Texans for Public Justice

Bush Donor Profile
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Edward W. Rose III

Occupation: President
Employer: Cardinal Investment Co.
Home: Dallas, TX
Like fellow Texas financier Richard Rainwater, Edward “Rusty” Rose began his career helping manage the finances of the oil-rich Bass family (see Lee Bass). Rose in 1974 founded Cardinal Investment Co., which he operates with Pioneer Marshall Payne. Sometimes called “the mortician,” Rose is a notorious “shortseller,” who often makes money betting that a company’s stock price will fall. In one outrageous case, the San Francisco Chronicle reported that Cardinal both invested in cable modem maker Terayon Communications and made an $80 million bet that its stock price would drop. After Cardinal badmouthed the company to financial reporters and federal regulators, Terayon’s stock did plummet more than 25 percent in 2000. The next day, investors filed a 58-page lawsuit against Terayon in an effort to recover their losses—and Cardinal joined the suit. In short, Cardinal trashed the company, cashed in its short position and then had the audacity to join a lawsuit seeking damage from the company for shareholder losses. Calling this gaming “utterly amazing,” the U.S. District Court judge handling the case in 2003 said, “It disturbs me that the people who are going to drive the litigation are in fact the people who are betting on the stock going down.” In a classic 1986 “mortician” deal, Rose and Rainwater borrowed $300 million to buy animal-fat renderer Darling-Delaware Co. This huge debt swamped Darling-Delaware, even as its new owners rewarded themselves with $180 million in “special dividends.” Now losing money, the company stopped paying taxes and even collected a multi-million-dollar U.S. Treasury refund. George W. Bush later recruited Rainwater to join him and other investors to buy the Texas Rangers baseball team. Rainwater agreed to do so, with the stipulation that Rose co-manage the business with Bush. The deal made Bush a millionaire 15 times over, with much of this profit derived from equity that other partners gifted to the aspiring politician, as well as the $135 million that local taxpayers forked out for a new ballpark. Bush has since invited Rose to stay at Camp David. Rose’s fashion-designer daughter, Lela, designed the Bush twins’ inaugural gowns and gave a summer job to twin Barbara. President Bush appointed Rose’s wife, Deedie, to the National Council on the Arts. The Roses paid $3.1 million in 2002 for an old city water station near their Dallas home to refurbish it into a venue for private parties. Cardinal Investment also has major stakes in Ace Cash Express (which cashes checks for the working poor for up to 6 percent of face value) and defense firm Sierra Technologies (which received $389,000 in federal contracts in fiscal 2002). Rose bought 20 percent of the debt of Allegiance Telecom shortly before the phone company filed for bankruptcy in 2003 (Allegiance received $259,000 in federal contracts in fiscal 2002). The U.S. General Services Administration reported a $168,000 contract with “Cardinal Investment Co.” in Fayetteville, NC to lease office space. No such company could be located in Fayetteville.
2000 cycle; Minor League Pioneer
2000 cycle; Major League Pioneer
2004 cycle; Major League Pioneer
2004 cycle; Ranger

Of Special Interest
Bush Appointee
Corporate or Campaign Scandal
Corporate Welfare Recipient/Dispenser
White House Sleepover Guest

  Profile last updated Jan 9, 2004