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This is an old revision of this page, as edited by 68.50.13.23 (talk) at 11:42, 16 May 2006 (→Dealings with Ed Pauley). The present address (URL) is a permanent link to this revision, which may differ significantly from the current revision.

Early Business History, 1953-1966

Zapata Petroleum Corporation, an oil exploration company, was created by George H. W. Bush in 1953, along with his business partners John Overbey, and brothers Hugh and Bill Liedtke. Bush had been working for Neil Mallon, CEO of Dresser Industries (now merged with Halliburton) from when he graduated from Yale in 1948, to 1951. The initial $1 million investment for Zapata was split by the Liedtkes (and their circle of investors) and by Bush's father and uncle, Prescott Bush and Herbert Walker (and his family circle of investors). Hugh Liedtke was named president, Bush was vice president; Overbey soon left. In 1954, Zapata Off-Shore Company was formed as a subsidiary, with Bush as president. (He raised some startup money from Eugene Meyer, publisher of the Washington Post, and his son-in-law, Phillip Graham).[1][2] Zapata split in 1959 into Zapata Petroleum (headed by the Liedtke's) and Zapata Off-Shore (headed by Bush, funded with $800,000).[3] Bush moved his offices and family that year from Midlands, TX to Houston. Zapata Petroleum merged in 1963 with South Penn Oil to become Pennzoil.

Zapata Off-Shore concentrated its business in the Caribbean, the Gulf of Mexico, and the Central American coast in the late 1950s and early 1960s, according to Nicolas King's George Bush: A Biography. The US government began to auction off mineral rights to these areas in 1954. Drilling contracts in 1958 with the seven large US oil producers included wells 40 miles north of Isabela, Cuba (131 miles south of Miami), near the island Cay Sal. (Fidel Castro overthrew Cuba's Batista government in July 1959.) Zapata also won a contract with Kuwait. Bush was joined in Zapata by a fellow Yale Skull and Bones member, Robert Gow, in 1962. (Gow had been roommates at Yale with Bush's cousin, Ray Walker.) Zapata Offshore had four oil-drilling rigs operational by 1963: Scorpion, Vinegaroon, Sidewinder, and (in the Persian Gulf) Nola III.

By 1964, Zapata Off-Shore had a number of subsidiaries, including: Seacat-Zapata Offshore Company (Persia Gulf), Zapata de Mexico, Zapata International Corporation, Zapata Lining Corporation, Zavala Oil Company, Zapata Overseas Corporation, and a 41% share of Amata Gas Corporation.

In 1960, Jorge Diaz Serrano of Mexico was put in touch with Bush by Dresser. They created a new company, Perforaciones Marinas del Golfo, aka Permargo, in conjunction with Edwin Pauley of Pan American Petroleum, with whom Zapata had a previous offshore contract. The deal with Pemargo is not mentioned in Zapata's annual reports. A Bush spokesman in 1988 claimed the deal only lasted seven months, from March to September 1960. Zapata sold Nola I to Pemargo in 1964. Diaz later became head of Mexico's national oil company, Pemex, 1976-1981. He subsequently was jailed for five years for embezzling $58 million from Pemex. Upon his release, he became Mexico's ambassador to Moscow, and visited Bush in the White House on his way there.

Bush ran for the US Senate in 1964 and lost; he continued as president of Zapata Off-Shore until 1966, when he sold his interest to his business partner, Robert Gow, and ran for US Congress.

Zapata's filing records with the US Securities and Exchange Commission (SEC) are intact for the years 1955-1959, and again from 1967 onwards. But records for the years 1960-1966 are missing. "The records were inadvertently placed in a session file to be destroyed" by a federal warehouse explains SEC records officer Suzanne McHugh, noting that a total of 1,000 boxes were pulped in this procedure. The destruction of records occurred either in October 1983 (according to McHugh) or in 1981 shortly after Bush became Vice President of the United States (according to SEC record analyst Wison Carpenter).

Connections with the CIA?

Several conspiracy theories suggest that Zapata Off-Shore acted in part as a CIA front company from the late-1950s to 1965. Neither they nor coincidence theories (which deny this connection) offer proof.

