Turning over the rocks at...
O O O O O
Sightings from The Catbird Seat
~ o ~
March 13, 2008
Blackstone’s Chief Received
$350 Million in Pay in 2007
By THE ASSOCIATED PRESS, The New York Times
The chairman and chief executive of the Blackstone Group, Stephen A.
Schwarzman, received $350.7 million of compensation in 2007, making him
one of the highest paid executives on Wall Street.
That comes on top of the $4.77 billion that Mr. Schwarzman received when
his stake in the firm was converted into stock as part of the private equity
giant’s initial public offering. Details of his compensation package were
disclosed Wednesday in a filing with the Securities and Exchange
Mr. Schwarzman — who this week announced a $100 million personal donation
to the New York Public Library – made $350,000 in salary but took no bonus
in 2007, according to the filing. He received $179,482 in other
compensation, which includes use of a car and driver.
Mr. Schwarzman also received $309.6 million in cash distributions —
compensation given to partners for the performance of their fund — last
year, for the period from Jan. 1 until the firm’s initial public offering on June
21. He then received $40.6 million in cash distributions from investment
funds for the balance of the year.
Blackstone had previously said that Mr. Schwarzman received $4.77 billion in
stock, representing his share of the company, through the June initial
offering of Blackstone’s management division. Twenty-five percent, or about
$1.2 billion, of those shares immediately vested, while the remaining will vest
in equal installments over four years.
His stock holdings have declined in value since the initial offering, when
shares were priced at $31 each. Today, the shares are trading around $16.
The figures included are drawn from Blackstone’s annual report filed
Wednesday. The company has not filed its annual proxy statement, where it
could provide more details.
March 11, 2008
Buyout Industry Staggers Under
Weight of Debt
By MICHAEL J. de la MERCED, The New York Times
With their big paydays and bigger egos, private equity moguls came to
symbolize an era of hyper-wealth on Wall Street.
Now their fortunes are plummeting.
Celebrated buyout firms like the Blackstone Group and Kohlberg Kravis
Roberts & Company, hailed only a year ago for their deal-making prowess, are
seeing their profits collapse as the credit crisis spreads through the
Investors fear that some of the companies that these firms bought on credit
could, like millions of American homeowners, begin to buckle under their
heavy debts now that a recession seems almost certain. The buyout lords
themselves suddenly confront gaping multibillion-dollar losses on their
On a day in which the stock market tumbled to its lowest point in two years
and rumors flew that a major Wall Street firm might be in trouble,
Blackstone said Monday that its profit had plunged.
The firm said earnings tumbled 89 percent in the final three months of 2007
and warned that the deep freeze in the credit markets — and, by extension,
in the private equity industry — was unlikely to thaw soon.
“They see the handwriting on the wall,” said Martin S. Fridson, a leading
expert on junk bonds, said of buyout firms. “They’re staring into the jaws
It is a major turn of events for Blackstone and its chief executive, Stephen
A. Schwarzman, who took the firm public last year at the height of the
buyout binge. On paper, Mr. Schwarzman has personally lost $3.9 billion as
the price of Blackstone’s stock sank.
Even so, Mr. Schwarzman is still worth billions, more than rich enough to
pledge $100 million to the New York Public Library, as he plans to do
In recent years private equity firms have bought thousands of companies,
mostly with borrowed money.
Blackstone and others argue they can run these businesses more efficiently
— and therefore more profitably — than they could as public companies.
Now, the bankers and investors who financed the boom in corporate
takeovers are running for the exits. Loans and junk bonds that deal makers
used to pay for the acquisitions — debts that must be repaid by the
companies, not the deal makers — are sinking in value.
The speed and ferocity of the industry’s reversal have taken even Wall
Street by surprise. On Monday, Carlyle Capital, a highly leveraged fund
linked to another buyout firm, the Washington-based Carlyle Group,
confronted the prospect of insolvency. Carlyle’s troubles, along with rumors
that Bear Stearns might be running short of cash, helped drive stocks lower.
Bear Stearns denied the rumors.
But companies far from Wall Street are feeling the pain of the private
equity crisis. In 2006, for example, Freescale Semiconductor, which makes
computer chips, found itself the object of private equity’s affection and the
subject of the biggest buyout battle of all time in the technology industry.
Two groups of private equity firms vied for the microchip manufacturer, a
spinoff of Motorola that builds most of the computer chips for that
company’s cellphones. Ultimately, the winning group, led by Blackstone, paid a
staggering $17.6 billion, most of that with borrowed money.
That was then. Now Freescale is plagued by falling demand from Motorola
and billions of dollars in debt related to its takeover. It replaced its chief
executive nearly three weeks ago, and its junk bonds recently traded at
levels that suggest the company might be unable to pay its debts. The
company has said that while times are challenging, it can meet its debts.
“No one saw this kind of outcome,” Michael Holland, chairman of the New
York investment firm Holland & Company, and a former Blackstone executive,
said of the buyout industry’s troubles.
Freescale is far from alone, as the private equity industry reels from the
shocks to the credit markets and the broader economy. Since last summer,
financing for the multibillion dollars deals has withered, depriving buyout
firms of the headlines and, more important, the returns to which they had
Bonds and loans of newly private companies as diverse as the Realogy
Corporation, a Minneapolis-based real estate company, and OSI Restaurant
Partners, which owns the Outback Steakhouse chain, have plunged so far in
value that bankers consider the debt distressed.
While these and many other companies are current on their debts, their
bonds now trade at 70 or 80 cents on the dollar, suggesting investors are
worried about these businesses’ financial health. Some bonds are selling at
even lower prices, and a few companies have gone bankrupt.
As a financial firm, Blackstone is just one of many that have suffered over
the past eight months. But unlike banks and mortgage lenders, Blackstone is
the only major American buyout firm that is publicly traded. Its stumbles
are more clearly tracked than any of its peers, as shown by a stock price
that has dropped more than 50 percent since its debut.
On Monday, Blackstone reported soft results in its private equity and
corporate real estate businesses, its two biggest divisions. Stripped of the
cheap debt that girds its deal making, Blackstone said it will now focus on
smaller transactions. Yet the firm has not struck any deal over $2 billion
since last July, when it announced a $25 billion takeover of Hilton Hotels.
Since then, it has failed to complete two buyouts, those of PHH, a mortgage
lender, and Alliance Data Systems, a credit card processor.
Blackstone also took an accounting charge related to its investment in the
Financial Guaranty Investment Corporation, a troubled bond insurance
But private equity firms’ problems now extend well beyond themselves.
Banks, for example, are saddled with billions of dollars of buyout-related
debt they cannot sell, serving as the next possible wave of write-downs after
the subprime mortgage debacle. Citigroup, Goldman Sachs and Lehman
Brothers are currently holding what some analysts estimate is $130 billion in
leveraged loans, or those supporting private equity deals.
And the companies that private equity firms have acquired may be the next
to suffer. Emboldened by the availability of cheap debt, private equity firms
borrowed more and more as they paid higher prices to strike more deals.
That has left many companies like Freescale to cope with more debt to pay
Surveying junk debt offerings since 2002, Mr. Fridson found that companies
taken private tended to suffer more distress than their peers. According to
his firm, FridsonVision, Blackstone had the fourth most-distressed
companies of major private equity firms, with nearly 34.8 percent of its
holdings falling into that category compared with the average of 27.7
Calling a bottom to the industry’s problems is a notoriously difficult task,
even for sophisticated investors like Blackstone. Executives from the firm
argue that these are times to buy things cheaply, be they stakes in
companies or real estate properties.
Blackstone recently raised $1.4 billion from investors for a fund devoted to
buying bonds and loans at fire sale prices. But in a conference call on
Monday, Hamilton E. James, the firm’s president, said the fund is “100
percent dry powder” and so far has not been tapped for investments. “Our
view is that things will get worse before they get better,” Mr. James said.
~ ~ ~
For more sightings of flocks of financial vultures, GO TO > > >
The 9-11 Coverup; AIG; Allied World Assurance; Aloha Airlines; The
Antechamber; Appraise This; Arbitrate This; Bank of Hawaii; The
Bankruptcy Buzzards; Blackwater; Broken Trust: The Book; Broken Trusts;
The Buzzards in The Halls of Justice; Citigroup; Confessions of a
Whistleblower; The Carlyle Group; The Chubb Group; The Connecticut
Connection; Dirty Money, Dirty Politics & Bishop Estate; First Hawaiian Bank;
Freedom To Sing; Goldman Sachs; Hawaiian Airlines; Hawaiian Electric; KKR;
Investcorp; Investco; Liberty House; Marsh & McLennan; The Nature
Conservancy; The Great Nest Egg Robberies; Nests Along Wall Street;
Nests of the Insurance Vampires; Paradise Paved; The Pentagon; The
Peregrine Fund; The Peregrine Gallery; The Pirates of Punaluu; The Puna
Connection; The Silence of the Whistleblowers; The Title Insurance
Vultures; Vampires in The U.S. Treasury; The Vampires on Jupiter Island;
Vultures in The Meadows; Vultures of the Sandwich Isles; Yakuza Doodle
July 3, 2007
Hilton agrees to be acquired by
Blackstone for $26 billion
By Gabriel Madway
SAN FRANCISCO (MarketWatch) -- Hilton Hotels Corp. said late Tuesday
it has agreed to be acquired by Blackstone Group’s real estate and corporate
private equity funds for $47.50 a share in cash, or $26 billion. The price
represents a 32% premium over the hotel chain's closing share price
Tuesday of $36.05. The deal is expected to close in the fourth quarter of
Blackstone said it views Hilton as an important strategic investment and does
not plan significant divestitures as a result of the deal. "It is hard to imagine
a better strategic fit for us than Hilton with its world-class people, brands
and network of hotels," said Jonathan Gray, senior managing director of
Blackstone, in a statement.
