Zapata Corporation

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Zapata Petroleum Corporation, an oil exploration company, was created by George H. W. Bush (hereafter identified as George Bush) in 1953, along with his business partners John Overbey, and brothers Hugh and Bill Liedtke. Its primary historical interest may be its ties to the 41st President.

Contents 1 Early Business History, 1953-1966 2 Alleged connections with the CIA 2.1 FBI memos 2.2 Family Connections; Yale Skull & Bones 2.3 Bay of Pigs 2.4 Dealings with Ed Pauley 2.5 Watergate 2.6 GHW Bush becomes CIA Director 2.7 Iran-Contra affair 3 Business History 1969 to present, offshoots 4 Omega Protein Corporation, subsidiary 5 References 5.1 Public records 5.2 Zapata 5.3 George Bush 5.4 CIA 5.5 Others 6 External links

[edit] Early Business History, 1953-1966

The initial $1 million investment for Zapata was split by the Liedtkes (and their circle of investors) and by Bush's father and uncle, Prescott Bush and Herbert Walker (and his family circle of friends). Hugh Liedtke was named president, Bush was vice president; Overbey soon left. In 1954, Zapata Off-Shore Company was formed as a subsidiary, with Bush as president. (He raised some startup money from Eugene Meyer, publisher of the Washington Post, and his son-in-law, Phillip Graham).^[1][2] Zapata Off-Shore accepted an offer from inventor R G LeTourneau for the development of a mobile but secure drilling rig. Zapata advanced him $400,000, refundable if the completed rig didn't work; if it did, he'd get an additional $550,000 plus 38,000 shares of Zapata Off-Shore common stock. Zapata split in 1959 into Zapata Petroleum (headed by the Liedtke's) and Zapata Off-Shore (headed by Bush, funded with $800,000).^[3] Bush moved his offices and family that year from Midland, TX to Houston. Zapata Petroleum merged in 1963 with South Penn Oil and other companies to become Pennzoil.

Zapata Off-Shore concentrated its business in the Caribbean, the Gulf of Mexico, and the Central American coast in the late 1950s and early 1960s, according to Nicolas King's George Bush: A Biography. The US government began to auction off mineral rights to these areas in 1954. Drilling contracts in 1958 with the seven large US oil producers included wells 40 miles north of Isabela, Cuba (131 miles south of Miami), near the island Cay Sal. (Fidel Castro overthrew Cuba's Batista government in July 1959.) Zapata also won a contract with Kuwait. Bush was joined in Zapata by a fellow Yale Skull and Bones member, Robert Gow, in 1962. Zapata Offshore had four oil-drilling rigs operational by 1963: Scorpion (1956), Vinegaroon (1957), Sidewinder, and (in the Persian Gulf) Nola III.

By 1964, Zapata Off-Shore had a number of subsidiaries, including: Seacat-Zapata Offshore Company (Persia Gulf), Zapata de Mexico, Zapata International Corporation, Zapata Lining Corporation, Zavala Oil Company, Zapata Overseas Corporation, and a 41% share of Amata Gas Corporation.

In 1960, Jorge Diaz Serrano of Mexico was put in touch with Bush by Dresser. They created a new company, Perforaciones Marinas del Golfo, aka Permargo, in conjunction with Edwin Pauley of Pan American Petroleum, with whom Zapata had a previous offshore contract. The deal with Pemargo is not mentioned in Zapata's annual reports. A Bush spokesman in 1988 claimed the deal only lasted seven months, from March to September 1960. Zapata sold Nola I to Pemargo in 1964.

Bush ran for the US Senate in 1964 and lost; he continued as president of Zapata Off-Shore until 1966, when he sold his interest to his business partner, Robert Gow, and ran for US Congress. William Stamps Farish III, age 28, joined the board in 1966.

