Arbusto Energy

Arbusto Energy
Founder George W Bush

Arbusto Energy (sometimes referred to as Arbusto Oil)[1] was a petroleum and energy company formed in Midland, Texas, in 1979, for former US President George W. Bush by a group of investors which included Dorothy Bush, Lewis Lehrman, William Henry Draper III, Bill Gammell, and James R. Bath. The company's chief financial officer was K. Michael Conaway, now a United States Congressman from Texas.

Controversy

It was later revealed that Bush made an investment of $50,000 while representing Salem bin Laden, the brother of Osama Bin Laden] of the Saudi Binladin Group. This fact became controversial after the September 11, 2001 attacks due to Salem bin Laden being an older, half-brother of Osama bin Laden, who is alleged to have planned and financed the attacks. Upon Salem bin Laden's death in a 1988 airplane crash, in Texas, his interest in Arbusto (along with other Binladin Group assets), passed to Khalid bin Mahfouz.

Arbusto became known as Bush Exploration in 1982, a year after George H. W. Bush became Vice President. A friend of the Bush family, Philip Uzielli, invested $1 million in 1982 in exchange for a 10% stake in the company, at a time when the whole company was valued at less than $400,000. As it neared financial collapse again in September 1984, Bush Exploration merged with Spectrum 7 Energy Corp., a company owned by William DeWitt and Mercer Reynolds. G. W. Bush became Chairman and CEO of Spectrum 7.

In 1985 Spectrum 7 reported a net loss of $1.5 million and was bought in 1986 for $2.2 million by Harken Energy, with Bush joining the Harken board of directors and finance audit committee.

In 1987 the Saudi investor Abdullah Taha Bakhsh bought most of Union Bank of Switzerland's shares in Harken becoming its third largest investor owning 17% of the company. He was represented on the board by Talat M. Othman. Another investor was Ghaith R. Pharaon, a partner of Bakhsh's, who would later be involved in the Bank of Credit and Commerce International scandal, and is currently the target of an international dragnet.

In January 1990 with the company in the same state as its previous incarnations, it was awarded a contract to drill for crude oil off the coast of Bahrain, a move that shocked industry insiders as Harken had no previous experience outside of the US or of drilling offshore.

In June 1990 Bush sold more than half of his shares in Harken to a Los Angeles broker named Ralph D. Smith. One week after the sale Harken announced an overall loss of $23.2 million triggering an investigation by the U.S. Securities and Exchange Commission into the sale.

Further reading

See also

References

  1. ↑ "Arbusto" is an Italian, Spanish and Portuguese word translating variously to "bush" or "shrub".

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