Bush's Big Score
You saw it here first: Governor George W. Bush will run for president in two years, and he's going to win. Here's another tip: This month's purchase of the Texas Rangers by Dallas media mogul Thomas Hicks -- a deal in which Bush will make up to $14 million for his 2 percent share of the team -- will come back to haunt the governor.
Whether Bush's big score from the Rangers sale will become his very own Whitewater remains to be seen. And of course, November 2000 is still a long way off. But for the moment, Bush appears to have the easiest road to the White House of any of the contenders. He should easily beat Garry Mauro in November for a second term in the governor's mansion. Thanks to his high name recognition and positioning as a moderate in the GOP, Bush can easily raise tens of millions of dollars for a presidential run. Meanwhile, the Democrats -- thanks to their fundraising missteps and Bill Clinton's overactive libido -- are looking about as comfortable as a bunch of Buddhist monks at a bar mitzvah.
But Bush will face scrutiny because the Rangers deal reeks of the same kind of country-club capitalism as does the Whitewater deal. Bush was brought into the Rangers deal in 1989 by then-baseball commissioner Peter Ueberroth because of whom he knew -- not what he knew. At least Clinton can claim that he lost money on the Whitewater deal. With the sale of the Rangers, Bush has made a fortune while ignoring several nagging ethical questions.
1. Why haven't Bush and his partners repaid their debt to society?
The city of Arlington insists that the governor and the other owners of the Rangers owe them $7.5 million due to a court judgment against the Arlington Sports Facilities Development Authority (ASFDA), the entity set up by Arlington to condemn land for, and administer, the Ballpark at Arlington project. In May 1996, a Tarrant County jury found the ASFDA had not paid a fair price for 13 acres of land it condemned, and awarded the owners of the land, the Mathes family, more than six times what the city had agreed to pay. That's where the Rangers' obligation comes in.
When the Rangers and Arlington signed their deal in 1990, the Rangers agreed to pay any costs on the stadium project in excess of $135 million. Arlington says the $7.5 million judgment in the Mathes suit should come from Bush and his partners. Two days after Hicks's purchase of the Rangers was announced, Arlington city attorney Jay Doegey told this reporter, "We have a contract with them that says they will pay anything over $135 million. The costs in the condemntion case are over that amount."
2. What happened to Bush's position on property rights?
In October 1994, during a luncheon in Houston, Bush said, "I understand full well the value of private property, and its importance not only in our state but in capitalism in general, and I will do everything I can to defend the power of private property and private property rights when I am the governor of this state."
But evidence from the Mathes lawsuit suggests that Bush and his fellow owners were planning to take the Matheses' land six months before the ASFDA was even created. In an October 26, 1990 memo from Arlington real estate broker Mike Reilly to Rangers president Tom Schieffer, Reilly says of the Mathes property: "In this particular situation our first offer should be our final offer ... If this fails, we will probably have to initiate condemnation proceedings after the bond election passes."
Bush has insisted that he "wasn't aware of the details" of the land condemnations. But on October 27, 1990, Bush was quoted in the Fort Worth Star-Telegram about the development plans for the acreage around the stadium. "The idea of making a land play, absolutely, to plunk the field down in the middle of a big piece of land, that's kind of always been the strategy," Bush said. In other words, while Bush didn't know the details regarding the condemnation of the Matheses' property, he did plan to exploit their property for his personal benefit.
The land around the stadium is one of the main reasons why Hicks paid $250 million -- or about triple what Bush and his partners paid in 1989 -- for the Rangers. Whoever owns the Rangers controls 300 acres of prime development land next to the stadium and the Six Flags Over Texas amusement park. Hicks also gains control of the gigantic cash register known as the Ballpark at Arlington, which was named the most profitable venue in baseball last year by Financial World magazine.
And Bush likes to take credit for building the stadium. In 1993, while squiring a Houston Chronicle reporter around the ballpark, Bush declared: "When all those people in Austin say, 'He ain't never done anything,' well, this is it." So Bush takes credit for a project that would not have occurred without taking land from one group of landowners and giving it to a different, wealthier, better-connected group of landowners. But he's still in favor of property rights?
3. How can Bush keep a straight face while making this kind of money?
"When it is all said and done, I will have made more money than I ever dreamed I would make," Bush told reporters the day after the sale to Hicks was announced.
Since Bush's profit may total 24 times his original $600,000 investment in the Rangers, it is fair to compare the Rangers deal with his ownership and management interest in Harken Energy. In 1990, while Bush's father was president, Harken, a tiny oil company with limited overseas experience, was chosen by the government of Bahrain to drill for oil. According to a 1994 story in the Dallas Morning News, six months after the Bahrain deal was announced, Bush sold his shares in Harken, making a $318,430 profit. But Bush ran afoul of federal regulators because he did not report the sale for eight months. And two months after Bush sold his shares, Harken reported a big quarterly loss, sending the stock price down by 60 percent. The Harken deal has been repeatedly scrutinized amid allegations that the Bahrainis were trying to buy influence within the Bush administration and that George W. Bush used insider information in deciding to sell his stock. Bush was never charged with any wrongdoing. But a pattern appears to be emerging, whereby Bush, because of his name and connections, gets unusually high returns on his investments.
4. Finally, and perhaps most important, why didn't Bush put his interest in the Rangers into a blind trust? According to financial disclosure filings at the Texas Ethics Commission, Bush transferred his stock portfolio and other assets into a blind trust in January 1995. But he didn't transfer his general partnership interest in the Rangers into the trust because, as he explained at a press conference at the governor's mansion last April, that would have amounted to a change in team ownership. A change of ownership "would have required a vote of the baseball owners," said Bush. "And it became unnecessary. We just didn't think it was necessary to get that vote. Secondly, I own it. I mean, there's no question I own it ... So it's not necessary."
But what if, instead of baseball, Bush were involved in say, a stock deal or an oil deal? And because of that deal, a Dallas gazillionaire paid the governor $14 million cash, with all of it going to the governor, not his blind trust? Few politicians would be able to weather their involvement in such a deal. Yet because Bush's deal involves baseball, all bets -- political and economic -- appear to be off, even though it could be argued that Hicks, by purchasing the Rangers, is also buying influence with the governor.
Under normal circumstances, Hicks would only be able to contribute to Bush's campaign account. But through the Rangers deal, Hicks -- a man with multiple businesses that could come under the scrutiny of state regulators -- will be stuffing millions of dollars directly into the pocket of the Texas governor. Imagine if former Louisiana governor Edwin Edwards were involved in a deal like this. How long would it take before the newspapers launched an investigation?
For now, it appears that Bush will skate on all of these questions. None of the state's major dailies have delved into the blind trust issue. And few have reviewed the details of the Mathes case since the Hicks deal was announced. But -- and remember, you read it here first -- as soon as Bush announces his run for the presidency, Texas will be swarming with East Coast reporters trying to figure out how a sitting governor, the Man Who Would Be President, made so much money on this one deal.
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