Mystery man

Why the White House deleted the name of Bush pal and Saudi go-between James Bath from the president's military records is a tantalizing but unanswered question.

Published April 28, 2004 1:54AM (EDT)

Last month, before the 9/11 commission began its public hearings and Iraq exploded in renewed warfare, the White House tried to quell a gathering storm regarding President Bush's military service, releasing hundreds of documents about Bush's tenure in the Texas Air National Guard some 30 years ago. A close examination of the documents reveals that they not only fail to answer lingering questions about Bush's service but prompt a crucial new area of inquiry that could play a role in the presidential campaign -- a long and lucrative, but low-profile, relationship between Saudis and the Bush family that goes back 30 years.

The document that raises that question is dated Sept. 29, 1972, and notes that 1st Lt. George W. Bush was suspended from flying because of his "failure to accomplish [his] annual medical examination." Since he had just received hundreds of thousands of dollars' worth of training as a jet fighter pilot, the fact that Bush let his medical certification lapse raises a troubling matter. Why did he allow himself to become ineligible to fly when he still had two years of service left? Given that random drug testing by the military had just started, some have suggested that Bush had not yet given up his partying ways and may have begged off because he had a substance abuse problem.

The records released by the White House last month fail to answer that question, but they do add one compelling fact to the story -- namely, that Bush was not the only man in his unit to be suspended for failing to take the physical, and that someone else at Ellington Air Force Base in Houston was suspended for exactly the same reason at almost the same time. However, in the documents, the second man's name was inexplicably redacted -- raising new questions.

Throughout the reams of documents released by the administration, standard practice was to allow each National Guardsman's name to be printed in full. Why did the White House make an exception in this case? Why would the Bush administration want to make sure this name in particular did not make it into the public eye?

The White House declined to answer these questions. However, the same document that was redacted by the White House had been the subject of a Freedom of Information Act request filed by Marty Heldt, who was investigating the story before the 2000 presidential election. In the same document that the White House selectively censored for release to the public, the name of the man who was also suspended with Bush is clearly printed. His name: James R. Bath.

Reached at his home near Houston, Bath, who has been a business associate and friend of George W. Bush's for about 30 years, acknowledged to Salon that he was the man in question, but he dismissed the suspensions as trivial. "It happens all the time, especially in the Guard," he said. "In a regular squadron it is real easy to get your physical, but in a Guard unit, it is a different kettle of fish because the flight surgeon is also a civilian."

Bath, who referred to Bush as "Geo" because his first name appeared in that abbreviated form on his National Guard uniform, said that "the base is a ghost town except when the whole unit is there. When you fall out of requirements, it is no big deal; you are simply not able to be on the flying schedule. That is it, full stop."

Bath asserted that allegations that Bush had been using drugs are a "bogus issue," but declined to answer precisely why he and Bush failed to undergo their physicals. "I'm telling you that it [drug use] did not happen. It is beyond laughable. I wasn't with him 24/7, but Geo did not use drugs. Geo did not use drugs, and I really know the facts."

In addition to those still unanswered questions, there is now the issue of why the White House redacted Bath's name, an issue that has been absent from the mainstream media but that has been debated on weblogs such as Calpundit and Code Name: Monkey.

As it happens, when I interviewed Bath for my recently published book, "House of Bush, House of Saud," I discovered that the White House may not want to reveal his name because Bath, a Houston businessman who became friends with George W. Bush in the '70s, is the middleman in a story Bush doesn't particularly want told -- the saga of how the richest family in the world, the House of Saud, and its surrogates courted the Bush family. Bath was present at the birth of a relationship that would bring more than $1.4 billion in investments and contracts from the House of Saud to the House of Bush over more than 20 years. The blotting out of Bath's name indicates President Bush's extreme sensitivity about his family's extensive connections with the Saudis.

About 6 feet tall, trim and balding, Bath mingles a wry, folksy Texas charm with the machismo of a veteran jet fighter pilot. It is a combination that has served him well in cultivating relationships with the greatest Texas power brokers of the last generation -- from former Gov. John Connally to the Bush family.

A native of Natchitoches, La., Bath moved to Houston in 1965 at age 29 to join the Texas Air National Guard. In 1968, he was hired by Atlantic Aviation, a Delaware company that sells business aircraft, to open an office in Houston. He went on to become an airplane broker on his own. Sometime around 1974 -- Bath doesn't recall the exact date -- he was trying to sell an F-27 turboprop when he received a phone call that changed his life.

