Bush letters show president's son doing favors, offering advice

WASHINGTON - When small oil producers went to George W. Bush in 1992 for help in getting President Bush to remove a tax on their drilling costs, the son took up their cause with his father's White House.

''Perhaps, the big guy'' should send ''a signal which will keep our oil base intact,'' the son wrote to the president's chief of staff, aiming to help an industry that had played a role in the Bush family fortunes.

Fast forward to today. Bush is running for president with strong financial backing from the oil industry as gas prices soar and regulators, politicians and oil companies blame each other.

Bush's rival, Vice President Al Gore, is trying to make his oil ties an issue. He has portrayed Bush as a good friend to oil and gas companies, which have contributed more than $1.5 million to Bush's presidential campaign, according to financial disclosure reports.

By contrast, Gore has received just under $100,000 from oil and gas companies, though his family also has ties to an oil company. Gore's father, the late Sen. Albert Gore Sr., had served on the board of Occidental Petroleum Corp. and owned stock in the company, now in a trust fund for Gore's mother.

Bush blames soaring gas prices on the Clinton administration, saying it has failed to get foreign oil producers to raise production, which would lower prices.

''Al Gore is doing everything he can to divert attention away from the administration's failed leadership,'' said Scott McClellan, Bush campaign spokesman.

He denies Gore camp suggestions that Bush is soft on oil producers, saying Bush supports increasing oil production and a government investigation of higher gas prices.

Bush, now governor of Texas, is still helping the oil industry. He assisted independent oil and gas producers last year when he signed an emergency bill giving them tax breaks. McClellan defended the move. ''The sector was in dire straits,'' he said. ''The governor supported it to help small oil and gas producers and field workers who depend on the sector to put food on the table.''

Bush had his own troubles in the Texas oil business. Following in the footsteps of his father, who'd made a small fortune as an oil executive in the 1950s, the younger Bush tried to make a go in the West Texas oil exploration business in the 1980s, lining up investors with the help of his family name and political connections.

He never struck it big, but eventually sold the business in a stock deal that netted him nearly $1 million and sparked a Security and Exchange Commission insider trading investigation. It ended with no charges being brought.

When a recession, sagging oil prices and taxes dogged small oil producers in 1991 and 1992, the industry turned to Bush figuring ''he knew our problems,'' said Gene Ames, a San Antonio oil producer who was then chairman of a trade group representing independent oil and gas companies.

The group wanted President Bush's support for tax relief, Ames told Bush in a Jan. 10, 1992, letter from the Bush presidential library released under the Freedom of Information Act. They ended up getting partial relief.

The independents had to pay taxes on certain drilling costs under an IRS mechanism known as the alternative minimum tax, which ensures that companies pay at least some taxes.

The industry had already convinced Democrats and Republicans on Capitol Hill to change the tax treatment and wanted the president to include the change in an economic stimulus package.

Ames, who said he met Bush a few times but had no political or business ties to him, hinted that a presidential thumbs up could go a long way toward improving his faltering political support in oil states.

''I'm afraid the President has a large political problem in the oil states'' because an administration official had recently been quoted thanking Saudi Arabian oil producers for letting oil prices drop, Ames said in the 1992 letter to George W. Bush. ''This has hit the oil patch like a bombshell.'' He invited the president to meet with oil executives the following month.

Bush, who was working on his father's re-election campaign, wrote the White House the next day, telling White House Chief of Staff Sam Skinner: ''We have trouble in the oil states because the President is viewed as favoring cheap energy.''

He suggested a meeting with Ames (''You don't need to spend hours'') and having the president say something in his upcoming State of the Union address that would boost demand for natural gas.

''Perhaps, the big guy could ... announce that --% of the government fleet will be converted to use natural gas ... This may be enough of a signal which will keep our oil base intact.'' He did not mention the tax issue and ended with a warning: ''Right now the hostility is such that a (Bill) Clinton could wound us.''

Ames said a meeting with the president never materialized but he thinks he did meet with White House deputies. President Bush didn't mention natural gas in his speech. But that fall he signed a bill that partially relieved the tax problem for independents.

''All we did was call attention to the fact that this was unfair treatment,'' said Ames.

Bush's campaign produced a record showing that Gore, who was in the Senate that year, voted in favor of an earlier version of the bill, which included the tax relief.


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