This piece was originally published in The Washington Spectator in August 2014.
Jeb Bush sat on the board of directors and served as a marketing consultant to a Florida company while it was under a criminal investigation that sent its two top executives to jail.
The collapse of InnoVida Holdings LLC in 2011 didn’t get much traction in the media. Except in South Florida, where a small group of investors lost more than $40 million on a scheme to market hurricane- and earthquake-resistant homes assembled from prefabricated plastic panels. The company CEO had promised a highly publicized rollout in Haiti followed by expansion into more lucrative markets. Neither ever occurred.
Even in South Florida, the story had receded into endless litigation (with more than 1,000 pleadings filed in bankruptcy and civil proceedings). It resurfaced in The New York Times in April, because it involved former Florida governor Jeb Bush, who is emerging as the preferred 2016 presidential candidate among establishment Republicans who consider New Jersey governor Chris Christie unelectable.
Bush was both a director on the corporate board and a marketing consultant for InnoVida Holdings LLC while it was the subject of a criminal investigation that sent its two top executives to jail.
The Times surveyed business dealings Bush pursued after leaving office in 2007. He had returned to the private sector with a modest net worth of $1.3 million, lagging behind his brothers. George W., for example, made $14 million on the sale of his partial ownership of the Texas Rangers while he was governor of Texas. Jeb, the Times reported, scrambled to make up for time lost while governor and had earned $3.2 million since leaving office.
There is much more to Jeb Bush’s role in the InnoVida scam, which wiped out every dime of shareholder wealth, than theTimes reported. Bankruptcy documents, a lawsuit filed by the Securities and Exchange Commission, and filings in criminal and civil cases suggest an ethical blind spot that led Bush to ignore the fact that the book value and returns reported by InnoVida executives were impossible under any reasonable set of financial assumptions.
Corporate board directors have a fiduciary responsibility to the shareholders whose interests they represent. Bush endorsed a company that defrauded its shareholders and the government while failing to deliver its product to market.