James R. Bath

James R. Bath, a native of Natchitoches, Louisiana, moved to Houston in 1965 at the age of twenty-nine to join the Texas Air National Guard, and became an aircraft broker and real estate developer there.¹ He was 55 years old in October 1991 and in June 1992.²³ From 1976 he was the business representative in Houston of Salem bin Laden, under a trust agreement, and he held a 5 percent interest in oil partnerships controlled by George W. Bush.³

Texas Air National Guard

Craig Unger wrote that Bath became friendly with George W. Bush, who began training as an F-102 pilot at Ellington Air Force Base in 1970, in the unit called the "Champagne Unit," and that Bath called Bush "Geo," the abbreviation on his uniform.¹ An order of the National Guard Bureau dated September 29, 1972, issued "by order of the Secretaries of the Army and the Air Force" over the name of Major General Francis S. Greenlief, chief of the bureau, confirmed in paragraph 6 the "verbal orders of the Comdr on 1 Aug 72 suspending 1STLT GEORGE W BUSH," Texas Air National Guard, Headquarters 147th Fighter Group, Ellington Air Force Base, Houston, "from flying status," and in paragraph 7 the "verbal orders of the Comdr on 1 Sep 72 suspending MAJ JAMES R BATH" of the same group. The reason given in each case was "Failure to accomplish annual medical examination."⁴

Unger wrote in Salon in 2004 that when the White House released Bush's military records in March 2004 the second name on the order was redacted, although names of other guardsmen were printed in full, and that the same order, released earlier under the Freedom of Information Act to the researcher Marty Heldt, showed Bath's name. The White House declined to explain. Bath confirmed that he was the man named and said the suspensions were not significant: "It happens all the time, especially in the Guard." He declined to say why he and Bush had missed their physicals and said: "Geo did not use drugs."¹ In 1991 Bath told Time that his friendship with Bush dated from their service in the Guard and that he was only "slightly" acquainted with the then-President, George H. W. Bush.²

Aviation, Bentsen and Connally

Atlantic Aviation, a Delaware company selling business aircraft, hired Bath in 1968 to open its Houston office, and he later became an aircraft broker on his own.¹ In 1973 he formed a real estate partnership with Lan Bentsen, a son of Senator Lloyd Bentsen; sources whom Time did not name said that one purpose was to find investments for the senator's blind trust. Bath and Bentsen said they had not been partners for years, but in 1991 secretaries at Bath's office still answered the telephone "Bath Bentsen Interests," and Bath said he had not got around to changing the name. Bath opened his own aircraft brokerage in 1976.² Unger wrote that Bath counted among his friends the Bentsen family, the younger and elder Bush, whom the son introduced to Bath in the mid-1970s, the Houston lawyer James A. Baker III, his duck-hunting companion, and John Connally.¹

Saudi Clients

Bath told Unger that around 1974, while trying to sell an F-27 turboprop, he received a telephone call from Salem bin Laden, then about twenty-five, a son of the founder of the Saudi Binladin Group, and that he befriended bin Laden and his associate Khalid bin Mahfouz, heir to the National Commercial Bank of Saudi Arabia. Unger wrote that Salem bin Laden bought aircraft and construction equipment, houses at Marble Falls and near Orlando, and set up an aircraft services company, Binladen Aviation, in San Antonio; and that Mahfouz bought a 3.5 million dollar house in the River Oaks section of Houston and a 4,000-acre ranch in Liberty County near Bath's own ranch. "By 1976, bin Laden had appointed Bath to be his American business representative. Bin Mahfouz drew up a similar arrangement with him."¹

According to the Houston Chronicle, the 1976 trust agreement by which Salem bin Laden appointed Bath his business representative in Houston was drawn shortly after George H. W. Bush became director of the Central Intelligence Agency. In sworn depositions Bath said he represented four prominent Saudis as trustee and would use his name on their investments in return for a 5 percent interest in the deals.³ Bath told Unger: "The investments were sometimes in my name as trustee, sometimes offshore corporations and sometimes in the name of a law firm."¹

