a saucy titbit(did i say that) on this quiet trading day
Nov. 21, 2003, 7:49PM
Sex, lies and computer chips By RICK CASEY Copyright 2003 Houston Chronicle
Maybe the president of Taiwan did pay presidential younger brother Neil Bush a million bucks for a recent 30-minute meeting in New York.
I expressed skepticism in a recent column, but that was before I saw Exhibit 24 in the files of Bush's contentious divorce.
I didn't realize Bush's advice was so valuable.
The exhibit is a two-page contract between Bush and Grace Semiconductor Manufacturing Co., which recently opened a $1.6 billion computer chip production plant in Shanghai.
The co-founder and CEO is Winston Wong, son of a wealthy Taiwanese plastics magnate. The contract bears Wong's and Bush's signatures.
Under the contract Bush has two duties:
· "To provide GSMC from time to time with business strategies and policies; latest information and trends of the related industry, and other expertized advices (sic)."
· "To attend Directors Board Meetings."
For this the contract provides that Bush be paid $400,000 a year in company preferred stock for five years -- a total of $2 million worth of stock.
In addition, he is to get $10,000 to cover expenses for each board of directors meeting he attends.
It is unclear whether Bush has started receiving the stock. In a sworn deposition last March, he noted that the contract, dated Aug. 15, 2002, provided for the first $400,000 stock installment to be paid "within one month after the first Board Meeting of GSMC for the year 2002." But no board meeting had been held.
Bush did not return phone calls to Ignite!, his Austin-based educational software company. Calls to the U.S. office of Grace Semiconductor and to Bush's divorce attorney, Rick Flowers, also were not returned.
The question remains: What does Bush offer Grace that is worth $2 million?
In the deposition, Sharon Bush's attorney, David Brown, put it directly:
"Now, you have absolutely no educational background in semiconductors, do you Mr. Bush?"
"That's correct," Bush responded.
Pressed later, Bush said, "But I know a lot about business and I've been working in Asia quite a long time."
He said he has a master's degree in business administration and an undergraduate degree in international economics, and has done a good deal of business in Asia in the past 12 years.
"I feel I've had pretty extensive business interaction over there and that's what I would bring, just general business knowledge," he said.
I asked some Silicon Valley semiconductor industry analysts what Bush could bring.
"It's hard to say," said George Burns of Strategic Marketing Research, a Santa Cruz firm that covers the semiconductor industry. "Certainly he could act as a lobbyist."
Fred Zieber, an industry analyst with Pathfinder Research in San Jose, said, "I don't have a clue. You can speculate, but nothing rises to the top."
Both mentioned that the United States has some restrictions on the export of semiconductor manufacturing equipment to China, so Bush might be able to help smooth the way for Grace to buy equipment.
But Bush did not mention lobbying in his deposition, and it's not included in the contract.
Another theory is simpler.
In some parts of the world it is assumed that members of the Royal Family have influence. And in those regions, anyone who has had both a father and a brother as presidents of the United States is a member of a Royal Family.
Membership is good for business. Bush, for example, had raised $23 million for his software firm at the time of the deposition, despite the fact that a series of businesses he started over the years went belly up.
Bush said 60 percent of the $23 million came from overseas -- much of it from the Middle East and Asia.
Grace CEO Wong was already one of those investors when he signed Bush to the $2 million contract. His co-founder of Grace was Jiang Mianheng, son of then-Chinese President Jiang Zemin.
"That's the way Grace is," said industry analyst Dan Hutcheson of VLSI Research. "They're very tied into the government."
He said Grace may be paying for more than they are getting from Bush, who has been somewhat politically radioactive ever since he was sanctioned for his role in the Silverado Savings & Loan scandal 15 years ago.
"They may be too far away to realize that," said Hutcheson.
I'd have more faith in Bush's assessment that his business experience, not his blood relations, led to the contract if it weren't for something else in the deposition.
As has been reported, Bush admitted to having sex with several women in Hong Kong and Thailand during an earlier business trip. In the deposition, he said a woman would knock on the door of his hotel room.
Under questioning he said he didn't know them before or see them afterward, and he didn't pay them any money.
"Were they prostitutes?" he was asked.
"I don't know," he said.
Since he was under oath, I assume he was telling the truth. Perhaps that means that rather than assuming the businessmen with whom he was meeting provided them for his entertainment, he holds open the possibility that they saw him in the hotel bar and were so attracted to him that they bribed the bartender for his room number.
Maybe that's what happened. And maybe Grace contracted to pay him $2 million in stock for his expertise.
You can write to Rick Casey at P.O. Box 4260, Houston, TX 77210, or e-mail him at [email protected]
