Neil Bush's Firm Under Federal Scrutiny

The AP reports:

The Education Department's inspector general says he will review whether federal money is inappropriately being spent on programs by a company founded by Neil Bush, the president's brother.

Citizens for Responsibility and Ethics in Washington, a Washington-based watchdog group, called for the inquiry and released a letter this week from the department's inspector general, John Higgins Jr.

In it, Higgins said he would ask an assistant to examine the group's complaint.

The group contends school districts inappropriately are using federal dollars for Ignite! Learning Inc. programs. It says there is no proof the company's products are effective and claims the schools are using the products due to political considerations.

The company's president, Ken Leonard, said in a statement that Ignite! has not received any correspondence from the inspector general's office.

"Ignite! Learning has no knowledge of any customer that has procured our curriculum solutions through means which are other than completely ethical and in compliance with the typical guidelines of their various funding sources," Leonard said.

Ignite! sells a product it refers to as a Curriculum on Wheels, which comes with software to teach math, social studies and science and costs about $3,800 each, not including subscription costs.

Neil Bush is the chairman of the company, based in Austin, Texas.

The Relatively Charmed Life of Neil Bush

Despite Silverado and Voodoo, Fortune Still Smiles on the President's Brother

The Washington Post reports:

Ah, it's nice to be Neil Bush.

When you're Neil Bush, rich people from all over the world are eager to invest money in your businesses, even though your businesses have a history of crashing and burning in spectacular fashion.

When you're Neil Bush, you'll be sitting in a hotel room in Thailand or Hong Kong, minding your own business, when suddenly there's a knock at the door. You answer it and a comely woman strolls in and has sex with you.

Life sure is fun when you're Neil Bush, son of one president, brother of another.

Just how much fun was revealed in a deposition taken last March, during Bush's very nasty divorce battle. Asked by his wife's attorney whether he'd had any extramarital affairs, Bush told the story of his Asian hotel room escapades.

"Mr. Bush," said the attorney, Marshall Davis Brown, "you have to admit that it's a pretty remarkable thing for a man just to go to a hotel room door and open it and have a woman standing there and have sex with her."

"It was very unusual," Bush replied.

Actually, it wasn't that unusual. It happened at least three or four times during Bush's business trips to Asia, he said: "I don't remember the exact number."

"Were they prostitutes?" asked Brown.

"I don't -- I don't know," Neil replied.

"Did you pay them?"

"No."

Not surprisingly, the revelation made headlines around the world. Equally unsurprisingly, the sex story overshadowed the curious financial revelations that came out in the same deposition.

In 2002, for instance, Bush signed a consulting contract with Grace Semiconductor -- a Shanghai-based company managed in part by the son of former Chinese president Jiang Zemin. Bush's contractual duties consist solely of attending board meetings and discussing "business strategies." For this, he is to be paid $2 million in company stock over five years, plus $10,000 for every board meeting he attends.

"Now, you have absolutely no educational background in semiconductors, do you Mr. Bush?" Brown asked.

"That's correct," Bush responded.

Meanwhile, back home in Texas, Bush serves as co-chairman of a company called Crest Investment. Crest, he revealed in the deposition, pays him $60,000 a year to provide "miscellaneous consulting services."

"Such as?" Brown asked.

"Such as answering phone calls when Jamal Daniel, the other co-chairman, called and asked for advice," Bush replied.

Ah, it's nice to be Neil Bush, who seems to be living the lifestyle immortalized in those famous Dire Straits lyrics: "Money for nothin' and chicks for free."

Unique, Relatively Speaking

Neil Bush is the latest manifestation of a long tradition in American life -- the president's embarrassing relative.

There was Sam Houston Johnson, who used to get drunk and start blabbing to the press until his brother, Lyndon, sicced the Secret Service on him.

And Donald Nixon, who dreamed of founding a fast-food chain called Nixonburgers and who accepted, but never repaid, a $200,000 loan from billionaire Howard Hughes. His brother, Dick, had the Secret Service tap his phone.

And Billy Carter, who drank prodigious quantities of beer, authored a book called "Redneck Power" and took $200,000 from the government of Libya.

And Roger Clinton, a party animal who spent a year in prison for cocaine dealing and who later appeared in a movie called "Pumpkinhead II" playing a pol called Mayor Bubba.

But Neil Bush has surpassed them all. Bush has done something that no other American has ever accomplished: He has become the embarrassing relative of not one but two presidents.

In the late '80s and early '90s, Bush embarrassed his father, George H.W. Bush, with his shady dealings as a board member of the infamous Silverado Savings and Loan, whose collapse cost taxpayers $1 billion.