See also: CV05-00030-James B. Nicholson, Trustee vs. Harmon-Witness:
June 22, 2007
Blackstone Ends Sharply
Higher in Debut
By JOE BEL BRUNO, Forbes, AP
Blackstone Group shares rose 13 percent in their stock market debut Friday,
as investors scrambled for a piece of the sixth-richest initial public offering
in U.S. history.
Chief Executive Stephen Schwarzman now controls a firm whose market
value stands at about $38 billion. His personal wealth also skyrocketed, with
a 24 percent stake in Blackstone's management partnership worth around $8
billion, on top of the roughly $449 million he was expected to cash out in the
Exuberance about the booming private-equity industry overshadowed
mounting criticism of the lavish lifestyles of top executives from politicians,
labor unions and the media. The strength of Blackstone's debut marks a
coming of age for the once-secretive industry, as it joins Wall Street's
publicly traded top-tier investment houses.
"This is a new breed of publicly traded financial firm," said Matthew Rhodes-Kropf, a professor of finance at Columbia Business School. "Once the market
demonstrates its appetite for this type of investment, we're going to see all
the biggest and the best go public - even after the incredibly negative press
it has generated."
For those lucky enough to get in on the IPO - a difficult task since most
shares were snapped up by big financial institutions and money managers -
the stock barreled past its $31 initial price. The shares closed up $4.06, or
13.1 percent, to $35.06.
About 113.1 million shares traded hands - almost the full offering of 133.3
million shares. The deal's underwriters did not exercise their option for
extra shares, but are expected to do so early next week.
The offering is the biggest U.S. IPO for a private-equity firm and the
largest overall U.S. IPO in five years. It could open the floodgates for other
alternative investment funds to go public, with names like KKR and The
Carlyle Group seen as the most likely candidates.
Blackstone's flotation of 12.3 percent of its management partnership gives
investors no real voting rights or direct connection to its $88 billion portfolio
of companies and real-estate holdings. Among its investments are Universal
Studios Orlando, Madame Tussauds wax museums and the real-estate titan
Equity Office Properties Trust...
The firm reported a net profit on those holdings of $2.27 billion in 2006,
largely through what is known as "carried interest." In essence, this is the
money that the management firm earns based on the gains from the
investments of its funds, and is generally 20 percent off the top of the
profits from those investments.
Rival buyout shops will likely want to mimic Blackstone's approach, which
provided Schwarzman and co-founder Peter G. Peterson with a clean way to
unwind their stakes. Unlike most IPOs where money raised boosts working
capital to fuel expansion, the proceeds from Blackstone's IPO went
mostly to its top executives so they could cash out their holdings.
In fact, the New York-based firm warned in a regulatory filing that it would
not turn a profit for years to come because of high compensation expenses
for its employees.
That didn't stop investors.
"There was heavy demand out there, especially because this came a week
early, and it opened pretty much as expected," said Ryan Larson, senior
equity trader at Voyageur Asset Management, a subsidiary of RBC Dain
Peterson, 80, took $1.88 billion in cash out of the IPO. He will retain a small
stake in the company but is expected to retire next year. Schwarzman's heir
apparent, Hamilton James, is expected to cash out to the tune of $147.9
million from the IPO. He will still hold about 5 percent of the firm even after
Other insiders that benefited included the Chinese government and
insurance giant American International Group Inc. In May, China announced
a $3 billion investment in Blackstone, which is likely worth something closer
to $4 billion now.
AIG, a long-term investor in Blackstone, received partnership units worth
about $1.74 billion, though it may not be able to sell those until the end of
2009, according to regulatory filings. In addition, its investments in
Blackstone funds was $1.18 billion as of March 31, and its share of
Blackstone's income in the March quarter was $107 million.
The success of the deal was not to say Blackstone's entrance into public life
went without a hitch.
The New York-based buyout shop acknowledged Thursday it could face much
higher taxes as early as next year if it is taxed as a corporation instead
of as a partnership, as various bills in Congress propose to do. That
would effectively bring Blackstone's tax rate to as much as 35 percent, from
15 percent now.
June 22, 2007
Out of the Gate:
AIG's Blackstone Stake
Forbes, Associated Press
American International Group Inc. is cashing in on Blackstone Group LP's
initial public offering, according to a Goldman Sachs analyst.
The New York-based insurer invested $150 million in Blackstone Group in
1998, and Goldman analyst Thomas V. Cholnoky said in a note to clients that
based on his calculations, that stake could be worth $1.9 billion to $2.1
Blackstone, a private equity firm, priced its IPO Thursday night at $31 per
share, the high end of its underwriters' range. Blackstone's owners will
receive almost $4 billion in cash plus stock in the new company.
Cholnoky estimates AIG will collect 10 percent to 12 percent of the cash and
48.8 million shares of a publicly traded Blackstone.
Cholnoky said its difficult to estimate the actual book value of the
investment because of AIG's limited disclosure about it, but he noted that
if the initial $150 million had increased threefold, it would add $1 billion to
$1.1 billion to AIG's book value, after taxes. Book value, or the net value of a
company's assets, is a common way for investors to determine what insurance
companies are worth.
Cholnoky said his estimates are conservative, and AIG's take would increase
if the shares do well in the open market.
Shares of AIG fell 41 cents to $71.64, and Blackstone shares rose 4.75, or
15.3 percent, to $35.75 in morning trading.
For more, GO TO > > > AIG: The Un-American Insurance Group
April 13, 2007
Sallie Mae in talks to
go private: report
Yahoo! Business News
NEW YORK (Reuters) - Sallie Mae, the largest U.S. student loan company,
is in talks to be bought out by private equity in a deal that could top $20
billion, the New York Times reported on its Web site on Friday.
Negotiations appear to be at a late stage, but many hurdles remain and it was
unclear that a deal would be reached, the Times said, citing unnamed
The Blackstone Group is one potential bidder, the Times said.
Sallie Mae and Blackstone could not immediately be reached for comment.
Sallie Mae recently agreed to pay $2 million to settle an investigation into
financial arrangements it was accused of making with U.S. colleges and
universities and change some of its business practices.
March 22, 2007
Blackstone files for $4 billion IPO
Private-equity firm discloses returns
of 31% for flagship investments
By David Weidner, MarketWatch
NEW YORK (MarketWatch) -- Private-equity giant Blackstone Group ended
the suspense late Thursday, filing for a $4 billion initial public offering that
would put a stake in one of Wall Street's blue-chip buyout firms in public
Blackstone, in a filing with the Securities and Exchange Commission, said
that it's seeking public ownership to access new sources of permanent
capital, add to the company's compensation package, enhance the firm's
brand and give itself a currency for acquisitions. "It is our intention to
preserve the elements of our culture that have contributed to our success as
a privately owned firm," the company wrote.
Blackstone also said that public shareholders will have limited voting rights
and will not elect the general partner or its directors. The founders will
elect candidates for those roles, according to the filing. The firm did not
give details on how many shares will become available or an estimated price
range, making it difficult to value the whole outfit.
The offering does make it clear that the public will have little say in how
things are done at 21-year-old Blackstone. Voting power will be limited and
the company won't be bound by rules many shareholders at public companies
take for granted. "Blackstone carefully structured its IPO to assure
management stays in control," said Denise Valentine, a senior analyst at
Celent. "There's no real downside to a mainstreaming firm."
The company plans on keeping its status as a limited partnership, a
designation the firm said will exempt it from some New York Stock Exchange
rules, including requirements for inclusion of independent directors on the
board, nominating and compensation committees.
Blackstone also will not have annual meetings for shareholders, the filing
said. Blackstone "certainly [is] not becoming a public firm -- not by any
stretch of the imagination," commented Colin Blaydon, dean of the business
school at Dartmouth University.
A public offering by Blackstone is a significant event in the world of private
finance. Firms such as Apollo Investment Corp. (AINV ) and Kohlberg Kravis
Roberts & Co. have offered bits and pieces of investments to the public, but
Blackstone is offering access to a powerhouse that small investors have
"In the past, to be able to invest in the funds, you had to be a high net worth
individual or a regulated institutional investor," said Greg Peterson, who
leads the private-equity practice group at PricewaterhouseCoopers. "Taking
it public, Joe Public can invest in it now."... [Catbird: And so can the
Pension Funds, Mutual Funds, banks, insurance companies, drug dealers,
money-launderers, organized crime, etc.]...
The historically secretive firm also shed light on its returns. Blackstone had
$2.27 billion in net income for 2006, up from $2.3 billion the previous year.
Revenue was $1.12 billion. Blackstone spent $250 million on compensation
and benefits. Its flagship corporate private-equity portfolio returned
30.8% annually since its inception in 1987. Blackstone's real-estate
portfolio returned 38.2% since 1991. Investments in funds of hedge funds
and mezzanine debt have returned 13% and 16%, respectively. The private-equity company has $78.7 billion in assets under management as of March 1.
The firm has $31.1 billion invested in companies, $1.9 billion in closed-end
mutual funds, $1.5 billion mezzanine funds, $17.7 billion invested in real-estate funds, $6.9 billion in senior debt and about $1.3 billion in hedge funds,
according to the filing.
Blackstone also has $17.1 billion invested in funds of hedge funds.
Underwriting the offering are Morgan Stanley, Citigroup, Merrill Lynch,
Credit Suisse, Lehman Brothers and Deutsche Bank.
Governance and pay Under terms of the offering, Blackstone said that Chief
Executive Stephen Schwarzman would receive "no compensation other than a
$350,000 salary," though he will own a "significant portion" of the carried
interest earned from the firm's carry funds.
The company also has a no "golden parachute" policy.
GOVERNMENT FRAUD, CORPORATE FRAUD,
AND MORE FRAUD
From The Conspirators: Secrets of an Iran-Contra Insider,
by Al Martin
People in the media often ask me to give them examples of frauds that began
in Iran-Contra and continue to this day, albeit under different names.
