mong the many questions that have been raised about George W. Bush's business dealings with Harken Energy, there's one that has so far failed to attract the attention of journalists delving into the president's past: Why is all this coming up now? Did Bush's sale of Harken stock more than a decade ago come to the fore spontaneously as a result of public outrage over scandals at Enron, WorldCom, and Arthur Andersen? Did enterprising reporters dig up long-buried secrets? Did one of the president's former business associates come forward to expose his hypocrisy?
While anything is possible, it appears the answer to all those questions is no. There has been no Harken whistleblower. There have been few, if any, elements of the Harken story that were not previously reported and, far more important, investigated by the Securities and Exchange Commission, which took no action against Bush. And despite public anger at Kenneth Lay, Bernard Ebbers, and other symbols of corporate criminality, the Harken story did not emerge spontaneously. Rather, a look at recent events suggests that the Harken resurrection was the result of a well-planned, well-funded, and well-executed campaign to damage the president politically at a time when his approval ratings seemed almost unchallengeably high. Those involved in the effort include former officials in the Clinton White House, veterans of liberal interest groups, sympathetic journalists, and some of the nation's richest labor unions.
LIKE A FOX
"The idea for the ad started a couple of weeks ago when Bush announced that he was going to give a speech on corporate responsibility," says Michael Lux, the man who heads American Family Voices. Lux, a former aide to President Clinton and former political director for the liberal interest group People for the American Way, says, "I was outraged at the idea that Bush was going to do a big speech and pound his chest and say he is in favor of corporate responsibility when he is closer to the corporate world than any president since Ronald Reagan. I started to think about the fox and the henhouse. I was talking to Joe Lockhart [the former Clinton press secretary who now runs an advertising agency in Washington], and he came up with the ad."
Lux has been trying to highlight the Harken story for months. He hired a writer named Stephen Pizzo, who in the 1990s wrote a story about Bush and Harken for Mother Jones magazine. Pizzo went to Lux last March, just before the president gave an earlier speech on corporate accountability, and the two discussed the allegations in Pizzo's Mother Jones piece. As a result of that talk, American Family Voices put out a press release on March 7 which "questioned the White House's credibility on this issue in light of President Bush's own actions as a Texas oil company executive prior to his career in politics." The release which was featured on one of AFV's websites, thedailyenron.com chronicled the stock sale as well as the story of two loans Bush received from Harken for the purpose of buying company stock.
The release attracted little attention, but in the days that followed, Lux returned to the issue several times in thedailyenron.com. On June 27, he published a report which began, "Yesterday the foxes assured Americans that they are hot on the trail of those missing chickens." After recounting the Harken story yet again, the article claimed that Bush had "pulled a Martha Stewart" when he sold his stock "on inside information."
There was no reason to expect that this release would receive any more notice than the ones that preceded it, but a short time later, Lux found his words featured in the editorial pages of America's most powerful newspaper. On June 2, five days after the American Family Voices release, New York Times columnist Paul Krugman told the story of Bush's stock sale. Krugman quoted Lux's line about the foxes and the chickens he credited it to thedailyenron.com and also compared Bush's stock sale, unfavorably, to Martha Stewart's financial troubles. Given a prominent place in the Times, the Harken story had new life.
Lux founded the organization in 2000 to be "a strong voice for middle and low income families on economic, health care, and consumer issues." The group got going with $800,000 donated by the American Federation of State, County, and Municipal Employees. To this day, the union remains AFV's largest single contributor, although Lux says the group also receives money from "other progressive groups and a wide variety of donors." In addition to the government employees, Lux says other labor unions that contribute to AFV include the International Brotherhood of Electrical Workers, the United Food and Commercial Workers, and the International Association of Machinists. Lux declined to name AFV's other contributors, except to say that they are "your classic progressive donors."
In the first months of its existence, AFV used its contributions from government workers to mount a furious effort to keep George W. Bush out of the White House. In September 2000, the Brennan Center for Justice at New York University School of Law, a pro-campaign finance group, cited AFV as one of the main organizations funding outside ads for Democrat Al Gore. In a study headlined, "Special Interest Groups Flood Key States With Ads For Gore; Group Spending For Bush Virtually Nonexistent," the center reported that American Family Voices spent $640,000 on pro-Gore ads between June and September 2000 (only two groups spent more for Gore: Handgun Control, with $1.3 million, and the AFL-CIO, with $1.1 million). In contrast, the group that spent the most money for Bush, the National Rifle Association, spent a relatively small $257,072.
Still, all that spending wasn't enough to win the White House for Gore, and after his defeat, American Family Voices found itself without a clear mission. Through much of 2001, Lux worked at his Washington consulting firm, Progressive Strategies, while AFV received almost no attention in the press. Then, as 2002 began, the group found a new cause.
WORLD OF ENRON
Lux created thedailyenron.com and another website, nomoreenrons.com, both of which began by covering the Enron matter, but later expanded to include other issues, like Vice President Dick Cheney's refusal to give the General Accounting Office information about his energy task force. The sites do the usual political stuff they give anti-Bush activists talking points and arguments to use against the administration, and also encourage readers to sign petitions and send letters to their senators and representatives. In addition, Lux tries to spread the message by speaking frequently with reporters "Like most groups," he says, "we give information to journalists who we've had a relationship with." When it's all added up, it is hard to say precisely what influence AFV has, but it is hard to deny that the stories and angles Lux emphasizes often find their way into the news.
For example, on Thursday both the Times and the Washington Post ran front-page stories on Bush's two loans from Harken. Both stories tied the loans to Bush's speech on Wall Street, in which he said, "I challenge compensation committees to put an end to all company loans to corporate officers." And both suggested that there was more than a little hypocrisy in Bush's position. The Times said the loans "raised the question of how [Bush's] toughened standards today would have applied to his own corporate experience," while the Post wrote that the "contrast between Bush's record as a business executive and his rhetoric in the face of corporate scandals underscores the challenge his administration faces in trying to credibly foster what he calls 'a new era of integrity in corporate America.'"
The loan story dominated news coverage all day, but, like the insider-trading allegations that had dominated coverage a few days earlier, it was not exactly new. Word of the loans was first reported by U.S. News & World Report in March 1992, as Bush's father began his presidential reelection campaign. The magazine reported that "Harken offers select executives, including [George W.] Bush, eight-year loans at five-percent interest. The loans may be used by company brass to exercise options to purchase Harken shares. Bush has borrowed $180,375."
The U.S. News story attracted a little notice in places like The Hotline. A few months later, in September 1992, Stephen Pizzo discussed the loans in his Mother Jones article. But in the decade that passed between 1992 and this week's stories in the Times and Post, it appears the loans received little, if any, attention. There was, however, one exception: The loans were prominently featured in American Family Voices's March 7 press release. Once more, Michael Lux's cause got a big boost from not one, but two, of the nation's most important papers.
Now, after his success with Harken, Lux senses it's time to move American Family Voices beyond what has been an essentially Enron-based critique of the Bush administration. In the next few weeks, he says, AFV plans to launch a much broader effort. "We're going to move forward with an overall campaign to build on the Enron work and corporate responsibility in general," Lux says. "It's gone so far past Enron now that we're going to do a broader campaign." The work, Lux explains, will involve "more ads, coalition building with unions and environmental groups, and work in a lot of states."
If the past is any measure, look for the campaign to have more than a little success. American Family Voices has a talented leader, rich supporters, and some important friends in the press. That's more than enough to keep making trouble for George W. Bush.