Bush's brother earns $171,000 in one-day stock market windfall

WASHINGTON - Cashing in stock options before the market crashed, President Bush's brother Neil Bush made $171,370 in a single day by buying and selling shares in a small U.S. high-tech firm where he had previously been a consultant, according to tax returns that give a glimpse into his business dealings.

The July 19, 1999, purchase and quick sale of stock from Kopin Corp. of Taunton, Mass., came on a day that the company received good news about a new Asian client that sent its stock value soaring.

"My timing on this transaction was very fortunate," Bush told the Associated Press.

Bush's profit was a slice of at least $798,218 the president's younger brother reported on his tax returns from three transactions involving Kopin's stock.

AP obtained his tax returns for the years 1997 through 2001 from a source familiar with his finances.

Those returns, as well as records that have come to light in Bush's divorce case, show that since his controversial tenure with the failed Colorado savings and loan Silverado more than a decade ago, he has become a globe-trotting businessman with a variety of consulting deals.

One of the most prominent financial transactions on his returns are the stock sales involving Kopin. Bush attributed his success in trading Kopin stock to good financial advice, saying he experienced losses as well as gains.

Regarding the July 19, 1999, sale, "my timing on this transaction was very fortunate and much better than most of my other trades," Bush said in an e-mail to AP. "Because you have some of my tax returns, you may notice the losses I have taken in the post-bubble market."

Bush recorded nearly $300,000 in losses from the sale of Kopin stock in late 2000 and 2001 when the stock market began sliding after the technology boom of the 1990s.

But unlike the ordinary investor who buys at the market price, Bush benefited from the fact that his stock purchase costs in some cases were minimal because he got a bargain, paying $13 a share when he exercised stock options from Kopin that were part of his consulting compensation from the company. Kopin granted him 20,000 stock options.

Kopin manufactures high-speed transistors used in cell phones and also produces tiny liquid crystal displays for use in consumer electronics such as camcorders and digital cameras.

The firm's electronic viewfinders are used in thermal weapons sights and a small amount of the company's business is with the government, which has provided Kopin with tens of millions of dollars in research money over the past decade.

Bush's big paydays stem from his role in 1995 as the intermediary who helped broker a deal that got an Asian company, Telecom Holdings, to invest $27-million in Kopin.

"Neil helped put together an approximately $27-million deal and was awarded stock options for his efforts. Stock options can range from anywhere to being utterly worthless to very valuable," Bush lawyer John Spalding said. "A Realtor in a similar deal would have made three times as much money and it would have been paid at closing. Neil eventually made around $500,000 in compensation for his work that was not guaranteed."

After the 1995 deal, Kopin snapped Bush up as a consultant for two years "to see what other doors he could open up for us" in Asia, said Kopin chief financial officer Richard Sneider.

On Dec. 2, 1998, three weeks after Kopin reported the first profit in its 14-year history, Bush bought 10,000 shares of Kopin stock for $140,000. He sold it a year later for $692,053.

On July 19, 1999, the Wall Street Journal published a story saying that a Japanese video camera company had started using tiny liquid crystal display viewfinders manufactured by Kopin.

The newspaper called the deal "a surprising win for the U.S. flat-panel-display industry." The company officially announced the deal after the Journal hit the street.

Bush said his financial adviser at Wells Fargo recommended shortly after 9 a.m. that he exercise the option to buy 15,000 shares of Kopin stock and immediately sell.

"I did," Bush said. Kopin stock opened that morning at $28.62. Bush sold at $33.25. Bush sold the stock for $495,745 and he listed his cost on his tax return as $324,375.

Bush said he had no inside information from Kopin, and simply acted on the advice of his adviser. "Any increase in the price of the stock on that day was purely coincidental, meaning that I did not have any improper information," he said.

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