Family Connections; Yale Skull & Bones

Although circumstantial, there were tight-knit Bush-family ties to US intelligence operations by the time GHW Bush formed Zapata. Prescott Bush was a close business associate of CIA Director Allen Dulles and W. Averell Harriman since the 1930s. Dresser Industries, where GHW Bush worked 1948-1951, served as cover for a number of CIA officers. Prescott served on the Board of Dresser for 22 years, Harriman brought it public in 1929; family friend Neil Mallon was CEO.

Averell Harriman was invited to join Skull and Bones in 1913, Prescott, Mallon, and Roland Harriman (also on Dresser's board) joined Skull and Bones in 1917. These three selected Robert A. Lovett (later "father of the CIA" and Secretary of Defense) and F. Trubee Davison to join in 1918. Robert Lovett became Prescott's partner at Brown Brothers Harriman. Prescott wrote in 1953 that Mallon is a: "very old and dear friend... well known to Allen Dulles, and has tried to be helpful to him in the CIA, especially in the procurement of individuals to serve in that important agency." F. Trubee Davison was in charge of CIA recruitment and personnel in the late 1940s. His son, Endicott Peabody Davison, joined Skull & Bones in 1948 along with GHW Bush, and later became Bush's lawyer. GHW Bush worked for Mallon from 1948-1951, named his third son Neil Mallon Bush, and wrote in his autobiography that Mallon "was a mentor second only to my father."

Several other Skull and Bones members (or relatives) helped with the CIA's Bay of Pigs operation. The CIA's Richard Dale Drain (Skull and Bones 1943) co-authored (with Jacob Easterline) a paper that proposed the Bay of Pigs invasion, "A Program of Covert Action against the Castro Regime," adopted by President Eisenhower on 17 March 1960. Drain also wrote a "Memorandum for the Record", 30 January 1961, that estimated the "likelihood of success was very high." The White House's coordinator on the Bay of Pigs operation was McGeorge Bundy (Skull and Bones 1940), and his brother William P. Bundy (Skull and Bones 1939), the State Department's liaison for the Bay of Pigs Operation. Probably a coincidence, Skull and Bones was reincorporated (from the 100 year-old Russell Trust Association) by Howard Weaver, just two hours before the Bay of Pigs operation was launched, on noon April 14, 1961. Weaver (Skull and Bones 1945) had retired from the CIA in 1959.

Richard M. Bissell, Jr. -- one of three aides to Allen Dulles, after working for Harriman -- directed the Bay of Pigs operations out of Miami. Though a Yale grad of 1932 he was not Skull and Bones; but his brother William was. Bissel was the CIA's Director of Plans, and brought in members from the 1954 PB Success operation in Guatemala, including E. Howard Hunt, David Atlee Phillips, and Theodore (Ted) Shackley. Shackley became CIA station chief in Miami after the Bay of Pigs. Then, as station chief in Laos and Saigon, Shackley went on to direct the infamous Project Phoenix, where he was joined by Donald Gregg and Rodriguez. Both Shackley and Gregg would later report directly to Bush.

Members of a tight-knit, wealthy group who owned property on tiny Jupiter Island in Hobe Sound, just north of Palm Beach and 90 minutes north of Miami, Florida, included: Harriman, Prescott Bush, G. Herbert Walker, Robert Lovett, Paul Mellon, Carl Tucker (whose son inducted Bush into Skull and Bones), C. Douglas Dillon, and others.

Two FBI Memos, November 22 and 23, 1963

Memo from FBI Special Agent in TX, regarding call by "GHW Bush of Zapata Off-Shore Drilling Company" received 75 minutes after JFK's murder
Memo from J. Edgar Hoover, referring to "Mr. George Bush of the CIA", briefed 24 hours after JFK's murder

