Did George W. Bush once have a financial relationship with Enron? In 1986, according to a publicly available record, the two drilled for oil together--at a time when Bush was a none-too-successful oil man in Texas, and his oil venture was in dire need of help. (In early March The Nation broke the story on its website; two days later the New York Times covered this Bush-Enron deal.)
In 1986 Spectrum 7, a privately owned oil company chaired by Bush, faced serious trouble. Two years earlier Bush had merged his failing Bush Exploration Company with the profitable Spectrum 7, where he was named the company's chief executive and director. Bush was paid $75,000 a year and handed 1.1 million shares, according to First Son, Bill Minutaglio's biography of Bush. Bush ended up owning about 15 percent of Spectrum 7. By the end of 1985 Spectrum's fortunes had reversed. With oil prices falling, the company was losing money and on the verge of collapse. To save the firm, Bush began negotiations to sell Spectrum 7 to Harken Energy, a large Dallas-based energy company mostly owned by billionaire George Soros, Saudi businessman Abdullah Taha Baksh and the Harvard Management Corporation.
In September 1986 Spectrum 7 and Harken announced a plan under which Spectrum 7 shareholders would receive Harken stock. Bush said publicly that Spectrum 7 would continue to operate in Midland, Texas, as a wholly owned subsidiary of Harken and that he would become an active member of Harken's board of directors. As Minutaglio reports, the deal would give Bush about $600,000 in Harken shares and $50,000 to $120,000 a year in consultant's fees. It also would provide $2.25 million in Harken stock for a company with a net value of close to $1.8 million.
As the details of the Spectrum-Harken acquisition--which Bush badly needed--were being finalized, Enron Oil and Gas Company, a subsidiary of Enron Corporation, announced on October 16, 1986, a new well producing both oil and natural gas. A press release reported that the well was producing 24,000 cubic feet of natural gas and 411 barrels of oil per day in the Belspec Fusselman Field, fifteen miles northeast of Midland. Enron held a 52 percent interest in the well. According to the announcement, 10 percent belonged to Spectrum 7. At that point, Spectrum 7 was still Bush's company. Harken's completion of the Spectrum 7 acquisition was announced in early November.
To spell it out: George W. Bush and Enron Oil and Gas were in business together in 1986--when Ken Lay was head of Enron. (Lay was named Enron chairman in February of that year.) How did this deal come about? Was this the only project in which Bush and Enron were partners? The White House did not respond to a request for information but later was quoted as saying there had been nothing unusual about the arrangement. Spokeswomen for Enron and EOG Resources (formerly Enron Oil and Gas) said they could not provide information on the well or on other possible Bush-Enron ventures.
Does the relationship between the younger Bush and Lay go back further than heretofore reported--to the mid-1980s? The deal could have happened with no contact between Lay and Bush. But most company heads would be quite interested to know that the son of a sitting Vice President had invested in one of their enterprises. Is it possible that Bush and Spectrum 7 received undue consideration from Enron? Given Enron's penchant for using political ties to win and protect business opportunities, it's tough not to wonder whether this Bush-Enron venture involved special arrangements. This is one more Enron partnership that deserves scrutiny--especially since George W. Bush failed to acknowledge it before the details became public. The Spectrum-Enron deal is either an odd historical coincidence or an indication that there's more to learn about the Bush-Enron association.