Tampa Tribune Whitewashes Jeb Bush's Murky Business Record In Support Of Presidential Run

Tampa Tribune editorial supporting former Gov. Jeb Bush's decision to explore the possibility of running for president claimed that his past business dealings, which include questionable investments, taxpayer bailouts, and failed ventures, “add to his qualifications” to be president.

The Tampa Tribune Claims Jeb Bush's Business Background Qualifies Him To Be President

The Tampa Tribune: Bush's Business Record “Only Adds To His Qualifications.” According to a December 17 Tampa Tribune editorial positively highlighting Jeb Bush's decision to run for president, Bush's “sophisticated business deals” and the fact that he has “made a lot of money ... only adds to his qualifications” to be president:

The attacks on Bush, no doubt, will escalate, now that he has signaled he is serious about a presidential run.

A report in Bloomberg last week claimed “Jeb Bush has a Mitt Romney problem” because of his sophisticated business deals.

It detailed Bush's involvement with offshore private equity funds that some say act as a tax haven. He has business ties to Chinese companies.

Americans will decide if such matters are important to them, but there is nothing illegal or unethical about his investments.

That Bush, after his public service, became an enterprising businessman who made a lot of money, in our view, only adds to his qualifications.

It is hardly surprising that this champion of free enterprise would take advantage of financial opportunities. The nation might benefit from a president who is more enthusiastic, and astute, about capitalism. [The Tampa Tribune, 12/17/14]

Bush's Business Record Marred With Questionable Investments, Taxpayer Bailouts, And Failed Ventures

Bush Joined Lehman Brothers in 2007 After Leaving Governorship. After his tenure as governor of Florida, Bush joined the private-equity firm Lehman Brothers, whose 2008 bankruptcy is considered to have played a major role in the financial crisis that year. A Wall Street Journal article referring to Bush as “Lehman's Secret Weapon,” reported on the firm's hiring the former governor:

In the arms race by private-equity firms to line up ever-higher profile “advisers,” Lehman Brothers may have just taken the lead.

According to a small handful of reports Friday, including this one in Investment Dealers' Digest and another in Private Equity Hub, the investment bank has hired former Florida Governor and presidential son and brother Jeb Bush for its in-house investing arm.

No sign of an announcement from Lehman on the hire.

Private-equity firms hire politicos and former corporate honchos all the time to help them open doors to deals, as well as to manage government relations and the companies in their portfolios. [The Wall Street Journal, 8/27/07]

Tampa Bay Times: “Florida Stands To Lose $1 Billion Because Of Lehman Brothers' Bankruptcy.” A Tampa Bay Times article explained that several months after Bush joined Lehman Brothers, the company filed for Chapter 11 bankruptcy which cost Florida “more than $1 billion” :

A price tag is now emerging for what last year's collapse of investment giant Lehman Brothers could cost the state of Florida: more than $1 billion.

The losses could make Florida and its citizens among the biggest casualties in the biggest bankruptcy ever.

More than $440 million disappeared from the pension fund that pays benefits for some 1 million retirees and public employees.

Counties, cities and school districts face a loss of more than $300 million for roads, sewers and schools.

The state has $290 million less to pay for everything from hurricane claims to health care, community colleges and care for infants with disabilities.

[...]

The storied bank hired former Gov. Jeb Bush as a consultant in June 2007, five months after he left office. As governor, Bush also served as a trustee for the State Board of Administration, which invests public money.

Lehman was the dominant Wall Street broker that sold the SBA $1.4 billion of risky, mortgage-related securities that started tanking in August 2007.

Bush has said he had nothing to do with those sales.

"As Governor Bush has stated several times in response to your inquiries, his role as a consultant to Lehman Brothers was in no way related to any Florida investments,'' said his spokeswoman, Kristy Campbell.

“It is unfortunate the St. Petersburg Times continues to perpetuate this incorrect and baseless conjecture.'' [Tampa Bay Times6/4/09]

Company That Loaned Bush Money To Buy Office Building Failed, Causing Federal Government Bailout. According to an Associated Press article, a savings and loans company loaned Bush about half of the money needed for a $9-million office building, but when the company became insolvent, the federal government and taxpayers “ended up repaying most of the loan” exposing the “poor lending practices that led to the thrift industry's troubles” :

A savings and loan became insolvent after lending President Bush's son Jeb and a partner about half the money toward purchase of a $9-million office building, and the federal government ended up repaying most of the loan, the New York Times reported.

Although it involved no criminal behavior, the loan is an example of the kind of poor lending practices that led to the thrift industry's troubles, the newspaper said.

[...]

The Miami deal involves Jeb Bush, 37, and his partner, Armando Codina, who own a partnership called 1390 Brickell.

In 1985, the two bought a Miami office building at that address for $9 million. They used a $7-million mortgage from an insurance company and a $4.6-million loan from Broward Federal Savings and Loan of Sunrise, Fla. The surplus money was to be used for improvements and a reserve account.