Some direct evidence supporting the connection between Zapata Co and the CIA may come from two FBI memos regarding George Bush, in November 1963. The first memo names Zapata Off-Shore and was written by FBI Special Agent Graham Kitchel on 22 November 1963, regarding the assassination of JFK at 12:30 p.m. CST that day. It begins: "At 1:45 p.m. Mr. GEORGE H. W. BUSH, President of the Zapata Off-Shore Drilling Company, Houston, Texas, residence 5525 Briar, Houston, telephonically furnished the following information to writer... BUSH stated that he wanted to be kept confidential..." So, Bush called the FBI just 75 minutes after JFK's assassination. A second FBI memo, written by J. Edgar Hoover himself, identifies George Bush with the CIA. It is dated 29 November 1963. The FBI Director describes a briefing about JFK's murder "orally furnished to Mr. George Bush of the Central Intelligence Agency... [by] this Bureau" on "November 23, 1963." So "George Bush of the CIA" was briefed by the FBI the day after "George H. W. Bush, President of the Zapata Off-Shore Drilling Company" calls the FBI. And this "George Bush of the CIA" was important enough, and enough involved with sentiments of the anti-Castro Cubans, that the FBI had him briefed that there were (to be?) "no plans for unauthorized action against Cuba." This briefing occurred on what must have been a frantic day for the FBI. (It is not clear whether the briefing took place in Dallas or Washington, DC). Furthermore, Hoover felt this briefing was important enough to reassure the State Department's Intelligence unit of it, in writing.

When this memo surfaced during the 1988 presidential campaign, GHW Bush spokespersons (including Stephen Hart) said Hoover's memo referred to another George Bush in Texas who worked for the CIA.[4] CIA spokeswoman Sharron Basso suggested it was referring to a George William Bush. However, others described this G. William Bush as a "lowly researcher" and "coast and beach analyst" who worked with documents and photos at the CIA in Virginia from September 1963 to February 1964, with a low rank of GS-5.[5][6][7] In fact, this G. William Bush swore an affadavit in federal court denying that Hoover's memo referred to him:

"I have carefully reviewed the FBI memorandum to the Director, Bureau of Intelligence and Research, Department of State dated November 29, 1963 which mentions a Mr. George Bush of the Central Intelligence Agency.... I do not recognize the contents of the memorandum as information furnished to me orally or otherwise during the time I was at the CIA. In fact, during my time at the CIA, I did not receive any oral communications from any government agency of any nature whatsoever. I did not receive any information relating to the Kennedy assassination during my time at the CIA from the FBI. Based on the above, it is my conclusion that I am not the Mr. George Bush of the Central Intelligence Agency referred to in the memorandum." (United States District Court for the District of Columbia, Civil Action 88-2600 GHR, Archives and Research Center v. Central Intelligence Agency, Affidavit of George William Bush, September 21, 1988.)

So, the only other "George Bush" identified by the CIA is very likely not the one. This raises questions as to why the CIA took the unusual step of (mis)identifying a former officer.

In his book The Immaculate Deception: The Bush Crime Family Exposed (1991), US Army Brigadier General Russell Bowen wrote there was a cover-up of Zapata's CIA connections.

Alleged Photograph

More-tenuous evidence potentially linking GHW Bush, hence Zapata, to the CIA may come from a photograph taken in front of the Texas School Book Depository building shortly after the JFK assassination that some allege shows George H. W. Bush, and that resembles other photos of Bush taken at the time. Other people say the resemblance is a coincidence, the photo is hard to make out, and it could be any number of people. Bush has stated he does not remember where he was at the time. Some people have expressed surprise at this and suggest that most American adults remembered where they were when they heard that JFK was killed, just as earlier generations remember Pearl Harbor and the current generation remembers 9/11.

Texas School Book Depository on 22 or 23 November 1963.jpg
File:Bush Sr on Zapata oil rig c1963.jpg
GHW Bush Sr on Zapata oil rig, c.1963

Bay of Pigs, boats

The CIA codename for the Bay of Pigs invasion of April 1961 was "Operation Zapata" (see Beschloss p.89). Under cover of Zapata Off-Shore, Bush Sr. is alleged to have been in contact with Felix Rodriguez, Barry Seal, Porter Goss (who served briefly as CIA Director under Bush Jr.), E. Howard Hunt, around the time of the Bay of Pigs operation.[8] John Loftus writes: "Zapata [Off-Shore] provided commercial supplies for one of [Allen] Dulles’ most notorious operations: the Bay of Pigs invasion."[9]

CIA liaison officer Col. L. (Leroy) Fletcher Prouty alleges in his book, The Secret Team (1973) and on his website, that Zapata Offshore was used as cover for two of the ships used in the Bay of Pigs invasion: the Barbara J and Houston. Prouty claims he delivered two ships to an inactive Naval Base near Elizabeth City, North Carolina, for a CIA contact named George Bush, who re-named the boats.[10] (As a World War II Navy pilot, Bush had named his first Grumman TBF Avenger torpedo-bomber plane the Barbara after his wife, a second plane the Barbara II, and a third plane the Barbara III.)

