http://www.cnn.com/2015/03/30/politics/election-2016-jeb-bush-business/Jeb Bush missed red flags in Florida business scandal
Harlan Waksal sat on InnoVida's board with Jeb Bush. He was busted in a Fort Lauderdale airport trying to smuggle 2 pounds of cocaine in his underpants and luggage, but the conviction was overturned after the court ruled he was illegally searched...
Miami (CNN)There were plenty of red flags surrounding the company Jeb Bush was planning to join: lawsuits, bad headlines, even previously convicted drug dealers in top positions.
But somehow Bush seemed to miss them all in 2007 as he prepared to join InnoVida as a $15,000-a month-consultant -- a position that would lead to board membership and stock options.
Just months out of the Florida governor's mansion, the consulting gig with InnoVida would help Bush replenish his bank account after eight years in public service. It was also a chance for him to lend the credibility that comes with being the son of a former president and the brother of a sitting one to a home state start-up making what promised to be a revolutionary new building material.
But in reality, Bush was getting caught up with a smooth-talking CEO who would ultimately be sent to prison for more than a decade for running a $40 million investment fraud. Bush's ties to InnoVida and chief executive Claudio Osorio are resurfacing as the former governor considers a White House run.
READ: Jeb Bush fundraising is a family affair
A CNN investigation uncovered a paper trail revealing a pattern of financial malfeasance allegations against Osorio and troubling accusations against his top lieutenants, raising questions about why Bush would associate with businessmen who have such disconcerting histories. Bush's work at the troubled company is all the more notable considering he's built a political career touting his business acumen, boasting to voters in Iowa recently that he's actually "signed the front side of a paycheck."
"It's hard to imagine any due diligence investigation that would have missed lawsuit after lawsuit against Osorio alleging fraud, misrepresentation and ethics violations," said Ken Boehm, the chairman of the National Legal and Policy Center, an ethics watchdog group that reviewed public records with CNN. "Even if they were doing due-diligence lite, they would have found the lawsuits. These lawsuits weren't hidden. They were in his home county."
Osorio traveled in elite circles. At political fundraisers and events at his multimillion-dollar Miami mansion, he chatted up the rich and famous, persuading them to invest millions in his company. He had the look of a successful entrepreneur, complete with a Colorado mountain house and a Maserati.
He even tried talking his way into the Oval Office, but had to settle for a 2009 meeting with President Barack Obama's personal assistant, according to court filings.
Osorio recruited Bush to the company because the political heavyweight would, as the Securities and Exchange Commission's complaint put it, "add an air of legitimacy to InnoVida."
Bush has never been accused of wrongdoing. He paid back more than half the $470,000 InnoVida paid him over his three years as a consultant and maintains Osorio deceived him and other board members.
"It is now obvious that Mr. Osorio deliberately misled a board of prominent business leaders about his company's dealings and that is why he is now in jail," Bush spokeswoman Kristy Campbell told CNN in an email.
Campbell has previously told reporters that Bush vetted the company before signing on as a consultant, visiting its factories in Miami and Dubai. And she told CNN that Bush hired a former federal law enforcement agent to conduct a background check on Osorio, which found "no red flags indicating criminal or financial wrongdoing."
It's a confounding explanation considering the allegations of shady dealings that had dogged Osorio and his associates for years.
Several top InnoVida officials have checkered pasts. One of the company's owners was convicted of cocaine trafficking in 1990. A decade earlier, a future board member was busted, accused of trying to board a flight from Fort Lauderdale, Florida, with a pound of cocaine in his underwear and another pound in his bag.
Before Bush started working at the company, at least three lawsuits were filed against Osorio that accused the businessman of financial wrongdoing and unethical behavior.
The most high-profile suit against Osorio was a 1999 class action he faced as chief executive of a Fortune 500 company called CHS Electronics. Shareholders sued Osorio, alleging securities fraud after the company collapsed.
In a foreshadowing of InnoVida's collapse, shareholders sued CHS and its executives, accusing them of misleading investors, artificially inflating CHS' stock price, overstating profits and income and fraudulently reducing expenses. The suit accused Osorio of personally manipulating the company's financial statements to show a profit, a practice referred to internally as "Claudio's magic."
Osorio and other CHS executives settled the suit for almost $12 million, but admitted no wrongdoing...
[...]Read the rest...it gets much worse.
Claudio OsorioJebbie, like all the Bush family, is nothing but a crook.