Jeb Bush made $29 million in the first seven years after he left public office, dramatically increasing his wealth during a recession, a financial crisis and the Obama presidency he has criticized.
Bush’s tax returns, released Tuesday, show how the former Florida governor set up a successful consulting and speaking business and plowed the profits into an array of investments including offshore holdings and business ventures in the shipping and oil industries.
Bush now has a net worth of $19 million to $22 million, his presidential campaign said, which means his wealth is more than 14 times larger than when he left office in early 2007. While he was governor, his net worth declined.
“Thank God for term limits,” Bush quipped on Tuesday as he briefed a small group of reporters in a law office a block from the White House.
“I’ve been truly blessed to be able to be more successful than I imagined,” he added.
Bush, 62, released 33 years of tax returns Tuesday in a show of transparency that topped the Republican Party’s previous two nominees and presented a challenge to other candidates for president. Romney and John McCain, the two most recent past presidential nominees, each released two years of returns.
Bush, the son and brother of former presidents, says he is running to close what he calls the opportunity gap between high-income Americans and everyone else. As other candidates emphasize their modest upbringings, Bush is trying to make his business experience an asset and prevent his wealth from becoming a political liability.
Among the biggest sources of Bush’s expanding wealth after leaving the governor’s office in 2007 were a contract with Lehman Brothers in 2007 and 2008 before the firm went bankrupt and a similar arrangement with Barclays Plc. Lehman paid Bush about $1.3 million a year and Barclays paid him about $2 million a year through 2014, according to the campaign.
Bush also made $8.1 million giving speeches from 2007 to 2013 to groups including the National Potato Council, the Minnesota Bankers Association and Pfizer Inc. Since the beginning of 2014, he has earned another $1.8 million from speeches, according to a list released by the campaign.
Another source of Bush’s income was his work on corporate boards of companies including Tenet Healthcare Corp., Rayonier Inc., Cormatrix, Swisher Hygiene, Empower Software Holdings and Geo Fossil Fuels LLC. Bush had other consulting clients through Jeb Bush & Associates, a firm he has since sold to his son, Jeb Bush Jr.
Bush and his campaign wouldn’t release a complete list of consulting clients, citing confidentiality agreements. The campaign did release the names of some consulting clients: Academic Partnerships, Clinical Medical Services, Planetary Resources and All-Med. None of the undisclosed clients are foreign, and Bush never lobbied, his campaign said.
40.1 Percent Rate
Bush and his wife, Columba, paid a 40.1 percent effective federal income tax rate in 2013 on more than $7 million in earnings. They paid slightly lower rates in the other years. "It's a little daunting to be paying 40 percent of your income in taxes," Bush said. "It's not something I'm bragging about."
The 40.1 percent rate is more than double what President Barack Obama paid in 2014 and nearly triple the rate that Mitt Romney, the 2012 Republican presidential nominee, paid in 2011.
Bush’s campaign drew attention to the disparity between the candidate’s tax returns and the president’s. There are a few reasons for Bush’s relatively high rate.
Compared with other high-income families, the Bushes earned relatively little income from lightly taxed capital gains and dividends. They faced increased marginal tax rates -- up to 43.4 percent in 2013 -- as a result of Obama’s policies.
They live in Florida, a state without an income tax they can deduct from their federal taxes. Bush’s self-employment taxes -- the equivalent of a wage-earner’s payroll taxes -- show up on his income tax return. And the Bushes donated a much smaller share of their income to charity than the Obamas have.
From 2007 to 2013, the Bushes gave a total of $431,056 to charity, or about 1.5 percent of their adjusted gross income. In 2011, Romney, who is much wealthier than Bush, donated more than 29 percent of his income to charity. The Obamas donated 14.8 percent last year.
Bush said his total charitable giving from 2007 to 2014 is $739,000; he hasn’t filed a tax return for that final year. The campaign released the names of some, but not all, charities that got donations from the family. They include: the Urban League of Miami, Knights of Columbus, Ave Maria University and the Green Beret Foundation. The campaign noted that Bush has helped raise more than $70 million for various causes.
