sinister. During the 1980s, young men and women rose up through the ranks of middle management believing that any means justified the end: an enhanced bottom line. Global empire was simply a pathway to increased profits.

The new trends were typified by the energy industry, where I worked. The Public Utility Regulatory Policy Act (PURPA) was passed by Congress in 1978, went through a series of legal challenges, and finally became law in 1982. Congress originally envisioned the law as a way to encourage small, independent companies like mine to develop alternative fuels and other innovative approaches to producing electricity. Under this law, the major utility companies were required to purchase energy generated by the smaller companies, at fair and reasonable prices. This policy was a result of Carter’s desire to reduce U.S. dependence on oil—all oil, not just imported oil. The intent of the law was clearly to encourage both alternative energy sources and the development of independent companies that reflected America’s entrepreneurial spirit. However, the reality turned out to be something very different.