Zapata's filing records with the US Securities and Exchange Commission (SEC) are intact for the years 1955-1959, and again from 1967 onwards. But records for the years 1960-1966 are missing. "The records were inadvertently placed in a session file to be destroyed" by a federal warehouse explains SEC records officer Suzanne McHugh, noting that a total of 1,000 boxes were pulped in this procedure. The destruction of records occurred either in October 1983 (according to McHugh) or in 1981 shortly after Bush became Vice President of the United States (according to SEC record analyst Wison Carpenter).

[edit] Alleged connections with the CIA

Several conspiracy theories suggest that Zapata Off-Shore, and Bush in particular, cooperated with the CIA beginning in the late-1950s. Neither they nor coincidence theories (which deny this connection) offer proof. The strongest evidence may be two FBI memos, and close ties between Bush and Felix Rodriguez.

[edit] FBI memos

Two FBI memos show connections between the CIA and George Bush during his time at Zapata. The first memo names Zapata Off-Shore and was written by FBI Special Agent Graham Kitchel on 22 November 1963, regarding the John F. Kennedy assassination at 12:30 p.m. CST that day. It begins: "At 1:45 p.m. Mr. GEORGE H. W. BUSH, President of the Zapata Off-Shore Drilling Company, Houston, Texas, residence 5525 Briar, Houston, telephonically furnished the following information to writer... BUSH stated that he wanted to be kept confidential... was proceeding to Dallas, Texas, would remain in the Sheraton-Dallas Hotel." So, Bush called the FBI just 75 minutes after JFK's assassination.

A second FBI memo, written by J. Edgar Hoover himself, identifies "George Bush" with the CIA. It is dated 29 November 1963 and refers to a briefing given Bush on 23 November. The FBI Director describes a briefing about JFK's murder "orally furnished to Mr. George Bush of the Central Intelligence Agency... [by] this Bureau" on "November 23, 1963. (It is not clear whether the briefing took place in Dallas or Washington, DC). So "George Bush of the CIA" was briefed by the FBI the day after "George H. W. Bush, President of the Zapata Off-Shore Drilling Company" called the FBI. And this "George Bush of the CIA" was important enough, and enough involved with sentiments of the anti-Castro Cubans, that the FBI had him briefed that there were "no plans for unauthorized action against Cuba." This briefing occurred on a frantic day for the FBI. Furthermore, Hoover felt this briefing was important enough to reassure the State Department's Intelligence unit of it, in writing.

In 1988, GHW Bush spokespersons (including Stephen Hart) said Hoover's memo referred to another George Bush who worked for the CIA.^[4] CIA spokeswoman Sharron Basso suggested it was referring to a George William Bush. However, others described this G. William Bush as a "lowly researcher" and "coast and beach analyst" who worked only with documents and photos at the CIA in Virginia from September 1963 to February 1964, with a low rank of GS-5.^{[5] [6][7]} In fact, this G. William Bush swore an affadavit in federal court denying that Hoover's memo referred to him:

"I have carefully reviewed the FBI memorandum to the Director, Bureau of Intelligence and Research, Department of State dated November 29, 1963 which mentions a Mr. George Bush of the Central Intelligence Agency.... I do not recognize the contents of the memorandum as information furnished to me orally or otherwise during the time I was at the CIA. In fact, during my time at the CIA, I did not receive any oral communications from any government agency of any nature whatsoever. I did not receive any information relating to the Kennedy assassination during my time at the CIA from the FBI. Based on the above, it is my conclusion that I am not the Mr. George Bush of the Central Intelligence Agency referred to in the memorandum." (United States District Court for the District of Columbia, Civil Action 88-2600 GHR, Archives and Research Center v. Central Intelligence Agency, Affidavit of George William Bush, September 21, 1988.)

So, the only other "George Bush" identified by the CIA is very likely not the one. This raises questions as to why the CIA took the unusual step of mis-identifying a former officer. It also raises questions about the veracity of the Bush campaign's statements.

In his book The Immaculate Deception: The Bush Crime Family Exposed (1991), US Army Brigadier General Russell Bowen wrote there was a cover-up of Zapata's CIA connections.