It’s essentially the same fraud and the same cast of characters.
The examples I always give (about which I have substantive information,
since I was involved in all three of the original frauds and also involved in
marketing some of the partnerships for the secondary fraud) are the Ocean
Reef Development Group, Ltd., the Omni Development Group, Ltd., and
the Tri-Lateral Investment Group, Ltd.
Who are the common players who are links between all three deals during
They are Frank Carlucci and Richard Armitage.
When Frank Carlucci and Richard Armitage left government service
immediately after Iran-Contra (they literally had to leave in order to avoid
being subpoenaed as part of the overall coverup), they became principals
with Pete Peterson, the infamous Republican player and GOPAC money
launderer, in the Blackstone Investment Group, which is a big organization.
Then they simply continued the same real estate development frauds
which were begun under Iran-Contra.
This time all the original deals went bankrupt. A certain set of banks got
burned. The property reverted to them, and then they refinanced the
property again through Blackstone.
Subsequently they entered into an arrangement with another similar
sounding company (there’s always been some confusion) the Capstone
Development Group, which was also a post-Iran-Contra creature.
They are two separate organizations.
Some people will try to claim that Capstone was simply a subsidiary of
It is not. It is a separate company. Look at the directors. They are none
other than Larry Eagleburger and Bernie Aronson, former co-workers of
Frank Carlucci and Assistant Secretary of State, Richard Armitage.
However, the real estate frauds continued essentially until the early 1990s.
It’s interesting to note how former government officials who were in the
Reagan-Bush Administration during Iran-Contra profit by subsequent frauds
– post-Iran-Contra frauds, if you will.
For instance, in 1994-95, there was the great Mexican Diversion Fraud, when
Blackstone immediately opened an office in Mexico City to take advantage of
American taxpayers’ money being lent to Mexico vis-a-vis the OCED and
OPEC and other United States lending and/or guaranteeing agencies.
The opportunity to commit fraud against the United States Treasury during
that Mexican bailout was just like a walk in the park.
You buy a busted out Mexican company for pennies on the dollar, pump it up,
make it look nice, make sure you’ve got your hands out for a twenty or thirty
million dollar loan from somebody else, like the IMF, or a direct United
States lending agency, and you would be given Brady Bonds which could then
And it was such a scam.
Dinnerstein alone documented $130 million of fraud committed by former
officials of the Reagan-Bush Administration during the “Great Mexican
Turkey Shoot” as it became known.
And then what happened?
The Russian bailout.
Blackstone suddenly opened an office in Moscow and promptly proceeded to
do the same thing again. This time they were raping and pillaging the
American taxpayer with the same corporate schemes to get money out of
U.S. agencies and/or collateral guaranty or fidelity instruments that could be
It’s exactly the same scheme.
It was another $38 million of fraud according to our estimates at the time.
To follow fraud from the Iran-Contra period and to continue to do it to this
day – just look at where the Blackstone Investment Group is opening up
offices in the world....
Visit one of the best sites on the internet at: www.almartinraw.com/
$ $ $
Bush Donor Profile
Stephen A. Schwarzman
Occupation: President, CEO & Co-founder
Employer: Blackstone Group
Home: New York City, NY
Stephen Schwarzman joined Lehman Brothers investment bank (see
Stephen Lessing) in 1972, eventually heading its mergers and acquisitions
unit. In fact, Schwarzman initiated the failed 1980s merger of Lehman with
American Express. Schwarzman quit in 1985, co-founding the Blackstone
Group with his ex-Lehman mentor, Peter Peterson, who was commerce
secretary under President Nixon.
Blackstone leveraged connections to become the biggest buyout fund in the
world. Early Blackstone hires included Reagan Budget Director David
Stockman and Roger Altman, a top Treasury official under Carter and
Clinton. Blackstone also hired Paul O’Neill as a senior advisor right after
President George W. Bush ousted his first treasury secretary.
Blackstone’s far-flung Hospitality Services Division went on a 1990s hotel-buying binge that started with lower-end franchises and expanded to luxury
hotels such as London’s Savoy and Washington’s Watergate.
Blackstone’s hospitality division became Cendant Corp. in a disastrous 1997
merger with CUC International that combined hotel assets with Avis rental
cars and real estate franchises Century 21, ERA and Coldwell Banker.
The next year Cendant reported that it was slashing its reported earnings
over the past three years by $650 million due to widespread accounting
fraud at CUC. Cendant sued Ernst & Young (see Les Brorsen) for certifying
CUC’s cooked books.
The company, with ex Defense Secretary William Cohen, ex-Canadian
Prime Minister Brian Mulroney and Craig Stapleton (see Dorothy
Stapleton) on its board, then settled investor lawsuits for a record $3.1
Ex-Cendant Vice Chair E. Kirk Shelton was convicted of federal fraud
charges in 2005.
American International Group (see Hank Greenberg and Ned Cloonan)
invested $1.4 billion in Blackstone in 1998.
The $38 million that Schwarzman paid for a Park Avenue apartment in 2000
set a Manhattan record.
$ $ $
Financial Bonanza behind the 9/11 Tragedy:
Who are the Financial Actors
behind the WTC?
by Michel Chossudovsky, Global Research
On October 17, 2000, eleven months before 9/11, Blackstone Real Estate
Advisors, of The Blackstone Group, L.P, purchased, from Teachers
Insurance and Annuity Association, the participating mortgage secured by
World Trade Center, Building 7.1
April 26, 2001 the Port Authority leased the WTC for 99 years to
Silverstein Properties and Westfield America Inc.
The transaction was authorised by Port Authority Chairman Lewis M.
This transfer from the New York and New Jersey Port Authority was
tantamount to the privatisation of the WTC Complex. The official press
release described it as "the richest real estate prize in New York City
history". The retail space underneath the complex was leased to Westfield
On 24 July 2001, 6 weeks prior to 9/11 Silverstein took control of the lease
of the WTC following the Port Authority decision on April 26.
Silverstein and Frank Lowy, CEO of Westefield Inc. took control of the 10.6
million-square-foot WTC complex. "Lowy leased the shopping concourse
called the Mall at the WTC, which comprised about 427,000 square feet of
Explicitly included in the agreement was that Silverstein and Westfield
"were given the right to rebuild the structures if they were destroyed".
In this transaction, Silverstein signed a rental contract for the WTC over 99
years amounting to 3,2 billion dollars in installments to be made to the Port
Authority: 800 million covered fees including a down payment of the order of
100 million dollars. Of this amount, Silverstein put in 14 million dollars of his
own money. The annual payment on the lease was of the order of 115 million
In the wake of the WTC attacks, Silverstein is suing for some $7.1 billion in
insurance money, double the amount of the value of the 99 year lease.
Silverstein Properties Inc. is a Manhattan-based real estate development
and investment firm that owns, manages, and has developed more than 20
million square feet of office, residential and retail space.
Westfield America, Inc. is controlled by the Australian based Lowy family
with major interests in shopping centres. The CEO of Westfield is Australian
businessman Frank Lowy.
The Blackstone Group, a private investment bank with offices in New York
and London, was founded in 1985 by its Chairman, Peter G. Peterson, and its
President and CEO, Stephen A. Schwarzman.
In addition to its Real Estate activities, the Blackstone Group's core
businesses include Mergers and Acquisitions Advisory, Restructuring and
Reorganization Advisory, Private Equity Investing, Private Mezzanine
Investing, and Liquid Alternative Asset Investing.
Blackstone chairman Peter G. Petersen is also Chairman of the Federal
Reserve Bank of New York and Chairman of the board of the Council on
Foreign Relations (CFR). His partner Stephen A. Schwarzman is also a
member of the Council on Foreign Relations (CFR). Peter G. Petersen is also
named in widow Ellen Mariani’s widow civil RICO suit filed against. George W.
Bush, et al.
Kissinger McLarty Associates, which is Henry Kissinger’s consulting firm has
a "strategic alliance" with the Blackstone Group "which is designed to help
provide financial advisory services to corporations seeking high-level
strategic advice." (www.blackstone.com) .
For details on the insurance claims pertaining to the WTC, see Centre for
Research on Globalization, The WTC Towers Collapse: an Enormous
Insurance Scam (selected articles),
http://www.globalresearch.ca/articles/WTC312A.html , 19 December 2003...
Michel Chossudovsky is the author of War and Globalization, the Truth
behind September 11, Global Outlook, 2002
For more on the 9-11 Coverup, GO TO > > > The Eagle Hooded
$ $ $
From PBS Frontline:
HOW TO MAKE A BILLION
Mikhail Khodorkovsky, 40, Russia's wealthiest man, made his first fortunes
in banking. Born in 1963, he was raised in a communal apartment in Moscow by
factory worker parents. As a child, he talked of becoming a factory director,
and later he became an active member in Kommosol (Communist Youth
League). He studied economics at the Mendeleeva Chemical Technical
Institute, and in 1987, with several of his fellow classmates, opened a
cooperative, selling computers and designing software. By 1990,
Khodorkovsky had founded Menatep, a bank with profits rumored to be
supplemented by funds controlled by various Kommosol, Central Committee
and KGB groups attempting to divert state funds. When the old order
collapsed, Menatep provided credit to state enterprises and regional offices
while they waited for the new government to establish financial flows.
Khodorkovsky also set up a market for state vouchers, and at this time he
gained control of several enterprises. Through his holding company, Rosprom,
Khodorkovsky snatched up chemical, construction, textile, mining and oil
enterprises. In 1995, he won a controlling stake in the oil giant Yukos for less
than $500 million -- today it is Russia's largest oil company with market
capitalization of $15 billion. In 2003, he became a main target of the
Kremlin's anti-oligarch crackdown. After raiding his offices and arresting
Khodorkovsky's close business associate, investigators went after several
other people and companies affiliated with Khodorkovsky for fraud, tax
evasion and even murder. In October 2003 Khodorkovsky was seized at
gunpoint by Russian federal agents on charges of fraud and tax evasion.
