Tuesday, January 13, 2015

Potential Candidate Jeb: Calling for Dough

Bloomberg reported:

Jeb Bush's allies are setting a fundraising goal of $100 million in the first three months of this year—including a whopping $25 million haul in Florida—in an effort to winnow the potential Republican presidential primary field with an audacious display of financial strength.

The targets were confirmed by multiple Republican sources involved in finance meetings with Bush's team. They requested anonymity to discuss internal deliberations. One said the point is to persuade some establishment candidates to stay on the sidelines in the 2016 race.

The attempt to intimidate the wide-open field with a shock-and-awe fundraising machine echoes the strategy Bush's brother, former President George W. Bush, used to win the White House in 2000.
Jeb's team approached several private equity underwriters (PEU's) for donations:

Bush visited with financial backers from KKR and Bridgewater Associates, a pair of New York-based investment firms, and held a fundraiser Wednesday in Greenwich, Conn. 
Republican Ken Mehlman works for Henry Kravis' KKR, where his bio states:

Mr. Mehlman spent a dozen years in national politics and government service, including as 62nd Chairman of the Republican National Committee and Campaign Manager of President Bush's 2004 re-election campaign as well as in high level positions in Congress and the White House.
Jeb resigned from his board positions when he announced he would explore running for the Presidency.  Bush served on the boards of Tenet Healthcare, Rayonier Inc., Empower Software Solutions and CorMatrix Cardiovascular Inc.  The article did not mention Bush's board positions with CNL Bankshares or Angelica Corporation.  Are they in the past like his board slot with Swisher Corporation?

The timing of his resignation is interesting.  Will Bush's board compensation be reported later this year in corporate proxy statements?

It remains to be seen if Jeb's 2014 board haul will become public information.  If not, that leaves 2013 as the last year such information would be available.  

While the orchestration has begun Jeb hasn't decided what to do with his other ventures:

“Bush was reviewing other businesses in which he is principal partner or owner,” the Post reported, citing an aide. They include consulting firm Jeb Bush & Associates and business advisory group Britton Hill Partnership.

Jeb invited comparisons to the party's 2012 nominee, former Massachusetts Governor Mitt Romney, by expanding his private equity portfolio this year, including a new fund in November, BH Global Aviation, that raised $61 million in September, mostly from foreign investors.

BH is short for Britton Hill, Jeb's PEU.  It runs in the family as son George P. founded both Pennybacker Capital and St. Augustine Capital Partners, LLC.

Britton Hill's first investments have been tied to the exploitation of shale oil and gas in the U.S., a booming area for private equity."  Falling oil prices have hurt shale oil and gas exploration.  How might it impact Britton Hill's investments?

Brother Neil Bush was appointed to the board of Escalera Resources, a natural gas and crude oil exploration company.  Their press release stated:

Escalera Resources Co. is pleased to announce the appointment of Mr. Neil Bush to the Company's Board of Directors. 

Mr. Neil Bush is the son of President and Mrs. George H.W. Bush.  Mr. Bush has been involved in both the energy industry and international business development for three decades. He began his career in 1980 with Amoco Production Company (now BP) in Denver, Colorado. Later in the 1980's he formed two independent E&P companies that explored for oil in various locations, both domestically (Wyoming, Colorado, California, and Michigan) and internationally (Argentina).

For the last 15 years, Mr. Bush has been engaged in a variety of international development activities with a focus on China and the Middle East.  He first visited China in 1976, following his father's service as U.S. Chief Liaison Officer in Beijing.  Currently, Mr. Bush has varied business interests in Hong Kong, Singapore and China, including ties to companies active in oil and gas exploration and exploitation, real estate development and property management.
How long before Britton Hill, De Soto Partners or Escalera run short of cash in a declining oil price environment?  Surely, Jeb's advisors are running the numbers.  In addition to political fundraising Jeb could be making capital calls.

Update 1-19-15:  WaPo reported on Jeb's term on the board of InnoVida, a period when company executives committed fraud.

Update 8-31-15:  Bloomberg reported Jeb facilitated a $236 million deal for Carnival Cruise Lines to house displaced people after Hurricane Katrina.  Bush also steered Florida public retirement investments to Lehman Brothers where he later landed a consultant job paying $1.3 million per year.