Bush Sr.'s Profitable Crossing
President Bush may complain that his mother-in-law took a hit on her Enron stock, but it seems his dad made a tidy profit on that other notorious bankruptcy, Global Crossing. In 1999 and 2000, the elder Bush pocketed more than $4.5 million by selling Global Crossing stock, according to Securities & Exchange Commission documents obtained by BusinessWeek. His last sale came just weeks before the once high-flying telecom's stock started tanking.
The elder Bush and his wife, Barbara, sold 100,000 Global Crossing shares on Nov. 16, 1999, for $4.45 million, according to the documents. Then, the Bushes notified the SEC they were selling an additional 1,000 shares on Mar. 13, 2000, for $55,000. The former First Family had acquired at least 100,000 shares of Global Crossing stock as a private investment on Apr. 21, 1998, the documents say.
The shares listed in the documents may have been payment for appearances the elder Bush, whose normal speaking fee ran $80,000, made at Global Crossing conferences. In the months before he acquired the stock in April, 1998, Bush made speeches on behalf of Global Crossing in Tokyo in February and in Barcelona in April. Jean Becker, spokeswoman for the former President, says Bush also addressed Global Crossing audiences in June, 1999, in Virginia and in June, 2000, in Rochester, N.Y. The Bushes acquired the 100,000 shares four months before Global Crossing went public at $19 a share (the stock split two-for-one six months later).
The documents don't indicate how much Bush paid for the shares since he acquired them before the company was public. It's also not known whether he bought additional shares of Global Crossing before or after it went public. Neither Bush's spokesman nor the manager of his trust would comment on his financial dealings. "I don't talk to the press about private clients," says Anthony Duke Jr., a managing director at Bessemer Trust, the Bushes' trustee.
In its first months of public trading, Global stock ran up as high as $64.25 in May, 1999, but then began a roller-coaster ride that lasted until a slow-motion collapse started a year later. The volume of trading intensified dramatically in September, 1999. And the Bushes sold 100,000 shares in November of that year after the volatile stock bounced back to $44.50 from a September low of $20.25. The second sale, four months later, came near Global's peak. A month after that, it had lost nearly half its value. A share of the company's stock now sells for pennies.
During its meteoric rise and fall, Global Crossing spent lavishly to cultivate political influence. In addition to hiring various Washington heavyweights, such as former Clinton antitrust chief Anne Bingaman, it contributed $2.8 million to a variety of candidates and both key political parties in the 2000 elections. While Bush was the biggest name snagged by Global, 55% of its donations went to Democrats, according to the Center for Responsive Politics.
The former President is a longtime friend of Global Crossing Vice-Chairman Lodwrick Cook, a former Arco executive and Republican fund-raiser. During his many public speeches, Bush has lauded the telecom revolution. "Information technology has transformed the way we live," he said in a keynote address to the Telecommunications Resellers Assn. on Nov. 2, 1999. "It moves information. It creates jobs. And it breaks down barriers." Among those introducing Bush that day in Louisville, Kent.: Global Crossing Vice-Chairman Joseph Clayton.
By Richard S. Dunham and Mike McNamee in Washington, D.C.