The Iron Triangle: Inside the Secret World of the Carlyle Group (Hardcover)
RFID CHIPS and the Carlyle
Why Did Bush Lie us into
Investing in War
The Carlyle Group profits from government and conflict
Meet The Carlyle Group
EXPOSED: The Carlyle
48 minute Real Player video ~ watch now
Audio version of the above movie
04/17/06 Randi Rhodes re: 911
(5.94MB) 25Min 57Sec
Democracy Now! Broadcast Exclusive: James Baker's
Double Life in Iraq: The Carlyle Group Stands to Make Killing on Iraqi Debt
In a major expose published last night on The Nation magazine's website,
columnist Naomi Klein reveals that President Bush's special envoy on Iraq's
debt, former Secretary of State James Baker, has been using his position to
benefit his corporate clients and the Carlyle Group, the powerful merchant
bank and defense contractor where Baker serves as a partner. [includes rush
According to confidential documents obtained by The Nation, Carlyle has
sought to secure an extraordinary $1 billion investment from the Kuwaiti
government, with Baker"s influence as debt envoy being used as a crucial
lever. The secret deal involves a complex transaction to transfer ownership
of as much as $57 billion in unpaid Iraqi debts. The debts, now owed to the
government of Kuwait, would be assigned to a foundation created and
controlled by a consortium in which the key players are the Carlyle Group
and the Albright Group, which is headed by another former Secretary of
State, Madeleine Albright. There are also several other well-connected firms
Under the deal, the government of Kuwait would also give the consortium $2
billion up front to invest in a private equity fund devised by the
consortium, with half of it going to Carlyle. In a letter dated August 6,
2004, the consortium informed Kuwait's foreign ministry that the country"s
unpaid debts from Iraq are "in imminent jeopardy." Another letter warns the
Kuwaitis that world opinion is turning in favor of debt forgiveness. As
evidence the consortium points out to Kuwait "President Bush's
appointment...of former Secretary of State James Baker as his envoy to
negotiate Iraqi debt relief." The consortium's proposal spells out the
threat: Not only is Kuwait unlikely to see any of its $30 billion from Iraq
in sovereign debt, but the $27 billion in war reparations that Iraq owes to
Kuwait from Saddam Hussein"s 1990 invasion "may well be a casualty of this
U.S. [debt relief] effort."
In the face of this threat, the consortium offers its services. If Kuwait
agrees to transfer the debts to the consortium"s foundation, the consortium
will use these personal connections to persuade world leaders that Iraq must
"maximize" its debt payments to Kuwait, which would be able to collect the
money after ten to fifteen years. And the more the consortium gets Iraq to
pay during that period, the more Kuwait collects, with the consortium taking
a 5 percent commission or more.
Naomi Klein, award-winning journalist and author of Fences and Windows:
Dispatches From the Front Lines of the Globalization Debate and No Logo:
Taking Aim at the Brand Bullies.
Naomi Klein's article in The Nation: "James Baker's Double Life"
The ex-presidents' club
Oliver Burkeman and Julian Borger
Wednesday October 31, 2001
It is hard to imagine an address closer to the heart of American power.
The offices of the Carlyle Group are on Pennsylvania Avenue in Washington
DC, midway between the White House and the Capitol building, and within a
stone's throw of the headquarters of the FBI and numerous government
departments. The address reflects Carlyle's position at the very centre of
the Washington establishment, but amid the frenetic politicking that has
occupied the higher reaches of that world in recent weeks, few have paid it
much attention. Elsewhere, few have even heard of it.
This is exactly the way Carlyle likes it. For 14 years now, with almost
no publicity, the company has been signing up an impressive list of former
politicians - including the first President Bush and his secretary of state,
James Baker; John Major; one-time World Bank treasurer Afsaneh Masheyekhi
and several south-east Asian powerbrokers - and using their contacts and
influence to promote the group. Among the companies Carlyle owns are those
which make equipment, vehicles and munitions for the US military, and its
celebrity employees have long served an ingenious dual purpose, helping
encourage investments from the very wealthy while also smoothing the path
for Carlyle's defence firms.
But since the start of the "war on terrorism", the firm - unofficially
valued at $3.5bn - has taken on an added significance. Carlyle has become
the thread which indirectly links American military policy in Afghanistan to
the personal financial fortunes of its celebrity employees, not least the
current president's father. And, until earlier this month, Carlyle provided
another curious link to the Afghan crisis: among the firm's
multi-million-dollar investors were members of the family of Osama bin
The closest the Carlyle Group has previously come to public attention was
last May, when a Seoul-based employee called Peter Chung was forced to
resign from his £100,000-a-year job after sending an email to friends -
subsequently forwarded to thousands of others - boasting of his plans to
"fuck every hot chick in Korea over the next two years". The more
business-oriented activities of Carlyle's staff have been conducted much
more quietly: since it was founded in 1987 by David Rubenstein, a policy
assistant in Jimmy Carter's administration, and two lawyer friends, the firm
has been dispatching an array of former world leaders on a series of
strategic networking trips.
Last year, George Bush Sr and John Major travelled to Riyadh to talk with
senior Saudi businessmen. In September 2000, Carlyle hired speakers
including Colin Powell and AOL Time Warner chair Steve Case to address an
extravagant party at Washington's Monarch Hotel. Months later, Major joined
James Baker for a function at the Lanesborough Hotel in London, to explain
the Florida election controversy to the wealthy attendees.
We can assume that Carlyle pays well. Neither Major's office nor Carlyle
will confirm the details of his salary as European chairman - an appointment
announced shortly before he left the House of Commons after the election -
but we know, for the purposes of comparison, that he is paid £105,000 for 28
days' work a year for an unrelated non-executive directorship. Bush gives
speeches for the company and is paid with stakes in the firm's investments,
believed to be worth at least $80,000 per appearance. The benefits have
attracted political stars from around the world: former Philippines
president Fidel Ramos is an adviser, as is former Thai premier Anand
Panyarachun - as well as former Bundesbank president Karl Otto Pohl, and
Arthur Levitt, former chairman of the SEC, the US stock market regulator.
Carlyle partners, who include Baker and the firm's chairman, Frank Carlucci
- Ronald Reagan's defence secretary and a former deputy director of the CIA
- own stakes that would be worth $180m each if each partner owned an equal
slice. As in many areas of its work, though, Carlyle is not obliged to
reveal the details, and chooses not to.
Among the defence firms which benefit from Carlyle's success is United
Defense, a Virginia-based contractor which makes vertical missile launch
systems currently on board US Navy ships in the Arabian sea, as well as a
range of other weapons delivery systems and combat vehicles. Carlyle's other
holdings span an improbable range, taking in the French newspaper Le Figaro
and the company which bottles Dr Pepper.
"They are big, and they are quiet," says David Mulholland, business editor
of Jane's Defence Weekly. "But they're not easy to get information out of,
[but] United Defense are going to do well [in the current conflict]." United
also owns Bofors, a Swedish munitions manufacturer.
Carlyle has said that it does not lobby the federal government, thus
avoiding a conflict of interest when, for example, Carlucci met Rumsfeld in
February when several important defence contracts were under consideration.
But critics see that as a matter of definition.
"It should be a deep cause for concern that a closely held company like
Carlyle can simultaneously have directors and advisers that are doing
business and making money and also advising the president of the United
States," says Peter Eisner, managing director of the Center for Public
Integrity, a non-profit-making Washington think-tank. "The problem comes
when private business and public policy blend together. What hat is former
president Bush wearing when he tells Crown Prince Abdullah not to worry
about US policy in the Middle East? What hat does he use when he deals with
South Korea, and causes policy changes there? Or when James Baker helps
argue the presidential election in the younger Bush's favour? It's a
kitchen-cabinet situation, and the informality involved is precisely a mark
of Carlyle's success."
The world of private equity is an inherently secretive one. Firms such as
Carlyle make most of their money buying firms which are not publicly traded,
overhauling them and selling them at a profit, so the process by which
likely targets are evaluated is much more confidential than on the open
market. "These firms certainly don't go out of their way to get into the
headlines," says Steven Bell, chief economist at Deutsche Asset Management.
"They'd rather make a splash in Institutional Pensions Week. The aim is to
realise very high returns for your investors while exerting a high degree of
control over the company. You don't want to get into the headlines when you
force the management to fire a director."
The process has worked wonders at United, and this month the firm announced
plans to go public, giving Carlyle the chance to cash in its investment.
But what sets Carlyle apart is the way it has exploited its political
contacts. When Carlucci arrived there in 1989, he brought with him a phalanx
of former subordinates from the CIA and the Pentagon, and an awareness of
the scale of business a company like Carlyle could do in the corridors and
steak-houses of Washington. In a decade and a half, the firm has been able
to realise a 34% rate of return on its investments, and now claims to be the
largest private equity firm in the world. Success brought more investors,
including the international financier George Soros and, in 1995, the wealthy
Saudi Binladin family, who insist they long ago severed all links with their
notorious relative. The first president Bush is understood to have visited
the Binladins in Saudi Arabia twice on the firm's behalf.
The Carlyle Group does not employ anyone at its Washington headquarters to
deal with the press. Inquiries about the links with the Binladins (as most
of the family choose to spell their name) are instead referred to someone
outside the company, on condition he is referred to only as "a source
familiar with the relationship". This source says: "I can confirm the fact
that any Binladin Group investment in Carlyle has been terminated or is
being terminated. It amounted to a $2m investment in the Carlyle II Fund,
which was anyway a very small portion of a $1.3bn fund. In the scheme of the
investments and in the scheme of the business of either party it was very
small. We have to get this into perspective. But I think there was a sense
that there were questions being raised and some controversy, and for such a
small amount of money it was something that we wanted to put behind us. It
was just a business decision."
But if the Binladins' connection to the Carlyle Group lasted no more than
six years, the current President Bush's own links to the firm go far deeper.
In 1990, he was appointed to the board of one of Carlyle's first purchases,
an airline food business called Caterair, which they eventually sold at a
loss. He left the board in 1992, later to become Governor of Texas. Shortly
thereafter, he was responsible for appointing several members of the board
which controlled the investment of Texas teachers' pension funds. A few
years later, the board decided to invest $100m of public money in the
Carlyle Group. The firm's magic touch was already bringing results. Today,
it is proving as fruitful as ever.
a mint inside "the iron triangle" of defense, government, and
Like everyone else in the United States, the group stood
transfixed as the events of September 11 unfolded. Present were
former secretary of defense Frank Carlucci, former secretary of
state James Baker III, and representatives of the bin Laden family.
This was not some underground presidential bunker or Central
Intelligence Agency interrogation room. It was the Ritz-Carlton in
Washington, D.C., the plush setting for the annual investor
conference of one of the most powerful, well-connected, and
secretive companies in the world: the Carlyle Group. And since
September 11, this little-known company has become unexpectedly
That the Carlyle Group had its conference on America's darkest
day was mere coincidence, but there is nothing accidental about the
cast of characters that this private-equity powerhouse has assembled
in the 14 years since its founding. Among those associated with
Carlyle are former U.S. president George Bush Sr., former U.K. prime
minister John Major, and former president of the Philippines Fidel
Ramos. And Carlyle has counted George Soros, Prince Alwaleed bin
Talal bin Abdul Aziz Alsaud of Saudi Arabia, and Osama bin Laden's
estranged family among its high-profile clientele. The group has
been able to parlay its political clout into a lucrative buyout
practice (in other words, purchasing struggling companies, turning
them around, and selling them for huge profits)--everything from
defense contractors to telecommunications and aerospace companies.
It is a kind of ruthless investing made popular by the movie Wall
Street, and any industry that relies heavily on government
regulation is fair game for Carlyle's brand of access capitalism.
Carlyle has established itself as the gatekeeper between private
business interests and U.S. defense spending. And as the Carlyle
investors watched the World Trade towers go down, the group's
prospects went up.