The Bay of Pigs operation was directed out of the "Miami Station" (aka JM/WAVE), which was the CIA's largest station worldwide. It housed 200 agents who handled approximately 2,000 Cubans. Robert Reynolds was the CIA's Miami station chief from September 1960 to October 1961. He was replaced by career-CIA officer Theodore Shackley, who oversaw Operation Mongoose, Operation 40 (including Porter Goss, Felix Rodriguez, Barry Seal), and others. When Bush became CIA Director in 1976 he appointed Ted Shackley as Deputy Director of Covert Operations. When Bush became Vice President in 1981, he appointed Donald Gregg as his National Security Advisor.

Kevin Phillips' book: America Dynasty

Kevin Phillips, in American Dynasty, discusses George Bush Sr.'s "highly likely" peripheral role in the Bay of Pigs fiasco. He points to the leadership role of Bush's fellow Skull and Bones alumni in organizing the operation. He notes an additional personal factor for Bush: the Walker side of the family (who initially funded Zapata Corporation) had lost a small fortune when Fidel Castro nationalized their West Indies Sugar [and rum!] Co. Ed Pauley was "known for CIA connections," according to Phillips, it was Pauley who put Pemargo's Diaz and Bush together.

Phillips also points to the links between the Bay of Pigs actors and the Watergate scandal. Nixon had appointed Bush as his United Nations Ambassador, a Cabinet-level position, in February 1971. The Watergate scandal broke in June 1972. Nixon won the November election and choose Bush as Chairman of the Republican National Committee in December 1972. Phillips writes: "the CIA-Pemex-Pennzoil [née Zapata] money line [was...] exposed in 1972 after funds it provided through Mexican banks were found in the hands of the Watergate burglars. Of those men, a solid majority—-Howard Hunt, Frank Sturgis, Eugenio Martinez, Virgilio Gonzalez, and Bernard Barker—-had been involved in the abortive Bay of Pigs episode. Nixon and his senior advisers knew that the money had come through Mexican banks from 'the Texans ': regional Nixon finance chief William Liedtke [co-founder of Zapata], Robert Mosbacher, and other Bush friends." [emphases added]

Dealings with Ed Pauley

Zapata had a number of business dealings with oilman Edwin Pauley, including the Pemargo joint venture described above. Pauley is now known to have had ties to the OSS, CIA and FBI.[11]

Among other activities, Pauley was a conservative Regent for the University of California, who was so opposed to the 1960s anti-Vietnam war protests on campus that he secretly contacted CIA Director John McCone to request assistance. McCone went to the FBI's J. Edgar Hoover, who immediately obliged. The FBI assisted Pauley in seeking the ouster of "ultra-liberal" regents, faculty members, and students, and even UC President Clark Kerr. The latter was not achieved until Ronald Reagan was elected Governor -- in part campaigning against campus protests. (For details, see entry on Edwin W. Pauley.)

GHW Bush becomes CIA Director

Many details of the Bay of Pigs emerged during the Church and Pike Committee hearings. William Colby, CIA Director since 1973, believed in making public previous misdeeds. President Ford, on Henry Kissinger's advice, replaced Colby in late 1975 with George H. W. Bush.

Officially, with no prior experience in the intelligence community, GHW Bush was appointed Director of the CIA by Ford and served 355 days, from January 30 1976-January 20, 1977. Twenty-one years later, after Bush's 8 years as Vice President and 4 years as President, the CIA Headquarters was re-named the "George Bush Center for Intelligence" in October 1998.

Zapata Off-Shore in Iran-Contra

File:Bush Sr and Felix Rodriguez in White House c1986.jpg
Rodriguez visiting Bush Sr in the White House c.1988
Note from Bush Sr. to Rodriguez, Dec. 1988
File:Porter Goss, Barry Seal, Felix Rodriguez, et al.jpg
Felix Rodriguez, Porter Goss, Barry Seal, and others, Mexico City 22 January 1963

Felix Rodriguez had extensive contact with George Bush during the Iran-Contra affair. Indeed, in September 1986 General John K. Singlaub wrote Oliver North expressing concern about Felix Rodriguez's daily contact with the Bush office and warned of damage to President Reagan and the Republican Party. Their degree of interaction and Bush's familiarity with Rodriguez suggests a long term history.