Founder, Menatep Group
Bank Menatep, Trust Investment Bank and Menatep
International Financial Alliance; investment firms
Global Asset Management, the Blackstone Group,
the Carlyle Group and AIG Capital Partners:
information technology company Sibintek; telecom
operators MKS, Macomnet, Metrocom, Rascom and
Magistral Telecom; and, through his Open Russia
Foundation, several Russian news publications
Khodorkovsky cultivated relationships with
government officials through his bank, Menatep,
which served the accounts of many state
enterprises and regional governments. Three years
before his acquisition of oil company Yukos,
Khodorkovsky was appointed to the Ministry of
Fuel and Energy. In 1996, he was among the Big
Seven, Russia's most influential bankers who
backed the reelection of President Boris Yeltsin.
Khodorkovsky's longtime partner, Leonid Nevzlin,
is a senator in the Federation Council (the upper
chamber of the Russian parliament; seats in the
Federation Council are appointed). Despite an
informal pact Russian oligarchs made with Putin in
2000 that they would stay out of politics,
Khodorkovsky has become increasingly involved in
the Kremlin's affairs. He has financed two liberal
opposition parties, Yabloko and the Union of Right
Forces, upsetting Putin's dominance in the Russian
In April 2003, Khodorkovsky announced his
intention to merge Yukos with competitor Sibneft to
create the fourth-largest oil company in the world.
Although antimonopoly officials have approved the
merger, with the ongoing investigations into
Khodorkovsy's activities, it may be delayed.
Khodorkovsky lives with his wife and four children in
Moscow. He frequently travels to the United States.
He reportedly dined with Condoleezza Rice last
year and recently was a guest at Herb Allen's
Idaho ranch, along with Bill Gates, Warren Buffett
and other luminaries, for an annual
telecommunications executives meeting.
After a series of dubious business practices,
Khodorkovsy has struggled with a poor public
image. In 1998, his bank Menatep collapsed, yet
Khodorkovsky managed to protect himself, despite
damage to his depositors and creditors. (The bank
also defaulted on a $236 million loan from
Western banks.) In 1999, he moved the location of
a Yukos shareholders meeting 160 miles from
Moscow without advance notice to minority
stockholders, keeping them from voting against the
sale of Yukos's assets to an offshore company.
That same year, he prepared a large issue of new
shares that diluted the stake of American investor
Kenneth Dart, who claimed Khodorkovsky
defrauded him of millions of dollars. Recently,
however, Khodorkovsky hired a Washington, D.C.,
public relations firm, and he is presenting himself as
a crusader for stockholder and investor rights.
Khodorkovsky donated $1 million of Yukos profits
to the U.S. Library of Congress, and he set up the
Open Russian Foundation, with Henry Kissinger
as a member of its board of trustees, to donate to
museums, hospitals and universities. In 2001
and 2002, Khodorkovsky's net worth increased
Special Update - Oct 28, 2003
Just five days before FRONTLINE/World's broadcast of "Rich in Russia,"
Russian oligarch Mikhail Khodorkovsky was seized at gunpoint by Russian
federal agents in Siberia while refueling his private jet. Khodorkovsky's
dramatic arrest and detention on charges of fraud and tax evasion follows a
months-long government investigation of his company Yukos.
Khodorkovsky claims the attack is politically motivated, because he has
bankrolled the campaigns of opposition party candidates running in the
December 2003 parliamentary elections. (President Vladimir Putin is
preparing to seek a second term in March 2004.) If convicted,
Khodorkovsky could face up to ten years in prison.
$ $ $
September 29, 2005
Emmis Sells 4 Stations
to Blackstone, SJL
Katy Bachman, MediaWeek
Emmis Communications announced Thursday it has reached an agreement to
sell another four of its TV stations to affiliates of the Blackstone Group, a
private investment firm and the SJL Broadcast Group for $259 million. The
sale follows the Indianapolis-based company’s strategy, announced in May, to
sell its TV station group to improve its financial position and concentrate on
its radio business.
The sale of KOIN-TV, the CBS affiliate in Portland, Ore.; KHON-TV, the
Fox affiliate in Honolulu; KSNW-TV, the NBC affiliate in Wichita, Kan.; and
KSNT-TV, the NBC affiliate in Topeka, Kan., leaves Emmis with three more
TV stations to divest.
In August, Emmis sold nine of its 16 TV stations for $681 million in three
separate transations, bringing total TV sales to $940 million. With three
more stations to sell, including a station in Orlando, the 20th largest TV
market, Emmis is easily on its way to bring in more than $1 billion, as
analysts have estimated.
“We are engaged in discussions [for the remaining stations]. The entire
process has been slowed down because of Hurrican Katrina,” said Jeff
Smulyan, chairman and CEO for Emmis, during the company’s quarterly
Headquartered in Montecito, Calif., SJL Broadcast Group was formed in
1983 to build a group of network-affiliated TV stations. The group currently
owns and operates five stations in San Luis Obispo, Calif.; Erie, Penn.;
Hungtington, W.V.; Altoona, Pa.; and Binghamton, N.Y.
$ $ $
January 28, 2006
On-air criticism lands KHON’s
Moore in hot water
The station’s new ownership disputes
charges of lost quality
By Erika Engle. Honolulu Star-Bulletin
The new owners of KHON are not happy with their top-rated news anchor.
At issue are remarks by Joe Moore at the end of the 6 o'clock news
Thursday evening, reprinted in yesterday's Star-Bulletin and repeated by
Moore yesterday during the also top-rated "Perry and Price Show" on
KSSK-FM 92.3/AM 590.
"What was said last night was not the truth," said Sandy Benton, chief
operating officer for Montecito Broadcast Group LLC, which has changed its
name from SJL Acquisition LLC. "I need to address it with Joe."
Moore had said Montecito "is a virtual company with no office building."
Benton said there is a home office. "Of course there is. It's in Montecito
(Calif.)," she said.
Montecito's founder, president and chief executive officer, George Lilly,
lives in Montecito. He could not be reached for comment.
Regarding the 35 job cuts the company has announced for KHON, Moore
said, "A small percentage of people will be replaced by automation. The rest
will severely reduce our ability to serve the community in the manner in
which you, and we, have become accustomed."
Benton countered, "We have every intention of serving the community to the
same degree it has been served in the past. If somebody had asked, we
would have told them that. In fact, we did tell them that."
Asked if the commitment could be maintained with one-third less staff, she
said, "I think you continue to forget that a good percentage of (the job cuts)
will be automation."
It has not been announced who will be laid off at KHON.
Benton said she is aware that Moore has a track record of being outspoken.
"I don't mind that he's outspoken, but I don't want to see inaccuracy flying
out of here like that. I don't know if our airwaves is the place to be
outspoken," she said.
Moore has four years remaining on his contract.
Wrapping up the 10 o'clock news Thursday night, Moore thanked the 6 p.m.
viewers who had communicated support to the KHON newsroom during the
He declined further comment yesterday afternoon.
Emmis Communications Corp., which announced last year it was selling KHON
and three mainland television stations to Montecito, completed the sale of
Emmis still owns and operates KGMB in Honolulu, WVUE in New Orleans and
WKCF in Orlando, Fla., stations for which it is seeking a buyer.
From: Paul Craig - Treasurer IBB Local 484
Subject: Locked out Boilermakers L-484
Date: Sun, 18 Dec. 2005
Dear Brothers and Sisters:
The boilermakers Local 484 of Meredosia Illinois have ben locked out from
the Celanese Co. since June 5th, 2005, after the company broke off
negotiations. Attached is the information that we have sent out to other
supporters. Check out our struggles at www.boilermakers484.org....
For more, GO TO > > > www.lockout484.org/index.htm
Note: Celanese Co. is majority owned by Blackstone Group.
July 9, 2004
Outrigger selling 2 resorts
By Allison Schaefers, Honolulu Star-Bulletin
Outrigger Enterprises Inc. has agreed to sell its Waikoloa Beach Marriott
and Wailea Marriott resorts to affiliates of Blackstone Real Estate
Advisors of New York for an undisclosed price.
The Wailea Marriott is a 521-room hotel on 22 beachfront acres in the
Wailea Resort on Maui. The Waikoloa Beach Marriott is a 545-room hotel
that sits on 16 oceanfront acres on the shore of Anaehoomalu Bay on the Big
Island’s Kohala Coast....
Both hotels, which have been operated by Outrigger through a franchise
agreement with Marriott International, will continue to be affiliated with
Marriott International after Blackstone’s acquisition. The sale is expected
to close as early as July 30, said David Carey, chief executive of Outrigger
Under various management contracts and its two hotel brands, Outrigger
Hotels & Resorts and Ohana Hotels & Resorts, the company operates or has
under development 51 hotels and resorts throughout the Pacific region,
Blackstone, a private investment firm, is most recently known in Hawaii for
having sold the Hyatt Regency Maui for $321 million in cash last year to
Host Marriott Corp.
The company owns the Marriott Grosvenor Square Hotel in London, the
Westin St. Francis in San Francisco and the Hyatt Capitol Hill in
Outrigger could not comment on what will happen to employees at the two
September 10, 2003
Blackstone, Apollo and Goldman Sachs to Acquire
Ondeo Nalco from Suez for $4.2 Billion
A consortium of private equity firms comprised of The Blackstone Group,
Apollo Management, L.P., and Goldman Sachs Capital Partners
(collectively, the “Investor Group”) has signed a definitive agreement to
acquire Ondeo Nalco from Suez S.A. in a transaction valued at $4.2 billion.
