State: Ex-partner of Jeb Bush hid assets abroad, U.S. says

Jeb Bush's former business partner, prominent Republican contributor J. David Eller, twice flew suitcases of cash to offshore tax havens to hide his assets, the U.S. Justice Department contends in a lawsuit.

The lawsuit also says Eller's MWI Corp., a Deerfield Beach water pump manufacturer, improperly used more than one-third of a $74.3-million U.S. loan to pay a Nigerian agent for the company. In turn, that agent and other company officials paid Nigerian government officials involved in buying MWI's pumps, the lawsuit says.

The government's new allegations center on a decade-old deal that has been under investigation for years. They came Friday in an amended civil complaint filed on behalf of a former MWI employee and whistle-blower who sued the company nearly four years ago. In intervening in the case, the Justice Department seeks unspecified damages against Eller and MWI.

The company denies any wrongdoing, and Friday its lawyer called the allegations about Eller's hiding cash overseas "shameful" and false.

Between 1985 and 1993, the government says, Eller flew on his company plane to the Bahamas and to Grand Cayman, once with a "large suitcase filled with currency" and once with a "large duffel bag or suitcase filled with currency." At both places, a chauffeured limousine whisked him and the money away. Eller told his pilot he was "moving his assets out of the United States," the lawsuit contends, calling it an effort to shield the money from creditors.

Eller's lawyer, William Scherer, said the flights never occurred and neither Eller nor MWI has accounts in either country.

The lawsuit by the George W. Bush Justice Department suggests no wrongdoing by Jeb Bush, who from 1988 to 1994 worked with Eller marketing MWI pumps to foreign countries, including Nigeria.

Indeed, the amended complaint omits allegations of influence-peddling by MWI -- including Eller's bringing Jeb Bush into the pump business -- leveled in the whistle-blower's recently unsealed lawsuit. That lawsuit prompted the federal investigation.

But the Justice Department's action against Bush's friend and former partner resurrects a controversial business venture that has dogged Bush for years. The allegations of wrongdoing by MWI track the period when Bush worked for an affiliated company promoting the company's equipment overseas.

A Bush spokeswoman, Katie Muniz, said Friday that the governor was unaware of any wrongdoing by MWI and that the absence of any reference to Bush proves what he has said for years: "He had nothing whatsoever to do with the alleged wrongdoing of MWI."

Eller and his company have contributed more than $129,000 to the Republican Party since 1989, according to the watchdog group Common Cause. He and Bush met through Republican political circles in the early 1980s. Bush has described Eller as a "good friend" and has said he is proud of his association with MWI.

The governor has said he made $648,250 from Bush-El, the company he and Eller formed in 1988 to promote MWI products abroad. He has repeatedly said, however, that none of that came from the Nigerian sales. To avoid possible conflicts of interest since his father was in the White House, he has said, he accepted no commissions on deals financed through U.S. agencies. Nor did he contact any government officials about the loans.

Twice while his father was in the White House, however, Jeb Bush visited Nigeria on behalf of MWI. In 1989, he was treated to a parade of 1,300 horses and tens of thousands of people lined the road to welcome the American president's son.

The St. Petersburg Times obtained a marketing video MWI made around 1989 for Nigeria, in which Eller notes his company has "support at the highest levels of our own government." It features pictures of a beaming Eller next to then-President George Bush and former President Ronald Reagan.

"In fact ... George Bush's son will be coming to Nigeria with us for the inauguration of our factory," Eller says on the tape. "And we're very proud of that, and it shows that our government is very interested in what we're doing in Nigeria and very supportive."

The U.S. Export-Import Bank, which promotes the use of American products to developing nations, in 1992 approved $74.3-million in loans to Nigeria to buy MWI equipment. The Justice Department contends that $28-million of that loan was improperly funneled to the company's Nigerian agent, Alhaji Mohammed Indimi.

The government maintains that MWI was required to disclose those "excessive and highly irregular" commissions, and that the bank never would have released the loan money had it known about them. The company submitted 48 different payment requests, most of them signed by Eller, which were false, the lawsuit states.

