TIME: Almanac 1993/TIME Almanac 1993.iso/time/102891/1028201.000

Text File | 1992-08-28 | 5.3 KB | 111 lines

                                                                                BUSINESS, Page  80

GLOBAL INTRIGUE

A Mysterious Mover of Money and Planes



    The Harken Energy folks are not the only Texas-based
colleagues of George W. Bush with fortuitous, if not
extraordinary, Arab connections. Another is the mysterious
Houston businessman James R. Bath, a deal broker whose alleged
associations run from the CIA to a major shareholder and
director of the Bank of Credit & Commerce International. The
President's son has denied that he ever had business dealings
with Bath, but early 1980s tax records reviewed by TIME show
that Bath invested $50,000 in Bush's energy ventures and
remained a stockholder until Bush sold his company to Harken in
1986.

    Bath's penchant for secrecy has been frustrated by a feud
with a former business partner, Bill White, who claims that
Bath was a front man for CIA business operations. White
contends that Bath has used his connections to the Bush family
and Texas Senator Lloyd Bentsen to cloak the development of a
lucrative array of offshore companies designed to move money and
airplanes between the Middle East and Texas. White, an Annapolis
graduate and former Navy fighter pilot, claims it was Bentsen's
son Lan who suggested that White go into the real estate
development business with Bath, a former Air Force fighter
pilot. The partners prospered together at first, but since their
falling out they have dueled in five lawsuits in which Bath has
kept the upper hand, White claims, by privately asserting to the
court that he had "national security" connections. White now
claims in court that Bath wanted to borrow $550,000 from their
real estate venture to cover funds that Bath had
"misappropriated" from an aircraft company he controlled.

    Bath, 55, acknowledges a friendship with George W. Bush
that stems from their service together in the Texas Air
National Guard, and says he is "slightly" acquainted with the
President. But Bath vehemently denies White's accusations. "I
am not a member of the CIA or any other intelligence agency,"
he says, describing White's portrayal as a "fantasy." Even so,
Bath, while insisting he is nothing more than a "small, obscure
businessman," is associated with some of the most powerful
figures in the U.S. and Middle East. Private records show, and
associates confirm, that Bath is a "representative" for several
immensely wealthy Saudi families, an unusual position for any
small-time Texas businessman.

    Bath got his start in real estate in 1973 by forming a
partnership with Lan Bentsen. One purpose, sources tell TIME,
was to find investments for the Senator's blind trust. Bath and
Bentsen have said they have not been partners for years, but
secretaries at Bath's office still answer the phone with a
cheery "Bath Bentsen Interests." Bath says he simply hasn't got
around to changing the name of his company.

    Bath opened his own aircraft brokerage firm in 1976, but
his Middle East connections first surfaced two years later,
when he became a shareholder and director of Houston's Main
Bank. His fellow investors were former U.S. Treasury Secretary
John Connally; Saudi financier Ghaith Pharaon, an alleged
B.C.C.I. front man; and Saudi banker Khaled bin Mahfouz, who
subsequently became a major B.C.C.I. shareholder. Pharaon later
sold his Main Bank holdings and bought the National Bank of
Georgia, allegedly on behalf of B.C.C.I. Unusual transactions
involving Main Bank in the late 1970s came to light last year
when a researcher discovered that the small community bank, at
a time when it held only $58 million in deposits, had been
buying $10 million a month in new $100 bills. Purpose: unknown.

    Bath controlled a fleet of companies connected to his
aircraft business, and he enjoyed unusual carte blanche to
direct the U.S. investments of several wealthy Middle
Easterners. Associates confirm that Bath has brokered more than
$150 million in private plane deals in recent years,
concentrated in sales and leases to Middle Eastern royalty and
other influential figures. Pharaon is believed to have bought
several expensive jets for his construction company. One Bath
entity, Skyway Aircraft, leased a $10 million Gulfstream II to
the Abu Dhabi National Oil Co., which is controlled by Sheik
Zayed bin Sultan an-Nahayan, the President of the United Arab
Emirates and the current owner of B.C.C.I. Bath's partners in
Skyway, one of four similarly named companies he controls, are
artfully hidden. The firm that incorporated Bath's companies in
the Cayman Islands is the same one that set up a money-
collecting front company for Oliver North in the Iran-contra
affair.

    Even if Bath is a clandestine public servant, the U.S. may
not always get a bargain. The Houston Post reported last year
that the U.S. had spent millions of dollars more than necessary
by fueling military aircraft, including Air Force One, at
privately owned Southwest Airport Services at Ellington Field
rather than using a government fuel station there. Bath operates
and holds a majority ownership stake in Southwest Airport
Services, which the Post said was charging a markup of as much
as 60% on the fuel. So far, the paper's charges have prompted
no official investigations.


By Jonathan Beaty.

    With reporting by S.C. Gwynne/Houston