Neil Bush taxes show stock windfall from Mass. firm he advised
WASHINGTON -- Cashing in stock options before the market crashed, the president's brother, Neil Bush, made at least $171,370 in a single day by buying and selling shares in a small US 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, which sent its stock value soaring.
"My timing on this transaction was very fortunate," Bush said.
Bush's profit was a slice of at least $798,218 that the president's younger brother reported on his tax returns from three transactions involving Kopin's stock.
His tax returns for 1997 through 2001 were obtained from a source familiar with his finances.
Those returns, as well as records that have come to light in Neil 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.
For instance, a Chinese firm, Grace Semiconductor Manufacturing Co. of Shanghai, offered to pay Bush $2 million in stock for his consulting services, but Bush said he has "not received one penny of compensation," because he never did the consulting.
Bush's tax returns also show $357,000 in income from his company, Ignite!, which is developing interactive, multimedia lessons for students.
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, adding 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. "Because you have some of my tax returns, you may notice the losses I have taken in the postbubble 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 paid $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 cellphones and 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. "Neil eventually made around $500,000 in compensation for his work that was not guaranteed."