Now Bush has embarrassed his brother George W. Bush with a made-for-the-tabloids divorce that featured paternity rumors, a defamation suit and, believe it or not, allegations of voodoo.

And Bush's career as an embarrassment may not be over. At 48, he is still relatively young and, judging from his deposition, still virile and vigorous. If his brother Jeb, governor of Florida, is ever elected president, Neil could conceivably embarrass him, too, pulling off an unprecedented hat trick of presidential embarrassment.

Obviously, it's time for a mid-career retrospective on the life and work of Neil Bush.

Or maybe not. His father, mother, brothers and ex-wife all declined to be interviewed. White House spokeswoman Claire Buchan uttered a curt "no comment."

Neil also declined to be interviewed, although he agreed to respond to e-mailed questions, provided they did not pertain to his divorce. He reports that he's too involved with Ignite!, his educational software company, to pay much attention to media coverage of his misadventures.

"Seriously," he writes via e-mail, "I'm too busy being a good father and promoting Ignite! to worry about that kind of thing."

The Wheeler-Dealer

Neil Mallon Bush was born in 1955 and named after his grandfather's Yale buddy Neil Mallon, the corporate CEO who gave George H.W. Bush his first job in the Texas oil business.

The third of the five Bush children, Neil was so thoughtful and helpful that siblings dubbed him "Mr. Perfect."

But Neil had trouble reading, and a counselor at St. Albans prep school in Washington told his mother he might not graduate. His problem was dyslexia, and his mother spent countless weekends taking him to special reading lessons.

It worked. He graduated, then went to Tulane University, where he received a degree in international economics and, in 1979, an MBA. That year, while working on his father's unsuccessful campaign for the 1980 Republican presidential nomination, Neil met Sharon Smith, whom his mother later described in her memoirs as "a darling young schoolteacher from New Hampshire."

They married in 1980 and moved to Denver, where Neil got a $30,000 job negotiating mineral leases for Amoco. Denver was an oil-fueled boomtown, and soon the handsome son of the vice president was charming the swells at the soirees of Denver's social set.

In 1982, Neil and two co-workers quit and formed an oil exploration company, JNB Exploration. His partners were geologists; Neil was in charge of raising money.

"Neil knew people because of his name," one partner, Evans Nash, said later.

Among the people Neil knew were two high-powered Denver real estate barons -- Bill Walters and Ken Good. Walters was a flamboyant Rolex-wearing, Rolls-driving mogul known as "the Donald Trump of Denver." Good owned the largest home in Colorado, a $10 million mansion with a special plumbing system that pumped Scotch, gin and vodka throughout the house.

After listening to Bush's sales pitch, Walters invested $150,000 and set up a $1.75 million line of credit for JNB at a bank he owned. Good invested $10,000 and pledged loans worth $1.5 million. Good also lent Bush $100,000 to gamble in the commodities market and said Neil didn't have to pay it back unless he made money.

"It was," Bush later admitted, "an incredibly sweet deal."

He set up an office, decorated it with a bust of his father and paid himself $66,000 a year -- double his Amoco salary. But JNB floundered. In five years, the company drilled 26 wells in four states, but it never found a drop of exploitable oil. JNB would have gone bankrupt if not for the money from Walters and Good.

But Bush was able to help the men who helped him. In 1985 he joined the board of Silverado Savings and Loan, which had already lent millions to Walters and Good. Over the next three years, Silverado lent an additional $106 million to Walters and $35 million to Good, although the two men's real estate empires were collapsing.

Good used some of that money to buy JNB, although it was still losing money. He raised Bush's salary to $120,000 and awarded him a bonus of $22,000. He also hired Bush as a director of one of his companies, at a salary of $100,000.

Neither Good nor Walters ever repaid a nickel of their Silverado loans, and in 1988 Silverado went belly up, leaving U.S. taxpayers holding the bag for $1.3 billion in debts.

Picking through the wreckage, regulators from the federal Office of Thrift Supervision concluded in 1991 that Bush's deals with Good and Walters while serving on Silverado's board constituted "multiple conflicts of interest." Bush became a public symbol of the $500 billion savings and loan scandal. Protesters picketed his home and pasted mock wanted posters around Washington: "Jail Neil Bush."

Bush proclaimed his innocence, declaring at a news conference that "self-serving regulators" were persecuting him because he was the president's son. But when he appeared before the House Banking Committee in 1990, he admitted that some of his deals looked "a little fishy."