The man on the phone was Salem bin Laden, heir to the great Saudi Binladin Group fortune. Then only about 25, Salem was also the older brother of Osama bin Laden, then 17.

Bath not only had a buyer for a plane no one else wanted but also had stumbled upon an extraordinary source of wealth and power. Bath ended up befriending both Salem bin Laden and his close associate, Khalid bin Mahfouz, then also about 25 and heir to the National Commercial Bank of Saudi Arabia, the biggest banking empire in the kingdom. Bath immediately took to the two men. "I like the Saudi mentality. They like guns, horses, aviation, the outdoors," he told me. "We had a lot in common."

In many ways, bin Mahfouz and bin Laden were Saudi versions of the well-heeled good old boys Bath knew so well. "In Texas, you'll find the rich carrying on about being just being poor country boys," he says. "Well, these guys were masters of playing the poor, simple Bedouin kid."

In fact, they were anything but poor. The Saudi Binladin Group was on its way to becoming the Saudi equivalent of Bechtel, the huge California construction and engineering firm. Likewise, bin Mahfouz had begun to build the National Commercial Bank into the Saudi version of Citibank, paving the way for it to enter the era of globalization.

Already close to the royal family in Saudi Arabia, bin Laden and bin Mahfouz sought to develop similar relationships in the United States. With Bath tutoring them in the ways of the West, they started coming to Houston regularly in the mid-'70s. Salem came first, buying planes and construction equipment for his family's company. He bought houses in Marble Falls on Lake Travis in central Texas' hill country and near Orlando, Fla. He started an aircraft services company in San Antonio, Binladen Aviation, largely to manage his small fleet of planes. He converted a BAC-111 for his personal use. For fun, he flew Lear jets, ultralights and other planes around central Texas. "He loved to fly, and spent more time trying to entertain himself than anyone I know," says Dee Howard, a San Antonio engineer who converted several aircraft for bin Laden.

Westerners who knew the family found them irresistible. "Salem was a crazy bastard -- and a delightful guy," says Terry Bennett, a doctor who attended the bin Ladens in Saudi Arabia. "All the bin Ladens filled the room. It was like being in the room with Bill Clinton or someone -- you were aware that they were there."

As the Saudis became entrenched in Texas in the '70s, bin Mahfouz bought an enormous, rambling $3.5 million faux chateau, later known as Houston's Versailles, in the posh River Oaks section of Houston. He also purchased a 4,000-acre ranch in Liberty County on the Trinity River near James Bath's ranch. "They loved the ranch and they loved the country life," says Bath. "There was a real affinity between Texas and life in the kingdom. Khalid would come out to the ranch with the family and the kids, to ride horses, shoot guns, [watch] fireworks. They'd been going to England forever. But Texas -- there was the novelty."

In the '70s, wealthy Saudis courted Democrats through prominent figures such as former Secretary of Defense Clark Clifford, a Washington super-lawyer, and Bert Lance, head of the Office of Management and Budget under Jimmy Carter. On the GOP side, they went to James Bath. Bath did not have nearly the stature that Clifford had. Nevertheless, he counted among his friends and business associates no fewer than five Texans who at one time or another would be considered presidential candidates.

Bath was friendly with the family of Lloyd Bentsen, the Democratic senator who was the vice-presidential candidate in 1988 and became secretary of the Treasury. He was a partner of one of the senator's sons, Lan Bentsen, in a small real estate firm. While he served in the Texas Air National Guard, Bath also became friendly with George W. Bush, who had begun training in 1970 as a pilot of F-102 fighters at Ellington Air Force Base near Houston. They were members of the "Champagne Unit" of the National Guard, so called as the vehicle through which the sons of Houston society escaped serving in the Vietnam War.

In the mid-'70s, the young Bush introduced Bath to his father, George H.W. Bush, a former U.S. ambassador to the United Nations, chairman of the Republican National Committee and, under President Ford, chief plenipotentiary of the U.S. mission to China. There was also Bath's duck-hunting buddy, James A. Baker III, then in his mid-40s, one of Houston's most powerful corporate attorneys and a true Texas patrician as a member of one of the oldest and wealthiest families in the city. Finally, there was John Connally, the former Democratic Texas governor who became secretary of the Treasury under Nixon in 1971 and had switched to the Republican Party.

By 1976, bin Laden had appointed Bath to be his American business representative. Bin Mahfouz drew up a similar arrangement with him. Bath was more than simply someone who could provide the Saudis with an entree to political power brokers. But exactly what he did beyond that, in the intelligence world and elsewhere, is shrouded in mystery. When asked about his career, Bath downplays his importance. By his account, he is merely "a small, obscure businessman." It has often been said that he was in the CIA, but Bath denied that to Time magazine. Later, he equivocated. "There's all sorts of degrees of civilian participation [in the CIA]," he told me. "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."