The returns don’t give a comprehensive picture of Bush’s wealth as of today.
That will come later. Bush is seeking an extension for the personal financial disclosure that’s required of presidential candidates, and he’ll file that this year. He will also release his 2014 tax return after he files it near the extended October 15 deadline.
‘The Jeb View’
When he left office, Bush said, he wanted to make his family financially secure. As a senior adviser at Barclays, he traveled the world. He said he deepened his knowledge about foreign markets while advising bank clients from Europe to Asia.
“My experience in government allowed me to provide some insights,” Bush said. “It wasn’t the Barclays view. It was the Jeb view about how the world works. And it seemed to have been quite effective. I mean, the amount of time I spent traveling the world talking to their top clients was an indication that I did add value for the enterprise.”
Bush said his speaking fees rose over time and that he was typically paid $40,000 to $50,000 per event, and as much as $75,000 outside the U.S.
“Not many people can sustain it over the length that I did,” he said.
‘Less Than Chelsea Clinton’
Asked whether the speaking fees and seven-figure payments disconnected him from most Americans, Bush said the appearances put him in front of people from “every sector of life.”
“I talked to a lot of people that have added a lot of value in my life,” Bush said, adding that he was mostly talking to community and business leaders.
“I made less than Chelsea Clinton,” Bush joked, referring to a Washington Post report Tuesday that the daughter of Bill and Hillary Clinton, the Democratic presidential candidate, earned $65,000 for an appearance this year at the University of Missouri at Kansas City. “I’m not even on the third team of the Clintons,” Bush said. The former president and his wife made at least $30 million from speeches in 2014 and 2015 alone, the couple disclosed earlier this year.
Bush’s tax returns show a mix of successful and failed investments.
In October 2013, he sold $903,216 worth of Tenet stock and claimed $462,013 in profit, more than doubling his money since he purchased it in May 2011. He made another $94,270 in profit on another batch of Tenet shares that he sold in September 2013.
Other investments didn’t fare so well. Bush bought $77,000 in Lehman Brothers stock in July 2008. The firm filed for bankruptcy in September 2008 and Bush sold the shares for $54 on Dec. 26, 2008.
Bush bought an exchange-traded fund that invested in gold in August 2011, right after the showdown in Washington over the federal debt ceiling and Standard & Poor’s downgraded the U.S. government. He sold the investment at a $65,037 loss in December 2013.
He made $351 buying shares of Facebook Inc. and then selling them on May 18, 2012, the date of the company’s initial public offering.
Bush also owned funds run by Abbey Capital LP that resulted in him filing tax forms that include addresses in Malta, the Cayman Islands and Bermuda. Investment funds often set up addresses outside the U.S. to help foreign investors limit their U.S. tax liabilities.
Bush said he paid U.S. taxes on those investments as required, and the campaign said those investments lost about $20,000.
Bush also said he didn’t choose the offshore investments, but that they were picked by SunTrust Banks Inc., which manages much of Bush’s money. Bush said the bank chose the investments based on a questionnaire he filled out about his risk tolerance and preferences. His campaign said the Abbey Capital investment amounted to less than two percent of his investments at SunTrust.
The tax returns and other documents released on Tuesday reveal a few other details about Bush’s finances.
- In 2013, he reported $6,575 in gambling winnings. That was actually a table prize at a dinner and should have been reported as regular income, not proceedings from gambling, according to the campaign.
- Columba Bush, his wife, has received a salary from Jeb Bush & Associates. In 2013, for example, she was paid $27,000.
- Jeb Bush made money from Old Rhodes Holdings LLC, which made at least part of its income from investing in disaster response services. In that business and in Bush’s Britton Hill Partners investment firm, he worked with Amar Bajpai, a former Lehman banker.
- Bush said Britton Hill Partners, which he has since left, has been wrongly described as a private equity firm. It provides capital to companies without taking them over or running them.
- Bush set up a revocable trust as part of an estate-planning strategy. He is the trustee, and Columba Bush is the beneficiary.
(Contributing: Zachary R. Mider and Margaret Collins)