Nalco is the world leader in providing water treatment and process chemicals
and services to companies in the general industrial, pulp and paper, and
energy sectors. With over 10,000 employees and operations in 130 countries,
the company provides innovative applications and solutions for the water and
industrial process needs of over 60,000 customers. Nalco generated
revenues of over $2.5 billion in 2002 and is based in Naperville, IL.
The transaction will be funded with approximately $3.2 billion of senior and
subordinated debt financing and the remainder in equity provided by the
Investor Group, and is expected to close in the fourth quarter of 2003,
subject to customary regulatory approvals.
Following the transaction, Nalco will operate as an independent company.
Source: The Blackstone Group
July 30, 1998
AIG to Invest $1.35 Billion in
The Blackstone Group and Its Funds
From Business Wire
NEW YORK - American International Group, Inc. (AIG) and The
Blackstone Group today announced the initiation of a long-term investment
agreement valued at approximately $1.35 billion. Under the terms of the
agreement between the two firms, AIG will acquire a 7% limited partnership
interest in The Blackstone Group and its affiliated companies for $150
million. In addition to its investment in The Blackstone Group, AIG has
agreed to invest over a number of years an estimated $1.2 billion as a limited
partner in future private equity, real estate, and other funds The Blackstone
The formalization of this relationship comes after years of close cooperation
between AIG, the global insurance and financial services organization, and
Blackstone, the private merchant bank.
M.R. Greenberg, Chairman and Chief Executive Officer of AIG, has served
as an Advisory Director of The Blackstone Group since Blackstone
established its first advisory board in 1989....
Blackstone’s co-founders, Peter G. Peterson (Chairman) and Stephen A.
Schwarzman (President and CEO), said in a joint statement, “AIG is one of
the very best managed and most profitable financial services organizations in
the world. ... We deeply appreciate the fact that AIG has decided to make
an equity investment in our firm and a major new long-term commitment to
For more, GO TO > > > Allied World Assurance; AIG: The Un-American
Insurance Group; The Carlyle Group; The Chubb Group; Dirty Gold in Goldman
Sachs; Marsh & McLennan: The Marsh Birds
February 16, 2000
American International Group, Inc., the Blackstone
Group L.P. and Kissinger Associates, Inc. Announce
a New Strategic Advisory Venture
From Business Wire
NEW YORK - American International Group, Inc. (AIG), The Blackstone
Group L.P. and Kissinger Associates, Inc. announced today the
establishment of a new venture to provide financial advisory services to
corporations seeking high level independent strategic advice.
Each party to the venture brings unique value, skills, and relationships.
Kissinger Associates, which is chaired by former U.S. Secretary of State
Henry Kissinger, is a strategic advisor to CEOs and senior executives of
numerous global corporations. AIG is the leading international insurance and
financial services organization with an unmatched worldwide network, and it
also sponsors private equity funds in many parts of the world, particularly in
The Blackstone Group, in addition to sponsoring private equity, real estate,
liquid alternative asset, and mezzanine funds, is a pioneer in cross-border
mergers and acquisitions and has advised on hundreds of billions of dollars
worth of M&A and restructuring assignments.
Together, the three firms will enjoy excellent access to business leaders
worldwide and will offer a unique set of client services. The venture will
operate globally and will take advantage of the existing relationships
between the partners.
– AIG has an ownership interest in Blackstone and is an investor in several of
Blackstone’s private equity funds;
– AIG and Blackstone have a joint venture, specializing in restructuring and
M&A advisory services in selected Asian countries.
– Henry Kissinger chairs both AIG’s International Advisory Board and the
advisory boards of several AIG-sponsored Infrastructure Fund....
Henry Kissinger, Chairman of Kissinger Associates said, “Hank Greenberg,
Pete Peterson and I have been close friends and business associates for
decades. This venture of our three firms is a great opportunity to provide a
new level of service to multinational companies in the contemporary political
and economic framework.”....
Kissinger Associates, which is chaired by the former U.S. Secretary of
State Henry Kissinger, is a leading consulting firm based in New York City.
Thomas F. McLarty, formerly Presidential Chief of Staff and Latin
American Envoy, recently joined the Firm as Vice Chairman.
Kissinger Associates provides strategic and geopolitical consulting services
to multinational corporations, including assistance in forming joint ventures
and guidance in solving business problems in foreign countries....
May 10, 2003
Blackstone M&A chief
builds a team
Tony James is hiring while others cut staff
By Luisa Beltran, CBS.MarketWatch.com
NEW YORK (CBS.MW) -- While the rest of Wall Street sheds bankers and
reels under a declining equities market, Hamilton "Tony" James is quietly
building a merger and acquisition team at the Blackstone Group.
James, who oversees Blackstone's private equity and M&A investment
banking groups, is looking to hire about 75 bankers, at all levels, by 2004.
Blackstone currently has 25 bankers within its M&A ranks, and hopes to add
five to 10 in the short term.
"We are in the process of team building," James said. "Once we get the team
together, we'll start transitioning client relationships and doing deals."
James hopes to have the team in place next year and will be focusing on
sectors such as media and telecommunications, financial institutions, health
care, and energy and power. The Blackstone M&A team will likely be paired
up with full-service firms such as Goldman Sachs and Merrill Lynch on deals.
Such high-profile plans come during a drought for mergers. The number of
global announced transactions has dropped this year by nearly 12 percent to
8,215 deals, while valuations fell 8 percent to $360.2 billion, according to
data from Thomson Financial.
Because of the Iraqi conflict, many dealmakers have put M&A on hold. James
believes the current dry spell is due not only to war but also a general lack of
confidence, which is causing deals to stall. It's not that companies are
shunning deals, he said, but they are starting transactions and then pulling
"Companies are reluctant to get committed," James said. "They still like
shopping but they are stopping short of making the ultimate commitment."
At Donaldson, Lufkin & Jenrette, James earned his stripes by successfully
housing private equity within an investment bank. Such an arrangement
allowed the private equity team to gain leads from the investment bank.
"At CSFB [Credit Suisse First Boston] and DLJ, we showed over 15 years
that you can run those business in a completely conflict-free way and have
synergies by having them so closely aligned," James said.
He also founded DLJ's merchant banking business in 1985, which made the
firm "tons of money," one former co-worker told CBS.MarketWatch.com.
So it was a natural fit last November when James jumped to the Blackstone
Group from CSFB, where he had been chairman of investment banking and
private equity. CSFB is the banking unit of Credit Suisse Group.
New York-based Blackstone is the acquisitive private-equity firm which last
year acquired TRW's automotive business for $4.7 billion. This year,
Blackstone is believed to be in talks to buy the Vivendi Universal's theme
"It a great fit," said Charles Ward, president of Lazard. "He will add a lot
to both sides of Blackstone -- the private equity and the investment bank."
Ward and James have been seen as the driving forces behind Credit Suisse
Group's $11.5 billion acquisition of DLJ in 2000. Once Credit Suisse
acquired DLJ, Ward and James were co-heads of investment banking and
private equity at CSFB before each left the firm at different times.
While James played a role in the megamerger, DLJ shareholders were happy
to sell, he said. "The management team decided to sell the company," James
said. "At end of the day, I was the senior remaining executive from DLJ that
was trying to make the merger integration work."
James joined Blackstone shortly before regulators clinched a $1.4 billion
settlement with 10 investment banks, including CSFB, last December. A
formal pact, signed on April 28, requires the firms to sever certain links
that exist between investment bankers and stock analysts.
The Securities and Exchange Commission, including regulators such as New
York state Attorney General Eliot Spitzer, accused CSFB along with
Merrill Lynch and Citigroup's Salomon Smith Barney, of issuing fraudulent
reports to win lucrative investment banking business.
"Many of the big firms went way overboard in pursuit of short-term profits,"
James said. "For everyone's sake, I hope we put it behind us because all
it does is weaken the public trust in the capital markets."
James declined to comment on the fraud allegations against CSFB.
But the problems on Wall Street are proving to be a boon to Blackstone.
Clients are now coming to James because they are looking for an adviser
who is conflict-free and has an unblemished record, he said.
"That is exactly what Blackstone is. Conflict-free," said James's old boss,
John Chalsty, the former chairman and CEO of Donaldson, Lufkin &
"They don't have to provide analyst research."
The DLJ connection
DLJ was also conflict-free when it was co-founded in 1959 by current SEC
Chairman William Donaldson. DLJ started as a pure provider of institutional
research and didn't begin a serious move into investment banking until the
James, 52, joined DLJ in 1975 when the firm had just a few bankers. He
became head of M&A in 1982. Under James, DLJ blossomed into a leading
investment bank, advising Qwest on its $48 billion buy of US West in 1999.
"Initially, Tony was involved in nearly every deal," said Chalsty, who is now
chairman of Muirfield Capital Management. "As we grew he continued to have
a role in nearly every deal we were involved in. He was a remarkable banker."
But some claim that the problems at CSFB over analysts' conflicts were
inherited from DLJ. "DLJ went from being a pristine research house to the
house that kicked around analysts to get global finance business," said
analyst Richard Bove, of Hoefer & Arnett.
The cult of James
As an investment banker, James holds the uncharacteristic title of being
known as a "people person." One of his strongest talents is dealing with the
many egos of an investment bank, former co-workers said....
Clients are also a top priority for James. But unlike other rainmakers, he
doesn't take them to basketball games and he rarely goes on fishing trips.
Also, James doesn't golf. "CEOs can afford all the basketball games that
they want themselves," he said.
Instead, he tries to understand client issues and gives them the fairest
advice he can. James pointed to long relationships with Sealed Air and
"You always put the client's interest first," James said. "Always tell them
exactly what you think. And never do anything for the fee or because it's in
your firm's interest."
It is this strategy, which caused some former co-workers to say: "Clients
love Tony James."
"My clients always stay with me," he said.
