Chinese mega-bucks for Bush brothers
By Margie Burns
December 16, 2003: (Online Journal) Many observers were surprised last week when George W. Bush came down in favor of the People's Republic of China, against a democratic referendum in Taiwan. His weighing in on behalf of mainland China becomes more questionable at a time when well-connected Chinese companies are funneling large sums of money to Bush's brothers.
News reports reveal that Shanghai-based Grace Semiconductor Manufacturing, a multi-billion-dollar company co-founded by a son of China's former president, has presidential brother Neil Bush under a $2 million contract.
With no background in semiconductors, Neil Mallon Bush, third brother in the family, got a five-year contract from Grace, involving an annual retainer of $400,000 in stock. The arrangement is disclosed in court papers in Mr. Bush's scandal-ridden divorce. The business press has conjectured that Grace hoped to influence US limits on exporting sensitive technology to China.
An even bigger Chinese company recently moved in ways that benefit youngest Bush brother Marvin P. Bush. The company is Hong Kong-based Cheung Kong Holdings, a gargantuan real estate and investment conglomerate now branching into biotechs. According to the company, "combined market capitalization of the Cheung Kong Group amounts to HK$515 billion," or "approximately 11.5 percent of the total market capitalization of the Hong Kong stock market."
Cheung Kong's portfolio now includes Critical Path, Inc., a California-based software and Internet-messaging services company that lost money for the first nine months of this year. The company's SEC filings list as a significant shareholder Mr. Purnendu Chatterjee, acting for Winston Partners LP, a company co-founded by Marvin P. Bush. Recent filings show that Chatterjee's group including Winston Partners owns about 5.5 million shares in Critical Path (6.82 percent). Cheung Kong already owned substantial shares in Critical Path in December 2001. Its backing can only solidify the net worth of Critical Path, which has faced class action litigation and has changed top managers a couple of times in the past three years.
It thus cannot but help boost Winston Partners, a private investment firm in northern Virginia formed by Bush with longtime business associate A. Scott Andrews.
There is no law forbidding a foreign corporation from investing in an American company just because a president's relatives hold financial interest in the same company. But there are some instances where taste and judgment, as well as explicit law, should come into play. It is not appropriate for a brother of a sitting president to take money from foreign companies, when we have such strict laws about disclosure that a president or First Family member who receives foreign gifts has to disclose every pair of earrings or belt buckle. Such gifts usually go to the American people after a president leaves office, and the Smithsonian Museum of American History has a charming exhibition of gifts to previous presidents and First Ladies.
These deals, au contraire, are not being exhibited. The White House and the Bush brothers have not responded to questions and requests for information. (Questions to the companies, to the CIA and to the FBI have not yet been answered.)
The deals are known in the international business community, where they must make an unfortunate impression. Marvin Bush is the former head of the Republican Party in Virginia, worked with the late GOP operative Lee Atwater, and has campaigned and networked extensively for his father and brother, as well as for other GOP candidates. He was also a Bush "Ranger," one of a group that raised at least $100,000 in political contributions to Bush's campaign in 2000. Neil Bush has campaigned for Republican candidates, has traveled the globe on behalf of the White House and has also stumped foreign nations for business deals for his educational software company.
This is "restoring honor and dignity to the White House?"
Cheung Kong Holdings and Grace Semiconductor are part of the intensely networked Chinese economy, with a high degree of public-private partnership. For Bush to allow his relatives, especially close relatives, to benefit financially from deals with well-connected firms in what we used to call "Red China" is, at best, a sorry reflection on his taste. For him to follow these deals with a massive shift of support to China, especially one that discourages a democratic referendum in Taiwan, is a worse reflection.
Margie Burns is a freelance writer in Washington, DC, and can be reached at email@example.com.
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