WASHINGTON — During his transition from Florida governor to likely presidential candidate, Jeb Bush served on the boards or as an adviser to at least 15 companies and nonprofits, a dizzying array of corporate connections that earned him millions of dollars and occasional headaches.
Bush returned to corporate America after leaving the governor's mansion in early 2007, and his industry portfolio expanded steadily until he began shedding ties late last year to prepare a run for president.
Executives who worked alongside Bush describe him as an engaged adviser with an eye on detail.
Yet experts question how anyone could serve so many boards at once effectively.
"Board of directors and advisory boards are in charge of high-level oversight," said law professor Elizabeth Nowicki, a former Securities and Exchange Commission lawyer. "You cannot possibly do that simultaneously for 10 or 15 entities."
There is no formal rule limiting the number of boards one person can serve. But in the wake of the Enron scandal, where flimsy board oversight contributed to the company's infamous meltdown, and a federal law that increased liability for a public company's director, common sense dictates a small number, Nowicki said.
"If somebody starts serving on more than three or four boards that's a problem," she said.
Three boards should be the maximum, agreed Zabihollah Rezaee, a University of Memphis accounting professor who has authored books about corporate governance.
"Board members are representing shareholders, and they are responsible to shareholders for financial integrity," said Rezaee. "Best practices" dictate a small number, he said, "because of the amount of time it requires to be effective."
Bush served on the boards or as an adviser to 11 companies or nonprofits at a time each year from 2010 to 2013, the Associated Press found. Those ties were in addition to his own businesses, such as Jeb Bush & Associates, and the educational foundations he created.
In 2010 Bush served on the board of directors of eight different entities, as adviser to a ninth company and advisory board member for two others. In 2013, he served on six boards, as an adviser to another company and on the advisory board of four more entities.
"Gov. Bush has always conducted his business with the highest integrity and performance, just as he did when he served as Florida's chief executive for eight successful years," Bush spokeswoman Kristy Campbell said in a statement.
She noted that not all the corporate entities were the same — some were board slots, some advisory positions and others nonprofits — and suggested it was unfair to put all in the same basket. AP's review found that Bush served on the board of directors of as many as seven for-profit companies at a time, well more than experts suggest — while at the same time serving as an adviser to other companies and nonprofits.
Bush's experience on corporate boardrooms could evolve into a theme during the 2016 race for the presidency. Among the issues the Florida Republican could be asked to explain:
• One company that paid Bush $15,000 a month as a board member and consultant, InnoVida Holdings, collapsed in fraud and bankruptcy, with the company's CEO, Claudio Osorio, now serving 12½ years in prison. Bush joined InnoVida despite warning signs that Osorio's prior company dissolved amid bankruptcy and allegations of fraud.
• At least five companies where Bush served on the board or as adviser faced class-action lawsuits from shareholders or legal action by the government. Some of the most sweeping cases, involving allegations of fraud or environmental damage, remain active. The Securities and Exchange Commission subpoenaed one of the companies, Rayonier Inc., in November, shortly before Bush's exit.
• Bush earned $3.9 million from four companies alone since 2007, the AP found, plus $25,000 a year more from a medical company in Georgia, $9,600 annually from Bloomberg Philanthropies and zero pay from a drug addiction nonprofit. His earnings from eight other companies are unknown, and Bush has declined AP's requests to disclose his compensation — raising questions about how open he would be as a presidential candidate.
Bush was a board member or adviser to publicly traded health care, timber, gold mining and sanitation companies; for private firms involved in housing, finance, medicine, higher education and decontamination; and for nonprofits focused on drug addiction and philanthropy. He served on the board of directors for nine of the 15, and as an adviser or advisory board member for the others. Two of the 15 are nonprofits.
Once Bush officially declares for president, he will have 45 days to file a public disclosure form listing his sources of income for the prior year. Those forms include broad ranges for the values of assets or salaries that can be used to estimate a politician's net worth, but they will not be precise totals and will capture just the prior year.
"Until you say the magic words 'I am running for president,' there are a whole lot of restrictions that don't apply to you. I think this is an advantage he is taking," said Bill Allison, a senior fellow with the Sunlight Foundation, a nonprofit that advocates for open government. "There just should be an expectation of transparency around anything that a presidential candidate is involved with, whether it's a nonprofit foundation or their past employers."
Spokeswoman Campbell said, "If he becomes a candidate, he'll comply with all necessary financial disclosures. That is an approach consistent with what he did in all three of his campaigns for governor."
