A continuation of the earlier blog . . . Recent White House belligerence about leaks is odd, given that one of the closest relatives of the president was involved in a corporate structure that operated for years like a swinging cat door between Kuwaiti financial investment, on one hand, and security information at sensitive U.S. sites including the World Trade Center, on the other.

 

Three interesting companies were all connected by personnel and financing. The first was a security company called Stratesec or Securacom, where Marvin P. Bush, youngest brother of the president, served as director from 1992 through 2000. The security contractor, whose clients included the World Trade Center, Dulles and National airports, and United Airlines, was financed by a private investment firm in D.C. called KuwAm, short for Kuwait American Corporation. Both companies were connected in turn to an aviation company named Aviation General, with an international clientele including the Middle East. All three companies were headed by a businessman, Wirt D. Walker III, long linked with Bush, and all three got Kuwaiti money via the Al Sabah family, rulers in Kuwait. All three are now out of business.

 

This typical document reflecting the al Sabah ownership interest in Wirt Walker companies shows an insider stock transaction by Mishal al Sabah in Aviation General, headed by Walker, in 2001.

 

Numerous Aviation General filings refer to Mishal Yousef Saud al Sabah as a director on its board and major shareholder in the company, including this quarterly report for the second quarter of 1999, proxy filings for 1999 and 2000 and 2001, and this annual report for 2002. A role for Al Sabah in Aviation General is indicated from its first filing in 1998 to one of its last filings in 2004.

 

The importance of Al Sabah money to the Walker companies cannot be overstated. Kuwaiti funding was the lifeblood of Aviation General, of Securacom, renamed Stratesec, and of KuwAm for years, and the influx of capital from the Al Sabahs also facilitated efforts to drum up funding for Securacom or Stratesec and for Commander Aircraft orAviation General through venture investment and through IPOs. An older member of the Al Sabah family had previously served as a director of KuwAm, and  limited partners in the 1980s included an Al Sabah family trust. Much of the Al Sabah funding was organized through an entity called a general partner, Special Situation Investment Holdings, as in this proxy from May 2000.

 

The three companies were thoroughly joined in interest, with Wirt Walker and Mishal Al Sabah serving almost interchangeably as directors or officers in the security company, the aviation company, and the private investment firm, from year to year, from the early 1990s through 2002. Walker and Al Sabah were also major shareholders. Respective company divisions and other entities were likewise joined, generally by virtue of the Kuwaiti capital. According to interviews with Walker, Al Sabah, a considerably younger man than he, became linked with Walker when still in his teens. When Al Sabah turned 21, he became a financial source for Walker business entities under various names, including Stratesec, Aviation General, Video City, Prism and Interactive Systems Worldwide, a sports gambling business, from the 1990s through 2004.

 

Marvin Bush also has longstanding connections to the Walker enterprises, to KuwAm as well as to Stratesec. Director of Marketing at Winston Partners, the northern Virginia investment firm founded by Bush with A. Scott Andrews, is Pamela S. Singleton, formerly a principal in KuwAm. The District of Columbia issued authority to KuwAm to incorporate on March 19, 1982. For 20 years it was headquartered in the Watergate, as were Aviation General and Stratesec in the 1990s. From 1990 through 1996 Singleton served as either Secretary or Treasurer of KuwAm.

 

It is no secret in Washington that the Kuwaiti ruling family has been taking care of the Bushes for years. Close ties in the first Gulf War were closely pursued, as reported by Seymour Hersh in the New Yorker, by an embarrassing junket after the combat in which more than one son of then president George H.W. Bush boarded a plane to the Middle East to drum up business with grateful Kuwaitis and others.

 

Despite the public embarrassment, some of that effort was quietly successful. A capital infusion largely from the Kuwaitis enabled Securacom to get going with a managerial reshuffle in 1992 that brought Bush aboard. Bush was among the directors who later signed off on the litigation against SecuraComm Consulting, Inc., over the similar company name.

 

In a somewhat parallel venture, according to sources at Daiwa Securities America, Daiwa was hired by Winston Capital Partners and by Marvin Bush in person just prior to the first Gulf War to raise a $115 million Leveraged Buyout Fund for Winston. Bush directed those activities to cease during the Gulf War. When Bush was contacted after the war, he told the company that the funding had been completed. Daiwa was later informed that the final list of investors for the Winston LBO fund included 14 Saudi and Kuwaiti merchant family investors, several of whom had HRH in their names.

 

The largest concern here, aside from the question of why it would be appropriate for a close relative of the president to benefit financially from foreign royalty without oversight or scrutiny, is the potential for security breaches. The financial vicissitudes of Walker, who has been sued in federal courts in D.C. and Georgia and has been found in arrears for state and federal taxes and for payments to subcontractors, is enough to raise questions about the safety of security information controlled by his companies. Add the fact that both the aviation firm and the security contractor were heavily financed and at times owned by a Kuwaiti slush fund. In even the most charitable view, no visible fire wall separates the construction data entailed in security arrangements at the WTC and Dulles and Reagan National airports from company management operating from, or based in, Kuwait. Mishal Al Sabah currently is abroad and faces arrest for contempt of court charges if he enters the U.S. in civil litigation, so it is presumed that he will not be returning to this country soon.

 

The White House and Bush have not responded to questions or requests for comment.