In running what its own marketing literature spookily calls "a
vast, interlocking, global network of businesses and investment
professionals" that operates within the so-called iron triangle of
industry, government, and the military, the Carlyle Group leaves
itself open to any number of conflicts of interest and stunning
ironies. For example, it is hard to ignore the fact that Osama bin
Laden's family members, who renounced their son ten years ago, stood
to gain financially from the war being waged against him until late
October, when public criticism of the relationship forced them to
liquidate their holdings in the firm. Or consider that U.S.
president George W. Bush is in a position to make budgetary
decisions that could pad his father's bank account. But for the
Carlyle Group, walking that narrow line is the art of doing business
at the murky intersection of Washington politics, national security,
and private capital; mastering it has enabled the group to amass $12
billion in funds under management. But while successful in the
traditional private-equity avenue of corporate buyouts, Carlyle has
recently set its sites on venture capital with less success. The
firm is finding that all the politicians in the world won't help it
identify an emerging technology or a winning business model.
Surprisingly, Carlyle has avoided the fertile VC market in
defense technology, which now, more than ever, comes from smaller
companies hoping to cash in on what the defense establishment calls
the revolution in military affairs, or RMA. Thus far, Carlyle
has passed up on these emerging technologies in favor of some truly
awful Internet plays. And despite its unique qualifications for
early-stage funding of defense companies, the firm seems to have no
appetite for the sector.
Despite its VC troubles, however, the Carlyle Group's core
business is set for some good times ahead. Though the group has
raised eyebrows on Capitol Hill in the past, the firm's close ties
with the current administration and its cozy relationship with
several prominent Saudi government figures has the watchdogs
howling. And it's those same connections that will keep Carlyle in
the black for as long as the war against terrorism endures.
For the 11th-largest defense contractor in the United States,
wartime is boom time. No one knows that better than the Carlyle
Group, which less than a month after U.S. troops began bombing
Afghanistan filed to take public its crown jewel of defense, United
Defense, a company it has owned for nearly a decade. That this
company is even able to go public is testament to the Carlyle
Group's pull in Washington.
United Defense makes the controversial Crusader, a 42-ton,
self-propelled howitzer that moves and operates much like a tank and
can lob ten 155-mm shells per minute as far as 40 kilometers. The
Crusader has been in the sights of Pentagon budget cutters since the
Clinton administration, which argued that it was a relic of the cold
war era--too heavy and slow for today's warfare. Even the Pentagon
had recommended the program be discontinued. But remarkably, the $11
billion contract for the Crusader is still alive, thanks largely to
the Carlyle Group.
"This is very much an example of a cold war-inspired weapon whose
time has passed," notes Steve Grundman, a consultant at Charles
River Associates, a defense and aerospace consultancy in Boston.
"Its liabilities were uncovered during the Kosovo campaign, when the
Army was unable to deploy it in time. It is exceedingly expensive,
and it was a wake-up call to the Army that many of its forces are no
But the Carlyle Group was having none of that. While it is
impossible to say what U.S. secretary of defense Donald Rumsfeld was
thinking when he made the decision to keep the Crusader program
alive, people close to the situation claim to have a pretty good
idea. Mr. Carlucci and Mr. Rumsfeld are good friends and former
wrestling partners from their undergraduate days at Princeton
University. And while Carlyle executives are quick to reject any
accusations of them lobbying the current administration, others
aren't so sure. "In this particular effort, I felt that they were
like any other lobbying group, apart from the fact that they are
not," said one Washington, D.C., lobbyist with intimate knowledge of
the Crusader negotiations, noting the fine line between lobbying and
having a drink with a old friend.
According to Greg McCarthy, a spokesperson for Representative
J.C. Watts Jr. (R: Oklahoma), whose district is home to one of the
Crusader's assembly plants, the Carlyle Group's influence was indeed
felt at the Pentagon. "Carlyle's strength was within the DoD,
because as a rule someone like Frank Carlucci is going to have
access," says Mr. McCarthy. "But they have other staff types that
work behind the scenes, in the dark, that know everything about the
Army and Capitol Hill."
Perhaps even more disconcerting than Carlyle's ties to the
Pentagon are its connections within the White House itself. Aside
from signing up George Bush Sr. shortly after his presidential term
ended, Carlyle gave George W. Bush a job on the board of Texas-based
airline food caterer Caterair International back in 1991. Since Bush
the younger took office this year, a number of events have raised
Shortly after George W. Bush was sworn in as president, he broke
off talks with North Korea regarding long-range ballistic missiles,
claiming there was no way to ensure North Korea would comply with
any guidelines that were developed. The news came as a shock to
South Korean officials, who had spent years negotiating with the
North, assisted by the Clinton administration. By June, Mr. Bush had
reopened negotiations with North Korea, but only at the urging of
his own father. According to reports, the former president sent his
son a memo persuasively arguing the need to work with the North
Korean government. It was the first time the nation had seen the
influence of the father on the son in office.
But what has been overlooked was Carlyle's business interest in
Korea. The senior Bush had spearheaded the group's successful
entrance into the South Korean market, paving the way for buyouts of
Korea's KorAm Bank and Mercury, a telecommunications equipment
company. For the business to be successful, stability between North
and South Korea is critical. And though there is no direct evidence
linking the senior Bush's business dealings in Korea with the change
in policy, it is the appearance of impropriety that excites the
watchdogs. "We are clearly aware that former President Bush has
weighed in on policy toward South Korea and we note that U.S. policy
changed after those communications," says Peter Eisner, managing
director at the Center for Public Integrity, a watchdog group in
Washington, D.C., which has an active file on the Carlyle Group. "We
know that former President Bush receives remuneration for his work
with Carlyle and that he is capable of advising the current
president, but how much further it goes, we don't know."
While the Center for Public Integrity looks for its smoking gun,
others in Washington say hard evidence is unimportant. "Whether the
decisions made by the former president are a real or apparent
conflict of interest doesn't matter, because in the public's eye
they're equally as damaging," says Larry Noble, executive director
and general counsel of the Center for Responsive Politics. "Bush
[Sr.] has to seriously consider the propriety of sitting on the
board of a group that is impacted by his son's decisions."
And the controversy is expected only to increase as Carlyle's
investments in Saudi Arabia are scrutinized during the war on
terrorism. Mr. Eisner says that very little is known about Carlyle's
involvements in Saudi Arabia, except that the firm has been making
close to $50 million a year training the Saudi Arabian National
Guard, troops that are sworn to protect the monarchy. Carlyle also
advises the Saudi royal family on the Economic Offset Program, a
system that is designed to encourage foreign businesses to open shop
in Saudi Arabia and uses re-investment incentives to keep those
businesses' proceeds in the country.
But the money flowing out of Saudi Arabia and into the Carlyle
Group is of even more interest. Immediately after the September 11
attacks, reports surfaced of Carlyle's involvement with the Saudi
Binladin Group, the $5 billion construction business run by Osama's
half-brother Bakr. The bin Laden family invested $2 million in the
Carlyle Partners II fund, which includes in its portfolio United
Defense and other defense and aerospace companies. On October 26,
the Carlyle Group severed its relationship with the bin Laden family
in what officials termed a mutual decision. Mr. Bush Sr. and Mr.
Major have been to Saudi Arabia on behalf of Carlyle as recently as
last year, and according to reports, the Federal Bureau of
Investigation is currently looking into the flow of money from the
bin Laden family. Carlyle officials declined to answer any questions
regarding their activities in Saudi Arabia.
But for all the questions, Carlyle has stayed clean in the eyes
of the law. Lobbying laws in Washington, D.C., are ambiguous at
best, requiring only that former politicians observe a one-year
"cooling-off period" before they reënter the lobbying scene on
behalf of industry. It is playing within this gray area that has
given the Carlyle Group some of the best returns in the business.
After David Rubenstein, a former aide in the Carter
administration, and William Conway Jr., former chief financial
officer of MCI Communications, hooked up at New York's Carlyle hotel
in 1987 to form the company, the Carlyle Group spent two lost years
investing in a hodgepodge of companies. It wasn't until 1989, when
the company brought in Mr. Carlucci, fresh off his two-year stint as
U.S. secretary of defense, that Carlyle got serious in government.
In 1991 the company made a name for itself by facilitating a $590
million purchase of Citicorp stock for Prince Alwaleed bin Talal.
Shortly thereafter, Carlyle snatched up defense contractors Harsco,
BDM International, and LTV, turning the companies around and selling
them to the likes of TRW, Boeing, and Lockheed Martin.
The Carlyle Group has diversified its holdings since then,
investing in everything from bottling companies to natural-food
grocers. In the process, it has become one of the biggest, most
successful private-equity firms in business, with annualized returns
of 35 percent. (Judging by the early numbers from some of their
funds, however, like many other private-equity funds, 2001 will be a
considerably less profitable year for Carlyle.) "They are the new
breed of private equity, acting more like a large mutual fund of
private companies," says David Snow, editor of
PrivateEquityCentral.net, a Web site that tracks private-equity
firms. The numbers are impressive: Carlyle employs 240 people, as
opposed to the 10 or 12 typical of most private-equity firms. It has
ownership stakes in 164 companies, which collectively employ more
than 70,000 people. George Soros invested $100 million in the
group's funds; the California Public Employees' Retirement System is
in for $305 million.
Carlyle has succeeded by raising money first, then finding the
talent to manage it. For instance, it raised a fund for buying out
telecom companies and hired William Kennard, the former U.S. Federal
Communications Commission chairman, to run it. Accused early on of
being nothing more than a bunch of Washington grip-and-grinners,
Carlyle has proven its critics wrong. At a Salomon Smith Barney
private-equity conference last March, a panel of professional
investment managers were asked who the best fund managers are.
Carlyle cofounder Mr. Conway was one of two managers chosen.
With its size and success, questions about the firm's ability to
grow revenue has arisen. Carlyle has placed its bets for future
growth on the VC markets, which it entered in 1996. But to date, it
has found that venture capital is a game with far different rules
than that of corporate buyouts. "They may be very established in
private equity, but it seems to me that they don't really know the
venture capital business," says one VC who has done deals with
Carlyle. "In buyouts, you take over a company and fight the
management, but in venture capital it's the opposite. You want to
work with people."
Carlyle executives admit as much. As a result, the Carlyle Europe
Venture Partners fund has been slow to commit its capital. So far,
it has spent just more than 20 percent of its $660 million, and 3 of
its original 17 investments have already folded. None has gone
public or been acquired. As Jack Biddle, cofounder of Novak Biddle
Venture Partners, dryly puts it, "I haven't been involved in a lot
of venture deals where the participation of a president mattered
that much. In venture capital, it's all about the technology."
For a firm that has made its money in highly regulated,
politically charged industries, picking business-to-business plays
is hardly second nature. While Carlyle has investments in highly
regulated sectors like telecom and banking, it has avoided defense
entirely, instead focusing on tech industries that have already gone
flat. The firm's European fund alone boasts six B2B companies, two
optical-networking companies, and Riot-E, a wireless media play.
Jacques Garaïalde, managing director of the Europe fund concedes
that expectations have been shifted. "Clearly, we can't make 100
times returns on B2B, but there are some situations in which we can
make 3 times."
But the struggles in its VC business may be offset, at least
temporarily, by the expected windfall from the war on terrorism. The
federal government has already approved a $40 billion supplemental
aid package to the current budget, $19 billion of which is headed
straight to the Pentagon. Some of the additional government spending
is likely to find its way into Carlyle's coffers.
The Bush administration isn't afraid to mix business and
politics, and no other firm embodies that penchant better than the
Carlyle Group. Walking that fine line is what Carlyle does best. We
may not see Osama bin Laden's brothers at Carlyle's investor
conferences any more, but business will go on as usual for the
biggest old boys network around. As Mr. Snow puts it, "Carlyle will
always have to defend itself and will never be able to convince
certain people that they aren't capable of forging murky backroom
deals. George Bush's father does profit when the Carlyle Group
profits, but to make the leap that the president would base
decisions on that is to say that the president is corrupt."
Exposed: The Carlyle Group
"The war in Iraq does not seem to be over al all, but in the
meantime the rebuilding has already started. This has unleashed
fiercecompetition for contracts, which are mainly awarded to American (ed:
What is remarkable about these companies, is that they have people on their
payroll from American politics and the military. Is this a conflict of
interest, or is this the new global way of doing business?