Bath's role in investing for the Saudis took various forms. "The investments were sometimes in my name as trustee, sometimes offshore corporations and sometimes in the name of a law firm," he says. "It would vary."

Bath generally received a 5 percent interest as his fee and was sometimes listed as a trustee in related corporate documents.

On behalf of Salem bin Laden, Bath purchased the Houston Gulf Airport, a small, private facility in League City, Texas, 25 miles east of Houston. He also became the sole director of Skyway Aircraft Leasing in the Cayman Islands, which was owned by bin Mahfouz.

Through Skyway, Bath brokered about $150 million worth of private aircraft deals to major stockholders in the Middle Eastern Bank of Credit and Commerce International, such as Ghaith Pharaon, a Saudi billionaire, and Sheik Zayed bin Sultan an-Nahayan, president of the United Arab Emirates. To incorporate his companies in the Cayman Islands, Bath used the same firm that set up a money-collecting front for Oliver North in the Iran-Contra affair. He also served as an intermediary between the Saudis and Connally, who, having served as Nixon's Treasury secretary, began to position himself for a shot at the White House in 1980.

In August 1977, Connally and Bath teamed up with bin Mahfouz and his friend Pharaon to buy the Main Bank of Houston, a small community bank with about $70 million in assets.

Through Main Bank, the young Saudis had established ties to Connally. They were now in business with a legitimate presidential contender who seemed well positioned for the 1980 campaign. Having business partnerships with an American presidential candidate elevated them enormously in the eyes of Saudis back home, especially the royal family.

At the time, Connally had only one serious political rival in Texas -- George H.W. Bush, a man with little of Connally's charisma. A Connecticut Yankee who constantly had to prove his Texas bona fides, Bush had a somewhat understated style that only accentuated his upper-class New England background. Connally was unabashed about being the biggest lawyer for Arab money in Texas. Bush kept his distance. Next to Connally, he seemed bland indeed. Nevertheless, within a few years, Saudis seeking access to the highest levels of American power soon forgot Lance, Clifford and Connally, realizing that Bush was the man to see.

Bath denies that money went from bin Mahfouz and bin Laden through him into Arbusto Energy, the first oil company started by George W. Bush. Bath had fronted for the two Saudi billionaires on other deals, but in this case, he says, "100 percent of those funds were mine. It was a purely personal investment." Bin Laden and bin Mahfouz, he insists, had nothing to do with either the elder Bush or his son. "They never met Bush -- ever," Bath says. "And there was no reason to. At that point, Bush was a young guy just out of Yale, a struggling young entrepreneur trying to get a drilling fund."

No evidence has emerged to contradict Bath. But in 1982, bin Mahfouz helped develop a 75-story skyscraper for the Texas Commerce Bank, which had been founded by Baker's family. That investment meant that the young Saudi now had shared business interests with the chief of staff to President Reagan.

Later in the '80s, bin Mahfouz's associates came to the rescue of Harken Energy, a struggling Dallas oil company of which George W. Bush was a director. And both the bin Mahfouz family and the bin Ladens participated in the Carlyle Group, the giant Washington private equity firm in which Bush Sr. and Baker were major figures. Over the next generation, more than $1.4 billion in investments and contracts went from the Saudis to these companies that were so close to the Bushes.

In the end, we may never know why both Bush and Bath failed to have their medical exams and lost their eligibility to fly in the National Guard. During the 2000 presidential campaign, a Bush spokesman said that Bush did not take the exam because he was in Alabama at the time, while his personal physician was back in Texas. That answer did not hold up under scrutiny, however, because only flight surgeons perform the physicals. When the same question arose this year, White House communications director Dan Bartlett had a different response. He said Bush did not undergo the physical because he knew he would be on a nonflying status in Alabama.

Why Bath's name was blotted out in the records of Bush's military service is an entirely different question. But it leads to a story that figures even more prominently in the headlines today. After all, he was present at the birth of the Bush-Saudi relationship.

By Craig Unger

Craig Unger is the author of 'Boss Rove: Inside Karl Rove's Secret Kingdom of Power' (Scribner, September 2012). He is also a contributing editor of Vanity Fair, and wrote the New York Times bestseller, 'House of Bush, House of Saud.' For more about Boss Rove, and to buy the book, go to

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