The wholly owned subsidiary

While most respectable analysts continue to spend time cogitating over US President Bush’s National Missile Defence programme, I must confess all I’ve done over the past few days is to read this delightful book on the ‘short but happy political life of George W. Bush’. It is, a bit embarrassing to talk of a book that’s somewhat dated (Shrub came out in October last year), but it’s so hilarious-frightening I’d recommend you buy it if you haven’t.

Shrub, to be fair to Bush, is a bit one-sided (hey, that’s the book’s charm), and that’s hardly surprising since a rabid Democrat’s written it, but what it does do is to make ex-President Clinton’s financial peccadilloes look childlike. Sure we’ve always known that some of Bush’s biggest supporters, and contributors, have been huge conglomerates, right from Exxon to Enron, but what’s fascinating is how blatant the whole money-for-favours business is. A few instances Shrub details about the man Molly Ivins calls ‘a wholly owned subsidiary of corporate America’:

In 1978, George ‘Dubya’ Bush needed funds for his oil firm Arbusto Energy (Arbusto’s the Spanish word, Dubya insists, for ‘bush’, but Cassell’s Spanish Dictionary says it means ‘shrub’), and managed to collect $4.7 mn from his father’s friends and associates — Celanese CEO J.D. Macomber and venture-capitalist W.H. Draper III put together $172,550 and both later got political appointments to the Import-Export Bank during the Reagan and Bush years. Most of the money, was collected between 1979 and 1982, when Bush Senior was either running for president or was Reagan’s vice-president.

By 1982, when Arbusto went bust-o, and it’s book value was $382,376, a person called Philip Uzielli appeared as a white knight and offered $1 million for a tenth of the firm, then worth $38,237. Uzielli’s a friend of James Baker III, the man who became Bush senior’s secretary of state — Daddy was vice-president when Uzielli did his Internet-style deal. It gets better.

Dubya renamed his company Bush Exploration (you can figure out why), and when it was in serious trouble, Mercer Reynolds III and William O. DeWitt (two people who became big contributors to Bush Senior’s campaign) bought Bush Exploration, as a result of which Dubya came to acquire a part of their firm, Spectrum 7. And when this began to fail (Bush Sr was now President), it was bought by Harken Energy Corporation — on the eve of the Gulf War, this small Texas firm with no international or offshore drilling experience, bagged an exclusive 35-year exploration contract with Bahrain!

Other Dubya greats include getting taxpayers to fund the tab ($191 mn) for building a new baseball stadium in Arlington which increased the value of the Texas baseball team (the Rangers) which he co-owned. As governor, Dubya was a big campaigner for ‘tort’ reform — essentially legislation that made it near-impossible for citizens to sue big firms because, as he put it, the current system was ‘bad for business and bad for the economy in Texas.’ In 1999, says Ivins, Dubya was personally flogging the only bill he designated ‘emergency legislation’, a $45 mn tax-break for owners (Exxon, mainly) of marginally productive oil and gas wells — ‘there’s a lot of people hurting’, said Dubya, the bleeding heart.

In 1997, Bush gave big oil polluters like Exxon a huge reprieve, and prevented the environment authorities from coming down heavily on them. These companies contributed $260,648 to his 1998 gubernatorial campaign and $243,900 to his presidential campaign — a South Texas oil-and-gas operator then gave another $101,000, and four energy company CEOs another $325,000.

The obvious question is whether Indian governments are as blatant as this when it comes to favouring big business? Certainly there have been enough such cases in the recent past, though the contributions of business houses to political parties are less easily accessible. In 1999, for instance, Prime Minister Vajpayee offered huge tax concessions to tobacco firms — when these were reversed by Finance Minister Yashwant Sinha on the grounds of a huge revenue loss, Vajpayee pulled him up, and got him to change his stance — some months ago, thankfully, Vajpayee changed his stance again.

Similarly, when the steel industry was in trouble a few years ago, the government offered them huge loans and even banned imports below a certain price, theoretically benefitting these producers by Rs 5,000 crore; the telecom policy was changed when the existing players found the license fees onerous in 1999, and parts of it are once again being changed — virtually as you read this piece — because some corporates are in favour of it.

At one level, of course, Vajpayee’s indiscretions look like kidstuff when you compare them with Bush’s. Yet, it’s true that Bush’s attempts to help US Inc have taken place through the legislature — so even if they’re biased, at least they’ve gone through the due process. The same can’t be said for some of Vajpayee’s actions like on steel prices or the recent telecom ones. So is Vajpayee a wholly-owned subsidiary too? Of corporate India though, and not, as his detractors in the RSS would have us believe, of corporate America.

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