In 1979, Bush's first business, Arbusto Energy, obtained financing from James Bath, a Houstonian and close family friend. One of many investors, Bath gave Bush $50,000 for a 5 percent stake in Arbusto. At the time, Bath was the sole U.S. business representative for Salem Bin Laden, head of the wealthy Saudi Arabian family and a brother (one of 17) to Osama Bin Laden. It has long been suspected, but never proven, that the Arbusto money came directly from Salem Bin Laden. In a statement issued shortly after the September 11 attacks, the White House vehemently denied the connection, insisting that Bath invested his own money, not Salem Bin Laden's, in Arbusto.

In conflicting statements, Bush at first denied ever knowing Bath, then acknowledged his stake in Arbusto and that he was aware Bath represented Saudi interests. In fact, Bath has extensive ties, both to the Bin Laden family and major players in the scandal-ridden Bank of Commerce and Credit International (BCCI) who have gone on to fund Osama Bin Laden. BCCI defrauded depositors of $10 billion in the '80s in what has been called the "largest bank fraud in world financial history" by former Manhattan District Attorney Robert Morgenthau. During the '80s, BCCI also acted as a main conduit for laundering money intended for clandestine CIA activities, ranging from financial support to the Afghan Mujahideen to paying intermediaries in the Iran-Contra affair.

When Salem Bin Laden died in 1988, powerful Saudi Arabian banker and BCCI principal Khalid Bin Mahfouz inherited his interests in Houston. Bath ran a business for bin Mahfouz in Houston and joined a partnership with Bin Mahfouz and Gaith Pharaon, BCCI's front man in Houston's Main Bank.

The Arbusto deal wasn't the last time Bush looked to highly questionable sources to invest in his oil dealings. After several incarnations, Arbusto emerged in 1986 as Harken Energy Corporation. When Harken ran into trouble a year later, Saudi Sheik Abdullah Taha Bakhsh purchased a 17.6 percent stake in the company. Bakhsh was a business partner with Pharaon in Saudi Arabia; his banker there just happened to be Bin Mahfouz.

Though Bush told the Wall Street Journal he had "no idea" BCCI was involved in Harken's financial dealings, the network of connections between Bush and BCCI is so extensive that the Journal concluded their investigation of the matter in 1991 by stating: "The number of BCCI-connected people who had dealings with Harken-all since George W. Bush came on board-raises the question of whether they mask an effort to cozy up to a presidential son." Or even the President: Bath finally came under investigation by the FBI in 1992 for his Saudi business relationships, accused of funneling Saudi money through Houston in order to influence the foreign policies of the Reagan and first Bush administrations.

Worst of all, Bin Mahfouz allegedly has been financing the Bin Laden terrorist network-making Bush a U.S. citizen who has done business with those who finance and support terrorists. According to USA Today, Bin Mahfouz and other Saudis attempted to transfer $3 million to various Bin Laden front operations in Saudi Arabia in 1999. ABC News reported the same year that Saudi officials stopped Bin Mahfouz from contributing money directly to Bin Laden. (Bin Mahfouz's sister is also a wife of Osama Bin Laden, a fact that former CIA Director James Woolsey revealed in 1998 Senate testimony.)

When President Bush announced he is hot on the trail of the money used over the years to finance terrorism, he must have realized that trail ultimately leads not only to Saudi Arabia, but to some of the same financiers who originally helped propel him into the oil business and later the White House. The ties between Bin Laden and the White House may be much closer than he is willing to acknowledge." (Wayne Madsen, 10/22/01)*

If the United States boosts defense spending in its quest to stop Saudi dissident Osama Bin Laden's alleged terrorist activities, his family may be the unexpected beneficiary of that, media reports said. "Among its far-flung business interests, the well-heeled Saudi Arabian clan, which says it is estranged from Laden, is an investor in a fund established by Carlyle Group, a well-connected Washington merchant bank specializing in buyouts of defense and aerospace companies," The Wall Street Journal said in an investigative dispatch. It said "through this investment and its ties to Saudi royalty, the Bin Laden family has become acquainted with some of the biggest names in the Republican Party."