One of the companies that operates in this manner is the Carlyle Group."
On their payroll are people like : George Bush (Sr.), James Baker III and
old premier John Major.
The Carlyle Group is a private investment bank which doesn't come to the
publics attention very often but it is one of the biggest American (ed: USA)
investors of the defense industry, telecom, property and financial services.
What is the Carlyle Group? Who are the people behind the name? And how much
power does Carlyle have?
(You need RealPlayer installed)
The Carlyle Group
Established in 1987, The Carlyle Group is a private global investment firm
that originates, structures and acts as lead equity investor in
management-led buyouts, strategic minority equity investments, equity
private placements, consolidations and buildups, and growth capital
James A. Baker, III
Frank C. Carlucci
Dr. Fritz Gerber
Sir Denys Henderson
Dr. Ing E.h. Eberhard von Kuenheim
Cees van Lede
The Rt. Honorable John Major, CH
Enrico Chicco Testa
The Carlyle Group is one of the world’s largest private equity firms, with
more than $18.9 billion under management. With 26 funds across four
investment disciplines (management-led buyouts, real estate, leveraged
finance, and venture capital), Carlyle combines global vision with local
insight, relying on a top-flight team of nearly 300 investment professionals
operating out of offices in 14 countries to uncover superior opportunities
in North America, Europe, and Asia.
While open to opportunities wherever they can be found, Carlyle focuses on
sectors in which it has demonstrated expertise: aerospace & defense,
automotive & transportation, consumer & retail, energy & power, healthcare,
industrial, real estate, technology & business services, and
telecommunications & media.
In a world awash with information, insight is often in short supply.
Carlyle’s edge is its ability to leverage the local insight of its
investment professionals, collaborating across the firms’ investment
disciplines from deal sourcing and due diligence through portfolio company
development. The result: A broader view of potential investment
opportunities and deeper level of expertise, creating value for Carlyle
portfolio companies that translates into superior returns for Carlyle
Carlyle’s team of investment professionals includes 127 MBAs, 27 JDs and 12
PhD/MDs from many of the world’s most prestigious universities.
Carlyle’s conservative investment philosophy and disciplined investment
process has generated extraordinary returns for its investors. Since its
founding in 1987, the firm has invested $12.4 billion in 355 transactions.
More than 600 investors from 55 countries entrust Carlyle with their capital
and their reputations. As one means of aligning its own interests with those
of its Limited Partner investors, Carlyle has committed more than $900
million of its own capital to its funds.
The ingredients of American Bloody
GREED, HYPOCRISY, WARS
Will the Carlyle Group salvage Lord Black's Hollinger?
CARLYLE GROUP, HALLIBURTON
GETTING RICH OFF IRAQ WAR
By Chuck Baldwin
Posted: March 27, 2003 - 8:45 pm PST
Since World War II, dozens of U.S. companies have made a "killing" from
military conflict. President Dwight David Eisenhower was the first to refer
to these companies as the "military industrial complex." The financial and
political clout of these companies has risen and waned through the years,
depending on who was in power and what the international climate was like.
Whatever one thinks of the morality or necessity of our war in Iraq, one
thing is undeniable: certain well-placed companies are making millions of
dollars off the war. Two companies with close ties to the Bush and Cheney
families that are reaping huge profits are the Halliburton Company and the
The Carlyle Group is so proficient at raking in government contracts that it
is often referred to as the "Ex-Presidents Club." Some of the West's biggest
and most powerful political leaders are helping to guide Carlyle through the
muddy waters of governmental red tape and are reaping huge benefits in the
Carlyle's movers and shakers include such heavyweights as Former Secretary
of State James Baker, Ex-Secretary of Defense Frank Carlucci, Former
President George H.W. Bush, and Former British Prime Minister John Major.
President G.W. Bush has also held board membership. What is even more
fascinating is that the bin Laden family was an investor in Carlyle.
Carlyle also has direct links to the Saudi royal family and has been
directly involved in training Saudi troops to protect oil fields. It also
helped build Saudi Arabia's national guard from 26,000 to over 70,000
troops. The link between Carlyle and Saudi Arabia is so strong that some
have called Carlyle a "front" organization for the Saudi royal family.
Since the September 11 terrorist attacks, the Carlyle Group has reaped
millions of dollars from government contracts on things such as cleaning up
anthrax-infected buildings, including the Hart Senate Office Building,
making X-ray scanners, providing logistics support to the U.S. military,
making metal-bond structures in fighter jets and missiles, and providing
employee background checks for the government.
Another well-connected company that is greatly profiting from the Iraq War
is Halliburton, a company formerly headed by Vice President Dick Cheney. A
Halliburton subsidiary, Kellogg, Brown and Root, just received a government
contract to extinguish oil well fires in Iraq. According to Forbes Magazine,
no other company was even allowed to bid on the contract. This contract
alone is worth tens of millions of dollars.
Therefore, while our war in Iraq is costing billions of dollars to America's
taxpayers and is also costing many American families the ultimate sacrifice
of lost sons and daughters, certain well-connected companies are reaping
huge profits and benefits. I sincerely hope and pray that these connections
are merely circumstantial and not intentional.
© 2003 Chuck Baldwin - All Rights Reserved
by Victor Thorn, Babel Magazine, Issue #77, 6 October 2002
A few weeks ago, James Baker publicly offered advice to the Bush
Administration on how they should proceed with their war on Iraq. What
he and every newscaster or commentator failed to mention was that Baker
is now employed by the highly-influential Carlyle Group, which is the
eleventh largest defense contractor in the United States. In essence,
then, we have a man trying to influence public policy while privately
employed by a company that has a vested interest in activating America's
If you're not familiar with them, the Carlyle Group has become a
powerhouse in affecting the direction in which our foreign policy takes,
especially in regard to war. They accomplish this by hiring former
government officials, then investing in private companies that are
subject to government change (i.e. the military and telecommunications).
Who, you may ask, do they employ to secure their government contracts?
Well, check-out this list for starters:
Department of Health, Education and Welfare - 1970's
Deputy Director, CIA - 1978-81
Deputy Secretary of Defense - 1981-82
National Security Director - 1987-89
CIA Director - 1976-77
Vice President of the United States - 1981-89
President of the United States - 1989-93
Chief of Staff - 1981-85
Secretary of the Treasury - 1985-89
Secretary of State - 1989-93
Former White House Budget Chief
Former Head, FCC
Former Head, SEC
Former Prime Minister, Britain
Former Philippine President
Treasurer & Chief Investment Officer of the World Bank
Former President, Thailand
Karl Otto Pohl
Former President, Bundesbank
French Aerobus Company
Park Tae Joon
Former South Korean Prime Minister
Alwaleed Sin Talal
bin Abdulaziz Alsaud
Saudi Arabian Prince
New World Order/Bilderberg luminary & int'l financier
George Bush Sr's campaign manager
There is also one other "family" that invested in the Carlyle Group,
but I'll keep that as a surprise for next week's article. In the
meantime, take a look at that list. It's like walking onto a baseball
field and having the New York Yankees behind you. The best team money
can buy! And I didn't even mention all of the players. Carlyle also
employs the former chairman of BMW and Nestle, is interviewing former
Clinton cabinet members (to insure that they have both sides of the
aisle covered), plus once hired Colin Powell and AOL Time-Warner
Chairman Steve Case to speak at a meeting at Washington D.C.'s Monarch
House. Plus, if we look at James Baker again, we'll find that he's on
the board of Azerbaijan International Oil Company, in which two U.S. oil
companies hold 40% of the shares. Who are these two companies? The first
is Amoco, who has on their payroll none other than Zbigniew Brzezinski
(Trilateral Commission founder, National Security Advisor for the Carter
Administration, Globalist supreme, and David Rockefeller's puppet on a
string). The second is Pennzoil, who has on their payroll Brent
Scowcroft, former National Security Advisor under George Bush, Sr.
But the man that really brought it all together is Frank Carlucci,
who holds directorships on such companies as General Dynamics,
Westinghouse, the Rand Corporation, and Ashland Oil, plus sits on the
board of directors of twelve other companies. Carlucci was also the
college classmate of someone very closely related to our current
administration's War Machine - Defense Secretary Donald Rumsfeld! What
relevance does this association have you may wonder? I think it is of
great importance, for in February, 2001, Carlucci and Vice President
Dick Cheney met with Donald Rumsfeld when the Carlyle Group had several
billion-dollar defense projects under consideration. (If you haven't
guessed, the Carlyle Group fared quite well when all was said and done.)
Do you still think these ties don't matter? Philip Agee, in his book "On
the Run" details all of Carlucci's CIA connections, many of whom he
hired (along with his Pentagon cronies) when he joined Carlyle in 1989.
(And all of us know what influence the CIA has, don't we?)
A former Carlyle employee honed-in on these dynamics when he said,
"The firm understands that having Bush and Major is like having movie
It's all about power and access, folks, as Oliver Burkeman and Julian
Burger pointed out in "The Guardian" on October 31, 2001. "Carlyle has
become the thread which indirectly links American military policy in
Afghanistan to the personal financial fortunes of its celebrity
employees, not the least the current President's father."
Is the picture becoming clearer? Now we're getting to the bottom of
America's War Machine. The Carlyle Group is set to make huge amounts of
money from our upcoming military conflicts and weapons expenditures. In
other words, when I talk about the War Machine, these folks are at the
crux of it. They're the war profiteers that keep its wheels greased!
Dan K. Thomasson, former editor of the Scripps Howard News Service,
summed it up best in March, 2001. "Nothing in recent history seems to
approach the success this group has had in the wholesale conversion of
former high government rank to gigantic profits."
Peter Eisner, Managing Director of the Center for Public Integrity,
adds, "It should be a deep cause for concern that a closely held company
like Carlyle can simultaneously have directors and advisors that are
doing business and making money and also advising the President of the
The Washington Business Journal simply says, "The Carlyle Group seems
to play be a different set of rules."
But who is the Carlyle Group? Well, their office is located only a
few blocks from the White House, and it was founded by three men:
- David Rubinstein - aide in the Carter Administration
- Bill Conway - Chief Financial Officer at MCI
- Dan D'Aniello - financial executive at Marriott
They named their group "Carlyle" after a New York hotel favored by
one of their first investors, the Mellon family. They now have an
ownership stake in 164 different companies, have 535 investors, operate
in 55 different countries, and have $13.5 billion in capital.
International financier George Soros invested $100 million in them,
while the California Public Employees Retirement System dumped $305
million into their laps. They also recently purchased the KorAm Bank,
thus accelerating their entry into the highly lucrative Asian markets.
But how did they become so successful so quickly? I'll let the
Carlyle Group's company brochure answer that question: "We invest in
niche opportunities created in industries heavily affected by changes in
government policies." Stated differently, the Carlyle Group buys what it
knows best - companies regulated by the government. In fact, 2/3 of
their business is either in the defense or telecommunications industries
... those affected by changes in government spending or policy!
And how do they affect these policies? It all revolves around ACCESS!
That's the key. Basically, they operate within what is called the "Iron
Triangle" - industry, government, and the military. A spokesman for
Oklahoma Representative J. C. Watts understood this connection when he
said, "Carlyle's strength was within the Department of Defense because
they have staff types that work behind the scenes, in the dark, that
know everything about the Army and Capitol Hill."
Charles Lewis, ex-Director at the Center for Public Integrity, adds
credence to this argument. "Carlyle is as deeply wired into the current
administration as they can possibly be."
On May 5, 2001, the New York Times described the Carlyle Group as
such: "It owns so many companies that it is now in effect one of the
nation's biggest defense contractors and a force in global
communications. Its blue-chip investors include major banks and
insurance companies, billion dollar pension funds and wealthy
investors." Hmm, they have a firm, controlling grip on both the War
Machine and the media ... convenient, don't you think?
