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Jeb Bush keeps a high-impact low profile

By Sydney P. Freedberg, Times Staff Writer
In print: Sunday, July 6, 2008

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ADVERTISEMENT BRIAN SMITH | Special to the Times (2006) [Courtesy of Pearl S. Buck International] Bush’s speaking schedule takes him around the world. In May 2007, a young brother and sister helped welcome him to an event in South Korea. Related Links Interactive profile: Career timeline, associates, activities since leaving governor's office

When Jeb Bush visited Kingston, Jamaica, last July, his hosts pulled out all the stops. They brought in a military band, threw a lavish reception at the home of the island's governor general and paid $60,000 for him to give a speech. The theme of the speech? Entrepreneurial capitalism.

Bush is becoming quite an expert on that. In the 18 months since leaving the Florida Governor's Mansion, he has quietly remade himself into a capitalist-entrepreneur extraordinaire. Capitalizing on his eight years as governor and a network of Bush family supporters, he leads a busy, and lucrative, life: global speaking engagements, a new consulting firm and affiliations with three big businesses. He earns hundreds of thousands of dollars in fees and stock and has joined the ranks of private equity executives on Wall Street.

And he keeps his hand in politics through five nonprofit organizations that help maintain his profile, champion his favorite causes and keep people wondering: Will Jeb Bush seek public office again?

Bush, 55, is determined to keep his gubernatorial afterlife low key, closely guarding the identities of business partners and clients and refusing to discuss his speaking fees or sponsors.

He declined interview requests, saying in an e-mail that he is "trying hard to stay out of the public eye to let my successor do his thing.''

Through a spokeswoman, he dismissed any suggestion that any of his post-office business activities might create an appearance of a conflict. He issued a brief statement that highlighted his legacy as governor, not his recent entrepreneurial ventures.

"Being governor of my beloved state of Florida was my dream job,'' Bush said. His tenure was marked by "a great many new initiatives'' that improved Florida's economy, education system and quality of life, he said. "Ultimately, my record speaks for itself."

Losing the perks

When Bush came to the governor's office in January 1999, he reported that he had a net worth of about $2-million, much of it earned in partnership with a friend of his father, Miami real estate developer Armando Codina.

While in office, Bush noted that his family finances suffered because of his public service. He left Tallahassee in January 2007 reporting a net worth of $1.3-million.

Despite the dropoff, Bush declined a state pension — the only living governor to do so. His spokeswoman, Kristy Campbell, says he opted out because he believed that he should serve the state for eight years and "not make a career out of the office.'' It is "voyeuristic" of the Times to publicize that, she said.

Like other former governors, Bush had to adjust to life without the perks of power — the mansion, the security detail, the state plane.

He got a Chrysler 300C, rented a $5,500-a-month condo in Coral Gables, worked out and lost weight and played golf with New York City Mayor Michael Bloomberg,

First, Bush renewed the real estate broker's license he first got in 1982. He registered with a firm founded by Jose I. Juncadella, one of South Florida's top commercial brokers. Before Bush became governor, they worked together at Codina's real estate firm.

Next, he founded a consulting company, Jeb Bush & Associates. It doesn't seem to have a Web site, and Bush declines to discuss what it does or identify its clients.

Bush set up a small office in a Miami skyscraper a block from Biscayne Bay. He shares a suite with lawyer and developer M. Ronald Krongold, a golfing friend for 25 years who helped run Bush's successful 1998 campaign.

The lecture circuit

Like many out-of-office politicians, Bush hit the lecture circuit, speaking regularly on topics ranging from the poisonous political atmosphere in Washington to his passion for bold leadership and what he likes to call "BHAG'' (big, hairy, audacious goals).

As a former governor who is the son of one president and brother of another, Bush is in demand. His speaking schedule has carried him from Bonita Springs to Seattle, with at least five speeches outside the country.

"One week he might be in Singapore and the next week in Chile,'' said Al Cardenas, Florida's former GOP chairman. His law office is a stone's throw from Bush's office.

While Bush does many events for free, he can get about $40,000 for a domestic speech, plus expenses. Abroad, clients pay more.

For the Jamaica appearance, for example, Canada-based Scotia­bank says it secured Bush's services from a booking agent, the Washington Speakers Bureau, for $60,000 (including agent's fees).

At a luncheon event, Bush told about 400 guests that a combination of entrepreneurial capitalism, leadership and education are the keys to success in a rapidly changing world.

Neither Bush nor the speaker's bureau will discuss his fees, schedule or sponsors. Most sponsors told the Times that Bush's contract bars them from discussing what they paid him.

One sponsor, a large media company in New Delhi, hosted Bush at a conference in October. A year earlier, former New York City Mayor Rudy Giuliani spoke at the same event for $200,000 (including a $40,000 agent's fee).

When Bush delivered a speech about diversity in South Korea in May 2007, his host was Jin Roy Ryu, a longtime family friend and contributor to his father's presidential library. About four months later, a subsidiary of Ryu's company, Poongsan Corp., was awarded a contract of up to $1.1-billion to supply the U.S. Mint with metal used in coins.

