Bush's Enron Deal
Corn, David, The Nation
Did George W. Bush once have a financial relationship with Enron? In 1986, according to a publicly available record, the two drilled for oil together--at a time when Bush was a none-too-successful oil man in Texas, and his oil venture was in dire need of help. (In early March The Nation broke the story on its website; two days later the New York Times covered this Bush-Enron deal.)
In 1986 Spectrum 7, a privately owned oil company chaired by Bush, faced serious trouble. Two years earlier Bush had merged his failing Bush Exploration Company with the profitable Spectrum 7, where he was named the company's chief executive and director. Bush was paid $75,000 a year and handed 1.1 million shares, according to First Son, Bill Minutaglio's biography of Bush. Bush ended up owning about 15 percent of Spectrum 7. By the end of 1985 Spectrum's fortunes had reversed. With oil prices falling, the company was losing money and on the verge of collapse. To save the firm, Bush began negotiations to sell Spectrum 7 to Harken Energy, a large Dallas-based energy company mostly owned by billionaire George Soros, Saudi businessman Abdullah Taha Baksh and the Harvard Management Corporation.
In September 1986 Spectrum 7 and Harken announced a plan under which Spectrum 7 shareholders would receive Harken stock. Bush said publicly that Spectrum 7 would continue to operate in Midland, Texas, as a wholly owned subsidiary of Harken and that he would become an active member of Harken's board of directors. As Minutaglio reports, the deal would give Bush about $600,000 in Harken shares and $50,000 to $120,000 a year in consultant's fees. It also would provide $2.25 million in Harken stock for a company with a net value of close to $1.8 million.
As the details of the Spectrum-Harken acquisition--which Bush badly needed--were being finalized, Enron Oil and Gas Company, a subsidiary of Enron Corporation, announced on October 16, 1986, a new well producing both oil and natural gas. …