Michael Mahony alleges that Zapata Off-Shore was used as part of a CIA drug-smuggling ring to pay for arming Nicaraguan Contras in 1986-1988, including Rodriguez, Eugene Hasenfus and others. Mahony claims Zapata's oil rigs were used as staging bases for drug shipments, allegedly named "Operation Whale Watch." Mahony allegedly worked for Naval Intelligence, US State Department and CIA for two decades. (Note: Mahony's byline appears in anti-Semitic outlets.)

Criticisms

Others suggest these are coincidences or not reliable. They note that the Bay of Pigs invasion landed at Zapata Penninsula, that there was no boat there named Zapata, and that Barbara Bush's maiden name, Pierce, begins with the letter "P," not "J". The names of ships proves nothing, and Prouty may have a faulty memory. The Kitchel memo quotes Bush as saying that he was in Houston on 22 November at 1:45pm, and is proceeding to Dallas for the night. Houston is 240 miles from Dallas, a 4-5 hours drive. Therefore the photo of the Texas School Book Depository either was taken after 6pm (note the shadows) or it does not show Bush, or it was taken on 23 November, or Bush lied to an FBI agent (which is unlikely), or the agent misheard (also unlikely). The fact that Bush's father Prescott, his mentor Mallon, his lawyer, and various Skull and Bones classmates had close ties to the CIA does not prove anything. That various covert operations (Operation 40, Operation Mongoose, Alpha 66, perhaps Bay of Pigs) were launched using the same islands off Cuba that Zapata did (Cay Sal), does not prove that Zapata Corporation (or GHW Bush) were involved. There could have been a third "George Bush" who worked for the CIA in 1963 who was briefed by the FBI the day after JFK's assassination, the day after Zapata's GHW Bush called the FBI, and who needed to know -- during that busy day -- about anti-Castro Cuban sentiments; and who Hoover felt worthy of writing about to the State Department's Department of Intelligence and Research (INR). Or, perhaps the FBI Director was mistaken as to Bush's identity. That Bush was friendly with Felix Rodriguez in 1987-88 does not mean he knew him in 1961. The CIA Headquarters was named by a partisan Congress, and in recognition of Bush's achievements as President and Vice President as well as his 355 days as CIA Director.

Business History 1969 to present, offshoots

Zapata, under Robert Gow's direction, acquired a controlling interest in the United Fruit Company in 1969. Robert's father, Ralph Gow, was on United Fruit's board of directors.

Gow apparently left Zapata in 1970. He took with him from Zapata Peter C. Knudtzon. Ties to the Bush family continued-- in 1971 both Jeb Bush and George W. Bush worked for Gow's new company, Stratford of Texas (aka Stratford of Houston). Stratford imported tropical plants. According to Knudtzon, Bush Jr. reportedly flew for Stratford to Florida and Guatemala (which suffered 400 death-squad murders that year).[12] Stratford evidently had ties to a large finca (nursery or plantation) in La Democracia, Huehuetenango, Guatemala.

In the 1970s, under chairman and CEO William Flynn, Zapata expanded its business to include subsidiaries in dredging, construction, coal mining, copper mining and fishing.

By the late 1970s, saddled with weak operations, high debt and low return on investment, the company again began undergoing changes in management and direction. Lead by John Mackin, who succeeded William Flynn, the company began selling off some of those businesses and refocused on offshore oil and gas exploration and production.

In 1982 chief operating officer Ronald Lassiter assumed the role of CEO -- just in time to preside over a decade of red ink brought on by the collapse of oil prices. Zapata Offshore became Zapata Corporation in 1982; its stock performed poorly.

By 1986 Zapata was one of the bad loans that shook the foundations of San Francisco-based Bank of America, with a debt of more than $500 million and a fiscal year loss of $250 million.

The company announced several restructurings during those years and managed to stave off bankruptcy more than once. Still, by the late 1980s, Zapata's oil service operations were consistently chalking up major losses.

In 1990 the oil drilling company proposed selling its entire fleet of offshore drilling rigs to focus solely on fishing. The company had not had a profitable quarter in more than five years.

