by Andrew Wheat

After shattering Texas fundraising records with his $25 million 1998 gubernatorial race, George W. Bush has already already broken federal fundraising records in a presidential race that is still eight months from term.

By the end of 1999, the Bush campaign had raised $69 million, which exceeds the total amount raised by both Clinton and Dole (not counting Federal matching funds) combined for the entire 1996 presidential race.

From whence this outpouring of financial support?

"I am humbled and honored that so many Americans are responding to my message," Bush said in a recent campaign press release.

As evidence of "grassroots support," Bush's record-breaking fundraisers have emphasized the total amount of money raised, the total number of contributors and the resulting average donation (recently reported as $335). Further parsing of these numbers, however, reveals that it is large corporations that are powering Bush's unprecedented political money machine.

Big business fueled Bush's two gubernatorial races in Texas, which imposes no limit on how much money wealthy PACs and individuals can give to state candidates. This indulgent system allowed the Bush gubernatorial campaigns to take more than $2.5 million from just 23 tycoons, who chipped in between $100,000 and $175,000 apiece. More than half of the $41 million Bush raised in his two gubernatorial campaigns came from donors of at least $5,000.

In contrast, Bush's presidential campaign falls under federal election laws, which limit individual donors to a maximum of $1,000 to any given candidate. Congress passed these limits after Watergate to combat perceptions that public offices were being sold to the highest bidder. Under the tighter federal rules, candidates must:

•  Raise less money;
  
•  Cast their fundraising nets further, across a much wider political base; or
  
•  Circumvent the federal limits.
  

Bush is not the first candidate to choose door number three. But he has done so far more successfully than anyone else. Helping him in this effort are some 400 elite fundraising "Pioneers," who have pledged to raise at least $100,000 each for Bush's presidential race. Together they will deliver a staggering minimum of $40 million to the campaign.

Bush's fundraising prowess alone lent him an aura of invincibility, at least until the thrashing that John McCain and New Hampshire voters dealt him on February 1. Yet, at press time, and with hundreds of millions of dollars to go in the 2000 elections, George W. Bush remains the man to beat. In an era of choreographed campaigns, the origins of Bush's unprecedented war chest arguably reveal more about him than do his stump speeches.

Black Gold

A significant number of the people who have been footing George W. Bush's campaign bills were writing checks for him before he ever launched his first gubernatorial race in 1993. Bush's top donors include people who bankrolled his failed oil ventures as well as the Texas Rangers baseball deal that made Bush a millionaire 15 times over.

When George W. followed his father's footsteps into West Texas's oil fields, he brought his family's blue-blood money and his dad's political connections. But they proved insufficient. The Texas oil patch was about to be hammered by a free fall in global oil prices and young George drilled more than his fair share of dry holes.

Although his first venture took its name from the Spanish word for "bush," this was too subtle a reference to the company's chief asset. After the elder Bush became vice president of the United States, Arbusto Energy changed its name in 1982 to Bush Exploration. By any name, Bush's oil businesses kept failing. Each time they did, another small oil company would buy Bush out -- and keep him on board. "His name was George Bush," noted Phil Kendrick, who founded Harken Oil, the last in the succession of Bush's oil companies. "That was worth the money they paid him."

Within weeks of the elder Bush becoming U.S. President in 1988, Harken won exclusive rights to develop any oil it discovered off the coast of oil-rich Bahrain. Amoco, which had also sought this contract, was beat out by a company with no experience drilling offshore or abroad.

To finance the Bahrain venture, Harken got $25 million from the oil-rich Bass family. Two of the Bass brothers were part of "Team 100," the elder Bush's elite 1988 fundraising squad that was the model for the younger Bush's more ambitious fundraising "Pioneers" (Lee Bass also is a Pioneer).

Bass money and Bush connections did not lead Harken to oil in Bahrain. The company's stock tanked after it reported huge losses in August 1990. Insider Bush got out just in time, selling off most of his Harken stock for almost $850,000 two months before the company went public with its bad financial news.

The Grand Slam

By this time, Bush had plunged into a more profitable line of business -- one that he hoped would be a springboard into politics. "My biggest liability in Texas," Bush told Time magazine in 1989, "is the question, 'What's this boy ever done?'"