Bush says the Mint contract never came up during the trip and he never even knew about it.

Ryu did not respond to e-mail inquiries about how much, if anything, Bush was paid for his appearance.

Bush's younger sister, Dorothy, is paid between $10,001 and $15,000 a speech, according to a Web listing at the speaker's bureau. His father, the former president, reportedly earned between $100,000 and $150,000 for a foreign speech, or $4-million in a single year. Former President Bill Clinton has gotten as much as $450,000 for an engagement, or $51-million in speaking fees, since leaving office in January 2001.

Tenet Healthcare

Besides "speechifying,'' as Bush calls it, the ex-governor has landed lucrative roles in corporate America. He works for three big firms, all of which did business with state government during his tenure.

Through Campbell, his spokeswoman, Bush said no company or organization ever got favorable treatment from state government to further his post-office plans. Campbell called the Times' questions about his recent ventures baseless, preposterous and offensive.

Bush's friends say he had his choice of firms and took care to avoid any appearance of a conflict of interest. His first pick: the board of Tenet Healthcare Corp., which wooed him with an initial stock grant valued at $260,000, plus fees and stock totaling $191,581 last year. That was more than any of the other eight non-employee directors received.

He is expected to attend (by telephone or in person) about two dozen board and committee meetings a year.

Trevor Fetter, president of the Dallas-based hospital chain, recently told shareholders that Bush's knowledge of Florida, the company's second-largest market, "has already proven to be very valuable.''

Bush said that since joining the board, he has never asked anyone in state government to rule favorably on any matter affecting Tenet. When he was appointed, he told the Miami Herald that Tenet was a "place that over the next few years there'll be some unsettled water. I prefer to go to some place where I can add value, rather than go to a place where things are going really well.''

While he was governor, Tenet's Florida hospitals received about $14-million from the state, much of it from Medicaid, the government health care program for the poor. Its hospitals also ran afoul of regulators in Tallahassee, prosecutors in Washington and lawsuits alleging patient abuse and financial fraud.

In 2005, then-Attorney General Charlie Crist filed a racketeering lawsuit against the firm, accusing it of bilking taxpayers by as much as $1-billion. Crist later settled with Tenet for a nominal $7-million.

Steve Uhlfelder, a Tenet lobbyist and longtime Bush friend, said the former governor never asked regulators to go easy on Tenet. In fact, he said, Bush acted against the company's interests by signing a law that helped rival hospitals in South Florida create open-heart surgery units.

The company, like a lot of businesses, did favor policies pushed by Bush.For example, he signed laws limiting jury awards in malpractice lawsuits and making it harder to sue businesses for negligence.

Thomas Giella, managing director of health care services for Korn/Ferry International, said health care companies trying to avoid potentially huge cuts in Medicare and Medicaid reimbursements are increasingly hiring former public officials. Giella also cautioned that the selection of ex-politicians can create an appearance of coziness if they received campaign contributions from the company.

Bush got a $500 contribution from Tenet in 2001, and the state Republican Party received $108,000 from the company between 1999 and 2006.

He denied campaign contributions ever influenced him, saying the "moral compass'' that guided all of his decisions was his goal to improve the economy, the education system and "the quality of life for our fellow Floridians.''

'Secret weapon'

About two months after joining Tenet, Bush became a consultant to Lehman Brothers and a member of the firm's private equity advisory board, which buys and sells companies worldwide.

The investment bank refuses to comment on Bush's duties or compensation. When the Wall Street Journal learned about it, its Web site called Bush "Leh­man's secret weapon.'' Others in the financial media speculated his hiring was part of a lobbying blitz to help the secretive private equity and hedge fund industries head off more regulation and tax increases.

How much does Bush earn at Lehman Brothers? Experts say there's no industry standard, and fees can range from a small stipend to stock deals worth seven or eight figures.

John Edwards, the former Democratic presidential candidate, earned $479,512 for 14 months' work at Fortress Investment Group, a hedge fund. A company that employed a New York political consultant got $12.3-million from another private equity firm, the Carlyle Group, for helping it secure a $1.3-billion investment in New York's pension fund. Lehman Brothers paid Giuliani $100,000 for a speech (including agent's fee) and Clinton $150,000.

Colin Blaydon, a professor at the Center for Private Equity and Entrepreneurship at Dartmouth's Tuck School of Business, said Bush's role may be as limited as someone "you want to have access to (or) ... can invite to dinner with potential clients.'' Or he could be a "regular and concrete contributor'' — effectively a partner in the firm, Blaydon said.

"The private equity business is in many ways about relationships, so being skilled at making connections is basically the way deals get put together,'' Blaydon said. "Being an ex-governor helps, but being part of a family that is a serious player in the world of big money and big oil is even more important.''

While Bush was governor, Lehman Brothers won at least six new contracts and $9.9-million in fees from the two agencies that handle Florida's bond deals and public investments, records show.

