Neil, financially dependent on Good, persuaded Silverado to extend a $900,000 line of credit to the developer so that Good could participate in a business deal that JNB Exploration had in Argentina. Neil and his JNB business partner, James Judd, used the money to purchase a 50 percent interest in an oil concession in northern Argentina, but they ran out of money before the drilling started.
“In most circles, people might have sued us because there was a contractual obligation,” said James Judd. “To be quite frank, the fact that Neil was involved in this particular deal—I can’t help but think there was some preferential consideration.”
Rather than sue the son of the Vice President, the Argentine industrialist Santiago Soldati, who owned the other 50 percent interest, took on the full cost of the project. Two years later Soldati was invited as a special guest to George Herbert Walker Bush’s inaugural.
Silverado hemorrhaged money throughout 1986 and 1987, because Neil and the other directors approved $200 million in loans to Neil’s two partners in JNB, his abysmally unsuccessful oil company. Silverado’s failure was due in large part to those two partners, who defaulted on $132 million in loans. This default, plus other Silverado defaults, cost taxpayers almost $1 billion. The order to shut down Silverado did not come until the day after George Bush was elected President in November 1988, suggesting political interference to hold the news until after the election. Had the report been issued earlier, it might have influenced the election because of the involvement of Bush’s son. Regulators seized the savings and loan on December 9, 1988, and the Bush family’s “Mr. Perfect” became the poster child for bunco banking.
The Office of Thrift Supervision filed three conflict-of-interest charges against Neil and subpoenaed him for a hearing. The Federal Deposit Insurance Corporation filed a $200 million civil suit in Denver against Neil and the other Silverado directors. The House Banking Committee subpoenaed Neil to testify about his role as a director of Silverado Savings and Loan Association.
His mother was irate. “Neilsie is being persecuted,” Barbara fumed to the press.
“If it wasn’t for me he would not be getting this heat,” said his father. The avalanche of negative publicity that hit Neil upset his family.
“The focus would not be on Neil Bush today,” said his brother Marvin, “if my dad were not President.”
The President became emotionally distraught over the scandal enveloping his son. “I remember being in a luncheon meeting with him and all of his advertising guys for the 1992 campaign,” said Bob Gardner of Gardner Communications. “Right in the middle of everything President Bush broke down and started crying over Neil. He said the kid was being unfairly attacked because of who his father is.”
After nine months the $200 million civil suit against Neil and the other Silverado directors was settled for $49.5 million, with $26.5 million to come from the pockets of the directors who had allowed Silverado to bleed to death. The directors were all insured, so in the end each one, including Neil, was charged only $50,000 as his share of the penalty. Neil didn’t even have to pay that himself or any of his legal fees, which amounted to $200,000. The entire amount—$250,000—was paid by a legal defense fund set up by his father’s good friend Lud Ashley, who turned to the Bushes’ friends to bail out the Bushes’ son. Some wondered why President Bush, with a declared net worth of $4 million at the time, did not pay his son’s legal fees himself. Because Neil had named his last child Ashley, in honor of his father’s good friend, the honored friend now came to Neil’s rescue.
“I did it because I was a friend of the family,” said Ashley, the former congressman from Ohio who was head of the Association of Bank Holding Companies when he passed the hat for Neil. At that time Ashley was supporting legislation submitted by George Bush’s White House to deregulate the banking industry. Some bankers in Ashley’s association felt uncomfortable with his actions on behalf of his friend’s son, because it created the wrong impression.
By then the savings-and-loan scandal had coiled around Neil’s neck like a noose, but the President’s son managed to escape a criminal indictment. In the OTS hearing, he was cited for “an ethical disability, a lack of skill in seeing ethical issues, he naively violated moral standards. Because he didn’t see, he didn’t engage in moral weighing . . . [T]he handicap does not absolve [him] of responsibility to depositors, shareholders, insurers and American taxpayers.”
Citing Neil Bush for “an ethical disability” was a public rebuke of George and Barbara Bush as parents: they had raised a son who either did not know the difference between right and wrong or was so avaricious that he deliberately ignored basic moral principles.
“The fact that man knows right from wrong proves his intellectual superiority to other creatures,” Mark Twain said. “But the fact that he can do wrong proves his moral inferiority to any creature that cannot.” The judge in the OTS hearing found Neil lower than a worm. He said Neil had violated “the worst kinds of conflict of interest” and recommended the OTS issue a cease-and-desist order restraining him from engaging in similar banking transactions in the future. Neil had to testify before the OTS for three hours on his own behalf. He was argumentative, uncooperative, and arrogant. At a later press conference he was even more defiant.