Ultimately, Bush paid $50,000 as his part of a federal lawsuit against Silverado and was reprimanded by the OTS. Good and Walters ended up declaring bankruptcy, and JNB, which had never found oil or made money, quietly perished.

Today, Bush maintains that he did nothing wrong.

"I happened to be one of hundreds of other American businessmen and women who served as an outside director on the board of a savings and loan institution that failed during the 1980s," he writes in an e-mail. "I regret that the institution's failure cost taxpayers so much money."

Strictly Business

During his high-rolling days in Denver, Neil had told reporters that he was thinking of running for Congress. At home, he spoke with his brothers about running for governor.

"They'd talk about how GW was going to run for governor of Texas and Jeb would run for governor of Florida and Neil would run for governor of Colorado," recalls Douglas Wead, a Bush family friend who served as a special assistant in the first Bush White House. "The family would have bet on Jeb, but if you just observed their personalities, you'd say Neil."

Neil was the most charming of the Bush brothers, Wead says. "He's relaxed, he's funny, he's a better speaker than anybody in the family. . . . He could easily have been a congressman."

The Silverado scandal killed Neil's dream of a political career. But, thanks to his father's friends, it had little effect on his business career.

Thomas "Lud" Ashley, an ex-congressman and bank lobbyist, "came to the rescue," Barbara Bush wrote in her memoirs, and raised money to pay Neil's legal bills.

"I'm a family friend," Ashley explains today, "and he was in real difficulty."

With Silverado and JNB both belly up, Bush started Apex Energy, a methane gas exploration company. He invested $3,000 of his own money and got $2.3 million from two companies run by his father's friend Louis Marx, heir to the Marx toy fortune.

Neil used Marx's money to pay himself a salary of $160,000, and he sold a Wyoming gas lease that he owned to Apex for $150,000. The lease proved worthless -- no methane there. In fact, Apex, like JNB, never found anything worth pumping.

After two years, Apex went broke. Bush had received more than $300,000 in salary but Marx got zip, and the Small Business Administration, which had backed Marx's investments, was left holding the empty bag.

An investigation by the House Small Business Committee found nothing "illegal or improper" but noted that a $2 million federally guaranteed investment to an applicant who risked only $3,000 of his own money seemed like "a very high leveraging of funds."

A few months after Apex crashed in 1991, Bush was rescued by another of his father's rich friends. Bill Daniels, a multimillionaire cable TV baron who raised $330,000 in 1987 for George H.W. Bush's presidential campaign, hired Neil to a $60,000 job at TransMedia Communications.

"Anyone who hires Neil Bush is going to get some heat," Daniels said at the time, "but somebody had to do it."

TransMedia was headquartered in Texas, so Bush sold his $500,000 house in Denver and moved Sharon and their three kids -- Lauren, Pierce and Ashley -- to Houston.

Peter Wehner of Colorado Business magazine called TransMedia to find out exactly what Bush would be doing for the company.

"I'm trying to find a title for him, if you want to know the truth," said Dick Barron, TransMedia's president. "He'll be learning the business, basically."

Traveling Salesman

In April 1993, shortly after leaving the White House, George H.W. Bush flew to Kuwait, accompanied by his wife, his sons Marvin and Neil, and his former secretary of state, James Baker.

The ex-president received a hero's welcome, a medal from the emir and an honorary degree from the university. After he left, Baker and Neil Bush went to work, attempting to win contracts from the Kuwaiti government. Ultimately, Bush's efforts failed to bear fruit. But over the next decade, he frequently traveled to the Middle East, Europe and Asia to negotiate deals and raise capital for various businesses. In 2000 he made $1.3 million, according to his deposition testimony -- $642,500 of it paid as a commission for introducing an Asian investor to the owners of an American high-tech company.

During his travels, he met with several Arab princes and enjoyed a private dinner with Jiang Zemin, then China's president, who serenaded Bush with a military song.

"I probably have access to people who wouldn't meet with a development-stage company," Bush told an Associated Press reporter in 2002, "but I feel I'm held to a higher standard."

For the last several years, Bush's main business interest has been Ignite!, the educational software company he co-founded in 1999. To fund Ignite!, Bush has raised $23 million from U.S. investors (including his parents), as well as businessmen from Taiwan, Japan, Kuwait, the British Virgin Islands and the United Arab Emirates, according to documents filed with the Securities and Exchange Commission.

Last year, Ignite! also entered into a partnership with a Mexican company, Grupo Carso Telecom. The partnership enabled Ignite! to lay off half of its 70 employees and outsource their jobs to Mexico.

