THE CARLYLE GROUP
Birds that drink from cesspools.
Sightings from The Catbird Seat
~ o ~
From the book, “American Dynasty,” by Kevin Phillips:
The Axis of Evil -
and the Web of War Profits
Wars, profits, and new wealth have historically been closely linked in the United States, as in the rest of the world. Supplying armies and navies paid well. So did government-licensed looting....
In the United States, at least the politics of obtaining wealth through war has not had a particular party label... Each war had its profiteers, but there was no regional, party, or ideological continuity.
By the end of the twentieth century, however, what began three generations earlier as a new U.S. military-industrial complex had achieved glossy permanence....While many mid-twentieth-century plants had been built by government funds–from 1940 to 1942–a peak of 67 percent of industrial financing was federal–private capital totally dominated the last quarter of the twentieth century.
Military preparedness increasingly became a for-profit activity. By 2003, through an initiative launched by Defense Secretary Richard Cheney in 1992, many government-run military support activities were being replaced by privatization and national security entrepreneurs–the private military corporations (PMSs) that did everything from train police in Croatia to handle Alabama airbase logistics or restore captured oil fields....
If these functions collectively commanded a somewhat lower share of national gross domestic product in 2004 that they had during the Eisenhower years, the opportunities for private enterprise were greater. The much increased share of money going to Pentagon functions, information systems, high technology, homeland security, the CIA, and other intelligence services, “black operations,” and PMC contracts avoided the highly unionized workforces of yesteryear, creating a higher ration of commercial niches.
In the Eisenhower era, aerospace companies earned only a 2 to 3 percent return on assets, half that of manufacturing corporations overall. By the Bush-Cheney years, military contractors could expect two or three times that return....
Indeed, the basic 2004 U.S. military budget of $400 billion a year was more than twice as much as the combines outlays for past and potential foes like Russia, China, Iraq, Syria, Iran, North Korea, Libya, and Cuba. The Axis of Evil was also the Axis of Reduced Military Resources. The U.S. outlay was twice that of all the NATO nations combined, and in 2002 the United States had accounted for 45.5 percent of all global conventional weapons deals and 48.6 percent of those concluded with developing nations. As weaponry became the most successful U.S. manufactured export, markets became economic drivers. Preparedness itself was not simply a necessary posture but a giant interest group.
Private military enterprises, rare to unthinkable in Eisenhower’s day, were becoming important governmental auxiliaries. Senior military officers liked how PNCs could edge into a difficult overseas situation without officially committing the United States or technically violating U.S. neutrality laws. They could sidestep public attention and congressional oversight....
The downside was that the PMCs aroused their own resentment, some of it fierce. One of the best know, the Vinnel Corporation – a specialist in training and advising police and military units in the Balkans and the Middle East (and a CIA cover) – became especially disliked during its quarter century of operations trainign internal security forces in Saudi Arabia, where its personnel reached several thousand. Its Riyadh facilities were car-bombed in 1995, killing five Americans. They were attacked again by a suicide bomber in May 2003 after the second Iraq war, when Turkish security forces trained by Vinnell turned back thousands of Iraqi Kurdish refugees to certain death, gunmen shot up the company’s Ankara, Turkey, offices. The killed a retired U.S. Air Force chief master sergeant.
The Carlyle Group, founded in 1987 as a merchant bank focused on political influence and defense-sector investments, became famous for turning its impressive portfolio of national-security-related companies – United Defense, BDM, Vinnell, U.S. Investigations Services, Composite Structures, EG&G, Federal Data Corporation, Lear Siegler, and Vought Aircraft – into winners for Carlye’s operation or profitable resale. This was achieved through the acumen and rainmaking of high-powered people ranging from George H.W. Bush, former secretary of state James Baker, and former defense secretary Frank Carlucci down to dozens of lesser cabinet, subcabinet, and senior regulatory agency officials.
Thirty to 40 percent yearly gains were common, but from the early days of the second Bush administration, there were conflict-of-interest charges. Carlyle’s preoccupation was with companies that could profit from its Washington connections. One newspaper called Carlyle “the thread which indirectly links American military policy in Afghanistan to the personal financial fortunes of it celebrity employees, not least the President’s father.”
“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,” said Peter Eisner, managing director of the Center for Public Integrity.” 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 U.S. policy in the Middle East?”
Richard Perle, the neoconservative stalwart who chaired the Pentagon’s Defense Policy Board, was simultaneously an investor in Middle East war preparations. As described by Seymour Hersh in The New Yorker, Pearl is also a managing partner in a venture-capital company called Trireme Partners, L.P., which was registered in November, 2001, in Delaware. Trireme’s main business, according to a two-page latter that one if its representatives sent to [Saudi financierAnan] Khashoggi last November, is to invest in companies that are of value to homeland security and defense.”...
Homeland security became a cornucopia as the new Homeland Security Department’s annual budget hit $40 billion, and hundreds of Secretary Tom Ridge’s former aids and other insiders registered to lobby for companies seeking a slice of the pie.
“Homeland Security appears to be viewed by the lobbying firms as a huge honeypot,” complained Fred Wertheimer, president of the public interest group Democracy 21.
Those better connected than former Ridge aids had found the pot of gold within months of 9-11. Marvin Bush, the brother of George W. Bush, was a large shareholder–through his Winston Partners investment firm–in Sybase, which marketed a “Sybase PATRIOT Compliance Solution” to put companies and banks in compliance with the anti-money-laundering provisions of the 2001 USA Patriot Act. Clients included the People’s Bank of China and Sumitomo Mitsubishi Bank.
Former CIA director James Woolsey, a leading neoconservative, was a principal of the Paladin Capital Group, a private firm investing in companies that defended against terrorist attacks; Richard Perle had a stake in the Autonomy Corporation, a supplier of eavesdropping equipment to intelligence agencies.