[edit] Family Connections; Yale Skull & Bones

There were tight-knit Bush-family and Zapata ties to US intelligence operations coincident with GHW Bush's formation of Zapata. Prescott Bush was a close business associate of CIA Director Allen Dulles and W. Averell Harriman since the 1930s. Dresser Industries, where GHW Bush worked 1948-1951, served as cover for a number of CIA officers. Prescott served on the Board of Dresser for 22 years, Harriman brought it public in 1929; family friend Neil Mallon was CEO.

Averell Harriman was invited to join Skull and Bones in 1913, Prescott, Mallon, and Roland Harriman (also on Dresser's board) joined Skull and Bones in 1917. These three selected Robert A. Lovett (later Secretary of Defense and "father of the CIA") and F. Trubee Davison to join in 1918. Robert Lovett became Prescott's partner at Brown Brothers Harriman. Prescott wrote in 1953 that Mallon is a: "very old and dear friend... well known to Allen Dulles, and has tried to be helpful to him in the CIA, especially in the procurement of individuals to serve in that important agency." F. Trubee Davison was in charge of CIA recruitment and personnel in the late 1940s. His son, Endicott Peabody Davison, joined Skull & Bones in 1948 along with GHW Bush, and later became Bush's lawyer. GHW Bush worked for Mallon from 1948-1951, named his third son Neil Mallon Bush after Mallon, and wrote in his autobiography that Mallon "was a mentor second only to my father."

Several other Skull and Bones members (or relatives) helped with the CIA's Bay of Pigs operation, staged in the same area Zapata Offshore was drilling for oil. The CIA's Richard Dale Drain (Skull and Bones 1943) co-authored (with Jacob Easterline) a paper that proposed the Bay of Pigs invasion, "A Program of Covert Action against the Castro Regime," adopted by President Eisenhower on 17 March 1960. Drain also wrote a "Memorandum for the Record", 30 January 1961, that estimated the "likelihood of success was very high." The White House's coordinator on the Bay of Pigs operation was McGeorge Bundy (Skull and Bones 1940), and his brother William P. Bundy (Skull and Bones 1939), the State Department's liaison for the Bay of Pigs Operation. Probably a coincidence, Skull and Bones was reincorporated (from the 100 year-old Russell Trust Association) by Howard Weaver, just two hours before the Bay of Pigs operation was launched, on noon April 14, 1961. Weaver (Skull and Bones 1945) had retired from the CIA in 1959.

Richard M. Bissell, Jr. -- one of three aides to Allen Dulles, after working for Harriman -- directed the Bay of Pigs operations out of Miami. Though a Yale grad of 1932 he was not Skull and Bones; but his brother William was. Bissel was the CIA's Director of Plans, and brought in members from the 1954 PBSUCCESS operation in Guatemala, including E. Howard Hunt, David Atlee Phillips, and Theodore (Ted) Shackley. Shackley became CIA station chief in Miami after the Bay of Pigs. Then, as station chief in Laos and Saigon, Shackley went on to direct the infamous Project Phoenix, where he was joined by Donald Gregg and Rodriguez. Both Shackley and Gregg would later report directly to Bush.

Members of a tight-knit, wealthy group who owned property on tiny Jupiter Island in Hobe Sound, just north of Palm Beach and 90 minutes north of Miami, Florida, included: Harriman, Prescott Bush, G. Herbert Walker, Robert Lovett, Paul Mellon, Carl Tucker (whose son inducted Bush into Skull and Bones), C. Douglas Dillon, and others. GHW Bush travelled to Miami frequently on behalf of Zapata Off-Shore, c.1960-1962.