Luisa Beltran is a reporter for CBS.MarketWatch.com in New York.
© 1997-2003 MarketWatch.com, Inc. All rights reserved.
* * *
The Unbearable Goodness of
By Shamarukh Mohiuddin with Kate Cloud and Nikhil Aziz
Treasury Secretary Paul O’Neill’s confidence in the “genius” of capitalism,
even as corporate scandals continue to unravel might be ironic, but it is
certainly not surprising. The defense of unfettered capitalism has been a
trademark of the contemporary U.S. conservatism ever since the political
Right wedded moral traditionalism with libertarian free market principles.
Now, in the wake of a corporate crisis that has global implications, the Right
stands ready once again to justify a free-market system that has sustained
it for years....
Telecom giant Qwest Communications recently admitted to overstating
revenues by over $1 billion for the last three years. Frequent additions to
the list of corporate malefactors, since Enron, makes one wonder how a “few
bad apples” could be an apt description of the current scenario in corporate
America. It is notable that even some doyens of big business leadership such
as Pete Peterson, Nixon’s Secretary of Commerce and now chairman of the
Blackstone Group, have started smelling a “rotting orchard” (interview with
Jim Lehrer on PBS NewsHour, 07/12/02)....
In spite of the government’s empty rhetoric that strict regulations are
needed, Right Wing commentators constantly assert that the market is able
to self-regulate. The Right’s market fundamentalist prescription, per
columnist Steve Chapman, is for government to “step aside” and let the
market run its course (www.townhall.com, 07/11/02).
James L. Gattuso of the conservative Washington think tank, Competitive
Enterprise Institute, has an equally ingenious solution. He agrees that
accounting standards need tightening, but “this can and should be done,” he
says, “through private, rather than political, regulatory bodies.” (www.cei.org,
07/28/02). The Heritage Foundation offers a similar solution in its 07/12/02
issue of the Backgrounder.
And what about President Bush’s resolve to punish those “corporate
criminals.” Bush, perhaps, has hopes that a discourse on morality (while
posing in front of Corporate Responsibility logos) would serve the dual
purpose of spotlighting those “bad apples” and helping the public forget
about his Harken boardroom dealings.
Throughout right-wing commentary, one topic is seldom touched upon: the
fate of ordinary corporate stakeholders. Every time a scandal breaks,
hundreds upon thousands of ordinary workers are laid off. It is as if these
workers are being treated as collateral damage while the market runs its
course. Collateral damage will probably include millions more who would likely
suffer if Social Security funds were put into the stock market. The
conservatives’ aggressive attempt to privatize Social Security, just before
the corporate scandals, has now subsided to a whisper, at least temporarily.
Still, there are many who continue to adhere to their privatization agenda....
One of those values –– greed –– is defended by the Right as both unavoidable
and useful. Chapman argues in his column that capitalism functions to
“channel greed into activities that provide broad benefits.” Trefgarne
supports this argument when he posits that since markets are based on
human nature, it is only inevitable that they will “fall victim to humors and
passions, such as greed and fear.” He says that the very fact of the
corporate scandals taking place shows that “rather than the markets failing,
they are working”.
Like many supporters of unfettered capitalism he fails to mention for whom
they are working.
The current Administration’s close ties to Enron, Halliburton and Arthur
Andersen, demonstrate the links between economic and political actors.
While many of our leading politicians, regardless of party affiliation, are now
trying to distance themselves from corporate fraud, they cannot erase their
long history as both beneficiaries and benefactors of the fallen corporations.
Arthur Anderson’s promotional video from 1996 shows Vice President Dick
Cheney (then CEO of Halliburton) applauding the accounting firm for
providing advice “over and above the just sort of normal by-the-book auditing
And not so long ago, President George W. Bush, a long time friend of
Enron’s Kenneth “Kenny Boy” Lay, was the head cheerleader for the
superiority of US business leaders. While campaigning in 2000 he said
corporate CEOs were “revolutionizing how businesses conduct their
business.” (C-Span, 01/04/01). In light of current events, this statement
rings devastatingly true.
Even though Enron was just the beginning, administration officials are
insisting that “no new laws are needed to reform corporate America, only
enforcement of existing laws”, as pointed out economist Paul Krugman. (Op-ed, New York Times, 08/13/02). Accordingly, the Bush Administration
championed a bill that allowed minimal accounting reforms after trying to
block it. When the bill was passed, it “began issuing ‘guidance’ to federal
prosecutors that will undermine the law's intent on whistle-blower
protection, document shredding and more.”
Bush and Co., as Krugman observes, “just don’t get it.”
Shamarukh Mohiuddin was a PRA intern in the summer of 2002
* * *
THE CHINESE CONNECTION: US
WEAPONS AND HIGH TECH GRAFT
From The Conspirators: Secrets of an Iran-Contra Insider, by Al Martin
THE FINAL REPORT of the Congressional Select Committee, chaired by
Christopher Cox of California, has been released. His co-chairman Nelson
Dix of Washington, is a Democrat but essentially controlled by Republican
interests, who’s very close to the defense industry within the State of
They have released this Cox Report, wherein thy mention that illicit
transfers of high technology American weapons in exchange for political
money have been going on for over twenty years.
Of course, they just mention it as a matter of state policy.
In their draft report, they mention only two defense contractors – Loral and
Hughes Electronics. The only reason these two were mentioned is because
they have already been previously exposed vis-a-vis the illicit transfer of
high technology weapons to China.
However, no mention was made of political money in exchange for
Department of Commerce permits allowing these defense contractors to
export weapons and technology. Furthermore, no other defense contractors
were mentioned in the draft report of the Select Committee....
Back to 1978 – the balance had been restored in the sub-continent vis-a-vis
our interests, namely that India, although technically a non-aligned state and
the second power of the non-alighed association of states, was in fact a
India was financed by the Soviet Union. They received all of their arms
from the Soviet Union. In the United Nations, they would consistently vote
with the Soviet Union. Although they maintained the facade of independence
and paid lip service to the west, they were in fact a de facto Soviet state.
Pakistan was very pro-United States. Having been extensively armed by the
United States, it resumed its theater political and military position by being
hostile towards India and keeping India in check.
It was also hostile toward the Soviet Union and moving once again closer to
the People’s Republic of China, particularly the People’s Army and the Public
Security Bureau (PSB).
These events relate essentially to earlier doctrines – doctrines that had
originally been discussed in 1971 when Nixon first broke the ice with China
with his meeting with Zhou Enlai.
These were later consolidated into a CIA policy in 1973, which literally
became known as the “Colby China Doctrine.”...
Colby’s concept was to contain Soviet expansionism in all spheres
simultaneously by supporting opposite factions....
The policy towards arming China began to change in 1986, when relationships
between the United States and the Soviet Union began to thaw to some
degree. They continued to thaw in the years thereafter.
Some of my fellow cohorts knew – for instance, in discussions I had with
Elliot Abrams in 1986 (he was the Assistant Secretary of State for Latin
American Affairs) – what the bigger picture was.
The Republicans withing the Reagan-Bush regime knew as early as 1986 that
there was a potential scandal brewing, if the extent of indirect weapon
transfers to the People’s Republic of China in exchange for Chinese money
ever came out.
This became an increasing detriment due to the shift in global strategic
policy from a hardline towards the beginning of a thaw between the US and
the Evil Empire of the Soviet Union.
By this time (1986-1987), the Chinese began to be regarded as a
destabilizing force geopolitically, whereas before they had been considered
a stabilizing force.
The Soviet Union had not been particularly concerned about our weapons
transfers to China for twenty years (from 1966 to 1986) insofar as Chinese
strategic nuclear weapons had all been concentrated around the facilities
where China produced nuclear weapons, namely Lop Nor.
By 1986, however, much to our chagrin, Chinese strategic assets had been
well dispersed throughout the country in mobile launchers and in silos.
We also became increasingly aware that the bulk of Chinese strategic forces
was in fact aimed at the United States, not at the Soviet Union, as had been
commonly presumed earlier – and as the Chinese had informed us earlier.
Therefore, there was a period from 1986 to 1990 where weapons technology
transfers and sales to China via intermediaries were temporarily scaled
down, just at the Soviet Union began to convert from a communist country to
a capitalist country.
However, when it became apparent in 1990 that the Soviet Union was
effectively unraveling, we returned to the situation that we were in
previously. This time it was for a different reason. It was that Russia was
now a destabilizing factor because of its own internal political chaos.
Therefore, a renewed effort with China to bolster Chinese technology and to
bolster the production of strategic systems in China was looked at as a
restabilizing influence against influence against Soviet internal instability
instead of external adventurism, as it had been ten years prior.
In 1991-1992, at the very end of the Bush administration, technology and
weapons transfer to China was ramped up again, which served Mr. Bush well
in terms of the amount of Chinese money that came into his 1992
However, this in not to say that the Chinese didn’t hedge their bets.
They had traditionally given money to both parties for years through a
variety of artifices. Before 1992, the bulk of political campaign
contributions had always been given to Republicans.
In 1992, even the Chinese sensed there was a shift coming. They made sure,
for the very first time, that the Democratic National Committee started to
get six-figure Chinese money.
Fast forward to today, that amount of money has increased. The policy of
covertly arming China has really not changed. As Larry Klayman at Judicial
Watch is correct in pointing out, we are “Japanning” China....
What he’s saying is that by allowing China, ostensibly a hostile nation, to have
“most favored nation” status with the United States regarding trade policies,
we are allowing China to exercise a $3 to $4 billion a month trade deficit
with the United States.
Much of this trade deficit is then used to purchase weapons, which are used
to build strategic thermonuclear weapon systems pointed at the United
The long and short of it is that the American citizen acting in his capacity as
both a taxpayer and a citizen is essentially arming China to point weapons at
the United States.