On trips to Nigeria, Indimi and other officers of MWI carried large amounts of Nigerian currency. The lawsuit cites one example in which he and other MWI officials brought "large quantities" of cash to the Abuja Hilton Hotel, where they met with Nigerian officials. The MWI representatives left the meeting without the money.

Eller declined to talk to the Times about the Nigerian deals. His attorney, Scherer, however, dismissed the allegations as baseless.

Scherer confirmed that Indimi, the company's Nigerian agent, received $28-million in commissions, but said that was perfectly legitimate. Indimi was MWI's longtime Nigerian agent, Scherer said, and the company was not required to detail its commissions to the Export-Import Bank.

"Who says that 30 percent is high (for commissions), especially when you're talking about sales that took a decade to make?" said Scherer. "That's absolutely and completely defensible."

He also said that "there is no proof" of any payoffs to Nigerian officials, and that people frequently carry lots of cash in Nigeria. If there were anything to back up such allegations, Scherer said, the government would have filed criminal charges, rather than just a civil lawsuit.

An attorney for Robert Purcell, the former MWI vice president who filed the 1998 whistle-blower lawsuit, agreed the complaint raised a number of potential criminal violations but declined to speculate why they weren't pursued.

"I'm not going to speculate on what I think or may not think," said Joseph Aronica, Purcell's lawyer.

The FBI notified MWI in March that it had closed a criminal investigation into the pump deals. Justice Department spokesman Charles Miller on Friday declined to comment on why no criminal charges were filed.

Under federal whistle-blower laws, designed to root out government fraud, federal authorities investigate citizen complaints and decide whether to intervene. Purcell stands to receive up to 25 percent of any money recovered as a result of his lawsuit.

But the government did not embrace all of Purcell's allegations. In amending his complaint, the Justice Department omitted Purcell's allegations that MWI vastly inflated the prices of its equipment and, through payoffs, persuaded Nigerian officials to declare that they needed MWI's pumps for irrigation and drainage. Purcell also contended that much of the MWI equipment sits unused and rusting today.

The Justice Department's Miller said federal prosecutors pursue only the whistle-blower charges they deem viable.

Juan Ponce, a former MWI vice president who played a key role in the Nigeria sales, said Friday from Nigeria that it was standard for businessmen there to carry cash, but he denied Indimi used it to pay off government officials.

"These allegations about the Hilton or whatever, I'm unaware of it," said Ponce, who still works with Indimi. "Alhaji Indimi was just the agent in Nigeria. Any transaction is done by the company, not the agent."

Reached in Nigeria this week, Indimi, who socialized with Bush and played golf with him in South Florida, said he was unaware of the lawsuit. "I closed this chapter years ago," he said.

In an interview in 1998, Indimi denied using his influence with Nigerian government officials to secure pump contracts. He was unaware, he said, of any excessive commissions or illegal payments.

"I don't have any business in politics," he said.

The lawsuit seeks triple damages against Eller and MWI, but does not specify the damages. Aronica, Purcell's lawyer, said a court could consider the damages to be triple the full $74.3-million in loans or the $28-million in improper commissions. In addition, the company could face hundreds of thousands of dollars in penalties.

The bank, however, reports that Nigeria has paid off virtually all of the loans, plus more than $28-million in interest. Given that, Scherer said, damages should be nonexistent.

"Triple zero is still zero," he said.

-- Times staff writer Sydney P. Freedberg contributed to this report.

High-profile connections

In a marketing videotape MWI made around 1989 to promote its business in Nigeria, MWI chief executive David Eller touted his company's high-profile political connections.

Eller, a prominent Republican contributor, former Republican state committeeman and delegate to the Republican National Convention, included images of himself with then-President George Bush and former President Ronald Reagan.

Said Eller: "We have had the support at the highest levels of our own government. The federal government has provided loans to Nigeria to allow us to bring this technology to Nigeria and we have the support, again, at the highest levels.

"In fact ... (President) George Bush's son will be coming to Nigeria with us for the inauguration of our factory. And we're very proud of that, and it shows that our government is very interested in what we're doing in Nigeria and very supportive."

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Lucy Morgan

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