After reading how deeply established they are as "Insiders," do you
think that the Carlyle Group has America's best interests at heart, or
their own which entails capitalizing on war? An excellent example can be
found in the recent $470 million contract that "United Defense," a
Carlyle subsidiary, received. And what did they get it for? To develop
the CRUSADER, which is such a faulty, antiquated, horrendous product
that it was described by Eric Miller of "The Project on Government
Oversight" as follows. "The Crusader has been the GAO's (Government
Accounting Office) poster child for bad weapons development." The
Crusader Project was so maligned that the government was set to drop it
completely. But lo and behold, what happened? War was on the horizon,
Carlyle pulled a few strings, and welluh - a $470 million contract is
thrown Carlyle's way for the Crusader. Funny how things happen, huh?
If that's not bad enough, the Carlyle Group is also the financial
advisor to a certain government. Who? Saudi Arabia. In fact, they make
nearly $50 million/year training the Saudi Arabian National Guard ---
troops that are sworn to protect the Saudi royal family! Now, if all
hell breaks loose in the Middle East, and considering that Saudi Arabia
has said that it won't support our efforts against Iraq, who do you
think the Saudi soldiers will kill? Their own kind - Arabs - or the
invading "white American devils?"
If you ask me, we've entered very treacherous waters, all for the
sake of making money off of warfare. Regardless of what they say, these
men in the Carlyle Group epitomize a very nefarious form of evil via
Your one-stop shop for
Halliburton, Bechtel, Carlyle Group,
and related evil overlords
Dick Cheney, CEO until 2000 election
- George H.W.
Bush Sr, Senior Advisor
- Frank Carlucci,
- James Baker,
Arthur Levitt, Senior Advisor
Richard Darman, Partner
"Judge whether good enough hit S.H.
at same time. Not only UBL
. Sweep it all up. Things related and not."
- - Donald Rumsfeld,
2001 Sep 11
George Schultz, former President
Caspar Weinberger, former General Counsel and Vice President
William Casey, former consultant
Politicians affiliated with Carlyle
Alice Albright, daughter of ex-Secretary of State
James Baker III, former
United States Secretary of State under
George H. W. Bush, Staff member under Ronald Reagan
and George W. Bush, Carlyle Senior Counselor
George H. W. Bush, former U.S. President, Senior
Advisor to the Carlyle Asia Advisory Board from April
1998 to October 2003.
George W. Bush, current U.S. President. Was
1990 to the Board of Directors of one of Carlyle's
first acquisitions, an airline food business called
Caterair, which Carlyle eventually sold at a loss.
Bush left the board in 1992 to later become Governor of
Texas, where he was responsible for appointing several
members of the board which controlled the investment of
Texas teachers' pension funds. A few years later, the
board decided to invest $100m of public money in the
Frank C. Carlucci, former
United States Secretary of Defense from
1989, chairman emeritus and currently strategic
business advisor. Also, former
Princeton roommate and wrestling partner of present
US Secretary of Defense,
Richard Darman, former Director of the U.S. Office
of Management and Budget under
George H. W. Bush, Senior Advisor and Managing
Director of The Carlyle Group
William Kennard, Chairman of the U.S.
Federal Communications Commission (FCC) under
Bill Clinton, Carlyle's Managing Director in the
Telecommunications & Media Group
Arthur Levitt, Chairman of the
U.S. Securities and Exchange Commission (SEC) under
Bill Clinton, Carlyle Senior Advisor
John Major, former
Prime Minister, Chairman, Carlyle Europe until
May 2004, and other posts to the present
Frank McKenna, former
ambassador to the
United States and former member of Carlyle's
Canadian advisory board
White House Chief of Staff under President
Bill Clinton, President of
Kissinger McLarty Associates, Carlyle Senior Advisor
Anand Panyarachun, former premier of
Colin Powell, former United States Secretary of
Fidel Ramos, former president of the
Philippines, Carlyle Asia Advisor Board Member until
the board was disbanded in February 2004
John W. Snow, United States
Secretary of the Treasury, chairman Committee on
Foreign Investments in the United States (CFIUS),
former CEO of
Park Tae Joon, former prime minister of
Robert Zoellick, former United States
Trade Representative and current
Deputy Secretary of State
Saudi Arabian relatives of
Osama bin Laden (not Osama bin Laden himself) were also
minor investors in Carlyle until
2001 when the family sold its $2.02 million investment
back to the firm in light of the public controversy
surrounding the bin Laden family after
Businesspersons affiliated with Carlyle
What Did Eisenhower Mean
When He Warned of a Military Industrial Complex? Take a Look
at the Carlyle Group An interview with Dan Briody
Halliburton is not the only company making huge profits from
the invasion of Iraq.
Carlyle Group is one of the US government's biggest contractors and one
of the largest defense contractors in the world. War = profit for them.
There is also a big connection between Chevron-Texaco and the Bush
administration. Chevron-Texaco is the # 1 US importer of Iraqi oil and they
stand to make billions once that Iraqi oil starts flowing at full capacity.
Take a Look at the Carlyle
An interview with Dan Briody
(Author of "The Iron Triangle: Inside the Secret World of the Carlyle
Buzzflash, June 23, 2003
They are at the epicenter of the
military-industrial-complex-Bush-Cheney-crony-capitalism administration. The
Carlyle Group is the model example of the nearly seamless connection between
the Bush administration, self-enrichment and companies who receive big
government defense contracts.
The roster of Carlyle "consultants" reads like a whoís who guide to
government officials of the 1980s, starting with former president George
Bush, former secretary of state James Baker, and former defense secretary
The most chilling aspect of Briody's book is that the political connections
and lobbying activities he unmasks are not illegal.
It is a testament to the brain dead mainstream media that the relationship
between the Carlyle group and the Bush-Cheney cartel is not a national
Brady is an award winning journalist who has written for Forbes, Wired, Red
Herring and the Industry Standard.
BuzzFlash: If we were looking at the Carlyle Group -- aside from its
controversial nature and the political world of who runs it and the
consultants affiliated with it -- what business model does it represent?
Dan Briody: Itís whatís known as a private equity firm. And thatís a very
vague term to describe a whole umbrella of different types of companies.
What Carlyle specializes in is buyouts, which means that they operate very
similar to a mutual fund. Only instead of buying and selling stock, they buy
and sell private companies. And they also do venture capital and real
estate. So theyíre in a variety of different kind of financial
transactions-based businesses. But their bread and butter is buyouts. And
within that area, they focus heavily on government-regulated industries ñ
anything that depends very heavily on policymaking and legislation coming
out of Washington, D.C. As such, they hire a number of ex-politicians to
help them in that regard.
BuzzFlash: In terms of companies that they buy out, most notably in terms of
their political-business crossover, theyíre probably most known for their
relationship to the defense industry, even though thatís not by any means
exclusively what they do.
Dan Briody: They got their start in the defense buyout business. They
struggled for the first couple of years before they hired Frank Carlucci,
who was the outgoing Secretary of Defense from the Reagan administration.
And Carlucci brought them in the direction of defense buyouts in the late
ë80s, early ë90s, in between the Cold War and the Gulf War, when defense
properties were undervalued. And the company struck gold a couple times in
that business and was able to build a very healthy buyout practice on the
back of these defense LBOs, or leveraged buyouts.
>From there, they have diversified over the ensuing 10-12 years, into
everything from healthcare to telecommunications, to aerospace and others.
But defense is still the cornerstone of their practice. And when people
think of the Carlyle Group, the first thing they think of is defense.
BuzzFlash: On the cover jacket of your book, it says that the book will
provide witness to how the Carlyle Group profited from the Sept. 11
terrorist attacks and continues to profit from the ongoing war on terrorism.
What evidence do you provide for that?
Dan Briody: There are a number of transactions that the company profited
from directly following the Sept. 11 attacks. The most important one was the
fact that they were able to take United Defense, their crown jewel of
defense holdings public shortly after the attacks. In fact, in the
prospectus that they circulated, before that IPO, they cited the Sept. 11
attacks as one of the reasons why they were able to sell public stock in
this company at this time. So that was all on the back of the defense
build-up following Sept. 11.
There are also a number of other holdings of theirs -- like at that time,
they owned a company called the IT Group, which is a company that cleans up
hazardous materials and won a very lucrative contract to clean up the Hart
Senate Building in Washington, D.C., which had been tainted by anthrax.
They also own a company called U.S. Investigative Services, USIS, which is a
company that does background checks and provides varying levels of security
clearance for different government employees, airline employees ñ things
like that. Obviously their contracts went through the roof after Sept. 11.
In addition to that, they own companies that do all kinds of security,
different aerospace companies. So whenever thereís a big defense buildup,
those companies profit. So there are a number of ways that theyíve profited
very handsomely from Sept. 11.
BuzzFlash: I recall that reading in the British papers that Tony Blair was
considering privatizing a portion of the intelligence apparatus in Britain,
and that the Carlyle Group was going to be subcontracted to do some of that.
Dan Briody: He did, in fact. The new company is called Qinetiq. Itís spelled
Q-I-N-E-T-I-Q. Itís the research arm of the ministry of defense in the U.K.,
which is essentially equivalent to DARPA [the Defense Advanced Research
Projects Agency] here in the U.S. And the Carlyle Group was part of that
transaction, so they own part of Qinetiq. It was a very controversial
transaction in the U.K., obviously. I mean, if you could try to imagine a
foreign company coming in and buying DARPA from the United States. Itís
unimaginable. And particularly a company thatís so stockpiled with very
powerful former politicians.
BuzzFlash: So Tony Blair essentially condoned the privatization of a large
section of the British defense intelligence apparatus to the Carlyle Group.
It would be comparable for us to subcontract that to a foreign company.
Dan Briody: Yes, which I don't think would ever happen.
BuzzFlash: You mentioned in another interview that we heard - I believe it
was on NPR, Terry Gross ñ that your book doesnít detail illegal activity of
the Carlyle Group. And whether that exists or not, you donít know. But it
details the legal activity, which is, to you, probably the more worrisome
issue ñ that all of this is legal. By that, do you mean the seamless
relationship between the private military sector and the governmental
Dan Briody: Thatís exactly what I mean. The book opens up with a mention of
Dwight Eisenhowerís farewell speech, in which he warned the country against
the formation of this military-industrial complex. And I think that that is
exactly what weíre seeing today. Weíre seeing a very tight-knit group of
companies and private military contractors that are virtually
indistinguishable from various administrations and the political
infrastructure of Washington, D.C. ñ so much so that itís not clear whose
interests weíre acting on when we go to war.
BuzzFlash: And now we see the extension in the case of Britain, to the
British defense intelligence industry.
Dan Briody: Right. And weíre also seeing Carlyle expand into Italy. They
just bought part of Fiatís aerospace division, which was a state-controlled
Italian military agency. And they are also in the running to buy out
DaimlerChryslerís aerospace division in Germany. So weíre seeing a real
broadening of the military activity around the Carlyle Group, so much so
thatís becoming more than just a domestic concern here ñ itís becoming an
BuzzFlash: Now Carlyle is ñ correct me if Iím wrong ñ a holding company. Is
it publicly traded?
Dan Briody: It is not publicly traded.
BuzzFlash: So itís a limited partnership?
Dan Briody: Yes. Itís a limited partnership. And as such, itís under no
obligation to release any of its financial data. So itís very difficult for
the average citizen to find out what the holdings of this company are and
where the conflicts of interest might be. You may have noticed that they
"opened up" their website recently because they were receiving a lot of
criticism for being secretive and closed up. But theyíre still controlling
what information theyíre putting on that website, so itís not like weíre
getting a look under the hood, so to speak, of this company. And theyíll
never go public. They would never do that.
BuzzFlash: Now probably the most controversial relationship is the
relationship of former President Bush to the company. As you point out, so
many of the members of the cast of characters in the Carlyle Group have been
associated with past administrations, particularly Reagan and Bushís. Former
President Bush has probably the highest profile relationship. What is his
relationship to the Carlyle Group, and what has he been used for?
Dan Briody: George Bush Sr. is a senior advisor to the company -- again, an
ambiguous term -- but essentially his role is to travel abroad and meet with
foreign business leaders and foreign heads of state, give speeches on behalf
of the Carlyle Group, and pack the house full of wealthy investors who will
contribute to Carlyleís buyout fund. And also he has had his hand in a
number of deals for Carlyle. He has worked closely with business leaders in
South Korea and in Saudi Arabia. Heís very close with the bin Laden family.
