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In 1982, Bush stumbled by trying to go public with a drilling fund just as oil prices dipped. That year he also sold 10% of his company to a Panamanian company run by Philip Uzielli, a longtime friend of Vice President Bush's top adviser James A. Baker III, who later became Secretary of State. What raised eyebrows was the price Uzielli paid: $1 million in exchange for 10% of Bush's company, whose total worth at the time was $382,000. Bush says the infusion wasn't a bailout. Arbusto, he says, "wasn't in trouble. We were in growth mode." Bush says he met Uzielli through investors and at first didn't know of his ties to Baker. "Jim Baker didn't introduce me to him. Jim Baker didn't pick up the phone and say, 'Phil, you must invest with George W.'" So why did Uzielli pay so much for his 10% stake? "There was a lot of romance and a lot of upside in the oil business," Bush explains. "Everybody thought the price of oil was going to $100." Uzielli, who has said he lost money on the deal, couldn't be reached for comment.
In 1984, Bush merged his company with Spectrum 7, an oil-drilling firm run by two supporters of his father, Bill DeWitt and Mercer Reynolds. It was a good fit. Arbusto had oil prospects; Spectrum had a network of investors. The merger doubled the size of Bush's operation, and the Spectrum people wanted to upgrade his image with fancy furniture and a company car, but Bush wouldn't hear of it. "Those were the doodah days in Midland," says O'Neill's wife Jan, "and a lot of people couldn't resist--jets, boats, cars. George didn't go for that." He liked the image he had.
He was optimistic, but a sign that high hopes weren't warranted had come in late 1983, when the First National Bank of Midland collapsed under the weight of bad loans. "We had a saying that year," says oilman Don Evans, now national finance chairman for Bush's exploratory committee: "'Stay alive till '85.'" But '85 was worse. Oil prices sagged, and investments dried up. By December, rumor had it that oil prices were about to plunge, and it happened right on schedule in January 1986. As prices cratered, those who had been using their oil reserves as collateral defaulted to the banks. Midland's economy folded like a bad poker hand. Bush had always followed conservative business practices, and since he'd had his network of investors to tap, his debt exposure was less than that of many others. He took a 25% pay cut, and his staff took smaller ones. But soon he realized that unless he found a buyer, it was just a matter of time before Spectrum died.
"Everybody was in pretty much the same boat," says Evans' wife Susie, who has known George since elementary school, "and everybody pulled together. When times were hard, we had dinner parties." At some of those parties, George drank more than was wise. "Usually the next morning," Laura Bush says, she would tell him he should quit. Spectrum president Paul Rea gently suggested the same thing.
Bush and his friends say the media have made too much of his drinking, that the W didn't stand for Wild, that the rumors are overblown. (Bush now jokes about the stories: "I bought cocaine at my dad's Inauguration," he facetiously told a writer for Texas Monthly.) Among Bush's Midland crowd, the favorite mind-altering substances were beer and whiskey. And most people say Bush's consumption was not especially gaudy.