Still struggling with debt by 1993, Zapata signed a deal with Norex America to raise more than $100 million through a loan and stock sale. But financier Malcolm Glazer, owner of the Tampa Bay Buccaneers NFL franchise and then-owner of 40 percent of Zapata, didn't want his holdings diluted and filed a lawsuit to block the deal.

By 1994 the company had come under the control of Malcom Glazer, after a proxy fight. Glazer became chairman of Zapata, replacing Ronald Lassiter, and in 1995 Avram Glazer was named CEO and president of Zapata. De facto headquarters moved from Houston to Rochester, NY. It no longer engaged in exploration, but owned several natural gas service companies. It also produced protein products from the menhaden fish. In subsequent years Zapata sold its energy-related businesses and focused on marine protein.

The Glazers spun off the company's fishing business, renamed Omega Protein, in 1998, and amid the dot-com heydey announced plans to become an Internet company. Between 1998 and 2000, Zapata tried to position itself as an internet media company under the "zap.com" name. The company's stock boomed and crashed along with other dot-coms, and in 2001 the company conducted a 1 for 10 reverse stock split. The venture was cited by many investment journalists as an example of a company jumping on the internet bandwagon without any relevant experience.

The Zapata Corporation serves as an investment vehicle for the Glazer family. Avram Glazer is the chairman and chief executive officer of Zapata.

Omega Protein Corporation, subsidiary

Zapata was a holding company for the Omega Protein Corporation, a marine protein business that processes the Atlantic menhaden into foods and industrial oils. Due to overfishing, they are only allowed to operate in Virgina and North Carolina. Nonetheless, they annually kill and process over 233 million pounds of menhaden from the Chesapeake Bay. Critics claim that this level of fishing is threatening the ecological balance of the bay by removing a key plankton feeder that limits phytoplankton blooms such as red tide (Franklin, 2006).


References

More Factual

There is relatively broader agreement as to the factual reliability of the following sources:

  • SEC filings of Zapata Corporation
  • Zapata Offshore Annual Reports, Microform Reading Room, Library of Congress.
  • Kevin Philips, Dynasty: Aristocracy, Fortune and the Politics of Deceit in the House of Bush, (2004), esp. pp.200-208.
  • Daniel Yergin, The Prize, (1991).
  • Transcript and audioof a "smoking gun" tape of Nixon telling Haldeman and Ehrlichman about the "Bay of Pigs" and "Texans."
  • Richard Bissell, Reflections of a Cold Warrior, (Yale University Press, 1996).
  • Joseph McBride, "The Man Who Wasn't There: 'George Bush,' CIA Operative," The Nation, July 16/23, 1988, p. 42.
  • Joseph McBride, "Where Was George?", The Nation, August 13/20, 1988, on the whereabouts of GHW Bush on 22 November 1963.
  • David Atlee Phillips (CIA, autobiography), The Night Watch.
  • E. Howard Hunt, Give Us This Day (New Rochelle: Arlington Press, 1973), lots of 'spin'.
  • Russell Bowen, The Immaculate Deception: The Bush Crime Family Exposed (1991).
  • Rodney Stich (former FAA investigator) Defrauding America (1994), and The Drugging of America (1999).
  • National Security Archives documentation of GHW Bush's CIA involvement in the early 1960s.
  • United States District Court for the District of Columbia, Civil Action 88-2600 GHR, Archives and Research Center v. Central Intelligence Agency, Affidavit of George William Bush, September 21, 1988.
  • Michael R. Beschloss, The Crisis Years: Kennedy and Khrushchev, 1960-63 (New York: Edward Burlingame Books, 1991), p. 89 refers to "Operation Zapata" as the codename for the Bay of Pigs operation.
  • Nicolas King, George Bush: A Biography.
  • Bush Sr.'s papers
  • "Adios, Zapata! Colorful company founded by Bush relocates to N.Y.," Houston Business Journal, April 26, 1999
  • Franklin, H. Bruce, "Net Losses", Mother Jones, March 2006 - extensive article on role of Menhaded in ecosystem and possible results of overfishing. Retrieved 21 February, 2006

More Opinionated

There is less agreement on the reliability of the following sources on Zapata (in terms of factual errors and/or point-of-view biases and interpretations):

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