Heís close with the royal family in Saudi Arabia. So heís been very, very
involved and a very effective business partner for the Carlyle Group for a
number of years now.
BuzzFlash: Is there cause to be concerned? Some people who cover Carlyle
also mention that one shouldnít solely focus on him, because he sort of
jumps in and out. Itís more the day-to-day people who cross back and forth
between their relationships with government officials and the private
industry - the military-industrial complex, if you will, as Eisenhower
called it. But former President Bush is the most visible symbol. Do you have
any speculation on how that might impact foreign policy, since heís the
father of the current president?
Dan Briody: There have been numerous reports that have been widely
circulated, and not disputed, by the New York Times, Wall Street Journal, of
how the father of the president is advising his son on foreign policy.
Certainly in the first year, he was very active in advising his son on
policy toward Korea and toward Saudi Arabia. And in both cases, he stepped
in and placed phone calls himself to the leaders of those nations to try to
smooth things over for his son, who was struggling a little bit in the early
going, in dealing with some of those more sensitive areas. So I think that
the impact of the father on the son in foreign policy has been very
significant and very inappropriate, given the investments of George Bush
Sr.ís company in both regions ñ in both the Korean peninsula and in Saudi
BuzzFlash: On pages 144 to 146, you discuss a little bit of the relationship
between Carlyle and the bin Laden family. Can you just mention that in
passing, and what that relationship was and perhaps is now?
Dan Briody: The Carlyle Group started working in Saudi Arabia in the early
ë90s through a Saudi prince, who is one of the biggest foreign investors
here in the United States. And through that relationship, they started
expanding their business in Saudi Arabia very significantly. One of the most
important investors that they found in the kingdom was the bin Laden family,
which, of course, owns the Saudi Binladin Group. It's about a $5 billion
construction company -- extremely wealthy family, extremely successful
company, and who officially disavowed Osama bin Laden back in the early
So they had been doing business with the bin Laden family for, give or take,
five or six years, when Sept. 11 happened. And suddenly, Osama bin Laden
became public enemy number one. He was on the cover of all the newspapers.
And it came to light that this company that was employing George Bush Sr.
counted the bin Laden family among their investors. And they had to divest
themselves from that relationship because of the criticism.
BuzzFlash: And although you donít mention it, there are those, including
author Greg Palast, who have claimed that the Bush administration ferreted
out members of the bin Laden family on special planes after Sept. 11. But
again, thatís not a part of whatís in your book, but weíre just pointing
Letís look at United Defense as one example of the relationship between the
private industry, the defense industry, and, in this case, itís a publicly
held company owned by the privately held Carlyle Group. Is that correct?
Dan Briody: Thatís right. And they own 50% of it.
BuzzFlash: And what is United Defense? Maybe you can give us as a case study
of the interrelationship between a company that has an umbilical cord to the
U.S. government, about how a company like that is never a loser.
Dan Briody: United Defense is a classic military contractor. They make guns
and gun systems, large Howitzer-type, mobile Howitzers. They make the
Bradley fighting vehicles and the Paladin gun systems that weíve seen a lot
of on TV, especially during the Iraqi war. They are one of the largest
defense contractors to the Army in the nation. And the Carlyle Group has
owned this company since 1997.
When they bought the company, there was a gun program that was the future of
United Defense. It was a gun called the Crusader. It was essentially a
next-generation Paladin gun system ñ a very large, mobile Howitzer. It looks
like tank, but itís essentially an enormous gun. And the Crusader was
heavily criticized by a national defense panel that was put together to
assess the military requirements going forward. It was called too heavy, too
slow ñ a Cold War relic. And it was on the chopping block for years after
that. But the Carlyle Group was able to mount a very successful campaign by
using strategically placed lobbyists, by extending their personal
relationships with folks in the Pentagon and in Washington, and by waging
essentially a public relations campaign for the gun, and they kept it alive
through successive rounds of defense budget cuts ñ miraculously.
No one could believe that this gun had survived as long as it did. And then
finally after Sept. 11, when all ships were sort of, you know, rising on the
tide of defense spending, they were able to take United Defense public, make
hundreds of millions of dollars off of that IPO, only to then finally have
the Crusader program cancelled in a very public fashion by Donald Rumsfeld
in an announcement. But of course, behind the scenes, what the public didnít
see was that United Defense was awarded a brand-new contract for a brand-new
gun that very same day that the Crusader program was cancelled. In fact, the
press release that United Defense put out about it had the announcement of
the new contract in it as well.
BuzzFlash: So they were essentially held harmless.
Dan Briody: Yes, exactly.
BuzzFlash: Perhaps this is more of a comment, but we found it not-so-curious
that after the controversial visit of Bush to the U.S.S. Abraham in the
flight suit, that he returned to California from 30 miles offshore and gave
a speech at, of all places, the United Defense plant. Do you have any
thoughts there about the fact the President of the United States is speaking
at a plant that is 50% owned by a company that his father is a consultant
Dan Briody: I think itís brazen, and I think itís shameless. And I think
that that will go down as a hallmark of this administration. We have seen an
absolute affinity for mixing business and politics, and throw in a war and
youíve got the Bush administration. And that scene of him giving that speech
at United Defenseís plant in Santa Clara summed up perfectly what this
administration is all about.
BuzzFlash: So all the interconnections were right there -- he was boosting
the war effort, talking about keeping the country secure, which meant, in
this case, he was praising the employees of United Defense, who, in essence,
are employees, in part, of the Carlyle Group, with which his father is
Dan Briody: He was doing it all. He was pitching a tax cut for the very
wealthy while doing an advertisement for his fatherís company, and
professing the war to be over, and kicking off his reelection campaign, all
in one fell swoop. It was an amazing achievement.
BuzzFlash: And yet for all these connections, I did not see any of them in
the press. I only made them because of your book, and knowing about the
Carlyle Group, and just going back and confirming that United Defense was,
in essence, a company that the Carlyle Group had ownership of.
Dan Briody: It was missed by most of the mainstream media, and that was very
disappointing. But The Nation picked up on it, thank God.
BuzzFlash: Going in another direction, you detail how the firm, when it was
opened in 1987, picked the name, "the Carlyle Group."
Dan Briody: Well, the co-founders, David Rubenstein and Stephen Norris,
were, at the time, meeting frequently at this hotel on the Upper East Side
of New York called the Carlyle Hotel. And the Carlyle was very, very, very
opulent and itís a very swanky establishment. Itís a beautiful hotel. And
these guys were looking for a name that gave them a sense of legitimacy and
credibility in the industry. They wanted something that was a little
blue-blood, or, as Steve Norris put it, gave them a silk-stocking air. And
so they thought that the Carlyle Group was the right way to go. And
certainly it does have that blue-blood, old money kind of feel to it, even
though itís only 15 years old.
BuzzFlash: Your book about the Carlyle Group, subtitled Inside the Secret
World of Carlyle Group, is called The Iron Triangle. Why did you choose that
Dan Briody: Well, "the iron triangle" is the euphemism that is employed in a
number of different areas. But among the areas that itís employed is this
confluence of business and politics that Eisenhower was talking about when
he referred to the military-industrial complex. This is a combination of
power and influence that is very dangerous and can result in foreign policy
decisions that are based solely on monetary concerns of very few people. And
thatís what I think weíve found here today.
BuzzFlash: Recently we've read that the Carlyle Group is starting to dabble
into media acquisition. Is that right? And if so, should we be worried about
Dan Briody: Yes, they have picked up a couple media companies. They, for a
while now, have owned a very popular publication called Le Figaro in France,
and they have been expanding their media acquisitions. And I definitely
think this is something that we should be concerned about. I mean, anytime
you see a company that has this much political clout -- and obviously has a
political agenda -- picking up media properties, youíve got to be concerned,
especially with the action that the FCC has taken so far this year. Weíre
looking at the potential for having a real controlling influence in the
media. And I personally would not like to see Carlyle Group controlling the
information that I receive on a daily basis.
According to the company web site, The Carlyle Group,
headquartered in Washington D.C., was established in 1987 as a
"private global investment firm that originates, structures and
acts as lead equity investor in management-led buyouts,
strategic minority equity investments, equity private
placements, consolidations and buildups, and growth capital
Carlyle states that its "mission is to become the
premier global private equity firm and to generate extraordinary
returns while maintaining our good name and the good name of our
partners. Toward that end, we have established a family of funds
in the Carlyle name and a network of offices around the world.
We maintain the highest standards of ethical conduct and employ
a conservative, proven and disciplined approach to investing." (
The collection of influential characters who now work, have
worked, or have invested in the group would make the most
convinced conspiracy theorists incredulous. They include among
others, John Major, former British Prime Minister;
Fidel Ramos, former Philippines President; Park Tae Joon,
former South Korean Prime Minister; Saudi Prince Al-Walid; Colin
Powell, former Secretary of State; James Baker III, former
Secretary of State; Caspar Weinberger, former Defense Secretary;
Richard Darman, former White House Budget Director; the
billionaire George Soros, and even some bin Laden family
members. You can add Alice Albright, daughter of Madeleine
Albright, former Secretary of State; Arthur Lewitt, former SEC
head; William Kennard, former head of the FCC, to this list.
Finally, add in the Europeans: Karl Otto Poehl, former
Bundesbank president; the now-deceased Henri Martre, who was
president of Aerospatiale; and Etienne Davignon, former
president of the Belgian Generale Holding Company.
Hoover's Online describes the Carlyle Group as a
military-industrial complex. The Carlyle Group, Hoover's
- takes part in management-led buyouts (MBOs), acquires
minority stakes, and provides other investment capital for
companies. It is particularly hawkish on the aerospace and
defense industries, putting to good use the experience of
its chairman emeritus Frank Carlucci, a former Secretary of
Defense. Firms in this arena make up a significant share of
the portfolio at Carlyle, one of the world's largest private
equity firms. The company has also engineered MBOs and other
capital deals for firms in such industries as consumer
products, energy, health care, information technology, real
estate, beverages, and telecommunications. Carlyle's
directorship reads like
George Walker Bush's inaugural ball invite list. Reagan
Secretary of the Treasury
James Baker serves as a senior counselor, and
Richard G. Darman, former director of the Office of
Management and Budget under
George Herbert Walker Bush, is a managing director.
Former President George Bush has served with Carlyle and
Colin L. Powell, before becoming Secretary of State,
made an appearance on behalf of the firm. (
- The company has more than $13 billion in assets under
management and has invested in such names as:
United Defense Industries, of Crusader artillery and
Bradley Fighting Vehicle fame;
Dr Pepper/Seven Up Bottling Group
MedPointe Inc. (
) Carlyle owns about 90% of
Voight Aircraft Industries, Inc. (
- Although the majority of the firm's money is in North
America, it is also pushing more intensely overseas,
launching funds aimed at Asia, Europe, Latin America, and
Russia. The firm (along with
Apax Partners (
) and UK-based
bought a 28% share of France-based health care and business
Vivendi Universal Publishing (
). One of the company's larger moves overseas is
the purchase of the transportation business of
The Daiei (
), Japan's #2 retailer in which the company has a
90 percent stake, worth $28 million. (
- Its moves overseas haven't all been as easy as picking
up the phone or as lucrative, however. Carlyle, along with
Welsh, Carson, Anderson & Stowe (
http://www.welshcarson.com/ ), are planning
to buy the yellow pages business of the financially strapped
Qwest Communications (
) while navigating the lawsuit filed by
Milberg Weiss Bershad Hynes & Lerach LLP (
). The firm also returned portions of its
European venture capital group funds to investors after the
values of its investments lessened and the availability of
target acquisitions decreased. (
- Carlyle is keeping an eye on the transportation and
healthcare industries as possible candidates for deal
making, but the maturing buy-out market creates fewer prize
deals and more competitors. (
California Public Employees' Retirement System (http://www.calpers.ca.gov/),
or CalPERS, owns more than 5% of Carlyle. (
The Carlyle Group Invests $20
million into Claris Lifesciences
Our News Bureau - Mumbai
Global private equity firm, The Carlyle Group, has made a $20 million
investment in Claris Lifesciences Limited (Claris), a leading
Indian pharmaceutical company that
manufactures and markets life saving products for treating critical illness
MIDEAST TERROR WAR ADDS URGENCY TO
CARLYLE GROUP CONTROVERSY
Former President Bush Works for International Investment Firm With Ties To
Company Had Bin Laden Family Connections
(Washington, DC) Judicial Watch, the public interest law firm that
investigates and prosecutes government corruption, today pointed out that
the recent spate of terror attacks on Israel has lent new urgency to the
need for former President Bush to resign from the Carlyle Group, an
international investment firm with close ties to the government of Saudi
The former president, the father of President Bush, worked for the bin Laden
family business in Saudi Arabia through the Carlyle Group, meeting with them
at least twice. The terrorist leader Osama bin Laden had supposedly been
“disowned” by his family, which runs a multi-billion dollar business in
Saudi Arabia and was a major investor in the senior Bush’s firm. Other
reports have stated his Saudi family have not truly cut off Osama bin Laden.