I. Paul Bremer III, the antiterrorist expert named by Bush to govern Iraq in May 2003, was profiled this way by The Nation a month later: “On October 11, 2001, just one month after the terror attacks in New York and Washington [Bremer,] once Ronald Reagan’s Ambassador at Large for counter-terrorism, launched a company designed to capitalize on the new atmosphere of fear in U.S. corporate boardrooms. Crisis Consulting Practice, a division of insurance giant Marsh & McLennan, specializes in helping multinations come up with ‘integrated and comprehensive crisis solutions’ for everything from terror attacks to accounting fraud.”
Another group of firms, concentrated in and around Washington, D.C., profited from the CIA subcontractor market. Although the combined intelligence budgets were not only secret but tunneled like Swiss cheese by so-called black ops, estimates for the early 2000s put the total at some $35 billion a year. From this exchequer came tens of billions of dollars in annual contracts, most pouring into the so-called intelligence-industrial complex that surrounded the CIA’ Northern Virginia headquarters.
So loosely administered were some of these accounts that a 1996 congressional investigation “revealed that the National Reconnaissance Office (NRO), a super-secret agency whose existence was publicly acknowledge only a few years ago, lost track of a $2 billion slush fund because it was so highly classified even top officials had no control over it.”
The world of CIA largesse was grand enough that “the CIA’s own 4,000 intelligence analysts are dwarfed by the more than 40,000 analysts who work for private companies that have government intelligence contracts.”
A second controversial aspect of CIA wealth and influence involved the Agency’s frequent, if unofficial, assertion of a modern version of benefit of clergy. If a CIA asset (as opposed to a mere salaried clerk or researcher) was indicted or arrested, the CIA officer intervened–with frequent success–to talk the local law enforcement agency, the FBI, or the U.S. attorney’s office out of prosecuting. Leave matters to us, the CIA said. This has been a virtual “get out of jail free” card enabling many CIA-connected operatives to avoid prosecution for various styles of moneymaking: drug running or, back during the eighties, milking federally insured mortgage programs or federally insured savings and loan associations.
One of Florida governor Jeb Bush’s former Miami business associates, real estate operator Camilo Padreda, a pre-Castro Cuban counterintelligence officer, ducked an S&L indictment in Texas when the CIA helped. Miguel Recarey, who had CIA connections and used his Miami-based International Medical Centers to help treat wounded Nicaraguan contras, was the business associate who had paid Jeb Bush a $75,000 real estate fee. When Recarey was indicted for large-scale Medicare fraud, his connections got him expedited $2.2 million IRS refund that allowed him to flee to Venezuela....
Excerpts from...
9-11
DESCENT INTO TYRANNY
by Alex Jones
Chapter One
The House of World Government
For many years I have been exposing the criminal activities of the global elite, also known as the New World Order. This collection of power-mad megalomaniacs has been engineering a successive string of terrorist events to usher in a corrupt world government--a world government where, public documents show, populations will be herded into compact cities, issued national ID cards, and even given implantable microchips.
In this book we are first going to look at some historical examples of tyrants and governments using disasters (in many cases terrorist events that these tyrants themselves perpetrate against their populations and bureaucracies) to create a crisis in order to convince the people to exchange liberty for so-called security....
FDR and Pearl Harbor
On December 8, 1941, after the Japanese attack of Pearl Harbor, the following words were broadcast across the United States by U.S. President Franklin Delano Roosevelt:
Yesterday, December 7, 1941--a date which will live in infamy--the United States of america was suddenly and deliberately attacked by naval and air forces of the empire of Japan.
It may have been a surprise attack to the American people, but it wasn't to the federal government and the military. Months before the attack, they knew the Japanese were preparing for an all-out assault in the Pacific.
The History Channel and many historical records have reported that twelve days prior to the attack, Rosevelt knew that actual date of the strike. The government had in its possession Admiral Yamamoto's communique reading, "On the morning of December 7, we will attack the Pacific fleet at Pearl Harbor and deal a death blow."...
The Honolulu Advertiser front-page headline on November 30, 1941 read: "Japan May Strike Over Weekend." Still, the military was told to go to the lowest level of readiness, the ships in the harbor wer lined up in tight rows, and the aircraft on the airfields were put into circles, nose tip to nose tip.
Roosevelt had campaigned to keep America out of the war, but his backers had been funding the Japanese war machine for years. They had also been financing and encouraging Hitler's blitzkrieg.
The Anglo-American establishment based in New York and Londen needed a global crisis to bring in a global government and the birth of the United Nations. That's why six months before the attack of Pearl Harbor, Roosevelt had the naval command remove the code-breaking machines from Pearl Harbor. They had to have the crisis to justify the creation of this global system of tyranny.
Think of the dastardly deed the White House had committed--leaving our troops, our sailors, our boys to die. The global elite had attempted to create a League of Nations at the end of World War I. When it failed, World War II had to be bigger, on a larger scale, so the people would say, "Give us a global government to protect us from these horrible wars."...
Chapter 3
You've seen the evidence of government-sponsored terrorism throughout history. Now let's take a closer look at what happened on September 11, 2001, and how it is being used to usher in a New World Order.
What is at stake is more than one small country. It is a big idea. A new world order, where diverse nations are drawn together to common cause to achieve universal aspirations of mankind--peace and security, freedom and the rule of law. Out of these troubled times, our fifth objective, a new world order, can emerge. Now we can see a new world coming into being, a world in which there is the very real prospect of a new world order.
-- President George Bush, State of the Union Address, September 11, 1991
The Council on Foreign Relations (CFR)--an organization publicly sworn to destroy American national sovereignty and to usher in a tyrannical police state---could not contain its glee on September 14, just days after the tragic attack, when its members announced their New World Order. At a meeting broadcast on C-Span, Gary Hart, co-chair of the U.S. Commission on National Security in the 21st Century, stated: "There is a chance for the president of the United States to use this disaster to carry out what his father--a phrase his father only used oned, and it hasn't been used since--and that is a New World Order."...
