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Posted on Sat, Oct. 05, 2002 story:PUB_DESC
Bush and business: Fast success, brushes with mystery

aviglucci@herald.com

It was 1991, dad was in the White House, and Jeb Bush was hopscotching through Nigeria in a corporate jet, on his way to meet government officials he hoped would buy $74 million worth of water pumps from his South Florida business partner.

On the jet with Bush was a Nigerian associate in the deal, Al-Haji Mohammed Indimi, who carried several heavy Hartmann suitcases. At least one of the bags, the airplane's pilot says, was packed with cash to bribe the Nigerian officials.

Did Jeb Bush know about the cash in the suitcase? Did he understand what the money was for?

Bush declined to be interviewed for this story. His campaign emphatically denied that he knew anything about suitcases full of bribe money.

''The governor was adamant he was not on an airplane with a suitcase full of cash,'' said campaign spokesman Cory Tilley. ``He's unaware of any plane he was on with luggage on it full of cash.''

Yet questions persist to this day about Bush's role in the Nigerian deal. A U.S. government lawsuit filed earlier this year alleges that Bush's former partner in the pump sale diverted millions of dollars from a federal loan through Indimi to pay bribes.

And while Jeb Bush has not been implicated in any bribe-paying, the lingering Nigerian affair bears many of the hallmarks of the puzzle that is his 20-year career in business.

It is, on the one hand, the story of a sharp businessman with a talent for salesmanship who started out with little in the bank and was a millionaire by his 30s, allowing him the financial security to run for governor of Florida at 40.

It is also a story of sometimes injudicious entanglements with questionable characters and enterprises that have left Bush open to accusations of trading on the family name.

More than once, Bush, with little or no investment of his own money, has made in a single deal the kind of profit most people don't see after years of work.

He has also made a practice of mixing politics and profit. Bush did business with political allies and counted on business associates for political support.

Several times, Bush business associates have landed in prison or in deep legal trouble. Twice in the 1980s, while his father was vice president, the young Jeb Bush intervened in Washington on behalf of people who turned out to be hucksters -- assistance that, however unwittingly on Bush's part, helped advance schemes to defraud the U.S. government of millions of dollars.

Tom Feeney, Bush's running mate in the 1994 governor's race, put the issue succinctly in a letter to GOP officials at the time: ``The only documented allegations come down to the fact that he did business with people that turned out later to be deadbeats and crooks.''

No evidence of wrongdoing by Jeb Bush has ever surfaced. But over the past decade, those relationships have given rise to questions about his judgment and what precisely he did to earn some of his money -- questions he has not always fully answered.

GOVERNOR'S FINANCES

He discusses career,

withholds certain details

Bush in some ways has been unusually candid about his private financial affairs. He has released his tax returns back to 1981. He has also been willing to discuss his personal finances with reporters at some length.

In a brief written statement, Bush said he was proud of his business career and feels that he has candidly answered all questions that have been raised about it.

''When I moved to Florida over 20 years ago, I worked hard with my partner to build a successful business from the ground up -- we created jobs for hundreds of Floridians, met a payroll and made a positive difference in our community,'' Bush said.

``Everything I have done and earned in my business life is already out there for anyone to see in great detail. I am confident I have fully addressed any and every issue that has been raised in this regard over the last decade.''

But Bush has drawn the line at disclosing details of some controversial ventures, even when they might clear up nagging questions, citing the privacy of his business partners.

Like the Nigerian pump venture.

The sale went through, thanks to a $74.3 million U.S. government loan. The loan financed Nigeria's purchase of pumps manufactured by MWI, a Deerfield Beach company whose president, David Eller, is a Broward County Republican fundraiser and Bush contributor.

Earlier this year, the U.S. Justice Department sued Eller and MWI to recover $28 million in loan money it contends went to pay illicit commissions and bribes in Nigeria. The suit alleges that MWI officers and employees knew Indimi traveled with large amounts of cash for bribes.

The suit doesn't name Bush. He did not work directly for MWI and never held an interest in the company. He and Eller had formed a separate company, called Bush-El, to sell MWI's pumps in Nigeria and other countries.

Bush has also said he did nothing to help secure the U.S. loan, and declined a $1 million commission once it was clear that the sale would be financed by U.S. taxpayers, to avoid any appearance of a conflict of interest because his father was president.