Houston Gulf Airport and Main Bank

Bath bought Houston Gulf Airport in League City, Texas in 1977 on behalf of Salem bin Laden, receiving a 5 percent interest in the companies that own and operate it; after bin Laden died in 1988 his interests in the airport passed to Mahfouz, according to court documents.³ Unger dates to August 1977 the purchase of the Main Bank of Houston, then a community bank with about 70 million dollars in assets, by Connally, Bath, Mahfouz and Ghaith Pharaon, and wrote that Bath acted as an intermediary between the Saudis and Connally, who was positioning himself for the 1980 presidential nomination.¹ Time dated to 1978 Bath's entry as a shareholder and director of Main Bank, with Connally, Pharaon, whom it described as an alleged front man for the Bank of Credit and Commerce International, and Mahfouz, who later became a major shareholder in that bank. Pharaon later sold his Main Bank holdings and bought the National Bank of Georgia, in Time's words "allegedly on behalf of B.C.C.I." Time reported that a researcher had found that in the late 1970s Main Bank, when it held only 58 million dollars in deposits, had been buying 10 million dollars a month in new 100 dollar bills, for a purpose not known.²

A full-page advertisement for the Jeddah newspaper Arab News and its magazine Saudi Business, printed in the issues of November 10, 11, 14, 15, 16, 18 and 26, 1978, carried a testimonial signed by Bath: "Doing business in Saudi Arabia is a very personal experience, and ARAB NEWS and SAUDI BUSINESS give me a feel for the market there." Beneath it the advertisement stated: "Jim Bath, a former U.S. Air Force fighter pilot, heads Jim Bath and Associates, a turbine aircraft consulting firm based in Houston. He also operates an airport there on behalf of a group of Saudi investors, and travels frequently to the Kingdom."⁵

Campaign Contributions

Federal Election Commission records list the following contributions from "Jim R. Bath" or "Jim Bath" of Houston. On May 30, 1978 he gave 125 dollars to the Archer for Congress Committee of William R. Archer, candidate for the House from the 7th District of Texas, with his employer given as Jim Bath and Associates. George Bush for Congress, the 1978 committee of George W. Bush in the 19th District of Texas, recorded 409 dollars on August 23, 1978 under the name "Bath, Jim (IK)" with a zero zip code, and gifts of 500 dollars on August 31 (employer given as "real estate aviation") and 500 dollars on October 12, 1978. The Senator Lloyd Bentsen Election Committee recorded 1,000 dollars on May 31, 1979, with the employer given as Bath Bentsen Interests. Bath gave 1,000 dollars to the Connally for President Committee on November 14, 1979 and 1,000 dollars to George Bush for President on January 4, 1980; 250 dollars on June 19, 1980 to the 1980 Republican Presidential Unity Committee, with the employer given as Bath/Bentsen International; 500 dollars to the Bentsen committee on May 20, 1982; 500 dollars on July 1, 1982 to the Friends of Prescott Bush Campaign Committee, the Connecticut Senate committee of Prescott S. Bush Jr.; 1,000 dollars to George Bush for President, Inc. on April 13, 1987; and 1,000 dollars to the Bentsen committee on October 5, 1988, with the employer field reading "realtor."⁶

Skyway, Southwest Airport Services and Hobby Airport

In a sworn deposition Bath said he was the sole director of Skyway Aircraft Leasing Ltd., which a court document showed to be owned by Mahfouz.³ Time reported that Bath's partners in Skyway, one of four similarly named companies he controlled, were "artfully hidden," and that the firm that incorporated his companies in the Cayman Islands had set up a money-collecting front company for Oliver North in the Iran-Contra affair; that Skyway leased a 10 million dollar Gulfstream II to the Abu Dhabi National Oil Company, controlled by Sheikh Zayed bin Sultan al-Nahayan, president of the United Arab Emirates and owner of BCCI; that associates confirmed Bath had brokered more than 150 million dollars of private aircraft sales and leases, concentrated among Middle Eastern royalty.² Unger wrote that through Skyway Bath brokered about 150 million dollars of aircraft deals to major BCCI stockholders including Pharaon and Sheikh Zayed.¹