The relationship between the CIA and the Afghan freedom fighters, the Mujhadeen, predates Ronald Reagan. The bonds of rapport formed with the Central Intelligence Agency and the Afghans led to the creation of their super-asset: Osama bin Laden, the rich Saudi Arabian sheik whose family, to this day, builds most United States military bases in the Middle East, North Africa, and Central Asia. It is on the record that bin Laden is a CIA asset (MSNBC, "Bin Laden comes home to roost: His CIA ties are only the beginning of a woeful story," by Michael Moran).
So, every time an American president needs a distraction overseas, a ship or an embassy gets blown up. On October 12, 2000, the U.S.S. Cole, while docked at the port of Aden in Yemen, was attacked. Seventeen Americans were killed, and thirty-nine wounded--sacrificed yet again on the alter of globalism.
For examples of this, look at Bill Clinton's presidency. Every time Bill Clinton was in trouble an embassy, a ship, or a barracks would suddenly blow up, just like the Federal Building in Oklahoma City. The CIA asset bin Laden was delivering time and time again, and Bill Clinton was there, protecting him, refusing to take files from foreign countries like Sudan, Iraq, and Afghanistan that indicate where al-Qaeda was in the world, where they were active--even in the continental United States. Sudan offered to arrest bin Laden on three separate occasions. Bill Clinton answered by bombing, with state-of-the-art cruise missiles, their only pharmaceutical plant, denying Africa desperately needed medicines (Los Angeles Times, December 5, 2001...)
In reality the New World Order scheme is a lot bigger than just Republicans of Democrats. The truth is that the Central Intelligence Agency, controlled by Wall Street, has been grooming Bin Laden and his family over the last fifty years to carry out dangerous projects in the Middle Ease, Centerl Asia and North Africa.
Back in 1996, according to the Times of India, the CIA worked in tandem with Pakistan to create the Taliban (Times of India, March 7, 2001, "CIA Worked in Tandem with Pak to Create Taliban").
Then in 1998, when the Afghans offered to arrest bin Laden, the CIA responded by publically telling them to do no such thing. They needed this bogeyman for one more big action (Washington Post, October 29, 2001, "Diplomats Met with Taliban on Bin Laden--Some Contend U.S. Missed Chance").
Through all of this, bin Laden's family was being rewarded with giant satellite company deals, oil company mergers, and some of the biggest construction projects in the world...
The Bush-bin Laden Family Connection
The Bush and bin Laden family connection goes back half a century, and by the 1970s George W. Bush and Osama bin Laden, as well as bin Laden's older brother, were already vacationing together, and owning airports and oil companies together (Daily Mail, December 17, 2001. "Bin Laden's family link to Bush.") Even before September 11, the Wall Street Journal had called for the Bush family to end their relationship with the bin Ladens.
The Carlyle Group, Oil, Opium and Bombs
The Carlyle Group is the biggest defense contractor on the planet. The majority owners of the Carlyle Group are the Bush family and the bin Laden family. They are profiting in the hundreds of billions off of this new war (Judicial Watch, September 28, 2001, "Bush Sr. in Business with Bin Laden Family Conglomerate Through Carlyle Group"; The Village Voice, October 11, 2001, "Bush Sr. Could Profit from War"; BBC News, December 4, 1997, "Taleban in Texas for talks on gas pipeline")....
On December 4, 1997, a BBC headline read, "Representatives of the Taleban are in Texas Visiting the Headquarters of Unicol." The article went on to report that they were in Texas with the Halliburton-connected pipeline construction company (Dick Cheney was the CEO of Halliburton from 1995 to 2000), Unicol to negotiate their support for a pipeline, which would be built by Halliburton.
Afghanistan represents the heart of the Central Asian oil reserve. Central Asia has the second largest oil reserves in the world... By April 2002, the head of the World Bank had opened offices in Afghanistan, at which point the World Bank announced it would fund the Afghan pipeline.
Afghanistan alone supplies over a third of the world's opium supply. The region of Central Asia supplies ove half. Since the global occupation armies took control of Afghanistan, opium production has skyrocketed to record levels. Europe is now awash in heroin, and the coffers of Western intelligence agencies ar busting at the seams with utraceable drug money. (London Observer, November 30, 2001, "With Taliban Gone, Afghans Look Forward to Bumper Opium Crop"...)
Dozens of respected publications have asked the simple question, "What brought those building down?" Expecially Building 7, which wasn't even hit by an aircraft. New York firefighter Louie Cacchioli, 51, who was trapped inside the building, reported that multiple bombs were going off all around him (People Magazine, September 21, 2001). Ther were other witnesses, former military munitions experts and police officers, as well as structural engineers who made similar observations. The oldest fire fighting magazine in the country was absolutely outraged, demanding a real investigation. According to their evidence, there is no way aircraft could have brought down those buildings (Fire Engineering, January 2001 Issue, "WTC Investigation? A Call to Action"...)
March 28, 2008
Carlyle Group faces Hawaiian Telcom heat
By admin, FierceTelecom
Fourth quarter 2007 financial results for Hawaiian Telcom, one of the oldest ILECs in the U.S., are scheduled to be reported on Monday, but The Wall Street Journal is reporting today that the owning the company has turned out to be a tremendous challenge for private equity firm Carlyle Group. Carlyle acquired the telco in 2005 for $1.6 billion from Verizon Communications, but mounting customer service and back office problems led to increased spending to fix the problems, lay-offs and a CEO switch....
The new CEO brought in by Carlyle, a company with other well-documented financial troubles of its own, is short on telecom experience but long on turnaround experience. If you worked for, or were being served by a telecom company in financial trouble, which kind of experience would earn more of your faith?