Re-joining the corporate world
Bush returned to corporate America less wealthy than when he took office. Bush's net worth, $2 million when he was elected Florida governor in 1998, dipped to less than $1.3 million by the time he left office in the first days of 2007, his financial disclosure forms show. The decline came largely from a diminished investment portfolio. He also earned less as governor — $129,000 his last year in office — than in the private sector, where he had been paid $755,000 annually by the Codina Group, a development company in Coral Gables before taking office.
Out of office, Bush began quickly making up time, becoming an adviser or board member for at least five companies in 2007.
One was Tenet Healthcare Corp., a publicly held company where Bush served on the board of directors from 2007 to 2014, earning $2,375,870 in pay and stock, the company's SEC filings show.
Tenet declined to make a board member available for an interview, but spokesman Donn Walker said Bush challenged management to deliver for patients and consumers. Bush attended 94 percent of board meetings and 99 percent of committee meetings, Walker said.
In a statement, Trevor Fetter, the company's president and CEO, said his fellow board member "made innumerable contributions to Tenet's transformation into a national diversified health care services provider."
That year Bush also became an adviser for Lehman Brothers, which, after its collapse, was absorbed by Barclays Capital. Bush worked for Barclays through 2014, advising clients on the regulatory landscape in the U.S. The New York Times reported last year that Barclays paid Bush $1 million a year. The company declined comment on Bush's pay and tenure.
Later in 2007, Bush took on what became his most troublesome board position, joining Miami Beach's InnoVida Holdings. Founder Osorio is now serving a prison sentence for orchestrating a global fraud that cost investors millions.
Bush conducted a thorough review before joining InnoVida's board, Campbell said. That included commissioning a background check of Osorio, conducted by a former federal agent whom she declined to identify.
"Based on the report that was shared with the governor by the company that was hired to do the background check, there were not red flags to indicate financial or criminal wrongdoing," Campbell said. The campaign declined to share the report.
But financial red flags did exist, public court records show.
Thirteen years before creating InnoVida in 2006, Osorio had founded another South Florida business, CHS Electronics, which sold computer products in Latin America and Europe from its headquarters west of the Miami International Airport.
In 1999, just as Bush was beginning his first term as Florida governor, scores of CHS investors filed suit in federal court in Miami accusing Osorio and CHS of inflating the company's income and profits. In all, 36 separate actions were consolidated into one class-action lawsuit that said CHS overstated its profits in 1998 by 50 percent.
After CHS admitted in 1999 that it overstated vendor rebates, a financial chess move that led the company to issue a misleadingly rosy financial picture, the price of its common stock plummeted 35 percent in one day.
The lawsuit cited analyst Robert Damron who urged investors not to buy. "There was fraud, and when I see fraud I walk away," he said.
CHS filed for bankruptcy protection in 2000, and, a year later, entered into an $11.5 million settlement with shareholders, federal court records show.
In September 2007, the SEC revoked CHS' securities registration.
Three months later, Bush joined Osorio's InnoVida, a South Florida manufacturer that said its unique fiber composite panel construction could withstand fires and hurricanes. But instead of building homes, including a U.S. government-financed project in earthquake-stricken Haiti, Osorio used investors' money to bankroll a Miami Beach mansion, Colorado mountain retreat home, Maserati and country club dues, the SEC said.
Bush's role on InnoVida's board helped build the company's image and attract business.
One businessman who hired InnoVida as a contractor said that, when he visited Osorio at the company's Miami Beach offices, Bush's pictures were all over the wall.
"He drops his name repeatedly. 'Jeb Bush this, Jeb Bush that.' And you just say, OK, there's credibility there," said Troy Von Otnott, founder of Massive Technologies, a CleanTech consulting firm in Atlanta.
InnoVida never delivered on its promises to build housing in Africa, despite receiving $3 million for the job from Von Otnott's partners. "They delivered false promises and hot air and lies," he said.
Now Von Otnott is among creditors trying to collect pennies on the dollar — and questioning how Bush could have put his name behind the company.
"We bought into their whole sales push because Jeb Bush was on their board of directors and had his picture all over their office," said Von Otnott, a onetime volunteer with Citizens Climate Lobby who describes himself as a political independent.
"At the very least, it just demonstrates poor judgment. If you are running for the president of the United States of America, you need to show that you have judgment."
A major InnoVida investor, Miami lawyer Chris Korge, said Bush "showed true concern" about the losses investors suffered.