Bush made $650,000 from Bush-El. But he has declined to specify the source of that money, other than to say it came from sales in countries other than Nigeria and from selling his half-share of the company to Eller.

Eller and his attorney, William R. Scherer Jr., declined to discuss the lawsuit's allegations. Indimi did not respond to questions faxed to him in Nigeria.

PILOT'S STORY OF CASH

He says he doesn't know

if Bush saw money on plane

To Greg Johnson, the MWI corporate pilot who ferried the future governor through Nigeria on two separate tours to promote the pump sales, Bush's protestations of ignorance about the cash Indimi carried are disingenuous.

On at least one occasion, a 1991 flight to meet a group of Nigerian governors in the city of Abuja, Johnson said in an interview last week, he saw stacks of Nigerian currency stashed in a suitcase when Indimi opened it on board the plane to give him cash for flight expenses.

Johnson said he doesn't know whether Bush, who had already boarded the jet, saw the contents of the suitcase. He did say he never saw Bush handle any suspect cash and didn't hear Bush or Indimi talk about it.

But Johnson, a Broward Republican activist and one-time Bush supporter, said anyone who does business with the Nigerian government knows that ``nothing happens until you pay somebody off.''

''You would have to be dumber than a sack of rocks not to understand that,'' said Johnson, who worked as a pilot in Africa for years.

Tilley, the Bush spokesman, cast doubt on Johnson's story, saying the pilot had retracted it once before.

''He has said Jeb Bush was not on any plane with these mysterious suitcases full of cash,'' Tilley said. ``It's been disproven, as far as we're concerned.''

But Johnson has never explicitly denied seeing Bush on the plane that was carrying a suitcase full of cash. What he has said is that he never saw Bush personally carry any suspect cash.

The issue first arose after the pilot's story was cited in a political column in The Herald during the 1998 gubernatorial election.

After the column ran, Johnson said, he got a call at home from Bush, who asked him to write a letter stating that he, Bush, never carried a suitcase full of cash.

Johnson did, and also signed a second letter, which he said was written for him by the Bush campaign, that said in part: ``The fact is that I have never seen Jeb Bush on any plane, or anywhere else with a suitcase or suitcases full of cash.''

POLITICAL APPEAL

It's built in part

on his commercial success

Bush's business travails have been amply reported in newspapers and magazines, but they appear to have made little dent in his political appeal, built in part on his touted commercial success.

Bush's response has been consistent: He earned every penny legitimately through hard work and skill. While occasionally displaying poor judgment, he has said, he never participated in or benefited from any improper schemes.

In fact, Bush says, he often spurned good opportunities while his father was president and vice president because the deals might have raised the specter of undue influence or the appearance of a conflict of interest.

And if people opened doors and made opportunity available to him because his last name is Bush, well, he can't help that, can he?

''Is favorable name recognition helpful in business, as it is in almost every other aspect of life? Perhaps,'' Bush said in a 1998 letter to The Herald. 'Is it an `unfair advantage'? No. It is just a fact of life.''

A NATURAL ABILITY

Ex-partner says he's `skilled

and creative businessman'

To be sure, Bush the businessman by most accounts possesses a natural ability to cultivate customers and partners. He is reputed to be astute, and hardworking on the edge of workaholic.

''He is a very skilled and creative businessman,'' said Hank Klein, Bush's one-time partner in the Miami real-estate brokerage of Codina Bush Klein, one of the chief sources of the governor's elevated net worth. ``He worked very hard at it. People used to ask me all the time whether he actually came to work. I was incredulous. Believe me, he was not a token. He earned his keep.''

Bush's tax returns leave no doubt about the source of most of his money -- his longtime partnership with powerhouse Miami developer Armando Codina, who helped make Bush, if not fabulously wealthy, comfortable enough. Bush reported a net worth of $1.5 million at the end of last year. In his peak earning years in the early 1990s, his net worth hit $2.26 million.

Certainly Bush never hid the fact that he intended to make a good deal of money. In a quip that would be repeated often in later years, he told a reporter in 1983: ''I'd like to be very wealthy, and I'll be glad to let you know when I think I've reached my goal.'' Observers could have been forgiven for thinking that day was a long way off.