Source URL:
http://www.fiercetelecom.com/story/carlyle-group-faces-hawaiian-telcom-heat/2008-03-28
For more, GO TO > > > Snakes in Paradise: The Carlyle Group
Mar 14, 2008
"SPITZER WAS SILENCED."
THE $200 BILLION BAIL-OUT FOR PREDATOR BANKS
AND SPITZER CHARGES ARE INTIMATELY LINKED
By Greg Palast
Reporting for Air America Radio's Clout*
While New York Governor Eliot Spitzer was paying an 'escort' $4,300 in a hotel room in Washington, just down the road, George Bush's new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.
Both acts were wanton, wicked and lewd. But there's a BIG difference. The Governor was using his own checkbook. Bush's man Bernanke was using ours.
This week, Bernanke's Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks' mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.
Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers' bordello: Eliot Spitzer.
Who are they kidding? Spitzer's lynching and the bankers' enriching are intimately tied.
HOW? FOLLOW THE MONEY.
The press has swallowed Wall Street's line that millions of US families are about to lose their homes because they bought homes they couldn't afford or took loans too big for their wallets. Ba-LON-ey. That's blaming the victim.
Here's what happened. Since the Bush regime came to power, a new species of loan became the norm, the 'sub-prime' mortgage and it's variants including loans with teeny 'introductory' interest rates. From out of nowhere, a company called 'Countrywide' became America's top mortgage lender, accounting for one in five home loans, a large chuck of these 'sub-prime's.
Here's how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 a month payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain't worth a can of spam and the Grinnings are told to scram - because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the 'discount' they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. Grinnings move into their Toyota.
Now, what kind of American is 'sub-prime'. Guess. No peeking. Here's a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers aren't 'stupid', they had no choice. They were 'steered' as it's called in the mortgage sharking business.
"Steering," sub-prime loans with usurious kickers, fake inducements to over-borrow, called 'fraudulent conveyance' or 'predatory lending' under US law, were almost completely forbidden in the olden days (Clinton Administration and earlier) by federal regulators and state laws as nothing more than fancy loan-sharking.
But when the Bush regime took over, Countrywide and its banking brethren were told to party hardy "it was OK now to steer'm, fake'm, charge'm and take'm."
BUT THERE WAS THIS ANNOYING PARTY-POOPER.
The Attorney General of New York, Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.
Instead of regulating the banks that had run amok, Bush's regulators went on the warpath against Spitzer and states attempting to stop predatory practices. Making an unprecedented use of the legal power of 'federal pre-emption', Bush-bots ordered the states to NOT enforce their consumer protection laws.
Indeed, the feds actually filed a lawsuit to block Spitzer's investigation of ugly racial mortgage steering. Bush's banking buddies were especially steamed that Spitzer hammered bank practices across the nation using New York State laws.
Spitzer not only took on Countrywide, he took on their predatory enablers in the investment banking community. Behind Countrywide was the Mother Shark, its funder and now owner, Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup's Citibank made mortgage usury their major profit centers. They did this through a bit of financial legerdemain called 'securitization.'
What that means is that they took a bunch of junk mortgages, like the Grinnings, loans about to go down the toilet and re-packaged them into 'tranches' of bonds which were stamped 'AAA' - top grade - by bond rating agencies. These gold-painted turds were sold as sparkling safe investments to US school district pension funds and town governments in Finland (really).
When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide's top man, Angelo Mozilo, will 'earn' a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars - he pulled in from 1998 through 2007.
BUT THERE WERE RUMBLINGS THAT THE PARTY WOULD SOON BE OVER.
Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide's stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.
Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That's Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.
The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the 'public treasure' and got to keep the Grinning's house. There was no 'quid' of a foreclosure moratorium for the 'pro quo' of public bail-out. Not one family was 'saved,' but not one banker was left behind.
Every mortgage sharking operation shot up in value. Mozilo's Countrywide stock rose 17% in one day. The Citi sheiks saw their company's stock rise $10 billion in an afternoon.
And that very same day the bail-out was decided - what a coinkydink! - the man called "The Sheriff of Wall Street" was cuffed.
SPITZER WAS SILENCED.
Do I believe the banks called Justice and said "Take him down today!" Naw, that's not how the system works. But the big players knew that unless Spitzer was taken out, he would create enough ruckus to spoil the party. Headlines in the financial press, one was 'Wall Street Declares War on Spitzer' - made clear to Bush's enforcers at Justice who their number one target should be. And it wasn't Bin Laden.
It was the night of February 13 when Spitzer made the bone-headed choice to order take-out in his Washington Hotel room. He had just finished signing these words for the Washington Post about predatory loans:
'Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which he federal government was turning a blind eye.'
Bush, said Spitzer right in the headline: 'was the 'Predator Lenders' Partner in Crime.' The President, said Spitzer, was a fugitive from justice. And Spitzer was in Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the planet.
Spitzer wrote: When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners the Bush administration will not be judged favorably."
FALLEN ON HIS OWN GUN
But now, the Administration can rest assured that this love story - of Bush and his bankers - will not be told by history at all ''now that the Sheriff of Wall Street has fallen on his own gun.''
A note on 'Prosecutorial Indiscretion.'
Back in the day when I was an investigator of racketeers for government, the federal prosecutor I was assisting was deciding whether to launch a case based on his negotiations for air-time with 60 Minutes. I'm not allowed to tell you the prosecutor's name, but I want to mention he was recently seen shouting: "Florida is Rudi country! Florida is Rudi country!"
Not all crimes lead to federal bust or even public exposure. It's up to something called 'prosecutorial discretion.'
Funny thing, this "discretion." For example, Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him in diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him.
Naming and shaming and ruining Spitzer - rarely done in these cases - was made at the 'discretion' of Bush's Justice Department.
Or maybe we should say, 'indiscretion.'
************
* Listen to Palast on Clout at http://www.GregPalast.com
Greg Palast, former investigator of financial fraud, is the author of the New York Times bestsellers Armed Madhouse and The Best Democracy Money Can Buy.