"That's turned out to be great," says Ignite! President Ken Leonard.

But Ignite!, which pays Bush $180,000 a year, is not his only business interest. Last year, Winston Wong -- a Taiwanese businessman and an investor in Ignite! -- signed Bush to that $2 million consulting deal with Grace Semiconductor, the company that Wong founded in partnership with the Chinese government. Bush has not yet received any compensation because the contract calls for him to be paid after board meetings and, he said by e-mail, "I was unable to attend their one and only board meeting."

A spokesman for Grace declined to comment.

Kevin Phillips, historian and author of the forthcoming book "American Dynasty: Aristocracy, Fortune and the Politics of Deceit in the House of Bush," sees Neil Bush as a man who has made a career of cashing in on his famous name.

"He's incorrigible," Phillips says. "He seems to be crawling through the underbelly of crony capitalism."

Bush vehemently denies that contention. "I have never used my family name to 'cash-in,' " Bush wrote by e-mail. "Unfortunately, such ridiculous charges come with the territory of coming from a famous and public family."

Fire and Disdain

"We create these prisonlike environments," Neil Bush said, "then we take our hunter-warrior types and label them attention-deficit disordered and put them on drugs."

It was the spring of 2002 and Bush was speaking about education at Whitney High School in Cerritos, Calif., considered one of the best public schools in America. He was touting Ignite!, which was being tested there. In the audience was writer Edward Humes, taking notes for his book on Whitney, "School of Dreams," published last summer.

Ignite! is designed, Bush said, to make learning fun for "hunter-warrior" kids who don't like reading. It's a computer curriculum that uses music, graphics and animation to teach middle school kids.

The program's first course -- eighth-grade American history -- was tested over the last two years in schools in a dozen states. Available commercially for the first time this year, it is being used by about 40,000 students in 120 school districts, mostly in Texas, at a cost of about $30 per pupil.

One school that uses Ignite! is Mendez Middle, a predominantly poor and Hispanic school in Austin. After three years of using the program, says Principal Connie Barr, the number of students who passed the state's eighth-grade history test has risen from 50 percent to 87 percent. "That's incredible," says Barr. "It doesn't replace the teacher or the textbook. What it does is give the teacher another way to deliver the information."

However, Ignite! has been attacked by other educators for dumbing down history. Among its controversial aspects is a lesson that depicts the Seminole Wars in a cartoon football game -- "the Jacksons vs. the Seminoles" -- the animated Indians smashing helmets with animated white settlers. The Constitutional Convention is taught in a rap song:

It was 55 delegates from 12 states

Took one hot Philadelphia summer to create

A perfect document for their imperfect times

Franklin, Madison, Washington -- a lot of the cats

Who used to be in the Continental Congress way back.

Ignite! is working well, Bush wrote in an e-mail: "Teachers and students have given anecdotal feedback that confirms the powerful impact our program is having on student achievement, student focus and attitudes, and teacher success in reaching all of their students."

But at Whitney reviews were less laudatory. "The kids felt pretty strongly that what this was about was lowering the bar," says Humes.

Humes wasn't impressed, either. "There was a lot of rhyming and games," he says. "It reminded me of what my son uses -- but he's in kindergarten."

When Bush spoke at Whitney, several students began arguing with him.

"He was very surprised," Humes recalls. "You had to see the look on his face when one young woman got up and said she liked calculus. He said it was useless. This is the branch of mathematics that makes space travel possible, and he said it was useless."

Tabloid Heaven

Even before the voodoo story and the paternity rumor and the defamation suit about the paternity rumor, Neil Bush's divorce was a candidate for the Nasty Breakup Hall of Fame.

It all began in 2002, when Bush informed his wife -- via e-mail -- that he no longer loved her and wanted a divorce.

At least that's the way Sharon Bush told the story back when she was still talking to reporters. Neil has never discussed the divorce in public, except in that now-famous deposition, in which he described his marriage as "loveless" with "no affection" and "very little sexual activity over the past 10 or 12 years."

Sharon, 51, claimed she was shocked to learn that her husband of 22 years had taken up with Maria Andrews, 40, a volunteer helping Neil's mother, former first lady Barbara Bush, with her correspondence. Andrews is the ex-wife of a Houston oil executive and the mother of three children.

Andrews is "very pretty -- petite is the best word for her," says John Spalding, a Houston lawyer and a friend of Neil Bush's. "She's just great, and she and Neil are great together."

