GW Bush...blind trust he created to hold his assets -

- many of them in oil, real estate, health care and other companies owned by Rainwater



Senior White House aide as 'bringing the business special interests into politics
so they can take over the regulatory bodies of government and regulate
themselves'.

'There's been a sigh of relief,' said Larry Smith, an analyst with
Sutro in New York. Bush's proclaimed victory was greeted by a sudden
leap in the share value of big pharmaceutical companies, big insurers
of health care, and the big oil and tobacco companies.

While Rove was masterminding Bush's gubernatorial victory of 1994 in
Texas, he himself had another job with one of these companies: a paid
political intelligence operative for the Philip Morris cigarette
company, reporting to another Bush aide, Jack Dillard, ubiquitous
tobacco lobbyist.

Unlike that of Clinton, Bush's record on tobacco does not displease
the industry; he decreed it impossible for the civil lawsuit against
tobacco companies to proceed in Texas. 'The prospect of Bill Clinton
gone and a Bush presidency makes the tobacco industry almost giddy,'
says Martin Feldman, an analyst of the industry for the consultants
Salomon Smith and Barney.

Corporate delight at the prospect of a Bush team heading for
Washington stems from the core political philosophy Bush brings from
Texas to Washington, which is also Rove's principal achievement. In
Texas legalese it was called 'tort reform'; in Washington it
translates as grand-scale deregulation of business, services and
industry.

It was described to The Observer this last week by a senior White
House aide as 'bringing the business special interests into politics
so they can take over the regulatory bodies of government and regulate
themselves'. For example: the Environmental Protection Agency, the
fair trade agencies, the health, safety and 'human resources'
executives, the regulation of industry, education, guns, medicine and
land use.

No industry has a higher stake in 'tort reform' than the drillers of
black gold, and few look forward to a deregulating Bush administration
more than the executives of the oil industry, which has already been
promised almost unfettered exploration and drilling rights.

But there are other interests too, and two of them - urban development
and health care - combine with oil in another mighty figure in the
background of a Bush administration. If he must thank his father for
his name, Bush must thank Richard Rainwater for his money.

Last year, 1999, as he prepared to run for President, Bush liquidated a blind trust he created to hold his assets - many of them in oil, real
estate, health care and other companies owned by Rainwater, a
contributor to Bush's campaigns and with whose money Bush aquired his
windfall stake in the Texas Rangers baseball team.

Rainwater is a billionaire buying into beleaguered companies at
discount prices and reselling when everyone wants in. But he is also
involved in companies, including oil firms, that are heavily regulated
with hundreds of millions in government contracts.

One, a hospital chain called Columbia/HCA, is the subject of a federal
investigation into Medicare fraud. Another, Charter Behavioural Health
Systems (in which Bush held investments), is subject to regulatory
scrutiny, while another - Crescent Real Estate, which operates mental
hospitals - has its multi-million-dollar government input under
federal investigation. Rainwater is not himself accused of any
misdemeanour, but in each case, the prospect of Bush's promise to
privatise and deregulate the health system is a tempting one.

Rainwater is most famous for investing the oil wealth of the third
point of Bush's business Iron Triangle - the Bass Brothers, builders
of the metropolis Fort Worth. He turned the $50 million they invested
with him in 1970 to $5 billion in 1986, mainly through timely
investing in Texaco oil and Disney.

This is how the wheels go round in Texas: in 1997, Governor Bush
supported a tax reform Bill aimed to cut, among other things, school
property taxes. The reform saved Rainwater's Crescent Real Estate
$2.5m.

In 1999, Bush rushed through an emergency tax relief package to help
independent oil producers as prices slumped. According to state
records, the biggest beneficiary was the Pioneer Natural Resources oil
company, with a $1m tax break. Filings with the Security Exchange
Commission show Rainwater to own 55m shares in Pioneer.

The scale model for this entwinement of political and commercial
interests was the inclusion of the oil companies in drawing up Texas's
clean air regulations last year. The rules were devised by Bush's
office in collaboration with Marathon Oil and Exxon, and left
companies to set their own standards voluntarily.

But while the governor was waiting to sign the new 'self-regulatory'
Bill into law, the town of Odessa, Texas, was covered by a pall of
black smoke so thick that drivers had to switch on their lights during
daylight.

Odessa, said Dr David Karman of the Texas Natural Resources
Commission, 'was like having an open incinerator in your backyard.
Only this incinerator is burning a very large soup of toxic
chemicals'.

In bringing the politics of Texan non-government into national
government, Bush is in perfect harmony with two of his most powerful
lieutenants in Congress: Dick Armey, leader of the House, and Tom
Delay, the Republicans' feared chief whip.

Delay, who led the impeachment of President Clinton and whose office
mobilised the baying crowds bussed around Florida last month, is seen
as the coming man and leader of the extreme Right, with which Bush
must deal. Delay has called the Environmental Protection Agency the
'Gestapo' of government.

Armey has likewise attacked what he calls 'government shackles on
enterprise'; both men have sworn absolute loyalty to Bush.

And as it happens, both men, like George W. Bush, come from Texas.
Another Iron Triangle.