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Fwd. by the Foreign Press Foundation - Related links:
* But where does all the loot go, also via the 'Central Banks' many people are wondering? Well, for instance via the privately owned Bank of England, and all other so called 'central banks' of this cartel, it is 'recycled' through the rather secret 'head office' of this London group in Basle, Switzerland. The likewise privately owned 'Bank of International Settlements', the BIS, which is functioning as one of the main 'central banks' to central banks. And it is difficult to believe, but their BIS bank has greater immunity than a sovereign nation, is accountable to no one, runs global monetary affairs and is privately owned. - BIS Url.: http://www.augustreview.com/index.php?option=com_content&task=view&id=7&Itemid=4
And it may be difficult for many of us to grasp, but it is true: none of the humanoids involved in 'The City', at the by them owned 'Bank of England' or at the Swiss based BIS is ever anywhere on earth accountable for what is done to you, your family or friends, or anybody else, including countries and continents. The 'Board' has all the same names, the known vultures are there, like Wolfowitz, Greenspan, Bernanke etc. - as their money-printing business in the US - the Federal Reserve which also has the cartel as private banking owners. The bookkeepers and usurers are absolutely immune and there is NO law nor any kind of court on this earth which ever can stop them. They think...
Many of them operate from 'The City' their own 'state within a state' in London, England, where the 'evil empire' can be found and the 'Board of Directors' of the so called 'Evil empire' - their Animal Farm - which is built on the corpses of millions of human beings. For those who don't know it yet. - Url.: http://tinyurl.com/2zj7wl
* The "visible and audible leaders" are mere puppets who dance on command. They have no power. They have no authority. In spite of all the outward show they are mere pawns in the game being played by the financial elite. - Url.: http://tinyurl.com/2zj7wl
* HITLER: AN OFFICER AND A GENTLEMAN? - History's warning regarding a compliant media. - Url.: http://tinyurl.com/2xcbce
*NEWSPAPERS (AND OTHER MEDIA) MAINTAIN THAT THEY ARE ENTITLED BY A “PRIVILEGE” TO LIE, etc., by proxy – that is, by printing the lies, etc. of others without verification and/or qualification. Yet, that is not the whole of it. -
Url.: http://tinyurl.com/3a8c9p
* WHY U.S. AMERICANS (AND MANY IN OTHER COUNTRIES) WILL BELIEVE ALMOST ANYTHING THEIR 'GOVERNMENT' AND PROPAGANDA MEDIA TELL THEM -
Url.: http://www.rense.com/general78/believe.htm
* THE US IS A 'CRIMOCRACY' - Christopher Bollyn: "This is how the U.S. government, which I call a "crimocracy" works. -
Url.: http://www.rumormillnews.com/cgi-bin/forum.cgi?read=110673
FOREIGN PRESS FOUNDATION
Editor: Henk Ruyssenaars
The Netherlands
March 7, 2008
Party seems to be over
for buy-out firms
By Henny Sender in New York, The Financial Times
When Carlyle Group established its now struggling mortgage-backed fund and decided to list it, last year, it seemed like a smart and even risk-free thing to do. Today, with the credit markets in full meltdown, that plan seems both arrogant and hazardous.
The private equity firms were the most powerful players in capital markets across the globe and were buying up ever bigger public companies. Carlyle’s co-founder David Rubenstein appeared at conferences, predicting that $80bn-$100bn buy-outs would soon be possible.
Investors were throwing money at private equity firms. They, in turn, were keen to attract as much of that money as possible because many of the leading private equity groups were considering plans to go public and part of the dynamic was to have size and scale, which meant having as many assets under management and collecting as many fees as possible.
Carlyle marketed its mortgage-backed fund to the investors in its flagship buy-out funds as a safe place for them to park their cash, while waiting to write cheques for deals, such as the $15bn purchase of Hertz.
The idea was doubly seductive for Carlyle since it would swell its assets under management and its fees. It was equally attractive for investors since interest rates were low and the fund promised lucrative returns. Listing would help the fund grow even more quickly.
The fund also looked attractive because after all what could be safer than its triple-A-rated mortgage securities? It was nothing like the complicated and high-risk vehicles, such as the structured investment vehicles (SIVs), which borrowed short-term and lent long-term, and had already blown up months before.
Only a careful read of the offer memo would have informed would-be investors that the fund had the ability to use borrowed money ... and plenty of it – more than 90 cents on the dollar.
That in turn exposed the fund to twin risks. If there were losses in the value of the debt, those losses would be magnified by the use of leverage. Secondly, the fund was exposed to the risk that skittish banks might one day cut back credit lines.
That second fear appeared remote even eight months ago, when the fees the private equity firms paid Wall Street were measured in the hundreds of millions of dollars, making the buy-out groups the banks most lucrative customers. That the banks would dare to stand up to these powerful clients seemed inconceivable.
Today, however, after the market capitalisation of most banks has been halved, and with their own backs to the wall, those same banks are in a very different position.
“There comes a time when the banks have to ask our clients to live up to their side too,” says the head of the group which deals with private equity firms at one major US bank. There are only so many times the banks can forestall or turn a blind eye. They have to say you put up the margin or we are taking the collateral.”
Today both the Carlyle fund and a similar Kohlberg Kravis Roberts fund are in bad shape, introducing a rare bout of humility for the two firms which launched them. Private equity firms such as TPG, which refrained from such diversification and looked ultra-conservative in 2007, now look far less tarnished by contrast.
It is likely that the equity of Carlyle’s fund will be wiped out and that if the financing evaporates, Carlyle will be forced to liquidate the fund. In a release on Friday, Carlyle noted “additional margin calls and increased collateral requirements could quickly deplete its liquidity and impair its capital”.
