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>>15771006
>>15771006
>Harbinger
>based in Rochester
HRG Group
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Not to be confused with Harbinger Capital or Harbinger Systems.
HRG Group, Inc.Traded as
NYSE: HRG
Russell 2000 Component
Founded 1999; 23 years ago [1]
Revenue Decrease US$5.2 billion (2017) [1]
Number of employees
16,021[2]
HRG Group, Inc., formerly Harbinger Group Inc. andZapata Corporation,[3] is a holding company based in Rochester, New York,[4] having originated from an oil company started by a group including future U.S. president George H. W. Bush. In 2009, it was renamed the Harbinger Group Inc.[5]
Early business history
The company traces its origins to Zapata Petroleum Corporation, founded in 1953 by futureU.S. President George H. W. Bush, along with his business partners John Overbey, Hugh Liedtke, Bill Liedtke, and Thomas J. Devine. Overbey was a "landman" skilled in scouting oil fields and obtaining drilling rights cheaply. Bush and Thomas J. Devine were oil-wildcatting associates.[6][better source needed] Their joint activities culminated in the establishment of Zapata Oil.[7] The company was named for Viva Zapata!, a 1952 biographical film starring Marlon Brando as Mexican revolutionary Emiliano Zapata.[8] The initial $1 million investment for Zapata was provided by the Liedtke brothers and their circle of investors, by Bush's father Prescott Bush and his maternal grandfather George Herbert Walker, and their family's circle of friends. Hugh Liedtke was named president, Bush was vice president; Overbey soon left.
According to a CIA internal memo dated November 29, 1975,[7] Zapata Petroleum began in 1953 through Bush's joint efforts with Thomas J. Devine, a CIA staffer who had resigned his agency position that same year to go into private business, but who continued to work for the CIA under commercial cover. Devine would later accompany Bush to Vietnam in late 1967 as a "cleared and witting commercial asset" of the agency, acted as his informal foreign affairs advisor, and had a close relationship with him through 1975.[9]
In 1954, Zapata Off-Shore Company was formed as a subsidiary of Zapata Oil, with Bush as president of the new company. He raised some startup money fromEugene Meyer, publisher of the Washington Post, and his son-in-law, Philip Graham.[10][11]
Zapata Off-Shore accepted an offer from an inventor, R. G. LeTourneau, for the development of a mobile but secure drilling rig. Zapata advanced him $400,000, which was to be refundable if the completed rig did not function, followed by an additional $550,000 together with 38,000 shares of Zapata Off-Shore common stock when it did.
The U.S. government began to auction off mineral rights to the Caribbean, the Gulf of Mexico, and islands off the Central American coast in 1954, and in the late 1950s and early 1960, Zapata Off-Shore concentrated its business in these areas.[12] In 1958, drilling contracts with the seven largest U.S. oil producers included wells 40 miles (64 km) north of Isabela, Cuba, near the island Cay Sal.
In 1959 Bush bought control of Zapata Off-Shore, funded with $800,000,[13] splitting Zapata Corporation into two independent companies with the Liedtkes still in control of Zapata Petroleum. Bush moved his offices and family that year from Midland, odesa Texas to Houston for access to the Caribbean through the Houston Ship Channel.[14][better source needed] But although Zapata Offshore had only a few drilling rigs, Bush set up operations also in the Gulf of Mexico, the Persian Gulf, Trinidad, Borneo, andMedellín, Colombia,and theKuwait Shell Petroleum Development Companywas among the company's clients.[15][better source needed]
In 1960, Jorge Díaz Serrano of Mexico was put in touch with Bush by Dresser Industries. Dresser was owned by Prescott Bush's Yale friends Roland and W. Averell Harriman, and had been George H.W. Bush's first employer upon his graduation from Yale, giving him his start in both the oil business and the defense contractor business.[16][better source needed] Serrano and Bush created a new company, Perforaciones Marinas del Golfo, aka Permargo, in conjunction with Edwin Pauley of Pan American Petroleum, with whom Zapata had a previous offshore contract. The deal with Permargo is not mentioned in Zapata's annual reports, and SEC records are missing. In 1988, a Bush spokesman claimed that the deal lasted only from March to September 1960. However, Zapata sold the oil-drilling rig Nola I to Pemargo in 1964.[citation needed]