[edit] Bay of Pigs

The CIA codename for the Bay of Pigs invasion of April 1961 was "Operation Zapata". (See Beschloss, p.89). Through his work with Zapata Off-Shore, Bush Sr. is alleged to have come into contact with Felix Rodriguez, Barry Seal, Porter Goss (who served briefly as CIA Director under Bush Jr.), E. Howard Hunt, around the time of the Bay of Pigs operation.[2] John Loftus writes: "Zapata [Off-Shore] provided commercial supplies for one of [Allen] Dulles’ most notorious operations: the Bay of Pigs invasion."[3]

CIA liaison officer Col. L. (Leroy) Fletcher Prouty alleges in his book, The Secret Team (1973) and on his website, that Zapata Off-Shore provided or was used as cover for two of the ships used in the Bay of Pigs invasion: the Barbara J and Houston. Prouty claims he delivered two ships to an inactive Naval Base near Elizabeth City, North Carolina, for a CIA contact named George Bush, who re-named the boats.[4] (As a World War II Navy pilot, Bush had named his first plane the Barbara after his wife, a second plane the Barbara II, and a third plane the Barbara III.)

The Bay of Pigs operation was directed out of the "Miami Station" (aka JM/WAVE). It housed 200 agents who handled approximately 2,000 Cubans. Robert Reynolds was the CIA's Miami station chief from September 1960 to October 1961. He was replaced by career-CIA officer Theodore Shackley, who oversaw Operation Mongoose and Operation 40 (which included Porter Goss, Felix Rodriguez, and Barry Seal.) When Bush became CIA Director in 1976 he appointed Ted Shackley as Deputy Director of Covert Operations. When Bush became Vice President in 1981, he appointed Donald Gregg as his National Security Advisor.

Kevin Phillips, in American Dynasty, discusses George Bush Sr.'s "highly likely" role in the Bay of Pigs fiasco. He points to the leadership role of Bush's fellow Skull and Bones alumni in organizing the operation. He notes an additional personal factor for Bush: the Walker side of the family (who initially funded Zapata Corporation) had lost a small fortune when Fidel Castro nationalized their West Indies Sugar Co. Edwin Pauley was "known for CIA connections," according to Phillips, it was Pauley who put Pemargo's Diaz and Bush together.

[edit] Dealings with Ed Pauley

Zapata had a number of business dealings with oilman Edwin Pauley, including the Pemargo joint venture. Documents prove that Pauley worked with the OSS, CIA and FBI.[5]

Among other activities, Pauley was a conservative Regent for the University of California. He was so opposed to the 1960s anti-Vietnam war protests on campus that he secretly contacted his former-classmate, CIA Director John McCone, to request assistance. McCone went to FBI Director J. Edgar Hoover, who immediately obliged. The FBI assisted Pauley in seeking the ouster of "ultra-liberal" regents, faculty members, and students, and even UC President Clark Kerr. The latter was not achieved until Ronald Reagan was elected Governor -- in part campaigning against campus protests. (For details, see entry on Edwin W. Pauley.)

[edit] Watergate

Phillips (and others) have detailed subsequent involvement by Zapata associates in the Watergate scandal. George Bush, as Nixon's United Nations, urged his former Zapata partner Bill Liedtke to launder $100,000 to the White House plumbers. Liedtke was Nixon's finance chair in Texas, and had raised $700,000 in anonymous donations. Phillips writes: "the CIA-Pemex-Pennzoil [née Zapata] money line [was...] exposed in 1972 after funds it provided through Mexican banks were found in the hands of the Watergate burglars. Liedtke passed the 'Mexican' donations to Maurice Stans of the Committee to Re-Elect the President (CREEP), who gave them to Watergate burglar G. Gordon Liddy, who gave them to Bernard Barker. After Nixon's 1972 re-election, he appointed Bush as Chairman of the Republican National Committee. When the laundering was exposed, those involved included several CIA officials: E. Howard Hunt, Frank Sturgis, Eugenio Martínez, Virgilio González, and Bernard Barker. A discussion of the laundering appears on the Nixon tapes for June 23, 1973.[6]

[edit] GHW Bush becomes CIA Director

Officially, with no prior experience in the intelligence community, although then serving as US Ambassador to China, GHW Bush was appointed Director of the CIA by Ford and served 355 days, from January 30 1976-January 20, 1977. Twenty-one years later, after Bush's 8 years as Vice President and 4 years as President, the CIA Headquarters was re-named the "George Bush Center for Intelligence" in October 1998.