Copyright The Financial Times Limited 2008
February 9, 2008
HawTel chiefs ring up big pay
By Jennifer Sudick, Honolulu Star-Bulletin
Hawaiian Telcom's new upper management team comes with a price tag more than six times that of former CEO Michael Ruley, who was abruptly fired Monday in favor of a turnaround expert brought in by Washington, D.C.-based owner Carlyle Group.
The hiring of Stephen Cooper, chairman of Kroll Zolfo Cooper, a New York restructuring advisory and interim management company, as well as Kevin Nystrom, a senior director at the firm, as the company's chief operating officer, will cost Hawaiian Telcom a base fee of $600,000 a month -- plus bonuses based on improvements in the company's earnings. The chief operating officer position was created for Nystrom.
Ruley's compensation totaled $1.14 million in 2006, according to the company's latest annual filing.
The new executives' base pay, which amounts to $7.2 million a year, is what the company "feels is appropriate based on the experience that both Cooper and Nystrom have had over the years," spokesman Joel Matsunaga said.
Cooper, who replaced Kenneth Lay in 2002 as interim head of since-dissolved Enron Corp., has led a number of restructuring projects, including the bankruptcy of American Home Mortgage last year. Nystrom has served as director of restructuring of American Home Mortgage since August.
The fee, disclosed yesterday in a filing with the U.S. Securities and Exchange Commission, also covers any additional associate directors the new team might hire. Matsunaga declined to say how many that would be.
http://starbulletin.com/2008/02/09/news/story01.html
For more, GO TO > > > Snakes in Paradise: The Carlyle Group
Dec. 07, 2007
Commentary: The CIA's Gift to
Conspiracy Theorists
By Robert Baer, Time
The CIA has proved, once again, that the cover up is worse than the crime. Or at least let's hope that's the case.
CIA Director Gen. Michael Hayden has admitted that in 2005 the CIA destroyed two videotapes of interrogations of al-Qaeda prisoners, including a central figure in 9/11, Abu Zubaydah. Hayden said the tapes were destroyed to protect the identities of the CIA interrogators from members of al-Qaeda and other terrorists who might try to retaliate. He also claims that the tapes were made to safeguard against unlawful treatment of detainees, and that they were only destroyed after it was confirmed that suspects were not being tortured.
At a time when Congressional Democrats are trying once again to pass a torture ban, it's a given that the revelation is going to further inflame the torture debate — since the tapes apparently showed harsh interrogation techniques. The assumption will be that the CIA did not want the tapes seen in public because they are too graphic and could lead to indictments.
But more to the point, the revelation will raise another question: What other evidence has the CIA destroyed? And can the CIA be trusted to tell us? The CIA had told the 9/11 Commission, when it formally requested such materials, that there was no taping of interrogations. CIA lawyers also told federal prosecutors trying the Zacarias Moussaoui terror case that the agency did not possess recordings of interrogations sought by the judge and Moussaoui's defense lawyers. The CIA insists that the tapes destroyed were not the ones in question.
I would find it very difficult to believe the CIA would deliberately destroy evidence material to the 9/11 investigation, evidence that would cover up a core truth, such as who really was behind 9/11. On the other hand I have to wonder what space-time continuum the CIA exists in, if they weren't able to grasp what a field day the 9/11 conspiracy theorists are going to have with this — especially at a time when trust for the government is plumbing new depths.
I myself have felt the pull of the conspiracy theorists — who believe that 9/11 was an inside job, somehow pulled off by the U.S. government. For the record, I don't believe that the World Trade Center was brought down by our own explosives, or that a rocket, rather than an airliner, hit the Pentagon. I spent a career in the CIA trying to orchestrate plots, wasn't all that good at it, and certainly couldn't carry off 9/11. Nor could the real pros I had the pleasure to work with.
Still, the people who think 9/11 was an inside job might easily be able to believe that Abu Zubaydah named his American accomplices in the tape that has now been destroyed by the CIA.
It isn't going to help that the Abu Zubaydah investigation has a lot of problems even without destroyed evidence. When Abu Zubaydah was arrested in Pakistan in 2002, two ATM cards were found on him. One was issued by a bank in Saudi Arabia (a bank close to the Saudi royal family) and the other to a bank in Kuwait. As I understand it, neither Kuwait nor Saudi Arabia has been able to tell us who fed the accounts.
Also, apparently, when Abu Zubaydah was captured, telephone records, including calls to the United States, were found in the house he was living in. The calls stopped on September 10, and resumed on September 16. There's nothing in the 9/11 Commission report about any of this, and I have no idea whether the leads were run down, the evidence lost or destroyed.
If this sounds like paranoia, it is. But the CIA certainly is not helping by destroying evidence. And they should know better than to destroy evidence in the biggest criminal case in American history. More than anything what we need right now is complete and total transparency on 9/11.
Robert Baer, a former CIA field officer assigned to the Middle East, is TIME.com's intelligence columnist and the author of See No Evil and, most recently, the novel Blow the House Down
http://www.time.com/time/nation/article/0,8599,1692518,00
Conspiracy Theories
Carlyle's Mysterious Connections...
Is it Time for Sodium Pentothal?
By Jay Salomon, Taipan Online
February 26, 2002
Back in the early 90s–during the previous round of Middle Eastern terrorism – Taipan recommended EG&G (EGG:NYSE), a maker of high-tech airport security equipment.
I was asked to do a follow-up.
For days, I found nothing about this large defense contractor. It was no longer traded. Then, I discovered that EG&G had been taken over by the Carlyle Group, an enterprise about which I knew nothing.
Months later–and after exhaustive research–I begin my reports on the Carlyle Group, an almost secret society and a multibillion-dollar powerhouse about which almost no one knows anything. And that’s exactly the way Carlyle wants to keep it.
Carlyle earns special attention not only because of its huge presence in the defense sector, but also because of the imposing list of persons in its employ, either directly or as consultants. I doubt the names of James Baker, Frank Carlucci, and John Major will ring hollow with any reader.
