Jeb Bush was a young man building a real estate business in Miami in 1985 when health-care entrepreneur Miguel Recarey Jr. hired him to help locate office space in South Florida.
Bush, then the son of the vice president, later provided another service: opening doors in Washington, where Recarey had mounted an aggressive lobbying effort for a waiver from Medicare rules that would allow his fast-growing company to continue to expand.
Recarey got what he wanted. But two years later, the firm, International Medical Centers, was shut down as regulators searched for millions in missing federal funds. Facing charges of bribery and bilking Medicare, Recarey fled the country to avoid prosecution. He remains a fugitive in Spain, where a court denied U.S. requests for extradition.
The Recarey case illustrates aspects of Bush’s business record that are likely to resurface as he moves closer to a campaign for president. Time and again, he benefited from his family name and connections to land a consulting deal or board membership, sometimes doing business with people and companies that would later run afoul of the law.
In the case of Recarey, Bush has said over the years that he “made one call” to a mid-level official to seek a fair deal for a Florida businessman.
But new interviews and a review of congressional testimony show that Bush engaged in multiple calls on Recarey’s behalf to senior administration officials — and that his advocacy made a difference.
One recipient of Bush’s outreach on behalf of Recarey, C. McClain Haddow, then the chief of staff to the secretary of health and human services, Margaret Heckler, told The Washington Post that hearing from the vice president’s son “certainly altered the trajectory of the decision.”
Transcripts from a 1987 congressional inquiry show that another HHS official, Kevin Moley, who was a Bush family friend, became concerned when he heard Bush was helping Recarey.
“I said, ‘Jeb, this is something, you know, you probably don’t want to be involved in,’ ” Moley said during his sworn testimony. “And he said, ‘Kevin, I only want to make sure that Mike Recarey gets a fair hearing.’ ”
Bush declined to be interviewed. His spokeswoman, Kristy Campbell, said that Moley was the only person Bush remembered contacting at HHS regarding the Recarey case.
“As Governor Bush has said multiple times, he only recollects making a call to Mr. Moley and simply asking for a fair shake for Mr. Recarey as other Florida leaders did as well. It is unfortunate that [Recarey] turned out to be a bad actor,” Campbell said.
Campbell added that Bush “has always operated with the highest level of integrity throughout his business career.”
Bush’s work with Recarey was one early element in what would become a sprawling business portfolio that he developed before and after his eight years as governor.
He was involved in dozens of businesses, starting in real estate in the 1980s when he joined forces with a politically connected developer, Armando Codina. Bush later established a lucrative consulting practice, becoming part-owner of a professional football team, sitting on corporate boards and, most recently, launching a successful Florida-based investment partnership.
Bush has severed ties with his business interests in recent months as he turns his attention back to politics. He has long touted his business experience as a political asset.
But his business résumé also includes some ventures that could provoke criticism on the national stage, as some did during his past Florida campaigns.
In one case, Bush reportedly advocated for a federal loan guarantee for a Miami contractor later convicted of fraud in applying for the loan, though Bush later said he did not recall doing so. He became a board member and consultant to a Florida-based manufacturer whose two top officers are now serving federal prison sentences for defrauding investors and the U.S. government. And he worked with another Florida firm investigated for alleged fraud involving a deal to sell water pumps to Nigeria underwritten by the Export-Import Bank of the United States.
Codina, who served as an early business mentor for Bush, said Bush’s record would hold up well against any competitor. “Given the thousands and thousands of leasing deals that Bush Realty was involved in, the record for having only a few clients who ultimately turned out to be less than truthful is remarkable, and that record would compare favorably with any firm in this business either in Miami or another city,” Codina said in an e-mail exchange with The Washington Post.
Recarey stood out even in the excesses of Miami’s go-go 1980s. Active in Florida’s anti-Castro community, he was known for having extraordinary charm and a volatile temper. He collected assault rifles, traveled with heavy security and had his office wired with sophisticated eavesdropping equipment. He had a checkered past that included jail time for income tax evasion in the 1970s. He bragged about his ties to Florida crime boss Santo Trafficante Jr.
By the mid-1980s, Recarey’s firm, IMC, needed more office space, and he approached the real estate brokerage owned by Bush and Codina.
IMC was booming in large part from Medicare-funded business that had soared as a result of the firm’s participation in a federal pilot project to study whether health maintenance organizations could reduce the cost of Medicare. The use of HMOs had been embraced by the market-oriented Reagan-Bush administration.
But IMC’s growth was threatened by federal rules requiring firms to get special waivers if more than half of their business came from Medicare patients.
By 1985, Recarey was seeking help from Washington. Almost 8 in 10 IMC patients were then on Medicare, and a temporary waiver granted to the firm three years earlier was scheduled to expire. Another waiver was also needed for Recarey to accomplish his goals of expanding the company’s geographic reach.
Career HHS staffers opposed IMC’s request, in part because doctors and patients had complained about the company’s management and the quality of care it provided.
To press his case with the agency, Recarey hired prominent Republican lobbyists in Washington, including former White House adviser Lyn Nofziger and Reagan campaign manager John Sears, congressional testimony and interviews show. Their effort was intense and involved calls and meetings with people at the White House and HHS.
Recarey also sought help from Bush, whom he had hired for a $75,000 fee for the real estate search.
Bush’s ties to Recarey came up repeatedly during a House subcommittee hearing in December 1987, when lawmakers examined the collapse of IMC, then the largest Medicare scandal ever.
Haddow and Moley both testified under oath that they spoke with Bush about Recarey’s waiver request.
Haddow told the committee that Bush contacted Heckler and “called me at Ms. Heckler’s request at one point on this issue.”
“Ms. Heckler’s description of it and the reason why she thought it was important, I thought were blatantly political,” Haddow said in his sworn testimony.
In a recent interview, Haddow recalled that Heckler, a former Republican member of Congress from Massachusetts, had been excited to receive the call from the son of George H.W. Bush, who was widely seen as the GOP’s next presidential nominee.
“It was her belief she would be in the running to be vice president,” Haddow said.
Haddow eventually left the government and, for several months, worked as an IMC consultant. Haddow pleaded guilty to an unrelated conflict-of-interest charge while at HHS and was sentenced to several months in prison for launching a nonprofit foundation with ties to HHS that employed his wife.
Moley testified that he heard Bush had made inquiries on behalf of Recarey, a development that “later led me to call Jeb and find out what was up.”
Moley later said in interviews that Heckler never told him about a call from Bush and that he felt Bush probably did not call her. Moley said he heard about Bush’s interest in IMC from Ron Kaufman, another Republican who has also served as an adviser to Bush’s father.
Kaufman told The Post that he does not recall any conversation with Bush or Moley about the Recarey issue.
Heckler, now 84, said in a 2012 Huffington Post interview that Bush had called her.
Reached recently by The Washington Post, Heckler said she wanted time to consider the matter because her memory was fuzzy. She then did not respond to follow-up requests.
In his campaigns for governor, Bush played down his association with Recarey. He told the St. Petersburg Times in 1993 that “this issue has been blown out of proportion way beyond what is fair. I made one call.”
Bush also said that he was proud of his efforts to use his familiarity with Washington to benefit private citizens who needed help.
“I do this for a lot of people. I did it for Democrats, I did it for Republicans,” he told the Times. “Government is a big complex beast.”
Recarey, now working as a technology executive in Madrid, has said little over the years about his involvement with Bush. He did not follow through on an agreement to conduct an interview with The Post.
Alice Crites contributed to this report.