Security, Secrecy and a Bush Brother
(According to poster JackRiddler over at DemocraticUnderground.com, this is the article which has spawned much speculation and misinformation about Stratasec. Cross-posting here for the record.)
By Margie Burns, February, 2003
A company that provided security at the World Trade Center, Washington D.C.'s Dulles International Airport and United Airlines between 1995 and 2001 was backed by a private Kuwaiti-American investment firm whose records were not open to full public disclosure, with ties to the Bush family.
Marvin P. Bush, a younger brother of George W. Bush, was a principal in the company from 1993 to 2000, when most of the work on the big projects was done. But White House responses to 9/11 have not publicly disclosed the company's part in providing security to any of the named facilities.
Public records indicate that the firm, formerly named Securacom, had Bush on its board of directors. He was also listed as a significant shareholder. The firm, which is now named Stratesec, Inc., is located in Sterling, Va., a D.C. suburb, and emphasizes federal clients. Bush is no longer on the board.
Bush has not responded to repeated telephoned and emailed requests for comment.
The American Stock Exchange delisted Stratesec's stock in October 2002. (Securacom also had a contract to provide security at Los Alamos National Laboratories, notorious for its security breach.)
According to its present CEO, Barry McDaniel, the company had an ongoing contract to handle security at the World Trade Center "up to the day the buildings fell down." Yet instead of being investigated, the company and companies involved with it have benefited from legislation pushed by the Bush White House and rubber-stamped by Congressional Republicans. Stratesec, its backer KuwAm, and their corporate officers stand to benefit from limitations on liability and national-security protections from investigation provided in bills since 9/11.
HCC Insurance Holdings, Inc., a reinsurance corporation on whose board Marvin Bush sat as director until November 2002, similarly benefits from terrorism insurance protections. (Bush's first year on the board at HCC coincided with his last year on the board at Stratesec.) HCC, formerly Houston Casualty Company, carried some of the insurance for the World Trade Center. It posted a loss for the quarter after the attacks of Sept. 11 and dropped participation in worker's compensation as a result. Bush remains an adviser to the chairman and the Board of Directors, as well as a member of the company's investment committee.
The former CEO of Stratesec is Wirt D. Walker III, who is still chairman of the board. Although he has also been the managing director of KuwAm for several years, Walker states definitively in phone interviews that there was no exchange of talent between Stratesec and KuwAm during the WTC and other projects.
As Walker put it, "I'm an investment banker." He continued, "We just owned some stock." The investment company "was not involved in any way in the work or day-to-day operations" of the security company. He explained clearly and pleasantly that there was no sharing of information or of personnel between the two companies.
In December 2000 &endash;- when the presidential election was determined -- Stratesec added a Government Division, providing "the same full range of security systems services as the Commercial Division," in the company's words. Stratesec now has "an open-ended contract with the General Services Administration (GSA) and a Blanket Purchase Agreement (BPA) with the agency that allows the government to purchase materials and services from the Company without having to go through a full competition."
The company lists as government clients "the US Army, US Navy, US Air force, and the Department of Justice," in projects that "often require state-of-the-art security solutions for classified or high-risk government sites." In 2000, the US Army accounted for 29% of the company's earned revenues, or about $6.9 million.
The White House opposed an independent commission to investigate 9/11 until after the terrorism insurance protections and protections for security companies had safely passed Congress. It has also quietly intervened in lawsuits against United Airlines in New York, brought by relatives of the victims.
Marvin Bush joined Securacom's Board of Directors in 1993, as part of new management hired when the company separated from engineering firm Burns and Roe. The new team was capitalized by KuwAm, the D.C.-based Kuwaiti-American investment company. Bush also served on the Board of Directors at KuwAm, along with Mishal Yousef Saud al-Sabah, Chairman of KuwAm and also a Director on Securacom's (Stratesec's) board.
The World Trade Center and the Metropolitan Washington Airport Authority -- which operates Dulles -- were two of Securacom's three biggest clients in 1996 and 1997. (The third was MCI, now WorldCom.)
Stratesec (Securacom) differs from other security companies which separate the function of consultant from that of service provider. The company defines itself as a "single-source" provider of "end-to-end" security services, including everything from diagnosis of existing systems to hiring subcontractors to installing video and electronic equipment. It also provides armored vehicles and security guards.
When, following the 1993 bombing of the World Trade Center, the Port Authority of New York and New Jersey began its multi-million-dollar, multiyear revamping of security in and around the Twin Towers and Buildings 4 and 5, Securacom was among numerous contractors hired in the upgrade.
The companies doing security jobs received due mention in print, in security industry publications and elsewhere. The board membership of a son of former President Bush went unnoticed, at least in print.
According to SEC filings, Securacom/Stratesec acquired the $8.3 million World Trade Center contract in October 1996. The project generated 28% of over-all revenues for the company in 1996, part of increased over-all revenues. SEC filings indicate that revenues from the World Trade Center project commenced in 1996 at $1.6 million, peaked in 1997 at $6.6 million ($4.1 million in the first half), and diminished in 1998 to less than $1 million.
A key concept in security is "access control." In hindsight, as the security industry's reportage on the WTC precautions makes clear, further attacks would have to come from the air. Unfortunately, such detailed reports did not convey that message at home. Nobody thought outside the box enough to deduce that a jumbo jet could overcome even the extraordinary controls at the World Trade Center. With 20-20 hindsight, it is obvious that the intricate procedures in the building's lobbies and on its perimeters were like trying to stop a 767 with ID badges.