And that is the real nub and the real sizzle of the scandal....
What we have not discussed is the money coming through a variety of
Chinese agents. The crossover between the Republicans and the Democrats
vis-a-vis surreptitious Chinese political money coming into the national
committees of both coffers has been worked consistently over twenty years
by the same intermediaries.
This is what has already been publicly revealed about Charlie Trie and John
Huang, for instance, and the 147 other Chinese that commonly mentioned in
the media as being “The Gang of 147" identified by Congress.
The banks, which are the root of the money, start from the Bank of China
and filter out through the Hong Kong branch of the Hong Kong and Shanghai
Bank, the Industrial Bank of Indonesia, and the Riady family.
The notion of Clinton’s closeness to the Riady – this isn’t new. None of this is
new. The Riady family was also very close to the Bush people. It’s just that
when the money for Republicans left the Industrial Bank of Indonesia, it
simply took different routes.
It is Chinese money (and this is little known) that principally caused the
formation of the Nugan Hand Bank.
When that fell apart and became exposed and some people in Australia died
to make sure it stayed covered up, there was simply a new artifice created
Money from the Riady group was coming directly into Arkansas banks,
principally through the Stephens Investment Group. It was simply a
different artifice when the money went from the Orient to the United
When it got to the Democrats, it was simply a different set of banks and a
different set of brokerage firms. In Republican times, the money had often
been filtered through Merrill Lynch.
Now the money is filtered through Stephens Investment Group and other
smaller brokerage firms close to Clinton or other Democrats.
What has come to light recently is the Democrat side of the equation. This
includes the connection of Ron Brown, the DNC, Chinese weapons and
licensing by the Commerce Department for export of armaments and high-technology weapons, which were winding up in China being mislabeled and so
You start to understand the role of Ron Brown in all of this. And you start
to understand why he had to go.
Ron Brown suddenly died at the very same time the FBI received conclusive
information that John Huang and Charlie Trie and a few others were not
only just Chinese businessmen, but were in fact reserve officers (not just in
the PSB) but of the MSS, the Chinese Ministry of State Security.
If this were to become publicly known (the FBI already knew it and had
leaked some of this information, but not the proof to back it up, to Burton’s
committee), FBI Director Freeh has recognized the political implication.
This would constitute treasonable conduct by the Clinton administration....
It also represents treasonable conduct by the Bush administration. I
imagine that’s why certain Republicans aren’t all that enthralled about
Look at the Republicans who are the most reticent in supporting a new and
expanded probe into Chinese money for Chinese weapons. They are the very
same Republicans of the old Bush group who were very close to the defense
industry before and continue to derive much money from the defense
It struck me with some humor that the members of the Congressional Select
Committee investigating this includes the second most senior Republican
member. It’s none other than Congressman Porter Goss, who has the
distinction of having received more defense money from Loral and Hughes
Electronics than anyone else.
So if anyone is looking for any astounding revelations from the select
committee, or even the Defense Intelligence Oversight Committee, which is
also loaded with Republicans close to the defense industry, I wouldn’t bet on
An interesting little double feature of this on the Republican side is how
they’re making money three ways to Sunday on this thing.
In 1991, the first people who set up export companies in the Soviet Union
were all part of the Old Bush Gang.
Frank Carlucci and Dick Armitage set up an export company, Blackstone
Investment Group, operating ostensibly for the CIA to purchase
potentially wayward nuclear materials out of the Soviet Union. This also
involved some technology that people weren’t aware of.
The stuff was getting repackaged and then surreptitiously sold back to
In other words, how can you sell the same nuclear components and
technologies five different times in ten years and keep selling them to the
same parties back and forth?
It’s incredible. But, as I’ve said before, you could write a separate book on
Anyway, I think I’ll end it here because otherwise if I start getting into the
banks, it’s just endless – following this Chinese money around. And then how
it gets looped into deals in the United States and looped into transactions
that are so far removed, you would never believe that they originally
extended from Chinese money.
They get guaranteed from all sorts of esoteric little agencies that don’t have
anything to do with the Department of Defense.
It’s almost laughable.
For more, GO TO > > > Crouching Dragons-Hidden Rats; Flying High in Hawaii;
The Indonesian Connection; The Secret Nests: CIA; Year of the Dragon
$ $ $
THE JAPANESE WURLITZER
From “Agents of Influence: How Japan Manipulates America’s Political and
Economic System,” (copyright 1990)
by Pat Choate
JAPAN’S ECONOMIC PROPAGANDA techniques are remarkably similar to
America’s political propaganda techniques. A quick way to understand how
Japan spreads its propaganda in America is to look at how America spreads
its own propaganda elsewhere.
America operates two propaganda program – one is overt, the other is covert.
The overt program is operated by the U.S. Information Agency (USIA),
which diffuses information about American culture, history, and political
positions. USIA employs all the standard public relations techniques –
hosting lunches, arranging interviews, distributing literature, providing
American guest speakers, stocking libraries, arranging cultural exchanges,
sponsoring conferences, and financing trips to America for students,
academics, and foreign opinion leaders.
America’s covert propaganda program is directed by the Central
Intelligence Agency. By any measure, this is a massive undertaking. Loch
Johnson estimates that fully 40 percent of CIA secret operations are
The substance of this covert propaganda is carefully monitored ot ensure
that it reflects the nuances of the government’s current policies. Policy
papers describing the intended message are prepared by the CIA and
reviewed by the State Department – even the White House. To spread its
propaganda, the CIA has recruited several hundred memebers of the foreign
media. Johnson says:
“The CIA secretly provides a flood of supportive propaganda distributed
through its vast, hidden network of “media assets”: reporters, newspaper and
magazine editors, anchormen, television producers, camermen, broadcast
technicians – the whole range of media personnel. Whatever foreign policies
or slogans the White House may be pushing at the time ... (there have been
hundreds of such propaganda “themes” over the years) ... the CIA will likely
be advancing these same ideas through its covert channels.”...
In addition to advancing specific U.S. themes, the CIA also uses its media
assets to boost politicians and opinion leaders in other countries whose
positions are favorable to the United States and to tarnish those whose
positions are not. Other nations do the same, including Japan.
Why do foreign journalists free-lance as CIA propaganda promoters? Money
is generally the biggest incentive. Most work for a regular CIA salary or on a
piece/rate basis. Others volunteer. Ideology, patriotism, personal affinity
for Americans, social ties, and entrapment have each served as bonds. Some
work for America as a means of professional advancement: in return for
their assistance, the CIA, the Defense Department, and the State
department give them privileged access to officials, scoops, and inside
information. Others are unaware that they are being used. Regardless of
the reason, the end result is the same.
Japan’s propaganda techniques are similar to those used by America. Much
like an enormous Wurlitzer organ, Japan pumps out a steady flow of
propaganda through thousands of outlets – books, speeches, reports,
conferences, television, editorials, articles, and whisper campaigns....
The overt propaganda largely is concerned with providing foreigners a better
understanding of Japanese history and culture. It is managed by government
agencies like the Japan External Trade Organization (JETRO) and Japan’s
Foreign Ministry, and surfaces in an array of official government
Japan’s covert propaganda, on the other hand, has little to do with history
and culture. Not surprisingly, it aims to develop the Japanese economy, its
industries and its exports. MITI and a slew of Japanese agencies,
foundations, companies, and trade associations work quietly to further this
end. Often, they see to it that others – including Americans in the pay of
Japan – further it for them.
A representative example of how the Japanese Wurlitzer works is its
program to blunt critcism of Japan’s rapidly growing, highly visible
investments in many of America’s most productive and most critical
After the Reagan Administration began its radical devaluation of the dollar
in 1985, Japan used its newfound purchasing power to acquire undervalued
American assets. The Japanese of such prominent properties and companies
as Rockefeller Center, CBS Records, and the Firestone tire company
generated sharp but generally unfocused political criticism....
[One of the entities involved in the Rockefeller Center purchase was
Kamehameha Schools Bishop Estate.]
In mid- and late 1988, conferences on foreign investment became an
American growth industry. Many were conducted by think tanks that were
funded – in part or whole – by Japanese sponsors. Others were organized by
accounting and law firms that had hefty Japanese client bases or by trade
associations with extensive Japanese membership.
Japanese companies urged still other policy organizations to hold foreign
investment symposia. Lawrence Baer, president of the Global Economic
Action Institute (GEAI), a think tank funded largely and initially by the
Unification Church, says a Japanese trading company approached him in 1988
aand encouraged GEAI to sponsor a conference on foreign investment. The
group complied. The roster of forum participants featured leading Wall
Street bankers, most of whom were helping the Japanese buy more American
All of these conferences were strikingly similar. For the most part, the
speakers were well-known investment bankers, lawyers, ex-officials, or
academics with personal or professional ties to Japan. Two of the most
prominent speakers on this conference circuit were Elliot Richardson and
Besides being founder, general counsel, and head of the Association for
International Investment, Richardson is a senior partner in the law firm of
Milbank, Tweed, Hadley & McCloy. One of the firm’s clients is the
government of Japan.
Peterson, once Secretary of Commerce, is chairman of the Blackstone
Group, a well-known Wall Street investment bank that is partially owned by
After the 1988 election, President Bush said that Americans should mute
their criticism of foreign investment, lest foreign investors refuse to finance
the federal budget deficit....
Japan got the Administration’s message. Soon after Bush’s announcement, a
Japanese diplomat reported that his embassy had concluded that the foreign
investment issue was no longer a pressing political problem....
In the spring of 1989, MITI contacted Japanese investors and “suggested”
that they be “sensitive” about making conspicuous purchases in America.
The warning came at a propitious moment. The Bush Administration was
considering whether to declare Japane an unfair trader. When the
Administration decided to give Japan a simple slap on the wrist, Japanese
purchases of prestigious American assets soon began surging again.