Add to them ex-President George H. W. Bush and (in a more convoluted way) current President George W. Bush and you have only a brief listing of the individuals who may be using their influence to generate profits and policies.
But don’t think for a minute that Carlyle houses only very conservative Republicans–this company includes high rollers of many political persuasions. Not to mention a long association with the Bin Laden family and assorted Saudis and other internationals who carry some dubious baggage.
As an investigative journalist, I would expect an enterprise like Carlyle to be on the radar screen of many who ply my trade. It may be so. But the mainstream press has been incredibly silent on the large number of issues raised by the activities of Carlyle.
The most inquisitive and successful of the fact-finders has been the Guardian. But a recent article demonstrates the problems raised by Carlyle’s refusal to discuss much of anything. For information for an October report on the Carlyle/Bin Laden connection, Carlyle referred the Guardian to someone outside the company who reported himself only as a "source familiar with the relationship." And this source did little more than "confirm" that the Bin Laden crowd was no longer connected to Carlyle.
At the time, the Guardian noted that Carlyle did not employ anyone at its Washington headquarters to deal with the press.
Since then, Chris Ullman has been named vice president for corporate communications–and the long-blank website (which used to contain nothing but a disclaimer stating that "the Carlyle Group does not provide investment or other services to the general public") has now been revitalized. But the news section of the website has not one offering of any news following the November 13, 2001, announcement of Mr. Ullman’s appointment.
Of course, my job normally would be to stick a foot in the Carlyle door and try every bit of subterfuge to talk to Mr. Ullman.
That’s the way this game is traditionally played.
Carlyle has been uniquely successful in avoiding the scrutiny of the mainstream press as well as public regulatory oversight of its activities. But more and more articles, mostly web-based and nontraditional, are surfacing about it.
And there’s no guarantee that once the ball starts rolling, mainstream press coverage will be any less hostile than that on the web.
What’s more, certain members of Congress are beginning to take an interest in the intriguing convergence between influence and profits at Carlyle.
The Enron situation will fuel the need to know more about the activities of the company and its principals. For several weeks, the former head of the SEC, Arthur Levitt, was lauded on most of the talk shows for his unsuccessful attempts to limit the ability of accounting firms like Arthur Andersen to both "account" and "consult."
I was struck by the fact that Levitt was only identified by his former job–never a mention of his current position. Not once did anyone ask: "Thanks for being on our show, Mr. Levitt. What have you been doing since you left the SEC?"
For the record, Levitt is Carlyle’s "senior adviser."
When was the last time any executive of a worthy company did not use free airtime to give a plug to his enterprise?
Back to Enron.
We have the Bush family position in Carlyle and the family’s strong ties with former Enron head, Ken Lay, coinciding with a scandal inside and outside the Beltway that threatens the integrity of significant portions of our financial system. And that’s potentially just a sideshow compared to the questions raised by Carlyle-owned United Defense’s important position as the eleventh largest defense contractor in the United States.
One troubling Enron question leads to an even more troubling question about United Defense.
In the case of Enron, the Administration has proudly stated that its close ties to the company did not influence its decisions, as witness the fact that no effort was made to bail Enron out. And, so far as anyone knows, the assertion is true. But many have pointed out that because of the appearance of impropriety a bailout would have involved, the Administration was precluded from doing the very thing that would have been most in the public interest. So, what will it do with a company (to which it has demonstrably even closer ties) if questions of ethics or performance arise in the middle of a contract?
Early in my research, I came across a curious contract handed one Carlyle subsidiary. As I understand it, the Federal Government sought a contractor to assist in the sale of assets seized in drug raids.
But this was not a contract to sell the assets – instead, it was a contract to find a contractor to sell the assets!
Multi-billion dollar Carlyle earned the prize. Talk about apparent bureaucratic waste…
Which brings us to the question at hand – can Carlyle continue its silence much longer? And if it can’t–and it can’t–then to whom should it talk?
I for one would be happy to volunteer....
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Buzzards Behind the Blinds at First Hawaiian Bank
! ! ! ! !
July 6, 2003
United Defense armed for success
The Courier-Journal
United Defense Industries has been making landing craft and armored vehicles since World War II. The company’s arsenal includes combat vehicles (Bradley armored infantry vehicles), fire support equipment (self-propelled howitzers), combat support vehicles, weapons delivery systems (missile launchers) and amphibious assault vehicles.
The U.S. government [a.k.a. US taxpayers] accounts for almost 80 percent of sales. [I wonder who accounts for the other 20 percent?]
United Defense Industries also has acquired U.S. Marine Repair, a leading non-nuclear ship repair and overhaul company. The Carlyle Group owns 49.5 percent of United Defense, whose directors include such former government heavy-weights as Frank Carlucci (ex-secretary of defense) and Gen. John M. Shalikashvili (former chairman of the Joint Chiefs of Staff).
In Louisville, United Defense makes naval guns at the Greater Louisville Technology Park, formerly the Naval Ordnance Station.
Source: Hoover’s Inc (www.hoovers.com)
[The chart accompanying this article shows revenues for the Quarter ended March 31, 2003, to be $466.5 million vs. $356.4 million for the Quarter ended March 31, 2002. Net income for the respective quarters were $38.4 million vs. $19 million. Earnings per share were 73 cents vs. 36 cents. Stock prices on July 5, 2002 were $21.95 vs. $26.89 on July 3, 2003. Who says nobody wins in a war.]
December 17, 2002
Group takes majority stake
in CSX Lines
Reuters
WASHINGTON - CSX Corp., the largest eastern U.S. rail operator, on Tuesday sold a majority stake in its ocean transport unit to The Carlyle Group for $300 million in cash and securities as part of its plan to focus the company on its core railroad operations.