At the time he made his bold pronouncement, Bush was struggling to pay his bills. He once found it necessary to use one credit card to pay off another.

In spite of his rich and famous father, Jeb Bush was financially pretty much on his own after college. About the only help from George Bush was a $20,000 loan to help Jeb buy his first Miami home.

In 1980, at age 27, Jeb Bush came to Miami to work on his father's first campaign for president. Ronald Reagan won the GOP nomination, but the elder Bush served as his vice president for the next eight years.

One of his father's friends came to Jeb's aid -- Codina, a successful Cuban-American businessman and a leading George Bush supporter in the exile community who was branching out into real estate just as a development boom got under way in Miami.

Codina hired Bush to sell and lease real estate for his company, IntrAmerica Investments. Bush's salary in 1981: $41,408.

Bush soon proved to be a good prospect. Codina agreed to split profits 60-40 in a partnership with Bush, who had little to invest other than work.

Codina offered Bush entry into deals that neophyte developers can only dream of. Bush bought into one of the earliest, the Museum Tower office development in downtown Miami, for $1,000.

Bush has said he ''invested a lot of sweat equity'' recruiting tenants and negotiating leases. In 1990, he sold his interest in the tower for about $346,000.

Bush's income from IntrAmerica climbed steadily. It hit six figures by 1986 and reached a peak of $1,045,907 in 1992.

Bringing Bush into the fold also paid off for Codina. Bush helped build the real-estate brokerage into a significant player, finding tenants for the buildings Codina developed, adding to the partnership's bottom line.

Bush often served as the firm's public face, lobbying elected officials when the company needed zoning variances and when it bid successfully for a $12.8 million chunk of Metromover construction. He promoted Deering Bay, a luxury golf community in South Miami-Dade County that Codina developed, in Europe and Latin America.

The partner with the famous name helped get the firm in the door with prospective clients, former brokerage partner Klein recalled.

''Sometimes we went on calls together, usually an introductory call, to tell people what we could do,'' Klein said. But, he added, Bush ``did not like people fawning over him because of who he was.''

THE CODINA CONNECTION

Work for firm interspersed

with a focus on government

The association with Codina, besides fruitful, was also flexible. Codina welcomed Bush back after he quit twice, first to serve as Florida's secretary of commerce, from 1986 to 1988, and then to run his first, and unsuccessful, gubernatorial campaign in 1994.

Bush walked away from the firm for his first run for the governorship with a payment of $795,652, and he declared $708,000 in capital gains to the Internal Revenue Service. Total declared income was $1.67 million, his biggest year.

Though Bush lost, his run for governor raised his statewide profile, and opportunity came knocking more frequently. He was invited to sit on several corporate boards, earning $108,000 in director's fees in 1995 alone.

In 1997, he completed another tidy deal. He sold a 1 percent share in the Jacksonville Jaguars football team for a gain he estimated at $58,000. Bush had been invited into the exclusive deal by Thomas Petway, a Jacksonville insurance magnate and Republican donor. Bush borrowed $450,000 from SunBank, where he was on the board of directors, to buy in.

Bush's political contacts also proved useful to Codina's firm. The nexus helped Bush engineer what he has called the proudest coup of his real-estate career.

In 1997, he brokered the sale of a vacant IBM office park in Boca Raton for $46 million after beating out what he derisively called the New York ''suspender guys'' for the listing. Bush made pitches to IBM executives in New York to land it.

The buyer was a group called Blue Lake Ltd., whose partners included Mark Guzzetta, a Republican fundraiser and longtime Bush family friend who later became finance co-chairman of Bush's gubernatorial campaign. Bush was best man at Guzzetta's wedding. Bush has declined to disclose the commission for the sale.

SOUR RELATIONSHIPS

Some people Bush dealt with

were not what they seemed

Yet Bush's path to success was also dogged by controversy:

 In 1983, Bush and Codina reached an agreement to lease a large amount of office space in their Museum Tower building to Alberto Duque, a purportedly wealthy coffee merchant from Colombia with a controlling interest in a Miami bank and a long list of friends among the city's business elite.

Bush attended lavish dinners hosted by Duque and flew in Duque's private jet airplane to the inauguration of Costa Rica's president.