In the wake of Judicial Watch and other criticism of its ties to the bin
Laden family business, the Carlyle Group reportedly no longer does business
with the bin Laden conglomerate. Yet the Group, among other conflicts of
interest, reportedly has a major business relationship with the Saudi
Arabian government, which many have criticized for its lack of cooperation
in America’s war on terrorism and its financial and other support for
terrorist attacks on Israel and U.S. interests.
“It stands to reason, as noted in the David Sanger piece in The New York
Times today, that President Bush consults with his father on issues of the
day. In a normal situation, this would be appropriate, but with President
Bush’s father being effectively an agent of the Saudi Arabian government, it
raises, in the least, a conflict of interest problem. Questions can be
raised, for instance, if the ‘kid gloves’ treatment of Saudi Arabia by the
Bush Administration has anything to do with his father’s financial ties to
the Saudi regime. Former President Bush would be doing his son and his
country a favor by immediately resigning from the Carlyle Group,” stated
Judicial Watch Chairman and General Counsel Larry Klayman.
Group, Bushes & Terrorism: Strange Mix
by J. Grant Swank, Jr.
Feb 28, 2006
Washington's "name" people and world leaders
reap billions on the "war on terrorism."
Could this likewise involve the present UAE
– US 21 ports sneak?
And could US President George W. Bush
reap his own billions from the "war?"
Note: The quiet, no-noise Carlyle Group,
a worldwide private equity investment
company founded in 1987 with more than $30
billion of capital, is alleged to have
connections to the Middle East.
Both father and son George Bush belong
and belonged to it. Other well-known
personages such as Colin Powell, James
Baker, John Major, and George Soros also
gather yield from the Group.
The Group specializes in Aerospace,
Defense, Automotive, Consumer, Industrial,
Energy, Power, Real Estate, Technology,
Business Services, Telecommunication,
Transportation and Media. Its involvement
focuses on interests related to political
activity, some calling it political
So how do political personal riches
equate to membership in the Group? How do
the 800 members benefit from its billions,
that sum equating to $37.5 million apiece?
After all, Group's offices are positioned on
Pennsylvania Avenue between the White House
and Capitol Building, not far from the FBI
Some of the Group's contractors relate to
the US military, for example, an artillery
project, aerospace and defense industries.
Craig Unger's book, "House of Bush, House
of Saud," informs that Saudi Arabia inserted
1.4 billion to companies tied to father and
son George Bush. Ninety percent of that
money was contracted to BDM, defense
contractor, such firm owned by the Group.
"Among the companies Carlyle owns are
those which make equipment, vehicles and
munitions for the US military, and its
celebrity employees have long served an
ingenious dual purpose, helping encourage
investments from the very wealthy while also
smoothing the path for Carlyle's defense
firms," state Oliver Burkeman and Julian
Borger of The Guardian.
"Since the start of the ‘war on
terrorism,' the firm has taken on an added
significance. Carlyle has become the thread
which indirectly links American military
policy in Afghanistan to the personal
financial fortunes of its celebrity
employees, not least the current president's
"Until earlier this month, Carlyle
provided another curious link to the Afghan
crisis: among the firm's
multi-million-dollar investors were members
of Osama bin Laden family. The bin Laden tie
to the Group was more than six years."
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The Halliburton Agenda : The Politics
of Oil and Money
The Carlyle Group to Meet in
Portugal to Plan for Rebuilding Iraq
Headlines. Broadcast on Friday, April 4, 2003 by the The
Portual News (Portugal's Weekend Newspaper in English) US
Arms Group Heads for Lisbon ... The American based Carlyle
Group is heavily involved in supplying arms to the Coalition
forces fighting in ... several other US companies, the
Carlyle Group is expected to be awarded ...
|The Wall Street Journal Europe,
Friday / Saturday September 28-29 2001, p.4
Family Has Intricate Ties With Washington
Saudi Clan Has Had Access
To Influential Republicans
By Staff Reporters
Daniel Golden and James Bandler in Boston, and
Marcus Walker in Hamburg
If the U.S. boosts defense spending in its quest
to stop Osama bin Laden's alleged terrorist
activities, there may be one unexpected beneficiary:
Mr. bin Laden's family.
Among its far-flung business interests, the
well-heeled Saudi Arabian clan - which says it is
estranged from Osama - is an investor in a fund
established by Carlyle Group, a
well-connected Washington merchant bank specializing
in buyouts of defense and aerospace companies.
Through this investment and its ties to Saudi
royalty, the bin Laden family has become acquainted
with some of the biggest names in the Republican
Party. In recent years, former U.S. President George
Bush, ex-Secretary of State James Baker and
ex-Secretary of Defense Frank Carlucci have made the
pilgrimage to the bin Laden family's headquarters in
Jeddah, Saudi Arabia. Mr. Bush makes speeches on
behalf of Carlyle Group and is senior adviser to its
Asian Partners fund, while Mr. Baker is its senior
counselor. Mr. Carlucci is the group's chairman.
Osama is one of more than 50 children of Mohammed
bin Laden, who built the family's $5 billion
business, Saudi Binladin Group, largely with
construction contracts from the Saudi government.
Osama worked briefly in the business and is believed
to have inherited as much as $50 million from his
father in cash and stock, although he doesn't have
access to the shares, a family spokesman says.
Because his Saudi citizenship was revoked in 1994,
Mr. bin Laden is ineligible to own assets in the
kingdom, the spokesman added.
The bin Laden family has long disavowed Osama,
and has cooperated fully with several federal
investigations into his activities. The family
business, headed by Osama's half-brother Bakr bin
Laden, epitomizes the U.S.-Saudi alliance that the
suspected terrorist often rails against. After the
1996 truck bombing in Dhahran, Saudi Arabia, that
killed 19 U.S. servicemen, Saudi Binladin Group
built military barracks and airfields for U.S.
But the Federal Bureau of Investigation has
issued subpoenas to banks used by the bin Laden
family seeking records of family dealings, a person
familiar to the matter said. This person said the
subpoenas weren't an indication the FBI had found
any suspicious behavior by the family. A family
spokesman said he had no knowledge of the subpoenas
but that the family welcomes them and has nothing to
People familiar with the family's finances say
the bin Ladens do much of their banking with
National Commercial Bank in Saudi Arabia and
with the London branch of Deutsche Bank AG.
They also use Citigroup Inc. and ABN Amro,
the people said.
"If there were ever any company closely connected
to the U.S. and its presence in Saudi Arabia, it's
the Saudi Binladin Group," says Charles Freeman,
president of the Middle East Policy Council, a
Washington nonprofit concern that receives tens of
thousands of dollars a year from the bin Laden
family. "They're the establishment that Osama's
trying to overthrow."
Mr. Freeman, who served as U.S. ambassador to
Saudi Arabia during the Gulf War, says he has spoken
to two of Osama's brothers since hijacked planes
rammed the World Trade Center and the Pentagon on
Sept. 11. They told him, he says, that the FBI has
been "remarkably sensitive, tactful and protective"
of the family during the current crisis, recognizing
its longstanding friendship with the U.S.
A Carlyle executive said the bin Laden family
committed $2 million through a London investment arm
in Carlyle Partners II Fund, which raised $ 1.3
billion overall. The fund has purchased several
aerospace companies among 29 deals. So far, the
family received $1.3. million back in completed
investments and should ultimately realize a 40%
annualized rate of return, the Carlyle executive
But a foreign financier with ties to the bin
Laden family says the family's overall investment
with Carlyle is considerably larger. He called the
$2 million merely an initial contribution. "It's
like plowing a field," this person said. "You seed
it once. You plow it, and then you reseed it again."
The Carlyle executive added that he would think
twice before accepting any future investments by the
bin Ladens. "The situation has changed now," hesaid.
"I don't want to spend my life talking to
A U.S. inquiry into bin Laden family business
dealings could brush against some big names
associated with the U.S. government. Former
President Bush said through his chief of staff, Jean
Becker, that he recalled only one meeting with the
bin Laden family, which took place in November 1998.
Ms. Becker confirmed that there was a second meeting
in January 2000, after being read the ex-president's
subsequent thank-you note. "President Bush does not
have a relationship with the bin Laden family," says
Ms. Becker. "He's met them twice."
Mr. Baker visited the bin Laden family both in
1998 and 1999, according to people close to the
family. In the second trip, he traveled on a family
plane. Mr. Baker declined comment, as did Mr.
Carlucci, a past chairman of Nortel Networks
Corp., which has partnered with Saudi Binladin Group
on telecommunications ventures.
Bush Advisers Cashed in on Saudi Gravy Train
by Jonathan Wells, Jack Meyers and Maggie
Second of two parts.
Many of the same American corporate executives
who have reaped millions of dollars from arms and
oil deals with the Saudi monarchy have served or
currently serve at the highest levels of U.S.
government, public records show.
Those lucrative financial relationships call into
question the ability of America's political elite to
make tough foreign policy decisions about the
kingdom that produced Osama bin Laden and is perhaps
the biggest incubator for anti-Western Islamic
Nowhere is the revolving U.S.-Saudi money wheel more
evident than within President Bush's own coterie of
foreign policy advisers, starting with the
president's father, George H.W. Bush.
At the same time that the elder Bush counsels his
son on the ongoing war on terrorism, the former
president remains a senior adviser to the Washington
Carlyle Group. That influential investment bank
has deep connections to the Saudi royal family as
well as financial interests in U.S. defense firms
hired by the kingdom to equip and train the Saudi
Last year, former President Bush visited Saudi
Arabia's King Fahd bin Abdul Aziz Al-Saud, but a
Carlyle spokesman said the two did not discuss
Carlyle business as previously reported. The elder
Bush is reportedly paid between $80,000 and $100,000
for each Carlyle speech he makes. The company
declined comment on the former president's pay.
The Carlyle Group has also served as a paid
adviser to the Saudi monarchy on the so-called
``Economic Offset Program,'' an arrangement that
effectively requires U.S. arms manufacturers selling
weapons to Saudi Arabia to give back a portion of
their revenues in the form of contracts to Saudi
businesses, most of whom are connected to the royal
family. A company spokesman said yesterday that
arrangement was ended ``a few months ago,'' but said
he did not know whether it was terminated before or
after the Sept. 11 attacks.
A spokesman for former President Bush, reached
yesterday, had no immediate comment on his work for
the Carlyle Group.
These intricate personal and financial links have
led to virtual silence in the administration on
Saudi Arabia's failings in dealing with terrorists
like bin Laden, said Charles Lewis, executive
director of the Center for Public Integrity, a
Washington, D.C.-based government watchdog group.
``It's good old fashioned `I'll scratch your
back, you scratch mine.' You have former U.S.
officials, former presidents, aides to the current
president, a long line of people who are tight with
the Saudis, people who are the pillars of American
society and officialdom,'' said Lewis.
``So for that and other reasons no one wants to
alienate the Saudis, and we are willing to basically
ignore inconvenient truths that might otherwise
cause our blood to boil. We basically look away,''
he said. ``Folks don't like to stop the gravy
Some foreign policy observers said as long as
American power brokers in lucrative business deals
with the Saudis do not simultaneously craft U.S.
foreign policy, there is no conflict of interest.
