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In 1978, Bush ran for the U.S. House of Representatives but lost to State Sen. Kent Hance, a Democrat.
Bush began his career in the oil industry in 1979 when he established Arbusto Energy, an oil and gas exploration company he formed in 1977 with leftover funds from his education trust fund and money from other investors. Some of this funding came from the bin Laden family, which in 1994 publicly distanced itself from its kinsman Osama bin Laden. The 1979 energy crisis hurt Arbusto and, after a name change to Bush Exploration Co., Bush sold the company in 1984 to Spectrum 7, another Texas oil and gas exploration firm. Under the terms of the sale, Bush became CEO of Spectrum 7. The oil crisis of 1985-1986 bankrupted Spectrum 7. Spectrum 7 was subsequently saved by a buyout from Harken Energy Corp. in 1986 with Bush becoming a director of Harken.
After working on his father's successful 1988 presidential campaign, he was told by friend William DeWitt, Jr. that then-owner Eddie Chiles , another of the Bushes' many friends, wanted to sell the Texas Rangers, an Arlington-based Major League Baseball franchise. In April 1989, Bush assembled a group of investors from his father's close friends, who bought 86% of the Rangers for $75 million. (Bush later appointed one of these partners, Tom Schieffer to the post of Ambassador to Australia.) Critics expressed concern about the propriety of the purchase, charging use of political influence and favoritism involving a family friend. [6] Bush invested $606,302, with $500,000 of it a loan from a bank. Bush paid off the loan by selling $848,000 worth of stock in Harken Energy Corp. in 1990, sparking allegations of insider trading.
In the book House of Bush, House of Saud by Craig Unger on page 123, Harken Energy at the time of Bush's sale "was expected to run out of money in just three days." In a last-ditch attempt to save the company, Harken was advised by the endowment fund of Harvard University to spin-off two of its lower-performing divisions. "According to a Harken memo, if the plan did not go through, the company had 'no other source of immediate financing.'" Bush had already taken out a $500,000 loan and sought Harken's general counsel for advice. The reply was explicit: "The act of trading, particularly if close in time to the receipt of the inside information, is strong evidence that the insider's investment decision was based on the inside information...The insider should be advised not to sell." This memo was turned over by Bush's attorney the day after the SEC ruled that it would not charge Bush with insider trading. On June 22, Bush sold his 212,140 shares of stock anyway for a net profit of $848,560. The very next quarter, Harken announced losses of $23 million, which continued to the end of the year when the stock "plummeted from $4 to $1.25."
The subsequent SEC investigation ended in 1992 with a memo stating "it appears that Bush did not engage in illegal insider trading," but noted that the memo "must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result." [7] Critics allege that this decision was strongly influenced by the makeup of the SEC at the time, which heavily favored Bush. The chairman at the time was Richard Breeden , a good friend of the Bush family's who had been nominated to the SEC by President George H. W. Bush and a lawyer in James Baker's firm, Baker Botts . The SEC's general counsel at the time was James Doty , who had represented George W. Bush when he sought to buy into the Texas Rangers (although Doty recused himself from the investigation.) Bush's own lawyer was Robert Jordan, who had been "partners with both Doty and Breeden at Baker Botts and who later became George W. Bush's ambassador to Saudi Arabia." Finally, Bruce Hiler , the associate director of the SEC's enforcement division, who wrote a letter to Bush's attorney saying the investigation was being terminated, now represents former Enron president Jeff Skilling in matters before the government. [8]
As President, Bush has refused to authorize the SEC to release its full report on the investigation. Bush personally earned US$14.9 million from his $606,302 investment in the 1998 sale of the team for $250 million at a total profit of US$170 million. [9]
He served as managing general partner of the Rangers until he was elected Governor of Texas on November 8, 1994 over incumbent Democrat Ann Richards. He went on to become, in 1998, the first Texas governor to be elected for two consecutive four-year terms. His tenure in office featured a positive reputation for bipartisan leadership. Among issues attracting national and international attention during his terms was Texas' use of the death penalty. He signed the death warrants of 152 criminals, including that of Karla Faye Tucker.
In 1996, Bush was summoned to jury duty in a Travis County, Texas drunk driving case. His counsel, Alberto R. Gonzales, successfully argued that, as governor, Bush might one day be called to pardon the defendant, and that this should excuse him from sitting on the jury. When Bush's 1976 drunk driving conviction was made public during the 2000 presidential campaign, it was also revealed that Bush had left blank the question on the juror questionnaire regarding previous convictions. After learning of the 1976 conviction, the prosecutor of the 1996 case, a Democrat, said that he felt "deceived" by the arguments of Bush and Gonzales [10].
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