Bush denies any conflicts in the awarding of business to Lehman Brothers or other companies that now employ him. He also has denied any role in the sales by Lehman of risky securities to the State Board of Administration, which manages billions of dollars in investments for hundreds of local government agencies in Florida.

The official who supervised the agency was Coleman Stipanovich, brother of J.M. "Mac" Stipanovich, a GOP consultant who ran Bush's unsuccessful gubernatorial campaign in 1994.

Last year, when some school districts and local governments grew alarmed and began withdrawing billions of dollars, the state put a temporary freeze on withdrawals. Coleman Stipanovich was forced out as regulators began investigations that are still ongoing.

CNL Bancshares

In November, Bush was appointed to the board of another financial services firm, CNL Bancshares, a bank holding company led by real estate developer and major GOP donor James M. Seneff Jr.

"As CNLBank continues its expansion beyond its headquarters in Orlando ... Gov. Bush provides both credibility and visibility to our company throughout the state,'' Seneff said in a statement.

Bush is expected to attend monthly or quarterly board meetings and help drum up business. He will "identify talent and make introductions to potential clients,'' Seneff said.

The company declined to discuss Bush's pay. Half of all corporate directors in a recent survey made more than $100,031 a year, according to the Corporate Library, a business watchdog group.

CNL Bancshares is affiliated with a group of Seneff companies forming one of the nation's largest privately held real estate investment and financial services firms.

In 2003, while Bush was governor, his office approved up to $3.1-million in tax refunds to be paid over eight years to CNL Holdings, which is an affiliate of CNLBancshares. The company was to receive the money in return for creating 418 new jobs with an average annual wage of $62,170. Only $181,875 was paid, however, because CNL fell short of its job promises.

A company spokeswoman and Bush said there was no connection between the tax break and Bush's appointment.

All three corporations that now employ Bush say they sought him for his business smarts and knowledge of Florida, not to reward him for past or future actions.

Millions in donations

Although Bush does his nonprofit work for free, his five nonprofit organizations have raised millions of dollars. Some of the donors belong to the same network of lobbyists, developers and business executives who helped finance Bush's political aspirations — and helped his father and brother reach the White House as well.

The nonprofits champion two of his favorite causes — education and ethanol (see chart on Page 12A). They also help the former governor maintain a public profile while legally sidestepping rules designed to limit political influence.

Unlike political candidates, many non­profits — known as 501(c)s for the tax code section that applies to them — can accept donations of any amount, from virtually anyone, including foreign sources. They are not required to provide a detailed breakdown of their spending.

They are not required to disclose their donors, either, and two of Bush's don't. But a partial list of donors includes longtime family friends, lobbyists and companies that benefited from state government while he was governor.

For example, his Foundation for Florida's Future received $550,000 in 11 installments from the Villages, a giant retirement community developed by Republican booster H. Gary Morse. Morse's company also donated $100,000 to a nonprofit affiliate led by Bush with a similar name, Foundation for Florida's Future Action Fund. And he has donated more than $800,000 personally and through his businesses to the state Republican Party since 1999.

While he was governor, Bush signed a bill that allowed the Villages' hospital to expand without having to undergo the same costly review as other hospitals.

Morse did not return a phone call seeking comment. Other donors said in interviews that the nonprofit groups are a way to promote worthy causes, not a Bush candidacy. They denied their contributions were designed to curry favor with Bush, adding that he would never give favors from the government.

Bush's nonprofits provide jobs for several politically savvy staffers, too.

One of them is Patricia Levesque, Bush's former deputy chief of staff for education. She is the executive director of two of Bush's education nonprofits.

She was among seven former Bush aides or political appointees who served on the 25-member Taxation and Budget Reform Commission, a panel that meets every 20 years to propose changes to Florida's tax structure.

Levesque helped push Bush's education agenda during the deliberations of the commission, which ultimately adopted two proposed constitutional amendments that would provide legal protection for private school vouchers.

Campbell, who served in Bush's gubernatorial press office, said his nonprofit groups meet all state and federal reporting requirements. She would not say how much she, Levesque or other foundation staffers make. She also denied the groups are being used to keep Bush's political donor base intact or former aides employed.

"Raising student achievement and fostering excellence in education are about as nefarious as our goals get,'' she said.

Yet, increasingly, people who are mulling a campaign for political office set up nonprofits, which pay for travel, staff salaries and other expenses.

"It's pervasive and politicians in both parties do it,'' said Frances R. Hill, a law professor at the University of Miami and director of a group that analyzes money in politics. "There may be legitimate reasons to maintain multiple tax-exempt entities, but my antenna go up when a powerful political figure has this many floating around.''

"That's an incredibly cynical view of what the mission of these nonprofit organizations truly is,'' said Justin Sayfie, a former Bush aide and fundraiser whose law firm contributed to Bush's Foundation for Excellence in Education. Sayfie wouldn't say how much.

Times staffers Kris Hundley, Helen Huntley, Carolyn Edds, Connie Humburg and Alicia Olazabal contributed to this report.