Bush left InnoVida in September 2010. In 2013, as part of the company's bankruptcy proceedings, Bush agreed to repay $270,000 of the $468,902 InnoVida paid Jeb Bush & Associates LLC over the 33 months he worked for InnoVida. From his Miami prison, Osorio declined an AP interview request.
"As soon as concerns regarding InnoVida were brought to Gov. Bush's attention, he took action to address them immediately," Campbell said.
Shedding one corporate tie, expanding others
Though Bush shed that corporate role, he continued taking positions on company boards, affixing his name to 11 entities each year from 2010-13.
One is CorMatrix Cardiovascular Inc., a Georgia-based medical device company where Bush served on the board from 2009-2014, and took part on the company's compensation and audit committees.
"He was an active member," said John Thomas, the company's chief financial officer. "He really came better prepared than most board members. I've served on the board of seven different public companies. He was one of the most prepared board members that I have had the privilege of working with."
Thomas said CorMatrix paid Bush $25,000 annually, plus fees for attending meetings in person or by telephone. Board members were not required to attend the company's annual shareholders meetings. Bush did, "to the delight of our shareholders," he said.
"They obviously took pictures with him and did that the entire time. And he was very congenial," Thomas said. "We would love to have him come back to our board at some point."
In January 2010, Bush joined the advisory board of Zimek Technologies, an upstart Florida company with a patented system to kill antibiotic-resistant bacteria and prevent infectious diseases from spreading.
Bush's stay was brief, about six months. His role was to "help get introductions of the product to potential users," said Michael Silva, a spokesman for Zimek. "He was enthusiastic about it because it was Florida-based and a very unusual product."
Silva said Bush's pay was "minor" but the company could not disclose it.
Zimek has no staff, Silva said, beyond its founder and an administrative assistant. But the company has recently hired lobbyists in Washington in a bid to put its disinfecting system to use fighting Ebola and other public health outbreaks.
From 2009-2014, Bush was an advisory board member for Miami's Whitney University System, which services higher education institutions in Latin America. Spokesman Nuno Fernandes declined to disclose Bush's pay but called him "a highly valued 'go to' resource for our top senior executives."
Another Florida link is Rayonier Inc., a publicly traded timber company headquartered in Jacksonville. Bush served on the board from 2008 to December 2014, earning $977,320 in total compensation.
"He was an excellent board member, he was always prepared," said V. Larkin Martin, a fellow Rayonier board member.
She said Bush actively responded when the company had to restate its financial statements in November 2014.
That month, investors began filing a series of lawsuits alleging Rayonier made false and misleading statements that caused them losses. The suits have been consolidated into a class-action lawsuit that was recently amended to nearly 100 pages. It alleged Rayonier overharvested its Pacific Northwest timber for over a decade and will be forced to reduce dividends significantly.
The SEC subpoenaed Rayonier over its amended reports that November; the company said it is cooperating with the SEC. While another 2014 lawsuit, alleging Rayonier caused environmental damage to Georgia's Altamaha River, was dismissed by a judge, the investor case remains active.
When the trouble came to light, Bush urged the company to "do the right thing" and self-report the problem, Martin said. "We were all of one accord in that."
Another Bush-connected company facing a class-action complaint is Barrick Gold Corp., the world's largest gold mining company, which has come under shareholder scrutiny after paying its chairman a $12.9 million compensation package last year and $9.5 million the year before.
The class-action suit, filed in 2013, focuses on the company's Pascua-Lama open pit gold and silver mine planned for the high desert border between Argentina and Chile — and pitched as the company's "crown jewel." Instead, the lawsuit said, the project collapsed amid environmental problems, costing investors millions as Barrick's stock fell 65 percent from its high.
Bush served on Barrick's international advisory board in 2011, 2012 and 2013. The advisory members, spokesman Andy Lloyd said, "are essentially there to provide strategic advice." He said the members meet once a year and provide counsel at other times. He declined to discuss Bush's role in depth and said his pay was confidential.
Bush served on the board of directors for Swisher Hygiene Inc., a publicly traded sanitation company, from 2010 to 2013, earning $313,825. It, too, faced legal challenges during his tenure.
Investors accused Swisher of making false statements that plunged the company's market value, and Bush was named as a defendant in some cases. In February 2014, Swisher Hygiene agreed to pay $5.5 million to a settlement fund.
Associated Press writer Steve Peoples and AP correspondent Tony Winton contributed to this story.