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Bush uncle linked to options lawsuit

Defendants' backdating benefited a board he was on, the SEC alleges.

February 09, 2007|From Times staff and wire

WASHINGTON — President Bush's uncle William H.T. "Bucky" Bush was among directors of a defense contractor who together reaped $6 million from what federal regulators say was an illegal five-year scheme by two company executives to manipulate the timing of stock option grants, court documents show.

The youngest brother of former President George H.W. Bush, he is the second Bush family member whose name has surfaced in stock options scandals this month.

He was an outside, nonexecutive director of Engineered Support Systems Inc. of St. Louis, a supplier of military equipment and electronics that financially benefited from the Iraq war. It was acquired last year by another defense contractor and has been under federal investigation on suspicion of options backdating.

In a civil suit filed Tuesday, the Securities and Exchange Commission accused the former chief financial officer and former controller of enriching themselves and others with backdating.

Bush and the other board members were not accused of any wrongdoing.

Bush made about $450,000 in January 2005 by exercising his company stock options and selling shares, his SEC filing shows. When questioned by a Times reporter about the sale at the time, he said he had not pulled any strings in Washington to win Iraq war contracts.

He was not immediately available to comment Thursday, a family spokesman said.

Last week in an unrelated case, Marvin Bush, the current president's youngest brother, was named as a defendant in a suit charging that officers and directors of HCC Insurance Holdings benefited from backdated options.

Marvin Bush, now an advisory director, was a director when some of the backdated options were issued. According to the complaint, Marvin Bush made $2.2 million on the questioned options. The class action was filed in U.S. District Court in Houston on behalf of HCC stockholders.

More than 100 public companies are under investigation by the SEC and the Justice Department on suspicion of improper options backdating.

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