But Duque's financial empire, it turned out, was a house of cards built on nonexistent coffee. Duque was convicted of fraud and sentenced to 15 years, but skipped out of a halfway house and fled abroad after serving seven years.

Codina publicly shouldered the blame for setting up the Duque deal. Bush has said he was taken in, along with many other prominent citizens, by a master scam artist.

 In 1985, developer Hiram Martinez Jr., whose request for $18 million worth of federal loan insurance for a Kendall apartment development had been held up in Washington because of questions over its land value, asked Bush to write to the U.S. Department of Housing and Urban Development. The contractor was Camilo Padreda, who served as finance chairman of the Miami-Dade GOP when Bush was chairman.

A copy of the letter released by HUD shows that Bush asked an agency undersecretary to ''review'' the matter. He also enclosed a letter from Martinez's lawyer.

Martinez got the loan, but he had inflated the land value and cost of the project. He got six years in prison for fraud. Padreda served out house arrest and probation.

Bush has said he doesn't remember writing the letter.

 Also in 1985, Bush was retained to find a new corporate headquarters for fast-growing International Medical Centers, a Miami-based HMO owned by Miguel Recarey Jr. and the largest recipient of Medicare payments in the country. Bush later said he was unaware that Recarey had an arrest record and had served 30 days in jail for tax evasion.

Recarey complained to Bush that tightened federal rules would hurt business by capping IMC's enrollment of Medicare patients. Bush made a call to the Department of Health and Human Services on Recarey's behalf. An HHS official later said Bush's call helped IMC obtain an exemption from the rule.

Bush denies asking for special treatment. ''I just asked that IMC get a fair hearing,'' he has said.

With the exemption, IMC's Medicare income soared, reaching a total of $1 billion before the HMO collapsed amid a sprawling bribery and fraud scandal. Recarey, charged with embezzlement and phony invoicing, went to Spain.

IMC did not pick any of the buildings Bush had shown Recarey. But IMC paid Bush's firm $75,000 over three years anyway. Bush has said the money was for his real-estate work, and has labeled as ''unfair and untrue'' allegations that he was paid for helping Recarey.

 In 1995, through Petway, the Jacksonville insurance executive, Bush joined the board of Ideon, a troubled company, embroiled in various lawsuits, that paid him $54,000 in fees that year. The company was sold the next year. Lawsuits alleging stock manipulation and poor management were later settled for $15 million, paid by the buyer. Bush said he agreed to join the board after concluding that the company was resolving its legal problems.

But the one deal that brought Bush, in his words, ''unmitigated grief'' was the Nigerian pump sale. Critics have questioned whether he should have been involved at all, since his father was president.

Bush says his participation was conditioned on getting a private loan for the pump sale to avoid any appearance of impropriety. In 1990, however, after Bush's first trip to Nigeria, the pump company applied for a $74.3 million loan to the U.S. Export-Import Bank, a government agency.

The next year, while the bank was considering the application, Bush returned to Nigeria.

He did so, he said, because the bank's approval was uncertain. He said he spoke with Nigerians about private financing, but has not released names or details.

Because closing the deal also hinged on persuading the governors of seven Nigerian states to buy the pumps, Bush, Indimi and MWI officials flew to meet the officials at a hotel in Abuja, Johnson said.

GOVERNMENT LAWSUIT

Justice Department: Cash

went to Nigeria -- and stayed

In its suit, the U.S. Justice Department alleges that ``Indimi carried large quantities of naira [the Nigerian currency] from the airport to the Abuja Hilton hotel, where he and other MWI officers and employees met with Nigerian State officials. Indimi and the other officers and employees returned to the airport . . . without the currency.''

The Export-Import Bank loan was approved the following year -- entirely on the merits, Bush has said.

Under oath, Johnson was asked whether Bush was on the flight where bribe money was carried. ''I don't recall,'' he said, according to an excerpt from a transcript of the deposition obtained by The Herald.

Johnson, who has terminal pancreatic cancer, says now he was tired after an all-day interrogation and just ``wanted to get out of there.''

''I'm not aiming at Jeb Bush,'' he said. ``He's always been very nice to me. Why should I lie? My days on earth are on a day-to-day basis. I'm a dead man walking.''

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