``To have Bush Sr. on the board of Carlyle is not
necessarily a significant problem because Carlyle
has interests all over the world,'' said Vincent
Cannistraro, a former counter-intelligence chief for
the Central Intelligence Agency.
Companies regularly entice powerful political
figures to work for them, he said.
``It's kind of business as usual. Where it really
affects things is when someone with a financial
interest in a company also has a policy position in
the administration,'' Cannistraro said.
A significant portion of the millions of dollars
U.S. companies and their politically influential
executives have earned in deals with the Saudis has
been through military contracts.
The Carlyle Group had a major stake in the large
defense contractor B.D.M., which has
multimillion-dollar contracts through its
subsidiaries to train and manage the Saudi National
Guard and the Saudi air force, U.S. Department of
Defense records show. In 1998, Carlyle sold its
controlling interest in B.D.M. to defense giant TRW
Meanwhile, the boards of directors of the Carlyle
Group, B.D.M. and TRW are all stocked with
high-level Republican policy makers.
Frank C. Carlucci, a former secretary of defense
under President Reagan, was chairman of B.D.M. for
most of the 1990s. Carlucci, who also served as
Reagan's national security adviser and a deputy
director of the CIA, now heads the Carlyle Group.
Along with former President Bush, other officials
from past Republican administrations now at the
Carlyle Group include: former Secretary of State
James A. Baker III; ex-budget chief Richard Darman;
and former Securities and Exchange Commission
chairman Arthur Levitt.
President Bush is himself linked to the Carlyle
group: He was a director of one of its subsidiaries,
an airline food services company called Caterair,
until 1994. Six years later, when Bush was governor
of Texas, the board of directors of the Texas
teachers' pension fund - some of whom were his
appointees - voted to invest $100 million with the
The president of B.D.M. is Philip A. Odeen, a
former high-level Pentagon official in the Nixon
administration. During the Clinton administration,
Odeen chaired the Pentagon task force that planned
the restructuring of the U.S. military for the 21st
century. Currently, he is the vice-chair of the
Defense Science Board, which advises the Pentagon on
TRW, the new owner of B.D.M., has its own
noteworthy board members, including former CIA
director Robert M. Gates and Michael H. Armacost,
who served as undersecretary of state under
President Reagan and as ambassador to Japan for
former President Bush.
Big Saudi money also makes its way back to Texas
and the Bush family. The family of Saudi Arabia's
longtime U.S. ambassador, Prince Bandar bin Sultan
bin Abdul Aziz, gave $1 million to the Bush
Presidential Library in College Station, Texas.
The revolving door
Another example of the complex web connecting
U.S. and Saudi powerbrokers is Dick Cheney, who
moved from the Pentagon to the international oil
business and back as vice president last year.
After serving as the elder Bush's secretary of
defense, Cheney was hired to run oil-services giant
Halliburton Co., where he worked until he resigned
last year to campaign with the younger Bush. In
2000, his last year with Halliburton, Cheney
received $34 million when he cashed out from the
Not surprisingly, Halliburton's links to Cheney
and other Washington power brokers appear to have
helped the company's business prospects in the
Just last month, Halliburton was awarded a $140
million contract to develop an oil field in Saudi
Arabia by the kingdom's state-owned petroleum firm,
Saudi Aramco, and a Halliburton subsidiary, Kellogg
Brown & Root, along with two Japanese firms, was
hired by the Saudis to build a $40 million ethylene
Cheney isn't the only member of President Bush's
inner circle whose work for firms connected to the
Saudis has paid big dividends.
The current national security adviser,
Condoleezza Rice, is a former longtime member of the
board of directors of another giant oil conglomerate
with business in the Saudi desert, Chevron, which
merged with Texaco this year. Rice even has a
Chevron oil tanker named after her.
Substantial profits received by U.S. leaders in
private sector deals with the Saudis have helped to
squelch criticism of the royal family's refusal to
address the role its country has played in fueling
Islamic terrorism, Lewis said.
``There's a disconnect there,'' Lewis said. ``I'm
fascinated that we don't lay this at Saudi Arabia's
doorstep. But the chances to cash in and the amount
you can cash in for are starting to become
absolutely astronomical. Who wants to look like the
Boy Scout complaining about it and potentially
jeopardize their own post-employment prospects?''
Former advisers to the president's father also
hold key positions with U.S. firms which have teamed
up with the Saudis on major oil deals.
Former Bush Secretary of the Treasury Nicholas
Brady and a former Bush assistant, Edith E. Holiday,
are both on the board of directors of Amerada Hess,
an American petroleum firm currently teaming up with
several powerful Saudi families to develop oil
fields in Azerbaijan.
Another company that has done business with
wealthy Saudis is international energy firm Frontera
Resources Corp. based in Houston. Until recently,
Frontera was a 30 percent investor in a $900 million
project to develop oilfields in Azerbajian. Also
investing in the project were Azerbaijan's state-run
oil company and Delta-Hess, a joint-venture created
by the Saudis' Delta Oil and Amerada Hess.
Randy Theilig, a Frontera spokesman, said the
company relinquished its interest in the project in
July because it was no longer ``economically
viable,'' and has no current business dealings with
the Saudis or in Azerbajian.
Members of Frontera's board of advisers, which
includes former CIA director John Deutch and former
Secretary of the Treasury and U.S. Sen. Lloyd
Bentsen, have been active financial supporters of
the Democratic Party.
Shining a bright light on the web of financial
connections between the power elite in the U.S. and
Saudi Arabia is critical, Middle Eastern foreign
policy experts said.
``I think the fact that they have these
connections makes it important for this information
to be made public,'' said Henry Siegman, a senior
fellow on the Middle East at the Council on Foreign
Larry Noble, executive director of the
Center for Responsive Politics in Washington,
D.C., a non-partisan group that examines money and
politics, said the Bush-Carlyle connection is a
``It is well known that the father is a close
adviser to his son and therefore it does raise
concerns,'' Noble said ``It's not necessarily that
the father has been compromised, but the danger is
that it leads people to question George W. Bush. The
public has a right to feel their leaders are making
independent judgments without the influence of
9/11: “The Carlyle
group is a multinational conglomerate that invests in heavily
government-regulated industries like telecommunications, healthcare and,
particularly, defense.” --Michael Moore
FAHRENHEIT 9/11: The Bin
Laden and Bush families were both connected to the Carlyle Group, as were
many of the Bush family’s friends and associates.
In the early 1990s, George W. Bush served on the board of directors for
CaterAir, an airline catering company. CaterAir was owned by the Carlyle
Group. Kenneth N. Gilpin, “Little-Known Carlyle Scores Big,” The New York
Times, March 26, 1991. “George W. Bush left the company in 1994, a year
after his father’s presidency ended.” Ross Ramsey, et al., “Campaign ’94
Fisher’s Staff Slips Up On Spanish,” The Houston Chronicle, September 17,
In the mid-1990s, George H.W. Bush joined up with the Carlyle Group. “Under
the leadership of ex-officials like Baker and former Defense Secretary Frank
C. Carlucci, Carlyle developed a specialty in buying defense companies and
doubling or quadrupling their value. The ex-president not only became an
investor in Carlyle, but a member of the company's Asia Advisory Board and a
rainmaker who drummed up investors. Twelve rich Saudi families, including
the Bin Ladens, were among them. In 2002, the Washington Post reported,
‘Saudis close to Prince Sultan, the Saudi defense minister ... were
encouraged to put money into Carlyle as a favor to the elder Bush.’ Bush
retired from the company last October, and Baker, who lobbied U.S. allies
last month to forgive Iraq's debt, remains a Carlyle senior counselor. Kevin
Phillips, “The Barreling Bushes; Four Generations of the Dynasty Have Chased
Profits Through Cozy Ties with Mideast Leaders, Spinning Webs of Conflicts
of Interest,” Los Angeles Times, January 11, 2004.
The bin Laden family first invested in Carlyle in 1994. Representing
Carlyle’s Asia Board, George H.W. Bush visited the bin laden family's
headquarters in Jeddah, Saudi Arabia. Kurt Eichenwald, “Bin Laden Family
Liquidates Holdings With Carlyle Group,” The New York Times, October 26,
James Baker was a Carlyle Senior Counselor beginning in 1993. Carlyle Group
http://www.thecarlylegroup.com/eng/team/l5-team391.html site down
Bush's OMB chief, Richard Darman, was with Carlyle by 1994. Bob Cook,
Mergers & Acquisitions Report, December 12, 1994.
George W. Bush was with Caterair -- owned by Carlyle -- until 1994, after
Fred Malek, a senior advisor to Carlyle, who also served as the director of
the 1988 Republican Convention, suggested to Carlyle that the President’s
eldest son would “be a positive addition to Caterair’s board.” Kenneth N.
Carlyle Scores Big,” New York Times,
March 26, 1991.
FAHRENHEIT 9/11: “Carlyle Group was
holding its annual investor conference on the morning of September 11th in
the Ritz Carlton Hotel in Washington, D.C. At that meeting were all of the
Carlyle regulars, James Baker, likely John Major, definitely George H. W.
Bush, though he left the morning of September 11th. Shafiq bin Ladin, who is
Osama bin Laden’s half-brother, and was in town to look after his family’s
investments in the Carlyle Group. All of them, together in one room,
watching as the uh the planes hit the towers.”
On the morning of September 11, 2001, “in the plush setting of the
Ritz-Carlton hotel in Washington, DC, the Carlyle Group was holding its
annual international investor conference. Frank Carlucci, James Baker III,
David Rubenstein, William Conway, and Dan D’Aniellow were together, along
with a host of former world leaders, former defense experts, wealthy Arabs
from the Middle East, and major international investors as they terror
played out on television. There with them, looking after the investments of
his family was Shafiq bin Laden, Osama bin Laden’s estranged half-brother.
George Bush Sr. was also at the conference, but Carlyle’s spokesperson says
the former president left before the terror attacks, and was on an airplane
over the Midwest when flights across the country were grounded on the
morning of September 11. In any circumstance, a confluence of such
politically complex and globally connected people would have been curious,
even newsworthy. But in the context of the terrorist attacks being waged
against the United States by a group of Saudi nationals led by Osama bin
Laden, the group assembled at the Ritz-Carlton that day was a disconcerting
and freakish coincidence.” Dan Briody, The Iron Triangle, John Wiley & Sons,
Inc., 2003, p. 139-140. See also, Melanie Warner, “What do George Bush,
Arthur Levitt, Jim Baker, Dick Darman, and John Major Have in Common? (They
All Work for the Carlyle Group),” Fortune, March 18, 2002,
FAHRENHEIT 9/11: “With all the weapons companies it owned, The Carlyle
Group was in essence, the 11th largest defense contractor in the United
“By virtue of its holdings in companies like U.S. Marine Repair and United
Defense Industries, Carlyle is the equivalent of the eleventh-largest
defense contractor in the nation. It has $16.2 billion under management and
claims an average annual return of 35%.” Phyllis Berman, “Lucky Twice,”
Forbes, December 8, 2003.
FAHRENHEIT 9/11: “It owned United Defense, makers of the Bradley armored
fighting vehicle. September 11th guaranteed that United Defense was going to
have a very good year. Just 6 weeks after 9-11 Carlyle filed to take United
Defense public and in December made a one day profit of $237 million
“On a single day last month, Carlyle earned $237 million selling shares in
United Defense Industries, the Army's fifth-largest contractor. The stock
offering was well timed: Carlyle officials say they decided to take the
company public only after the Sept. 11 attacks. … On Sept. 26, , the
Army signed a $665-million modified contract with United Defense through
April 2003 to complete the Crusader's development phase. In October, the
company listed the Crusader, and the attacks themselves, as selling points
for its stock offering. Mark Fineman, “Arms Buildup is a Boon to Firm Run by
Big Guns,” Los Angeles Times, January 10, 2002.
