Inside Jeb Bush's Shady Business Dealings With China
Former Florida governor Jeb Bush is mulling a run for the presidency, setting up a political action committee (complete with stock images of fake supporters). As a part of his possible quest for the White House, he has resigned from a slew of corporate and nonprofit boards, which served as a platform over the past seven years to make him filthy rich.
One under-explored avenue of Bush's business dealings has been the China connection. Given that Bush may soon be vying to be commander-in-chief, it seems untoward that he would be close to the country that is our greatest economic rival, but that's exactly what the former Florida governor has done.
Another Bush In Hainan
Hainan, China was the site of George W. Bush's first major foreign policy crisis. In 2001, a reconnaissance aircraft collided with a Chinese plane, and U.S. Navy personnel were stranded on Hainan Island. Following a series of diplomatic maneuvers, mutual recognition of the event, and an apology for the death of a Chinese fighter pilot, the crew was freed.
In 2011, Jeb Bush arrived in Hainan not as an official diplomat—it had been four years since he was a public official—but as an informal liaison between Florida corporations and booming Chinese business. He was greeted by the governor, Luo Baoming, and the Hainan government put up a proud press release about how Hainan and Florida were naturally going to engage in economic cooperation:
Luo Baoming said that Hainan Province and Florida shared many similarities; therefore the two parties had wide cooperation space with immense potential. For example, Hainan and Florida are able to cooperate with each other in cruise industry. There are cruise stop ports in Haikou and Sanya in Hainan Province. During the “12th Five-Year Plan”, a world cruise home port will be built in Sanya. Luo expected that the two parties ware able to set up smooth cooperation channel and John Ellis Bush could play a key role in promoting the mutual cooperation. Finally Luo Baoming invited John Ellis Bush to attend the 2011 Annual Conference of Boao Forum for Asia to become the third person (after his father George Bush and elder brother George Walker Bush) in his family to take part in this forum.
John Ellis Bush expressed his gratitude for the warm reception by Hainan Provincial Government. He said that he had fully experienced the good ecological environment and flourishing development trend of Hainan. He found that the development speed and grade of hotel industry in Sanya had been of the world class when he investigated in Sanya. A number of similarities between Hainan Province and Florida make him more confident in the cooperation of the two parties.
Jeb Bush hoped that Hainan Province and Florida would extend the cooperation in hotel management, cruise and yacht and establish long lasting contact and cooperation mechanism. He will be very happy to assist the new Governor in promoting the friendly relationship between Hainan Province and Florida.
In 2013, Bush's private equity business Britton Hill Holdings invested in BH Logistics, which last spring raised $26 million from a variety of investors including HNA group, which is based in Hainan. It also operates 500 jets as part of a subsidiary, Hainan Airlines.
"For the Chinese, the Bush name and the Bush connections to energy are a natural marriage,” China business scholar Derek Scissors told BloombergPolitics. “This is a classic example of the way sophisticated Chinese firms work. They don’t want to get involved directly in a U.S. startup that’s involved in shale, so they’ll take a minority stake to keep a lower profile. They’re looking for political protection, and the Bush name legitimizes the investment and makes him a perfect partner.”
Perhaps it isn't a coincidence that Bush endorsed long-shot Jon Huntsman, the former U.S. Ambassador to China, during his 2011 run for the presidency. Bush called Huntsman a “serious, experienced leader”during a time of “global upheaval and strife.” Huntsman has long been an advocate of increased economic and social ties with China, something he even touted on the campaign trail. If you look at Bush's endorsement less as a serious intervention on behalf of a long-shot candidate and more as a way to curry favor for his increasing portfolio of Chinese investments, it makes a lot more sense.
HNA Group has been rapidly expanding over the past few years, and has set its sights on a number of new markets, including energy, while Republicans in Congress have been pushing for expanded exports of U.S. oil and natural gas.
All of this helped Bush make a lot of money, but there are rising questions about what it could do for his political career.
“The Chinese don’t like political attention in the United States, because anything involving China can be tainted,” Scissors told BloombergPolitics. “[Bush] may be taking advantage of a political opportunity that’s going to cause him political problems down the road. It would be interesting to know if they have a story ready to explain what he’s doing.”
It appears Jeb Bush has not resigned from his private equity firm, despite resigning from various other positions. This means he could very well be running in a campaign where the issue of Chinese competition will loom large—but he will continue to use his political prominence to get rich off Chinese business. That's a circle he may find hard to square with voters.