[edit] Iran-Contra affair

Michael Mahony alleges that Zapata Off-Shore was used as part of a CIA drug-smuggling ring to pay for arming Nicaraguan Contras in 1986-1988, including Rodriguez, Eugene Hasenfus and others. Mahony claims Zapata's oil rigs were used as staging bases for drug shipments, allegedly named "Operation Whale Watch." Mahony allegedly worked for Naval Intelligence, US State Department and CIA for two decades.

CIA operative Rodriguez had extensive contact with George Bush during the Iran-Contra affair. Indeed, in September 1986 General John K. Singlaub wrote Oliver North expressing concern about Felix Rodriguez's daily contact with the Bush office and warned of damage to President Reagan and the Republican Party.

[edit] Business History 1969 to present, offshoots

Zapata, under Robert Gow's direction, acquired a controlling interest in the United Fruit Company in 1969. Robert's father, Ralph Gow, was on United Fruit's board of directors.

Gow apparently left Zapata in 1970. He took with him from Zapata Peter C. Knudtzon. Ties to the Bush family continued-- in 1971 both Jeb Bush and George W. Bush worked for Gow's new company, Stratford of Texas (aka Stratford of Houston). Stratford imported tropical plants. According to Knudtzon, George W. Bush reportedly flew for Stratford to Florida and Guatemala (which suffered 400 death-squad murders that year).[7] Stratford evidently had ties to a large finca (nursery or plantation) in La Democracia, Huehuetenango, Guatemala.

In the 1970s, under chairman and CEO William Flynn, Zapata expanded its business to include subsidiaries in dredging, construction, coal mining, copper mining and fishing.

By the late 1970s, saddled with weak operations, high debt and low return on investment, the company again began undergoing changes in management and direction. Lead by John Mackin, who succeeded William Flynn, the company began selling off some of those businesses and refocused on offshore oil and gas exploration and production.

In 1982 chief operating officer Ronald Lassiter assumed the role of CEO, and presided over a decade of red ink brought on by the collapse of oil prices. Zapata Offshore became Zapata Corporation in 1982. Its stock performed poorly. By 1986 Zapata was one of the bad loans that shook the foundations of San Francisco-based Bank of America, with a debt of more than $500 million and a fiscal year loss of $250 million. The company announced several restructurings during those years and managed to stave off bankruptcy, but continued to incur major losses. In 1990 the oil drilling company proposed selling its entire fleet of offshore drilling rigs to focus solely on fishing. The company had not had a profitable quarter in more than five years.

Zapata Offshore continued on as an offshore drilling company until the early 1990s when it was purchased by Arethusa Offshore which a few years sold the rigs to Diamond Offshore. Still struggling with debt by 1993, Zapata signed a deal with Norex America to raise more than $100 million through a loan and stock sale. But financier Malcolm Glazer, owner of the Tampa Bay Buccaneers NFL franchise and then-owner of 40 percent of Zapata, didn't want his holdings diluted and filed a lawsuit to block the deal.

By 1994 the company had come under Glazer's control, after a proxy fight. Glazer became chairman of Zapata, replacing Ronald Lassiter, and in 1995 Avram Glazer was named CEO and president of Zapata. De facto headquarters moved from Houston to Rochester, NY. It no longer engaged in exploration, but owned several natural gas service companies. It also produced protein products from the menhaden fish. In subsequent years Zapata sold its energy-related businesses and focused on marine protein.

The Glazers spun off the company's fishing business, renamed Omega Protein, in 1998. Between 1998 and 2000, Zapata tried to position itself as an internet media company under the "zap.com" name. The company's stock boomed and crashed along with other dot-coms, and in 2001 the company conducted a 1 for 10 reverse stock split. The venture was cited by many investment journalists as an example of a company jumping on the internet bandwagon without any relevant experience.

The Zapata Corporation continues to serve as an investment vehicle for the Glazer family. Avram Glazer is the chairman and chief executive officer of Zapata.