He approached the microphones, adjusted his tie, jammed his hands in his pockets, and denounced the “inaccurate” media, the “self-serving” regulators, and the “government bullies.” He denounced everything but his own actions. When a reporter asked him to concede that there was at least the appearance of a conflict of interest, he erupted.
“I’ll say it again,” he snapped. “I’m innocent of all charges.” Then he spoke as if the reporters were mutes with a limited understanding of English. Pausing after every word, he glared reprovingly.
“There. Was. No. Conflict. Of. Interest.”
The reporters were astounded that in the face of irrefutable evidence, Neil continued to maintain he was legally and morally in the right. “He seemed to believe it was his birthright,” wrote Steven Wilmsen in
Playboy
, “to profit at the nation’s expense.”
A cease-and-desist order was issued in April 1991, restraining Neil Bush from engaging in bank transactions for the rest of his life. Such an order from the OTS was unprecedented against someone no longer affiliated with a financial institution. For a businessman, the order was the shameful equivalent of a military man’s dishonorable discharge. Even so, Neil recovered faster than most from such a wallop.
Months before the hearing he had formed another company, Apex Energy, to prospect for methane gas in Wyoming. He invested $3,000 of his own money and received $2.7 million in capitalization from Louis Marx, a New York financier who had contributed $100,000 to George Bush’s campaign. Marx bought 49 percent of Neil’s company by using funds he had obtained from a Small Business Administration program designed to help “high risk start-up companies.” Neil paid himself $320,000 in salary over two years, plus $150,000 for an oil lease. In the company’s first year, it lost $708,000. By the second year, its stock was worthless. When the company defaulted on its SBA loan, Denver’s congresswoman Pat Schroeder called for an investigation, but the SBA declined to press the case. In April 1991, Neil resigned as president of the company.
He said the negative publicity had become unbearable. He unlisted his phone and stayed inside his five-bedroom house on the fourth tee of Glenmoor Country Club. “It just exploded into a public nightmare for me,” he said later. “I read all the newspaper stories. I worried about what the next leak was going to be. I worried about the impact on Dad and my role in this thing. I gained a little weight. I didn’t eat well.”
The fancy invitations soon fell off as Denver society jettisoned the young Bushes from the A-list. Barbara Bush flew in to co-host a fund-raising luncheon with Sharon Bush at the home of Bill Daniels, president of TransMedia, a cable-television conglomerate. More than $300,000 was raised for George H.W.’s 1988 campaign, but even the First Lady’s cachet did not help her son and daughter-in-law.
The final indignity came when Neil was unceremoniously dumped from the Colorado Tennis Association’s Clyde Rogers Memorial Day Open. After Neil and his tennis partner had trounced their opponents in a doubles match, an official protest was lodged, accusing Neil of playing in a bracket below his ability in order to win. Neil said he had not realized he was registered to play a team rated a full point below his U.S. Tennis Association rating of 5.5 (on a 10-point scale). “The bottom line is that it’s the player’s responsibility,” said the organizer, Harold Aarons. “He blew it as far as that goes.”
Neil and Sharon decided they had to leave town. Later Neil said, “We were evicted.” They put their house, which had been registered in Sharon’s name to protect their one and only asset, on the market and made plans to move to Houston, where the Bush name was still socially acceptable. At a going-away party hosted by the Republican National Committeeman Jim Nicholson, Neil apologized for any embarrassment he might have caused the party. He said he realized he’d been in the eye of the storm, and he regretted it. But, he added, he did not feel he had done anything wrong. Nicholson, who would be appointed Ambassador to the Vatican by Neil’s brother, agreed.
Democrats, of course, disagreed. At their 2000 national convention Colorado’s party chairman introduced his state on national television by announcing, “Colorado is the former home of Neil Bush, the brother of George W. Bush, who fled our state after plundering the hard-earned savings of working families in the Savings and Loan scandal.”
Despite his “ethical disability” and the cease-and-desist order, Neil found work through his father’s friend Bill Daniels. In 1990 Daniels wrote to the President, asking him to oppose regulation in the cable industry, which the White House subsequently did. A few months later Daniels hired Neil as the director of finance for TransMedia in Houston at sixty thousand dollars a year. Neil had no experience in communications, but Daniels said he “thought Neil deserved a second chance.”