"Still, in its annual report for 2001, United announced that it had been
awarded a three-year, $697 million contract to complete full upgrading of
389 Bradley units and had added a $ 655 million contract modification to
complete the Crusader's 'definition and risk-reduction phase contract,'
which would be worth $ 1.7 billion through 2003. Together, the Crusader and
Bradley programs contributed 41 percent of United sales in 2001, the report
said. With Crusader and the Bradley upgrade in hand, a decision was made to
sell United stock to the public in late 2001." Walter Pincus, “Crusader a
Boon to Carlyle Group Even if Pentagon Scraps Project,” Washington Post, May
FAHRENHEIT 9/11: “With so much attention focused on the bin Laden family
being important Carlyle investors, the bin Ladens eventually had to
"Following the attacks on September 11, the bin Laden family’s
investments in the Carlyle Group became an embarrassment to the Carlyle
Group and the family was forced to liquidate their assets with the firm."
Kurt Eichenwald, “Bin Laden Family Liquidates Holdings with Carlyle Group,”
The New York Times, October 26, 2001.
FAHRENHEIT 9/11: “Bush’s dad stayed on as Senior Advisor to Carlyle’s
Asia Board for another 2 years.”
“Former President Bush was at one time the Senior Advisor to the Carlyle
Asia Advisory Board but retired from that position in October 2003. He holds
no other positions at Carlyle.”
“The former president is no longer a company adviser, but he still has
investments there, Mr. Ullman (vice president for corporate communications)
said.” Dallas Morning News, "Michael Moore keeps heat on at premiere", May
FAHRENHEIT 9/11: George H. W. Bush receives daily CIA briefings.
"One of the people who corresponded with [former ambassador Joseph]
Wilson is George H. W. Bush, the only president to have been head of the
C.I.A.-- he still receives regular briefings from Langley." Vicky Ward,
“Double Exposure,” Vanity Fair, January 2004.
Former President Bush has made efforts to keep abreast of foreign affairs,
partly by exercising his right to be briefed by CIA personnel about
developments around the globe. Ha'aretz, “George Bush Sr. Vouches for Son's
Support of Israel to the Saudis”, July 16, 2001.
FAHRENHEIT 9/11: “They are benefiting from the confusion that arises
when George H. W. Bush visits Saudi Arabia, on behalf of Carlyle, and meets
with the royal family and meets with the bin Laden family. Is he
representing the United States of America, or is he representing an
investment firm in the United States of America or is he representing both?”
Few firms could have rivaled the Carlyle Group for its array of high-powered
friends. The Washington-based venture capital house had been likened to a
retirement home for Gulf War veterans, and the likes of George Bush Sr,
James Baker, and John Major ‘can take credit for its rapid rise.’ The
Observer noted in a profile, “It used to be fashionable to deride Carlyle as
a second-rate influence-peddler and dismiss its stable of retired
politicians as superannuated ‘access capitalists.’” … Carlyle had sponsored
visits by Bush Sr. to South Korea and China, and his clout with the Saudi
government – perhaps Carlyle’s most important customer – is also likely to
be valued. Conal Walsh, “The Carlyle Controversy: With Friends in High
Places: Former World Leaders Give Carlyle Group Unrivalled Prowess in
Lobbying for Business,” The Observer, September 15, 2002.
“’It should be a deep cause for
concern that a closely held company like Carlyle can simultaneously have
directors and advisers that are doing business and making money and also
advising the president of the United States,’ says Peter Eisner, managing
director of the Center for Public Integrity, a non-profit-making Washington
think-tank. ‘The problem comes when private business and public policy blend
together. What hat is former president Bush wearing when he tells Crown
Prince Abdullah not to worry about US policy in the Middle East? What hat
does he use when he deals with South Korea, and causes policy changes there?
Or when James Baker helps argue the presidential election in the younger
Bush's favour? It's a kitchen-cabinet situation, and the informality
involved is precisely a mark of Carlyle's success.’" Oliver Burkeman Julian
Borger, “The Winners: The Ex-Presidents' Club,” The Guardian, October 31,
“The Saudi family of Osama bin Laden is severing its financial ties with the
Carlyle Group, a private investment firm known for its connections to
influential Washington political figures… In recent years, Frank C.
Carlucci, the chairman of Carlyle and a former secretary of defense, has
visited the family's headquarters in Jeddah, Saudi Arabia, as have former
President George Bush and James A. Baker III, the former secretary of state.
Mr. Bush works as an adviser to Carlyle, and Mr. Baker is a partner in the
firm.” Kurt Eichenwald, “Bin Laden Family Liquidates Holdings With Carlyle
Group,” New York Times, October 26, 2001.
FAHRENHEIT 9/11: “Another group of people invest in you, your friends,
and their related businesses $1.4 billion over a number of years.”
“In all, at least $1.46 billion had made its way from the Saudis to the
House of Bush and its allied companies and institutions.” Craig Unger, House
of Bush, House of Saud, p. 200, (Scribner: New York, 2004). For a complete
breakdown of the investments, see Unger’s Appendix C, pp. 295-298.
This number includes investments made and contracts awarded at the time that
Bush’s friends were involved in the Carlyle Group:
James Baker was a Carlyle Senior Counselor beginning in 1993. Carlyle Group
http://www.thecarlylegroup.com/eng/team/l5-team391.html site down.
Bush's OMB chief, Richard Darman, was with Carlyle by 1994. Bob Cook,
Mergers & Acquisitions Report, December 12, 1994.
George W. Bush was with Caterair -- owned by Carlyle -- until 1994,
after Fred Malek, a senior advisor to Carlyle, who also served as the
director of the 1988 Republican Convention, suggested to Carlyle that the
President’s eldest son would “be a positive addition to Caterair’s board.”
Kenneth N. Gilpin, “Little-Known CarlyleScores Big,” New York Times, March
Bush Sr. was first involved in Carlyle by the mid-1990s and no later than
1997.Kevin Phillips, “The Barreling Bushes; Four Generations of the Dynasty
Have Chased Profits Through Cozy Ties with Mideast Leaders, Spinning Webs of
Conflicts of Interest,” Los Angeles Times, January 11 , 2004; Dan Briody,
The Iron Triangle, John Wiley & Sons, Inc., 2003.
Additional back up for these numbers is as follows:
Saudi investments in the Carlyle Group worth $80,000,000. Craig Unger,
“Saving the Saudis,” Vanity Fair, October 2003. The number was reported to
Unger by the head of Carlyle, David Rubenstein, in an interview.
In 1994, Carlyle owned military contractor BDM was “awarded a contract
to provide technical assistance and logistics support to the Royal Saudi Air
Force.” Worth: $46,200,000. PR Newswire, “BDM Federal Awarded $46 Million
Contract To Support Royal Saudi Air Force,” October 27, 1994.
During the 1990s, the Vinnell Corporation (a BDM subsidiary) held contracts
to train the Saudi Arabian National Guard, worth $819,000,000. Robert Burns,
“US Advises Saudi Military On Range Of Threats—Including Terrorism,”
Associated Press, November 13, 1995.
In 1995, BDM collected a contract to “augment Royal Saudi Air Force staff in
developing, implementing, and maintaining logistics and engineering plans
and programs.” Worth: $32,500,000. Defense Daily, “Defense Contracts,” June
23, 1995, as cited by Craig Unger.
In 1996, BDM was awarded a contract “to provide construction of 110 housing
units at the MK-1 Compound, Khamis Mushayt, Saudi Arabia, for Technical
Support Program personnel assisting the Royal Saudi Air
Force…. This effort supports foreign
military sales to Saudi Arabia.” Worth: $44,397,800. Department of Defense
News Release, “BDM Federal, Incorporated,” April 1, 1996.
During the late 1990s, Vinnell was awarded a contract “for the Saudi
Arabian National Guard (SANG) Modernization Program. The three-year
contract, awarded competitively, calls on Vinnell to continue to support
SANG training operations and related activities.” Worth: $163,300,000 . PR
Newswire, “Vinnell Selected for Award of $163.3 Million Contract for Saudi
Arabian National Guard Modernization Program,” May 3, 1995. Kashim Al-An,
“Saudi Guard Gets Quiet Help from US Firm with Connections,” Associated
Press, March 22, 1997.
In 1997, BDM was awarded a contract “to provide for 400 contractor personnel
to support the Royal Saudi Air Force in developing, implementing, and
maintaining logistics, supply, computer, reconnaissance, intelligence and
engineering plans and programs.” Worth: $18,728,682 (note: this is a “face
value increase to a firm fixed price contract). Defense Daily, “Defense
Contracts,” February 4, 1997.
Note: Carlyle purchased BDM and its subsidiary Vinnell in 1992 and sold it
to TRW in Dec, 1997.
In November 2001, Dick Cheney’s former company Halliburton was awarded “a
contract to provide services for the Saudi Arabian Oil Company’s (Saudi
Aramco) Qatif Field development project in the eastern province of Saudi
Arabia.” Worth: $140 million. Halliburton press release, “Halliburton
Awarded $140 Million Contract by Saudi Aramco,” November 14, 2001.
The same month, a consortium of three companies led by Halliburton
subsidiary KBR won a “contract for engineering, procurement, and
construction of an ethylene plant for Jubail United Petrochemcial Company, a
wholly owned company of Saudi Basic Industries Corporation.” Worth: $40
million. MaggieMulvihill, et al., “Bush Advisers Cashed in on Saudi Gravy
Train,” Boston Herald, December 11, 2001 ; Halliburton press release,
“Halliburton KBR, Chiyoda, and Mitsubishi Win SaudiArabian Ethylene
Project,” November 19, 2001. (Note: The $40 million figure cited for this
contractin all likelihood is much too low. Three separate energy industry
journals place the value of the contract at $350 million. While there are
two other companies involved, all reports point out that Halliburton KBR led
the consortium and thus, if the contract were $350 million, it is likely
that their cut would be—as lead contractor—significantly more than $40
million. See, Petroleum Economist, “News in Brief,” January 14, 2002;
Chemical Week, “KBR, Chiyoda, Mitsubishi Win Jubail Ethylene Contract,”
December 5, 2001; Middle East Economic Digest, “Projects Update:
Petrochemicals,” March 7, 2000.
Soon after Harken bought out George W. Bush’s company Spectrum 7 in 1986 and
placed Bush on their board of directors, a Saudi sheik swooped in to save
the troubled Harken. Abdullah Taha Bakhsh purchased a 17% stake in the
company. Worth: $25,000,000. Thomas Petzinger Jr., et al., “Family Ties: How
Oil Firm Linked to a Son of Bush Won Bahrain Drilling Pact; Harken Energy
Had a Web of Mideast Connections; In the Background: BCCI; Entrée at the
White House,” Wall Street Journal, December 6, 1991.
In 1989 Saudi Arabias King Fahd donated money to the Barbara Bush
Foundation for Family Literacy. At the time, Ms. Bush was the First Lady of
the United States. The King’s contribution represented almost half the
amount the organization was able to raise that year. Worth: $1,000,000.
Thomas Ferraro, “Saudi King also Contributed to Barbara Bush’s Foundation,”
United Press International, March 13, 1990.
Following George H. W. Bush’s departure from office, Saudi Ambassador to the
United States, Prince Bandar, donated money to the Bush Sr. Presidential
Library fund. Worth: At least $1,000,000. Dave Montgomery, “Hail to a Former
Chief,” Fort Worth Star-Telegram, November 7, 1997.
Both George H. W. Bush and George W. Bush attended the elite Phillips
Andover Academy in Massachusetts. In the summer of 2002 the Academy
announced it had established a scholarship in Bush Sr.’s name. Saudi Prince
Alwaleed binTalal bin Adul Aziz Alsaud -- the same Prince who bailed out
EuroDisney in the mid-Nineties -- was among the donors to the scholarship.
Worth $500,000. Phillips Academy-Andover press release, “A Statement from
Phillips Academy-Andover Regarding the Bush Scholars Program,” December 31,
Among the many presents George W. Bush has received from foreign leaders and
dignitaries during his term as President, perhaps none is grander
than the one Prince Bandar bestowed upon him. Bandar gave the current
president a “C.M. Russell oil canvas painting of a native American buffalo
hunt….” Worth: $1,000,000. Siobhan McDonough, “Gifts to President are
Gratefully Received, Quickly Carted into Storage,” Associated Press, July
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