That year, Bush family friend Eddie Chiles sold the Texas Rangers baseball team to a partnership in which young George had a high profile and a relatively modest $500,000 stake. For the $86 million needed to buy the team, Bush turned to Yale pal William DeWitt, Jr. A wealthy Ohio investor whose father once owned the Cincinnati Reds, DeWitt had bailed out the failing Bush Exploration oil company in 1984.

Insisting that the new Rangers partnership raise a greater share of its capital in Texas, Major League Baseball Commissioner Peter Ueberroth recruited Richard Rainwater to the deal. Rainwater had managed the Bass family's wealth before going solo in 1986. Apparently aware of Bush's business record, Rainwater conditioned his hefty Rangers investment on his confidante, Edward "Rusty" Rose, sharing the team's general manager position. Bush would be the partnership's public face, while Rose took care of business.

The business plan called for using tax dollars to boost the value of the Rangers franchise. By threatening to leave Arlington, Texas, the new owners induced the city to spend $150,000 to convince voters to approve a sales tax hike that would raise $135 million for a new ballpark. Arlington also approved a sweet rent-to-own deal in which the Rangers gradually would buy the new stadium for $60 million -- or less than half of what taxpayers paid for it.

Arlington's generous taxpayers greatly enhanced the value of the Rangers. Bush's partnership sold the team in 1998 for $250 million, or three times what they had paid for it 10 years earlier. While Bush ended up sinking $606,302 of his own money into the team, his partners kindly gifted him an additional 10 percent share. He personally made $15 million off the Rangers.

Bush's $15 million came from the new Rangers owner, Tom Hicks of the Dallas corporate takeover firm of Hicks Muse Tate & Furst. The Rangers were not Hicks' first professional sports team. Six months before he bought the Rangers from Bush, the governor helped Hicks get some corporate welfare for his Dallas Mavericks basketball team.

Bush signed 1997 legislation that expressly authorized Texas cities to impose new taxes to finance sports facilities. Months later, Dallas voters agreed to chip in for a $230 million new arena for Hicks' Mavericks and the Dallas Stars. Richard Rainwater had a minority stake in this hockey team, which was principally owned by H. Ross Perot, Jr. Perot, who gave $5,000 to Bush's gubernatorial campaigns, is the son of the 1992 Reform Party presidential candidate. Leading the pitch for this taxpayer-financed stadium were Dallas Mayor Ron Kirk and City Manager John Ware. Soon after the vote, Ware resigned to work for Hicks and the public learned that Mayor Kirk's wife had $500,000 in stock options in a Hicks company.

As this stadium deal reveals, Governor Bush was now in a position to repay the wealthy people who had kept popping up and bailing out his troubled business career. At the same time, the people who had supplied the brains and bucks for his oil and baseball deals again stepped up to the plate to fund his campaigns.

Bush's two gubernatorial campaigns received $146,000 from Hicks and his brother Steven, $100,000 from Rainwater, $61,000 from Rose and his partner, Marshall Payne, and $20,000 from DeWitt and his business partner, Mercer Reynolds.

Known Bush presidential "Pioneers" linked to the Rangers deal include Rose, Payne, DeWitt, Reynolds, Steven Hicks, Roland Betts and Craig Stapleton, a Bush in-law who is an executive at the investment and consulting firm Marsh & McLennan. These seven men already have raised a total of at least $700,000 for Bush's presidential race.

Well Endowed

Taxpayer-financed stadiums aside, mergers and acquisitions are Tom Hicks' favorite sport. For years, Hicks had urged the University of Texas (UT) to take greater risks in investing its $13 billion endowment. In 1990, Hicks had failed to get the endowment to invest in his takeover of Healthco, a dental supply company that went bankrupt three years later.

Ann Richards, Bush's Democratic predecessor, nominated Hicks to the UT Board of Regents; the Senate confirmed him in 1995, as Bush entered the Governor's Mansion. The same year, Hicks spent between $50,000 and $110,000 on lobbyists to push a bill -- signed into law by Bush -- that created the UT Investment Management Company (UTIMCO). UTIMCO took control of UT's endowment in 1996, moving an increasing share of it into riskier investments.

By law, three of UTIMCO's nine board members are UT Regents. To date, five Bush-appointed Regents (one of whom came from the Texas A&M University System) have sat on UTIMCO's Board. All of them are big donors who have given between $7,000 and $141,000 to Bush's gubernatorial campaigns.