Bath operated, and held a majority stake in, Southwest Airport Services at Ellington Field. The Houston Post reported in 1990 that the government had spent millions of dollars more than necessary by fueling military aircraft, including Air Force One, there rather than at a government fuel station, with a markup of as much as 60 percent; Time noted that the paper's report had prompted no official investigation.² In 1990 Bath bought the Express Auto Park garage at William P. Hobby Airport for 8.4 million dollars, which included a 1.4 million dollar loan provided by Mahfouz, according to transaction documents.³

Arbusto

Tax documents and personal financial records show that Bath held a 5 percent interest in Arbusto '79 Ltd. and Arbusto '80 Ltd., limited partnerships controlled by George W. Bush, and had invested 50,000 dollars in them; "There is no available evidence to show whether the money came from Saudi interests," the Chronicle wrote. Bush's company, Bush Exploration Co., the general partner, went through several mergers and became Harken Energy, of which Bush was a shareholder and director, which held offshore drilling rights off Bahrain, and one of whose top shareholders was Abdullah Taha Bakhsh. Bush told the newspaper that to his knowledge Bath's investment came from personal funds and that no Saudi money was invested in Arbusto.³ Early 1980s tax records reviewed by Time showed that Bath remained a stockholder until Bush sold his company to Harken in 1986, while Bush had denied ever having business dealings with Bath.² Bath told Unger that "100 percent of those funds were mine. It was a purely personal investment," and that bin Laden and Mahfouz "never met Bush, ever."¹

The White Litigation

Charles W. (Bill) White, a graduate of the Naval Academy and former Navy fighter pilot, formed a real estate partnership with Bath in 1980, with a joint venture for each project under a Master Partnership Agreement and White in charge of day-to-day operations; they were also partners in the development company Venturcorp, Inc.³⁷ White told Time that it was Lan Bentsen who suggested that he go into business with Bath.² Bath sued White in September 1986 for rescission or dissolution of the partnership and damages, and White counterclaimed in February 1987. After two motions to compel, and a hearing on February 20, 1989 at which White's lawyer stated that all requested documents had been produced or did not exist, the trial court appointed a special master; White then swore by affidavit that all documents had been produced and afterward produced more than ten thousand others. On October 6, 1989 the master struck White's pleadings, including his counterclaims, and ordered him to pay Bath 5,000 dollars. After an evidentiary hearing from June 18 to July 2, 1990, the trial court adopted the master's findings and entered a default judgment for Bath. The Fourteenth Court of Appeals at Houston, sitting as Justices Paul Pressler, Junell and Ellis, affirmed in White v. Bath, 825 S.W.2d 227, on February 20, 1992; Kem T. Frost appeared for Bath. Rehearing was denied on March 26, 1992, and the Supreme Court of the United States denied certiorari on April 19, 1993.⁷⁸

White claimed that Bath was a front man for CIA business operations, used his connections to the Bush family and Senator Bentsen to cloak offshore companies that moved money and airplanes between the Middle East and Texas, and kept the upper hand in five lawsuits "by privately asserting to the court that he had 'national security' connections"; he also claimed in court that Bath had wanted to borrow 550,000 dollars from their venture to cover funds Bath had "misappropriated" from an aircraft company he controlled. Bath told Time: "I am not a member of the CIA or any other intelligence agency," and called White's account a "fantasy."² Unger wrote that Bath later equivocated, telling him: "There's all sorts of degrees of civilian participation. It runs the whole spectrum, from maybe passing on relevant data to more substantive things. The people who are called on by their government and serve, I don't think you're going to find them talking about it. Were that the case with me, I'm almost certain you wouldn't find me talking about it."¹

The 1992 Federal Review

On June 4, 1992, Jerry Urban of the Chronicle reported, citing "sources close to the investigations," that the Financial Crimes Enforcement Network of the Treasury and the Federal Bureau of Investigation were reviewing accusations that Bath had guided money to Houston from Saudi investors who wanted to influence United States policy under the Reagan and Bush administrations, and that the review stemmed in part from court documents White had obtained in litigation. Such representation would have required registration as a foreign agent with the Department of Justice. White said Bath had told him he had assisted the CIA in a liaison role with Saudi Arabia since 1976. Bath, who had previously denied working for the CIA, declined to comment for the record, as did spokesmen for FinCEN and the FBI.³