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Sign of the Times

It's all in the family at Engineered Support Systems

There's a fleet of modified Humvees, camouflage-green and sporting red crosses, parked behind the Engineered Support Systems Inc. world headquarters, where the old Schnucks used to be. A jarring sight in tiny Cool Valley, to be sure: all those Army vehicles, specially equipped to treat casualties of chemical and biological warfare, just a stone's throw from Worm's favorite hangout, the I Don't Know Cabaret.

A twenty-year-old holding company whose subsidiaries make military-support equipment, ESSI is a rather nondescript military contractor. Michael Shanahan, company chairman and onetime owner of the hockey Blues, has a higher profile here than his firm.

In other words, ESSI is no Boeing.

But like the Seattle-born monster that ate Mr. Mac's baby, ESSI's fortunes climb when war seems imminent. And for the past year, the company's done quite well -- shares have risen by 67 percent (as of last week) while the broader market, measured by the S&P 500, has slipped 22 percent. Earnings are on track to grow 20 percent this year.

"We'll see an increase in activity from what's going on with Iraq and perhaps North Korea," Shanahan recently tipped Bloomberg News. Indeed, the company's been spewing out press release after press release, announcing expedited government contracts to support the buildup. Thanks, Saddam. Thanks, Kim. Thanks, George W.

Is it news that military contractors do well in times of peril?


But Worm loves family gossip, especially when it reaches the top:

One of ESSI's star directors is St. Louis investor and financial advisor William H.T. Bush, uncle of the saber-rattlin' commander in chief. Uncle Bucky, who has also held a $2,500-a-month gig as an ESSI consultant, owned 17,500 shares in the company as of January 17, 2002 -- worth more than $650,000 in today's market.

It's a relative pittance for the rich and related but also about 17,500 more shares than a certain green-eyed invertebrate has tucked in his portfolio. The elder Bush was tapped as a company director in 2000 -- as W campaigned for Poppy's old job.

To be fair, the Republican honcho wasn't, as the company puts it, the only "exceptionally well-qualified individual" tapped for a directorship. In addition to five retired generals, Democratic stalwarts are well represented, and their holdings are substantial -- folks such as Tom Guilfoil, the grizzled legal rainmaker, and S. Lee Kling, the banker recently tapped as moneyman for Dick Gephardt's quixotic presidential campaign.

Further proof that in the USA, the machinery of war doesn't know Republican from Democrat.

United we stand.

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