A major Bush donor also served as the first chair of the UTIMCO Board. Chair Tom Hicks quickly took charge, convening UTIMCO board meetings in his personal offices in Dallas and at Rangers Ballpark. UTIMCO proceeded to dole out lucrative contracts to private investment firms to manage portions of UT's endowment. UTIMCO entrusted hundreds of millions of endowment dollars to firms tied to Hicks and Bush. These include:

• The Carlyle Group: Its partners -- including George Bush Sr.'s economic advisor Richard Darman and ex-Secretary of State James Baker III ($11,000 to Bush) -- reportedly gifted an equity stake in the firm to the elder Bush;
  
  
• Maverick Capital Fund -- Its investors include Bush Pioneer Charles Wyly and his brother Sam, who contributed $210,273 to Bush's gubernatorial campaigns;
  
  
• Bass Brothers Enterprises -- The Bass family funneled $215,000 to Bush and financed Harken Oil's Bahrain venture;
  
  
• Kohlberg Kravis Roberts: The corporate buyout firm started by Henry Kravis would soon join Hicks, Muse in a $1.5 billion takeover of Regal Cinemas;
  
  
• Evercore Partners -- Eight months after its UTIMCO deal, Evercore joined Hicks, Muse in a $900 million buyout of television stations;
  
  
• American Securities Partners -- It won its UTIMCO contract several months after selling 11 radio stations to Hicks, Muse; and
  
  
• Wand Partners and Inverness Management -- Two firms headed by college buddies of Hicks.

In a response to "inaccurate and/or misleading" press reports of such transactions, UTIMCO wrote that its directors and staff have little knowledge of the political affiliations of the parties involved in its investments, which are solely based on their financial merits. UTIMCO added that the ethics of its actions are vetted by lawyers at Vinson & Elkins.

In another awkward coincidence, Vinson & Elkins and its attorneys pumped $133,000 into Bush's gubernatorial coffers. Three of these attorneys are Bush Pioneers, including lobbyist Joe Allen, who oversees the Vinson & Elkins political action committee.

Oh Pioneers!

Although Bush is on record favoring better campaign disclosures, rather than contribution limits, as the solution to what ails the U.S. political system, his campaign long resisted requests to disclose the identities of its mega-fundraising Pioneers.

Bush first disclosed the identities of some Pioneers in response to a July 1999 request by the Austin-based Texans for Public Justice, which tracks money in Texas politics. So far, however, the campaign has only identified 180 Pioneers who have reached or surpassed their $100,000 fundraising goal. This is fewer than half of some 400 Pioneers who are reportedly working toward that goal.

The Bush campaign reportedly assigns each Pioneer a number that his or her recruits are supposed to write on their contribution checks. This allows the campaign to credit the donations to the corresponding Pioneer. Under federal law, it would amount to illegal "bundling" if a Pioneer physically gathered the checks and delivered them to the campaign.

This is not all that the campaign is tracking. Newsweek reported in January on a fundraising letter sent out by Pioneer Tom Kuhn, who heads the Edison Electric Institute, a lobby trade group that represents investor-owned electric utilities. "As you know," the letter says, "a very important part of the campaign's outreach to the business community is the use of tracking numbers for contributions. Both Don Evans and Jack Oliver [Bush campaign operatives] have stressed the importance of having our industry incorporate the #1178 tracking number in your fundraising efforts. Listing your industry's code does not prevent you, any of your individual solicitors or your state from receiving credit for soliciting a contribution. It does ensure that our industry is credited and that your progress is listed among the other business/industry sectors."

Elected officials often discount the influence of money in politics with nostrums about how they are not even aware who gave them money. But the business lobby is responsive to politicians who keep very careful track.

Pioneers who head industry trade and lobby groups proudly gave Newsweek estimates of how much their industries raised so far for Bush. "Just under $500,000," said Tom Hammonds, president of the Food Marketing Institute, which has lobbied for food irradiation and against rules to protect workers from repetitive motion injuries. Pioneer Frederick Webber, who heads the Chemical Manufacturers Association, estimated his industry had raised $350,000. Red Caveney of the American Petroleum Institute trumped them both by claiming credit for more than $1 million in oil money to Bush.