Bush's Baseball Stake

Paul Krugman (column, July 16) says George W. Bush's investment in the Texas Rangers entitled him to $2.3 million from the baseball team's sale. But, Mr. Krugman writes, "his partners voluntarily gave up some of their share, and Mr. Bush received 12 percent of the proceeds — $14.9 million. So a group of businessmen, presumably with some interest in government decisions, gave a sitting governor a $12 million gift. Shouldn't that have raised a few eyebrows?"

We were among Mr. Bush's partners. In 1989, when we bought the team, Mr. Bush became the co-general partner with Edward Rose.

At that time, the two general partners were granted a 15 percent share (Mr. Bush received 10 percent and Mr. Rose, 5 percent) in the investment, after each investor got back his investment plus interest. This is a standard limited-partnership structure. At the time, Mr. Bush was a private citizen, not governor of Texas.

When we sold the team in 1998, Mr. Bush received his 10 percent share. This was not "a $12 million gift" to "a sitting governor."

Mr. Bush had a good idea and the ability to make it happen. He was a dedicated manager and investor, exactly what we hope for in our business leaders.

Here's the Krugman Bush bashing article the letter repsonds too

click here

July 16, 2002
Steps to Wealth
By PAUL KRUGMAN

Why are George W. Bush's business dealings relevant? Given that his aides tout his "character," the public deserves to know that he became wealthy entirely through patronage and connections. But more important, those dealings foreshadow many characteristics of his administration, such as its obsession with secrecy and its intermingling of public policy with private interest.

As the unanswered questions about Harken Energy pile up — what's in those documents the White House won't release? Who was the mystery buyer of Mr. Bush's stock? — let me now turn to how Mr. Bush, who got by with a lot of help from his friends in the 1980's, became wealthy in the 1990's. He invested $606,000 as part of a syndicate that bought the Texas Rangers baseball team in 1989 — borrowing the money and repaying the loan with the proceeds from his Harken stock sale — then saw that grow to $14.9 million over the next nine years. What made his investment so successful?

First, the city of Arlington built the Rangers a new stadium, on terms extraordinarily favorable to Mr. Bush's syndicate, eventually subsidizing Mr. Bush and his partners with more than $150 million in taxpayer money. The city was obliged to raise taxes substantially as a result. Soon after the stadium was completed, Mr. Bush ran successfully for governor of Texas on the theme of self-reliance rather than reliance on government.

Mr. Bush's syndicate eventually resold the Rangers, for triple the original price. The price-is-no-object buyer was a deal maker named Tom Hicks. And thereby hangs a tale.

The University of Texas, though a state institution, has a large endowment. As governor, Mr. Bush changed the rules governing that endowment, eliminating the requirements to disclose "all details concerning the investments made and income realized," and to have "a well-recognized performance measurement service" assess investment results. That is, government officials no longer had to tell the public what they were doing with public money, or allow an independent performance assessment. Then Mr. Bush "privatized" (his term) $9 billion in university assets, transferring them to a nonprofit corporation known as Utimco that could make investment decisions behind closed doors.

In effect, the money was put under the control of Utimco's chairman: Tom Hicks. Under his direction, at least $450 million was invested in private funds managed by Mr. Hicks's business associates and major Republican Party donors. The managers of such funds earn big fees. Due to Mr. Bush's change in the rules, these investments were hidden from public view; an employee of Utimco who alerted university auditors was summarily fired. Even now, it's hard to find out how these investments turned out, though they seem to have done quite badly.

Eventually Mr. Hicks's investment style created a public furor, and he did not seek to retain his position at Utimco when his term expired in 1999.

One last item: Mr. Bush, who put up 1.8 percent of the Rangers syndicate's original capital, was entitled to about $2.3 million from that sale. But his partners voluntarily gave up some of their share, and Mr. Bush received 12 percent of the proceeds — $14.9 million. So a group of businessmen, presumably with some interest in government decisions, gave a sitting governor a $12 million gift. Shouldn't that have raised a few eyebrows?

All of this showed Mr. Bush's characteristic style. First there's the penchant for secrecy, for denying the public information about decisions taken in its name. So it's no surprise that the proposed Homeland Security Department will be exempt from the Freedom of Information Act and from whistle-blower protection.

Then there's the conversion of institutions traditionally insulated from politics into tools for rewarding your friends and reinforcing your political control. Yesterday the University of Texas endowment; today the Federal Energy Regulatory Commission; tomorrow those Social Security "personal accounts"?

Finally, there's the indifference to conflicts of interest. In Austin, Governor Bush saw nothing wrong with profiting personally from a deal with Tom Hicks; in Washington, he sees nothing wrong with having the Pentagon sign what look like sweetheart deals with Dick Cheney's former employer Halliburton.

So the style of a future Bush administration was easily predictable, given Mr. Bush's career history.

The NYT is not a newspaper. It's a smear-tool for the Democratic Party.

The New York Times is in fact a newspaper--like all newspapers, books, pamphlets and magazines, part of "the press" under the plain-text meaning of the First Amendment.
It is also "a smear-tool for the Democratic Party."
To suppose that the two roles are incompatible is to sucker for the con of the hucksters known as journalists. Hamilton and Jefferson sponsored competing newspapers with which to wage their partisan struggles--and nobody batted an eye. Both were exercising their constitutional rights, and everyone understood that.
Journalism as a whole actually despises the First Amendment because it enshrines the principle that any Tom, Dick, or Harry could start a competing newspaper--and therefore that journalists are not special. The conceit that journalists are uniquely objective--and that journalists can decide who is "not a journalist", when the government is forbidden to make that decision--is the elitist claptrap.
And the place it is enshrined in law is with the FCC licensing of the employers of Peter, Dan, and whoever. The Federal Government says that those partisan jerks are "objective." The FCC says so, and M^cCain Feingold says so. When the one is challenged in court, the other should be put under a restraining order against "objectivity" broadcasting politics.

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