Sharon Bush did not want a divorce, particularly on her husband's terms, which she considered insufficiently generous. She launched a counterattack by hiring New York PR whiz Lou Colasuonno, a man who knows tabloids, having served as the editor of both the New York Post and the New York Daily News.

Colasuonno's opening gambit was a sure-fire attention-getter: In April 2003, he announced that Sharon was seeking a publisher for a tell-all book about the Bush family.

"This is a woman who has had some wonderful times with the Bushes," Colasuonno told the New York Observer. "But she has seen the dark side, too. And she intends to provide a view of the family that everyone will want to read."

Next, Colasuonno arranged -- and publicized -- a lunch date between Sharon and Kitty Kelley, the celebrity biographer from Hell, who is working on a book on the Bush dynasty.

"I learned a great deal about the Bush family from Sharon," Kelley told The Washington Post after the lunch. "She told me he's only offering $1,000 a month in support -- take it or leave it. . . . She said that when she told Neil she needs more to live on, Neil Bush said, 'Just get remarried.' Sharon was sobbing as she told me, 'Kitty, I just won't sell my body!' "

Whew! After that, Colasuonno says, Neil increased his offer considerably, and the final settlement gave Sharon about $30,000 a year in alimony, plus $750 a month for her two minor children, Pierce, 17, and Ashley, 14. (The couple's oldest child, Lauren -- a Princeton student and a fashion model -- is 19.)

But on the day the divorce was to be finalized -- April 28 -- Sharon told the judge that she wasn't sure she wanted to go through with it. "I believe in working through a marriage," she testified, "and I don't believe in divorce with three children."

Then, under oath, Sharon asked the judge to order "a DNA sampling of Maria Andrews's youngest child," a 2-year-old boy, because she "had cause for believing that it could possibly be his [Neil's] child."

The judge denied the request. The divorce became final that day, but the battle raged on.

In July, Sharon appeared on Houston's KHOU-TV News, telling her tale of woe. Somehow the station obtained a videotape of Neil Bush's deposition and aired juicy bits from his account of his Asian hotel exploits.

That upped the ante in the publicity war. Soon, Neil's friend Spalding was calling reporters with a choice morsel of his own: Sharon had yanked hair out of Neil's head, Spalding said, so she could make a voodoo doll and put a curse on her ex-husband.

"It was bizarre," Spalding says. "She literally pulled his hair and yanked it out of his head. He told me about it."

Sharon admitted doing that and also said she collected some from his hairstylist's floor. But it was not for voodoo, she told the Houston Chronicle. Neil was acting so erratically, she said, that she wanted to test the hair for signs of drug use. The tests were inconclusive, she said.

Neil responded by authorizing his lawyer to say he didn't use drugs.

At that point, it looked like the Bush divorce couldn't get much cheesier. But in September, Robert Andrews, ex-husband of Maria Andrews, sued Sharon Bush for defamation over her claims that Neil is the father of the 2-year-old. She spread the rumor, his lawsuit alleged, to news outlets, friends and "fast food restaurant employees." He demanded $850,000 in damages.

Then Sharon responded by asking the court to order Neil as well as Robert Andrews to provide DNA samples.

Then Andrews's attorney, Dale Jefferson, suggested a novel Texas-style "put-up-or-shut-up" solution: "We'll put up $850,000 and Sharon Bush can put up $850,000," Jefferson said. "And if she's right and Neil Bush is the father of that child, she gets Mr. Andrews's $850,000, and if we're right, we get her $850,000."

Then . . . no, that's enough of this folly. It's time to stop wallowing in the gutter. It's time to take the high road, to raise the sensitive questions worthy of high-minded people.

Like: How is Neil Bush holding up under the relentless onslaught of embarrassing publicity? How is the son of one president and the brother of another doing these days?

Just fine, thank you, his friends say.

"He's very optimistic and he's got very thick skin," says Spalding. "He's a very happy guy and he's in a great relationship, and he says, 'This will all blow over.' "

"He has real pluck about him," says Lud Ashley. "He keeps his chin up."

These days Bush divides his time between Texas -- home of his children and Ignite! -- and Paris, where Maria Andrews is living so her children can learn French.

"Neil is very much in love," says Rex John, a Houston PR man who is the godfather of Bush's daughter Lauren. "As his friend, I just really enjoy seeing him so happy because for so many years he was not happy."

"Neil and Maria are incredibly affectionate with each other and with friends," says Spalding's wife, Laura, who is Maria Andrews's attorney. "It's fun to watch them together because they're so in love."

Somehow, even after all his travails, it's still nice to be Neil Bush.