The full effects of the 2001 so-called PATRIOT Act have not yet been felt, fortunately. But one of its first effects was to benefit the president's brother Marvin.
Marvin P. Bush, one of George W. Bush's three younger brothers, is co-founder and partner in Winston Partners, a private investment firm in Alexandria, Va., a DC suburb. Winston Partners in turn is part of a larger venture capital entity called the Chatterjee Group, headed by venture capitalist Purnendu Chatterjee. (Venture capital firms provide money to start-up businesses and other companies, usually in return for equity and some managerial say in the company.)
SEC filings show that the Chatterjee Group consists of Winston Partners, L.P.; Chatterjee Fund Management, L.P.; Winston Partners II LDC, a Cayman Islands-based company; Winston Partners II LLC; Chatterjee Advisors LLC; Chatterjee Management Company; Mr. Chatterjee himself; and Furxedown Trading Limited, a company organized under the laws of the Isle of Man. The address for Winston Partners II LDC is in the Netherlands Antilles. The other subsidiaries were organized in Delaware.
Bush's partner is Scott Andrews, with whom he went to school. Winston Partners has two branches, hedge funds and private equity funds, engaged in a variety of investments including global "outsourcing" and offshore information technology:
H.R. 3162, called "The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act" (USA PATRIOT), was designed to prevent money laundering and requires banks to "know their customers." Inevitably, many companies are aggressively marketing services to make businesses PATRIOT Act-compliant: That is, they sell computer systems to enable banks to argue successfully to Uncle Sam that they're not laundering money for terrorists. One of the most aggressive is Sybase, Inc., which developed a "Sybase PATRIOT Compliance Solution" months ago. Sybase, which said it wanted foreign banks as customers (it already had a deal with the People's Bank of China), landed Sumitomo Mitsui Bank in time for the October 2002 compliance deadline.
This is where Winston Partners comes in. The Chatterjee Group, including Winston Partners, owns 5.5 million shares in Sybase (Chatterjee businesses also have been paid thousands more shares in Sybase). SEC filings show that Winston Partners LP owns 1,036,075 shares in Sybase; Winston Partners LDC holds 1,317,825 shares; and Winston Partners LLC owns 1,221,837 shares. The shares owned by the subsidiaries are collectively managed in funds for Winston Partners by Mr. Chatterjee. There is also a Chatterjee Charitable Foundation.
Business for Sybase is business for Bush, and the PATRIOT Act boosted business.
Not that the PATRIOT Act is Sybase's only federal conduit. The company is also a significant government contractor (especially nowadays), with contracts from the Agriculture Department, the Navy ($2.9 million in 2001), the Army ($1.8 million in 2001), the Department of Defense ($5.3 million in 2001), Commerce, the Treasury and the General Services Administration, among others. The federal procurement database lists Sybase's total awards for 2001 as $14,754,000.
Sybase is only one of the companies with federal contracts from which Marvin Bush's firm derives financial benefit. Winston Partners' portfolio also includes Amsec Corporation, which got Navy contracts worth $37,722,000 in 2001.
The potential for waste and abuse here can hardly be overstated. A branch of the military or other government agency that risked funding cutbacks, for example, could throw up a buffer by awarding a contract benefiting the First Family. Why spend money on a lobbyist in the industry, when you might have one in the White House?
Now step back and look at the big picture. The president's brother is marketing to offshore customers (shipping out American jobs, be it noted). He is closely linked to entities marketing "outsourcing" and "global alternative investments" yet more aggressively. Companies associated with them are doing other high-end versions of the same. And some companies in which they have a stake are involved in the most sensitive technology outside nuclear weapons -- being marketed simultaneously to the US government, to foreign banks, and to the states (Colorado, Texas, Oklahoma, New Jersey, and New York also purchase from Sybase). This is "security"?
Marvin Bush also currently sits on the board of directors of HCC Insurance Holdings, Inc., a reinsurance corporation which benefits enormously from the terrorism insurance protections passed by Congress. His brother, the president, held off on forming any investigative commission until after that legislation had been safely passed. He never gave in until the bills -- "homeland security" and the insurance bill -- had gone through.
Marvin Bush also was a director of Stratesec, which provided security at the World Trade Center, Washington D.C.'s Dulles International Airport, and United Airlines between 1995 and 2001, backed by a private Kuwaiti-American investment firm with ties to the Bush family whose records were not open to full public disclosure.
Nor is Marvin Bush the only family member in this picture. His brother Jeb Bush, Florida's governor, is also an investor in the Winston Capital Fund, managed by Marvin Bush's firm. And Indigo Systems Corporation, another federal contractor ($2,629,000 in 2001 from the DOD and NASA), is substantially backed by The Carlyle Group, the global finance company connected to George H.W. Bush.
As we used to say in Texas -- son of a gun.
There is a crying need for oversight and accountability, but the need has yet to be met.
Margie Burns writes from Washington, D.C. Email margie.burns@verizon.net.