In recent years, former president George H W Bush, ex-Secretary of State James Baker and ex-Secretary of Defense Frank Carlucci have made the pilgrimage to the Bin Laden family's headquarters in Jeddah (Saudi Arabia). "Ex-President Bush makes speeches on behalf of Carlyle Group and is senior adviser to its Asian Partners Fund, while Baker is its senior counselor and Carlucci is the group's chairman," the journal said." (Hindustani Times, 9/28/01)

With former US Defense Secretary Frank Carlucci as its chairman, it's no surprise that The Carlyle Group is drawn to defense. Defense and aerospace firms such as United Defense Industries make up a significant share of the world's largest private equity firm's portfolio. Also represented are information technology (Federal Data), health care, real estate, and bottling companies. Since Carlucci joined in 1989, a host of staffers from the Reagan and first Bush administrations have stinted at the company, including ex-Secretary of State James Baker and ex-budget chief Richard Darman. Former President Bush and former UK Prime Minister John Major have also made appearances. -Hoovers Online

Traveling with the fanfare of dignitaries, Mr. Bush and Mr. Baker [use] their extensive government contacts to further their business interests as representatives of the Carlyle Group, a $12 billion private equity firm based in Washington that has parlayed a roster of former top-level government officials, largely from the Bush and Reagan administrations, into a moneymaking machine. In a new spin on Washington's revolving door between business and government, where lobbying by former officials is restricted but soliciting investments is not, Carlyle has upped the ante and taken the practice global.

Mr. Bush and Mr. Baker were accompanied on their trips by former Prime Minister John Major of Britain, another of Carlyle's political stars. With door openers of this caliber, along with shrewd investment skills, Carlyle has gone from an unknown in the world of private equity to one of its biggest players. Private equity, which involves buying up companies in private deals and reselling them, is a high-end business open only to the very rich. Over the last decade, the Carlyle empire has grown to span three continents and include investments in most corners of the world. It owns so many companies that it is now in effect one of the nation's biggest defense contractors and a force in global telecommunications. Its blue-chip investors include major banks and insurance companies, billion-dollar pension funds and wealthy investors from Abu Dhabi to Singapore.

In getting business for Carlyle, Mr. Bush has been impressive. His meeting with the crown prince was followed by a yacht cruise and private dinners with Saudi businessmen. And Mr. Bush led Carlyle's successful entry into South Korea, the fastest-growing economy in Asia. After his meetings with the Prime Minister and other government and business leaders, Carlyle won a tough competition for control of KorAm, one of Korea's few healthy banks.

The steady flow of politicians to lucrative private-sector jobs based on their government contacts is a familiar Washington tale. But in this case, it is being played out for more dollars, on a global stage, and in the world of private finance, where the minimal government rules prohibiting lobbying by former officials for a given period are not a factor.

These rules say nothing about potential conflicts when former government officials use their connections and insights for financial gain, and they may attract more notice now that George W. Bush is President. Many of those involved with Carlyle, which invests largely in companies that do business with the government or are affected by government regulations, have ties to the Oval Office.

For instance, Frank C. Carlucci, a Reagan Secretary of Defense who as much as anyone is responsible for Carlyle's success, said he met in February with his old college classmate Donald H. Rumsfeld, currently Secretary of Defense, and Vice President Dick Cheney, himself a defense secretary under former President Bush, to talk about military matters - at a time when Carlyle has several billion-dollar defense projects under consideration.... "Carlyle is as deeply wired into the current administration as they can possibly be," said Charles Lewis, Executive Director of the Center for Public Integrity, a nonprofit public interest group based in Washington.

"George Bush is getting money from private interests that have business before the government, while his son is President. And, in a really peculiar way, George W. Bush could, some day, benefit financially from his own administration's decisions, through his father's investments. The average American doesn't know that and, to me, that's a jaw-dropper."

It is difficult to determine exactly how much money the senior Mr. Bush and Mr. Baker have made. Mr. Baker is a Carlyle partner, and Mr. Bush has the title Senior Adviser to its Asian activities. With a current market value of about $3.5 billion on Carlyle's equity and with the firm owned by 18 partners and one outside investor, Mr. Baker's Carlyle stake would be worth about $180 million if each partner held an equal stake. It is not known whether he has more or less than the other partners.

Unlike Mr. Baker, Mr. Bush has no ownership stake in Carlyle; he is an adviser and an investor and is compensated by obtaining stakes in Carlyle investments. Carlyle executives cited, for example, Mr. Bush's being allowed to put money he earns giving speeches for Carlyle into its investment funds. Mr. Bush generally receives $80,000 to $100,000 for a speech. He sits on no corporate boards other than Carlyle's. Carlyle also gave the Bush family a hand in 1990 by putting George W. Bush, who was then struggling to find a career, on the board of a Carlyle subsidiary, Caterair, an airline-catering company.

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