In the fall of 1989, Japanese investors bought Columbia Pictures, then New
York’s Rockefeller Center. At the same time, ex-President Reagan was paid
a well-publicized $2 million for making a speaking tour of Japan. In
combination, these three events put Japanese investment back into the
public spotlight. The Japanese Wurlitzer went back to work.
On November 1, 1989, Richard Whalen’s firm WIRES sent a 23-page foreign
investment report to America’s newspaper editors, columnists, and foreign
editors. It looked like an official news release or wire report. The report’s
principal message: “In an increasingly interdependent world economy,
investment across borders is both inevitable and beneficial to the U.S.”
The balance of the report argued that Japanese and other foreign
investment was good for America, and that the Exon-Florio Amendment in
the 1988 Trade Act – which gave the President the authority to
investigate and block foreign acquisitions that threaten national security –
Americans with ties to Japan echoed the same message in op-ed pieces,
interviews, and speeches....
It’s not surprising, Japanese investors provide much of the new money on
which Wall Street depends. And Japanese investors now own an extensive
financial stake in may of American’s leading investment firms. Nomura
Securities, for instance, owns 20 percent of Wassertein, Perella, the
prominent merger and acq1uisition (M&A) specialists. Yamaichi Securities
holds 20 percent of the Lodestar Group, which is led by the ex-vice
chairman of Merrill Lynch & Company and former chairman of Morgan
Stanley & Company.
Sumitomo Bank bought a 12.5 percent share in Goldman, Sachs for $500
million in 1986. Former Federal Reserve chairman Paul Volcker works for
Fuji-Wolfensohn, a joint venture to which Fuji Bank contributed $52.5 of
the $55 million start-up capital....
One of the most prominent Wall Street firms that broker Japanese
purchases of American assets is the Blackstone Group, which is 20 percent
owned by Nikko Securities.
Blackstone has been the investment banker for many Japanese acquisitions
of prestigious American companies, including the Sony buyout of CBS
Records and Columbia Pictures.
In the process, Blackstone has prospered. Financial World reports that
Blackstone chairman Peter Peterson earned at least $15 to $25 million in
To attract more business, Blackstone ran a full-page advertisement in
Japan’s largest daily business journal, Nihon Keizai Shimbun. The ad, written
in Japanese, encouraged Japanese companies to continue their acquisitions of
American firms. It extolled the economic advantages of such investments ...
As the ad makes clear, Blackstone also offers the Japanese political advice
about how to keep these acquisitions “friendly” ones.
The promise is not hollow. Three of the firm’s key officers give Blackstone
its political leverage: Peterson, Secretary of Commerce under President
Nixon and onetime head of Lehman Brothers; David Stockman, who directed
OMB in the first Reagan Administration; and Roger Altman, Assistant
Secretary of the Treasury in the Carter years and an economic adviser to
presidential candidate Michael Dukakis in 1988.
Not surprisingly, Peterson and Stockman are two of the nation’s strongest
advocates for keeping America’s markets open to Japanese exports and
investment. Both men write articles, address conferences, and advise
policymakers on the topic.
At the same time, Peterson heads both the prestigious Council on Foreign
Relations and the Institute for International Economics – a Washington
think tank that has been most effective in enforcing a rigid “free trade”
orthodoxy over the past decade....
For more on think tanks, GO TO > > > Drowning in Think Tanks
$ $ $
From Mills Law Firm website (
Couple's class-action suit settled
for $98.5 million
by Mary Fricker
A $98.5 million settlement reached in Chicago in a class-action suit begun by
a Santa Rosa couple could be shared by 165,000 real estate investors.
The settlement reached Monday is one of the five largest securities class-action settlements in U.S. history, according to San Rafael attorney Robert
Mills, who represented David and Ilene Albert. . . .
"I'm so glad for the part that I played in this," David Albert said
Wednesday. "I'm glad for the rest of the investors. It's not often that you
can take an action like this and have it turn out so well. “
The defendants in the case were Chicago-based VMS Realty Partners, once
a high-flying real estate syndicator, and more than 45 associates and
affiliates involved in selling sophisticated real estate investments.
The case took two years and produced 20 million documents that a team of
attorneys, including Mills, had to warehouse in Chicago, enter into computers
Although the Albert's started the case alone in 1989, a flood of other
lawsuits soon followed. A judge eventually consolidated the suits into one
case with about 30 plaintiffs, 50 defendants and 39 law firms.
"I hadn't the slightest idea when I started how big this would be," Albert
said. "But slowly I began to see the enormity of the thing."
The plaintiffs alleged in general that the VMS empire engaged in a pattern
of deception to attract investors. The defendants, in agreeing to the
settlement, did not admit wrongdoing.
The $98.5 million will be divided as follows:
As many as 165,000 shareholders will share $45 million in cash, which is
already in escrow. The exact amount that each investor, including the
Albert's, will receive depends upon how many respond to notices of the
settlement, Mills said.
Sources close to the case estimated that if most investors respond, they will
get about 15 to 30 percent of their original investment.
Most of the shareholders own stock in eight troubled VMS investment funds.
Those funds will receive money, notes, real estate and other benefits worth
at least $48.5 million, in a complex workout of the labyrinthine VMS empire.
The shareholders hope that with the $28.5 million infusion, the funds will be
able to survive and eventually return a profit. The funds severed their ties
with VMS Realty Partners last year and changed their name to Banyan. . . .
The funds' share of the $98.5 million that must be paid in the settlement is
$25 million to $30 million, so they will pay out in cash about what they will
receive in assets from the settlement.
Plaintiffs' attorneys will be paid $25 million, by court order.
The Albert's bought shares in VMS Mortgage Investors Fund in 1988, and
by June 1989 they were concerned enough about the performance of their
investment to contact Mills, who specializes in representing small investors in
Mills brought in the nation's leading law firm in shareholder litigation,
Milberg Weiss Bershad Specthrie & Lerach of New York and San Diego.
Among the defendants in the VMS case were numerous VMS entities -
partnerships, trusts, mortgage companies and others; former VMS officers,
directors and trustees; Prudential-Bache Securities Inc. (now Prudential
Securities, Inc.); several Xerox subsidiaries; securities brokers; real
estate appraisers; accountants; and other professionals associated with
the VMS operation.
Prudential-Bache was the key brokerage house marketing the VMS
investments, and Xerox Corp.'s credit subsidiary was a partner-investor.
The plaintiffs alleged VMS and its associates failed to disclose to
investors the riskiness of the investment, issued deceptive prospectuses,
hid financial problems and overvalued real estate.
They decided to settle, they said, because of the generous terms, the
financial weakness of some of the defendants and the difficulty in proving
fraud by the defendants in the complex transactions, among other reasons.
Defendant attorney Barry Gross in Chicago said the defendants settled
because the funds' stock was depressed by the litigation and they believed
it was time to move forward.
Gross said the stock value of the funds has gone up more than $40 million in
the two months since it was first announce in September that a settlement
was in the works.
$ $ $
January 26, 2001
Maui Hyatt sold for $200 million
By Andrew Gomes, Advertiser Staff Writer
New York based private investment bank The Blackstone Group has
contracted to buy the Hyatt Regency Maui Resort for an estimated $200
million from KM Hawaii Inc., an affiliate of Japan-based transportation
company Kokusai Jidosha, according to people familiar with the deal....
Founded in 1985 in part by the former chief executive of Lehman Brothers,
Blackstone has been looking for upscale hotel investments in Hawai`i for
several years. In 1998, the company unsuccessfully pursued one of Waikiki’s
finest, the Halekulani.
People with knowledge of the Maui Hyatt deal said a purchase agreement for
the 806-room Ka'anapali hotel —— Maui’s largest —— has been reached, and
said Hyatt, which manages the property with about 1,000 employees, may be
taking a small ownership interest in the hotel in exchange for a long-term
management contract with Blackstone. . . .
If completed, the Hyatt sale would follow sales of four other major
properties in 1998: the Maui Marriott Resort for $152.5 million; the
Westin Maui for $132 million; the Grand Wailea for $263.5 million; and the
Kea Lani for an undisclosed amount.
The Hyatt Regency Maui, trophy of the Ka‘anapali resort, also has been
attractive to buyers. It was developed for $80 million in 1980 by luxury
resort developer Christopher Hemmeter and sold to KM Hawai‘i by Chicago
real estate firm VMS Realty for $325 million in 1987.
KM Hawai‘i spent about $30 million on renovations in 1990 and 1996. Last
year, the hotel opened a $3.5 million spa. . . .
For more, GO TO > > > Dirty Money, Dirty Politics & Bishop Estate; Paradise
Paved; Predators in Paradise
# # #
TO TURN OVER MORE BLACK STONES
AND WATCH WHAT CRAWLS OUT,
AIG: The Un-American Insurance Group
Allied World Assurance
Aloha, Harken Energy!
Birds in the Lobby
Buzzards of Paradise
A Connecticut Yankee in King Kamehameha’s Court
The Carlyle Group: Birds that Drink from Cesspools
Crouching Dragon ~ Hidden Rats
Dirty Gold in Goldman Sachs
Dirty Money, Dirty Politics & Bishop Estate
Drowning in Think Tanks
Flying High In Hawaii
The Indonesian Connection
The Kissinger of Death
The Nature Conservancy
Nests Along Wall Street
The Puna Connection
The Secret Nests
Tracking the Titan
The Turnstone Birds
Parrots in the Newsroom
Predators of Paradise
RICO in Paradise
Vampires in The Executive Life Insurance Co.
Vultures of The Sandwich Isles
Woo vs. Harmon
The Xerox Conspiracy
Yakuza Doodle Dandies
Year of the Dragon
~ o ~
MORE OF THE CATBIRD’S FAVORITE LINKS
THE CATBIRD SEAT FORUM
THE CATBIRD SEAT
~ o ~
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