The loan from Broward Federal was obtained through J. E. Houston Financial Group, headed by J. Edward Houston, a former associate of Bush and Codina.

Broward Federal became insolvent in 1988, and the federal government paid more than $4 million to make good the loan on the Miami property as part of the bailout of the S&L industry.

Bush and Codina negotiated a settlement with regulators in which they repaid $505,000 and retained control of the building, the Times said.

It said Bush and Codina expressed surprise that the settlement could be interpreted as use of taxpayers' money to bail out the loan. Asked if they were aware that the money for the repayment came from taxpayers, both said no. [Associated Press, 10/15/1990; via Los Angeles Times]

Bush Was Member Of The Board Of Directors For Failed Construction Material Manufacturer InnoVida. According to The New York Times, Bush became a paid consultant and board member of InnoVida company in 2007. The company later filed for bankruptcy in 2011 and “had faked documents, lied about the health of the business and misappropriated $40 million in company funds” (emphasis added):

As it sought to recruit well-heeled investors, an untested and unprofitable Miami company named InnoVida brought aboard a trusted Florida figure in 2007: Jeb Bush, the former governor and the brother of a sitting president.

For potential stockholders, the imprimatur of Mr. Bush, who joined InnoVida as a paid consultant and a member of the board of directors, conferred credibility on the young start-up.

That credibility did not last long. It turned out that the leaders of InnoVida, a manufacturer of inexpensive building materials, had faked documents, lied about the health of the business and misappropriated $40 million in company funds, records show. The company went bankrupt in 2011, its founder eventually went to jail and investors lost nearly all of their money. [The New York Times, 4/20/14]

Think Progress: Bush Sat On The Board Of A Private Swiss Bank That Failed After His Tenure Ended. Think Progress reported that in 1986, Jeb Bush was a member of the board of the Swiss-owned bank The Private Bank and Trust which failed after federal regulators seized the organization and found that “it had been 'making investments contrary to client instructions and putting funds in companies affiliated with or managed by the bank.'” [Think Progress,11/21/14]

Bush Was Sued For Stock Manipulation After Serving On Board of Ideon Group. The St. Petersburg Times reported on September 20, 1998, that Bush served on the board of Ideon Group, a credit card fraud notification company. After Bush and seven other directors “agreed to sell Ideon to CUC International,” the company was sued “for stock manipulation and weak oversight.” Those suits were settled for $15 million. [St. Petersburg Times, 9/20/1998; via Media Matters, 12/16/14]

New York Times: Bush Was Named A Defendant In Law Suits Accusing Him Of “Insufficient Oversight” As Board Member Of Failed Soap Manufacturer. According to The New York Times, Bush was sued for his work as a board member of Swisher Hygiene after the company admitted to “unreliable financial statements” :

Mr. Bush sat on the board of Swisher Hygiene, a soap maker, at a time when, its executives acknowledged, their financial statements were unreliable and their accounting practices inadequate. That admission contributed to a plunge in stock price that has wiped out more than three-quarters of Swisher's value and touched off a wave of shareholder lawsuits. Several have named Mr. Bush as a defendant, accusing him and fellow board members of insufficient oversight. [The New York Times, 4/20/14]

Think Progress: A Company Founded By Bush Was Accused Of Bribery And Fraud. A Think Progress report detailing Bush's involvement with the Bush-El Corporation explained that the company, which was founded to sell water pumps on foreign markets, was accused of bribery of a Nigerian official and later found liable in a suit that alleged the company made “knowingly false or fraudulent claims” :

After helping elect his father president of the United States, Jeb Bush teamed in 1989 with then-Moving Water Industries, Corp. (MWI) president and CEO J. David Eller, to create Bush-El. The eponymous partnership aimed to market MWI's water pumps internationally. In 2002, the Miami Herald revealed that on one of Bush's trips to Nigeria to help sell them MWI pumps in 1991, that company's corporate pilot claimed he saw a suitcase full of cash -- an apparent bribe for Nigerian officials. The pilot did not implicate Bush and a Bush spokesman noted inconsistencies in the claims. “The governor was adamant he was not on an airplane with a suitcase full of cash,” the spokesman said, adding Bush was “unaware of any plane he was on with luggage on it full of cash.”

Bush has reportedly said his involvement in the Nigeria effort was conditioned on a private loan being secured (as his father was president at the time and he wanted to avoid any appearance of impropriety). But the company instead went to the U.S. Export-Import Bank for the $74.3 million it needed for the deal. In 1998, after a whistleblower alleged “knowingly false or fraudulent claims” connected to that financing, the Department of Justice filed suit against MWI. The company has steadfastly denied the allegations, but was found liable by a jury last year and fined $580,000 (the MWI has appealed the verdict). Bush was not implicated and was never forced to testify in the case after a federal judge ruled him irrelevant to the case. [Think Progress, 11/21/14]