War profiteering, racial discrimination and a 'financial sham': The allegations that cloud Jim Crane, Democrat donor and Obama's golfing buddy

February 26, 2013

Multimillionaire Houston Astros owner, Crane, hosted the President's secretive golfing weekend in Florida

Freight company he founded has paid millions in settling sexual and racial discrimination cases

Department of Justice charges of price-fixing military shipments to Baghdad only dropped after executives were sacked and multi-million dollar fines paid

Crane accused of 'domination and manipulation' of Board for his own 'significant financial benefit'

Obama's 'boys weekend' cost tax-payers an estimated $989,207

Barack Obama has described it as proof ‘I’d better keep my day job.' According to Tiger Woods, it was ‘just a great round of golf with Ron and Jim.’

Much has been made of Obama’s President’s Day golfing weekend in Florida – from it's cost to his questionable choices over his playing partners- but little has been reported about the questionable background of Democratic donor Jim Crane who hit the links alongside the President and Woods.

Obama and the ‘boys’ – among them Woods, US trade representative Ron Kirk and Houston Astros owner Crane - have done their best to downplay the trip. Like Tiger said, it was ‘just a great round of golf.’ No doubt for him it was. But there is no such thing as ‘just a round of golf,’ for Jim Crane.

From Club house to White House: Barrack Obama back at work after his 'boys weekend' in Florida

Houston Astros owner, Jim Crane at the MLB National League Opening, 2012. A man with his eyes on the future...and a distinctly murky past

Woods is a more eye-catching choice of presidential golf-partner with his dazzling skill and whiff of personal scandal. But dig a little deeper and Crane, 58, is arguably the more interesting, and controversial, of the two.

This is a man who was named best CEO golfer in the world and promptly had himself removed from the rankings because, ‘Nobody likes to be tracked and traced. I mean..you may not want people to know wherever you’re at.’

This is a man who advised his salespeople to, ‘get somebody out of their element, out of that boardroom..in a golf cart,’ because, ‘If you can’t sell something in four hours, you can’t sell it.’

This is a man whose company’s business practices have been the subject of several investigations, costly legal suits and eye-watering settlements and whose own methods have drawn excoriating criticism.

Playing the game: Crane and his wife Francine are generous
sponsors of sports and the arts as well as political donors.

This is a man who doesn’t slice shots he cuts deals. His partner on the course was Milton Carroll, Chairman of utilities company CenterPoint Energy and, along with Crane, boardmember of Western Gas Holdings.

Superficially, of course Crane's presence makes sense. For a start the Texan owns the Floridian National Golf Club where the men played.

Obama and his group, which included Chicago friend Eric Whitaker rented out all eight of the club's private cottages, with his security detail spilling over into many nearby hotel rooms.Then there’s the fact that since 2002 Crane has been an active and generous democratic donor and fundraiser. Last year he gave the maximum $5,000 to Obama’s campaign and $30,800 to the Democratic National Committee (DNC).

In 2010 he gave to the Democratic Texas candidate, Bill White, with $125,297 in donations.

But before 2002, when he began pouring his money into Democrat coffers, he was a similarly generous Republican donor.

His contributions included $5,000 to the Republican National Committee, (RNC) in 2000 and several to candidates including former Texas Senators Kay Bailey Hutchison and John Cornyn.

Back then, Crane was CEO of Eagle Global Logistics. He built the freight company and with it his fortune.

Inspite of intense interest in the President's golfing weekend and game with Tiger Woods, the weekend was off-limits to photographers

The Floridian National Golf Club opened in 1996 - a year later Crane's company was under EEOC investigation

Focused on relaxation: Obama is an avid golfer who met Woods in 2009 but President's Weekend was the men's first game together.

Balzac wrote that at the root of all ‘fortunes without apparent cause,’ is ‘a crime forgotten.’ Crane’s personal wealth is in excess of $500million and his history is long.

His path to building his wealth is punctuated with charges of racial and sexual discrimination, profiteering from the war in Iraq and breaches of fiduciary duty.

In 1997 Crane’s company, Eagle Global Logisitcs, was investigated by the Equal Employment Opportunity Commission (EEOC).

According to the lengthy report published by the commission Crane’s company paid, ‘female and minority employees less than white men who do similar work; did not investigate employee complaints of sexual harassment; and destroyed evidence that the company was instructed to retain as part of the two-year EEOC investigations.’

While Barack golfed Michelle took to the slopes at Buttermilk ski area, Aspen, Colo. She was joined by daughters Sasha and Malia.

Two hundred and three cases were upheld.

Eagle’s General Counsel, Judith Robertson testified against the company and was later sued by them for revealing privileged information.

It was reported in the Houston Chronicle that Crane instructed executives not to employ ‘blacks because once you hire blacks you can never fire them.’

As a boy Crane dreamed of owning a Baseball Team and a
Golf Club. As a man he's used to getting what he wants

In 2000 Eagle was forced to pay $9million in back-pay and damages. Six years later the company was once again attracting official opprobrium – this time with allegations of war profiteering.

In 2006 Eagle paid $4million to settle a civil suit brought by the Department of Justice alleging that the company had inflated the cost of military shipments to Iraq, allegedly adding $0.50 per kilogram of freight from Dubai to Baghdad.

They paid a further $300,000 in 2007 and $750,000 in 2010 to settle allegations of kickbacks. Ultimately Eagle paid a fine of $4,486,120 and fired two senior executives – conditions made by the Department of Justice for dropping the case in which Eagle was one of several companies charged with price-fixing shipments to Iraq.

According to Crane the fault lay with ‘two rogue executives’ both of whom were sacked.

As for those Breaches of Fiduciary Duty, in 2007 Apollo Management LP entered into a merger with Eagle Logistics for $38 per share.

But the deal quickly soured with Apollo claiming that the Merger Agreement was ‘the produce of a sham process, controlled and manipulated by Crane, with the tacit or express connivance of the remaining defendants’ – among them Milton Carroll also on the President’s recent boys weekend.

Apollo argued that Crane dominated and manipulated board members, excluded them from key meetings and with-held vital information.

Ultimately Crane cut ties from the company he founded and went onto set up Crane Global Logistics.
This is not a man who accepts defeat.

Though no doubt he took the President’s win on the course in good grace. But then that was ‘just a round of golf,’ wasn’t it?


Source: Daily Mail UK