Like Fredo in
The Godfather
, Neil is the Bushes’ bungling son—weak, superficially sweet, and forever dependent on the family’s connections. Those connections paid huge dividends in Houston as his father’s friends hired Neil for various “consulting” contracts. After he traveled to Argentina in June 1989 and played tennis with President-elect Carlos Menem, Neil was hired as a consultant by Plains Resources to prepare a bid to buy oil reserves in Argentina. In Beijing in December 2001, Neil dined with Chinese President Jiang Zemin and was hired in the mid-1990s by Thailand’s Charoen Pokphand Group to find a U.S. partner for a shopping mall in Shanghai. When the Chinese President’s son, Jiang Mianheng, founded a company with Winston Wong, the two men gave Neil a consulting contract in 2002 with Grace Semiconductor that paid him $2 million worth of Grace preferred stock over five years in $400,000 increments. In addition, Neil was put on the board of directors of Grace Semiconductor and paid $10,000 per meeting. Wong told the
Financial Times
that for these munificent fees “Mr. Bush supplied . . . useful guidance about the U.S. economy.” Crest Investment Corporation in Houston hired Neil as a $60,000-a-year consultant and made him co-chairman. Neil said he worked only three to four hours a week and described his services as “answering phone calls when Jamail Daniel, the other co-chairman, called and asked for advice.”
By this time Neil’s father was traveling in a stratosphere of wealth where the air was so thin that only billionaires could breathe. The elder Bush counted among his friends some of the wealthiest men in the world, like Prince Bandar of the Saudi royal family, so close to the Bushes they call him “Bandar Bush”; the Hinduja brothers, who own Gulf Oil, and are among the ten wealthiest people in Britain; the Bass brothers of Texas, whose combined net worth is $8.8 billion; Ali al-Sabah of the ruling family of Kuwait; and Paul Desmarais, the ninth-richest person in Canada.
These financiers—all global-conglomerate giants—were only too happy to help George’s dunderheaded son, knowing that in doing so they earned the Bush family’s gratitude. A favor done is a favor owed.
Neil had no qualms about approaching any of them for funding when he started an Internet-based software firm called Ignite! to provide an educational tool to students. Instead of books, Neil’s company provided cartoons on computers with hip-hop music, which he claimed was the best way to teach children, especially those with dyslexia, attention deficit disorder, and attention deficit/hyperactivity disorder.
His software on early American history contained a jingle to describe the cotton gin to students with learning disabilities:
Cotton was king
Cotton so easy to grow
It was a cash crop, Oh,
Yeah! And it led to a boom in the Southern eee-kon-oh-meee!
Most educators disagreed with Neil’s theory that students have different types of intelligences and that traditional schooling (reading, writing, and memorizing) does not work for everyone. But Neil, who suffered from dyslexia, insisted that he had developed an educational tool that helped children with learning disabilities.
Despite resistance from school administrators and criticism from
The Wall Street Journal
and
The Washington Post
, he raised more than $23 million from investors, including his parents, who gave $500,000; Winston Wong of Grace Semiconductor; Hushang Ansary, a former Iranian Ambassador to the United States, a Houston businessman, and a large GOP donor; Canada’s Paul Desmarais; and Mohammed Al Sabah of the Ultra Horizon Company in Kuwait.
Neil got a rush of Arab investors after traveling to Jidda, Saudi Arabia, and delivering a speech in which he said that the Arabs’ problem in the United States is that their lobby and public-relations machine is not as strong as the Israelis’. In saying that, he fed directly into an article of faith held in the Arab world and by anti-Semites the world over—that America’s Middle East policy is driven by the Jewish lobby rather than national interest. Neil simply had repeated the sentiments of his father, who was never perceived as pro-Israel. As President, Bush had complained in a White House press conference about the strength of the Jewish lobby on Capitol Hill. He reminded his critics that the United States gave “Israel the equivalent of $1,000 for every Israeli citizen,” a remark that detractors saw as an allusion to the stereotype of Jews as greedy and moneygrubbing. Echoing the President’s comments about the Jewish lobby was his Secretary of State James A. Baker, who said, “Fuck the Jews. They don’t vote for us anyway.”