[edit] Omega Protein Corporation, subsidiary

Zapata was a holding company for the Omega Protein Corporation, a marine protein business that processes the Atlantic menhaden into foods and industrial oils. Due to overfishing, they are only allowed to operate in Virginia and North Carolina. Nonetheless, they annually kill and process over 233 million pounds of menhaden from the Chesapeake Bay. Critics claim that this level of fishing is threatening the ecological balance of the bay by removing a key plankton feeder that limits phytoplankton blooms such as red tide (Franklin, 2006).

[edit] References

1. ^ Michael Hasty (February 5, 2004). Secret admirers: The Bushes and the Washington Post. Online Journal.
2. ^ Adios, Zapata!: Colorful company founded by Bush relocates to N.Y.. Houston Business Journal (April 23, 1999).
3. ^ Zapata Oil Files, 1943-1983, George Bush Personal Papers, George Bush Presidential Library
4. ^ John Fitzgerald Kennedy. American Patriot Friends Network.
5. ^ Bush called FBI when JFK died. The Houston Chronicle (December 21, 1991).
6. ^ George Bush: World Class Monster
7. ^ [1]

[edit] Public records

• SEC filings of Zapata Corporation
• Zapata Offshore Annual Reports, Microform Reading Room, Library of Congress.
• Transcript and audioof a "smoking gun" tape of Nixon telling Haldeman and Ehrlichman about the "Bay of Pigs" and "Texans."
• National Security Archives documentation of GHW Bush's CIA involvement in the early 1960s.
• United States District Court for the District of Columbia, Civil Action 88-2600 GHR, Archives and Research Center v. Central Intelligence Agency, Affidavit of George William Bush, September 21, 1988.
• Bush Sr.'s papers

[edit] Zapata

• "Adios, Zapata! Colorful company founded by Bush relocates to N.Y.," Houston Business Journal, April 26, 1999
• Franklin, H. Bruce, "Net Losses", Mother Jones, March 2006 - extensive article on role of Menhaded in ecosystem and possible results of overfishing. Retrieved 21 February, 2006

[edit] George Bush

• Kevin Philips, Dynasty: Aristocracy, Fortune and the Politics of Deceit in the House of Bush, (2004), esp. pp.200-208.
• Russell Bowen, The Immaculate Deception: The Bush Crime Family Exposed (1991).
• Joseph McBride, "The Man Who Wasn't There: 'George Bush,' CIA Operative," The Nation, July 16/23, 1988, p. 42.
• Joseph McBride, "Where Was George?", The Nation, August 13/20, 1988, on the whereabouts of GHW Bush on 22 November 1963.
• Nicolas King, George Bush: A Biography.
• Webster Tarpley & Anton Chaitkin, George Bush: The Unauthorized Biography, Chapter 8.2 (1991), and "Bush as a covert CIA operative during the early 1960s". Tarpey and Chaitkin are associated with Lyndon LaRouche.
• Laura Hanning 2004, Study of Evil -- A World Reappraised: supporting documents, photos, letters, part III George Herbert Walker Bush
• Anthony L. Kimery, "George Bush and the CIA: In the Company of Friends," Covert Action Quarterly, Summer, 1992.
• "George HW Bush and Felix Rodriguez: the tale of two old friends"
• The Mafia, CIA & George [HW] Bush, Pete Brewton, S.P.I. Books, 1992

[edit] CIA

• Richard Bissell, Reflections of a Cold Warrior, (Yale University Press, 1996).
• David Atlee Phillips, The Night Watch.
• E. Howard Hunt, Give Us This Day (New Rochelle: Arlington Press, 1973)
• Michael R. Beschloss, The Crisis Years: Kennedy and Khrushchev, 1960-63 (New York: Edward Burlingame Books, 1991), p. 89 refers to "Operation Zapata" as the codename for the Bay of Pigs operation.

[edit] Others

• Leroy Fletcher Prouty, The Secret Team (1973).
• Michael Maholy (of Yankton, SD), [8]
• Daniel Yergin, The Prize, (1991).
• Rodney Stich (former FAA investigator) Defrauding America (1994), and The Drugging of America (1999).

[edit] External links

• Zapata Corporation