SURPRISE! Company's Work in Iraq Profited Bush's Uncle

Company's Work in Iraq Profited Bush's Uncle
Wed Feb 23, 7:55 AM ET

By Walter F. Roche Jr. Times Staff Writer

WASHINGTON — The Iraq (news - web sites) war helped bring record earnings to St. Louis-based defense contractor Engineered Support Systems Inc., and new financial data show that the firm's war-related profits have trickled down to a familiar family name — Bush.
William H.T. "Bucky" Bush, uncle of the president and youngest brother of former President George H.W. Bush, cashed in ESSI stock options last month with a net value of nearly half a million dollars.
"Uncle Bucky," as he is known to the president, is on the board of the company, which supplies armor and other materials to U.S. troops. The company's stock prices have soared to record heights since before the invasion, benefiting in part from contracts to rapidly refit fleets of military vehicles with extra armor.
William Bush exercised options on 8,438 shares of company stock Jan. 18, according to reports filed with the U.S. Securities and Exchange Commission (news - web sites). He acknowledged in an interview that the transaction was worth about $450,000.
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Some of the firm's Defense Department work has included no-bid, sole-source contracts, including a $48.8-million deal to refurbish military trailers.
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William Bush was named to the board of ESSI in 2000, eight months before his nephew was elected president of the United States.
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Asked whether he was troubled by the fact that the company had earned significant revenue from the military engagements in Iraq and Afghanistan (news - web sites), the president's uncle said he would "prefer there was no business in Iraq. Unfortunately, we live in a troubled world."
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Bush exercised the expiring options shortly after a series of announcements that the company had won additional orders totaling about $77 million to supply kits to re-armor and refurbish military equipment being used by U.S. forces in Iraq. The company has 35 employees stationed in Iraq to install the protective gear.

The company estimates the refurbishing work in Iraq ultimately could bring revenues of $200 million or more.

News of the armoring and refurbishment contracts boosted ESSI's stock to a record $60.39 per share earlier this year. The stock closed Tuesday at $54.34.

In the conference call with analysts Tuesday, ESSI's Potthoff expressed optimism that the Bush administration's proposed $82-billion supplemental defense budget submitted last week could mean substantial additional opportunities for the company in Iraq and elsewhere.
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