Terms of the transaction call for a venture led by Carlyle, one of the largest U.S. private investment funds, to pay $240 million in cash and issue $60 million in securities to CSX in exchange for CSX Lines, its domestic container-shipping business....
With 17 U.S. flag vessels and 22,000 containers, CSX Lines ranks as the largest U.S. ocean transport company, providing transportation services to and from the continental United States, Alaska, Hawaii, Guam and Puerto Rico.
Copyright 2002, Reuters News Service
For more, GO TO > > > Nests on the Rails
December 18, 2002
Joe Conason's Journal:
Snow's job and the dock lockout
As several readers have pointed out, the confluence of CSX chief John Snow's Treasury appointment and his company's deal with the Bush-connected Carlyle Group is still more intriguing when another factor is considered: the president's decision to invoke his Taft-Hartley authority to stop the West Coast dock lockout (and not a strike, as I said earlier), just when that labor dispute was threatening to scuttle the CSX-Carlyle deal.
Did the president misuse his power to help a business that pays his father and his advisor James Baker III, along with a raft of other Bush cronies?
Will anyone in the Senate dare to ask the obvious questions about this strange coincidence when Snow is confirmed?
Maybe the AFL-CIO, which has been complaining about Snow's stewardship of CSX, will prod its friends on the Hill.
Snow's job
Something as spectacular as the Trent Lott implosion always obscures other fascinating news, such as a curious coincidence that attended the appointment of CSX chief executive John Snow as the new treasury secretary.
While he pondered a new role in the Bush administration, his company has been negotiating a major deal with the Carlyle Group, corporate home of James Baker III and George Herbert Walker Bush....
The deal reportedly was held up for a while in late October by the West Coast dockworkers' strike, which caused the Carlyle suits deep concern over the CSX unit's future revenues. But with the strike concluded, the deal was done.
As Daniel Gross explained in Slate last week, Snow is a former government bureaucrat turned "access capitalist," a not-very-successful CEO with a big appetite for perks and a lavish hand with political contributions. He wasn't a great choice for Treasury, but his profile is typical of this administration.
The most striking aspect of his appointment, now that we know about his firm's deal with Carlyle, is that he convinced the CSX board last year to award him a new contract that includes millions of dollars in severance benefits -- if he leaves the company to "fulfill an appointment to public office."
I always thought that those fat CEO contracts were meant to keep talented executives.
So here are a few questions for his confirmation:
When did he start to discuss a government position with the Bush White House?
When did his deal negotiations with Carlyle begin?
Why did he ask for special severance benefits if he accepted a government appointment?
And why did CSX essentially pay him to leave?
Exactly how does that benefit the company's stockholders?
~ ~ ~
For more poop on Treasury Secretary John Snow and CXX, GO TO > > > The Snow Birds; Nests On the Rails
November 22, 2002
Gerstner to Be Carlyle Group Chairman
Former IBM Chief Brings Long List of
Contacts to Private Equity Firm
By Greg Schneider, Washington Post Staff Writer
Carlyle Group, the Washington-based private equity firm with a reputation for hiring political heavyweights, snagged an industrial celebrity yesterday when it announced that former IBM chief executive Louis V. Gerstner Jr. will become its chairman.
Gerstner will succeed Reagan administration defense secretary Frank C. Carlucci on Jan. 7, and Carlucci will become chairman emeritus.
Credited with restoring International Business Machines Corp. to its position as an icon of American business, Gerstner, 60, retired as chief executive of IBM in March. . . .
...Continued at Louis V. Gerstner
November 29, 2002
THE ‘ARAB GATSBY’ AND HIS WASHINGTON PALS
By Maureen Dowd, The New York Times
WASHINGTON - Prince Bandar is known as the Arab Gatsby.
Rising from a murky past in a racist society, born in a Bedouin tent as the son of an African palace servant impregnated by a Saudi prince, to a glamorous present as dean of the Washington diplomatic corps.
Tossing glittery parties with celebrity entertainment at his sumptuous mansions in Aspen and England’s Wychwood, a royal hunting ground once used by Norman and Plantagenet kings.
Smoking cigars and bragging about his fighter-jock exploits – flying upside down 50 feet above the ground – at parties at his McLean, Va. estate overlooking the Potomac, “where there was more chilled vodka in little shot glasses than I’ve ever see,” as one guest recalled.
Flying off in his private Airbus to hunt birds in Spain with his friends former President George H.W. Bush and Norman Schwarzkopf, entertaining the current President Bush’s sister, Doro, at his Virginia farm, and palling around on the D.C. social circuit with Dick Cheney, Colin Powell, George Tenet, Brent Scowcroft and Bob Woodward.
Spinning a smoky web of intrigue with his cigars and CIA operations, helping finance the contras.
So if Bandar bin Sultan is Gatsby, his wife, Princess Haifa, must be like the careless Daisy, her voice full of money that could have ended up supporting two of the Saudi hijackers.
And those 15 Saudi hijackers would be “the foul dust that floated in the wake” of the Arab Gatsby’s dreams.
His new dream is that Saudi Arabia will help America get rid of Saddam, and then the anger over Saudi involvement in 9/11 will fade and the cozy, oily alliance between the countries can get back on track.
All the millions the Saudis have spent since 9/11 on a charm offensive could not save them from Newsweek’s Michael Isikoff and Evan Thomas, who drew fresh tracks between charitable checks Haifa wrote and two hijackers.
The princess says she feels as if a bomb has been dropped on her head – an unfortunate metaphor given the fact that Saudi terrorists funded by Saudi charities turned planes carrying innocent Americans into bombs.
She is rarely seen around Washington, abiding by Saudi customs sheltering women. But she entertains at her many homes, and powerful friends – including Barbara Bush and Alma Powell – called on Monday night to buck her up.
The case inflamed public suspicion that the Saudi government is more involved than it admits, and that the Bushies are less zealous about getting to the bottom of the Saudi role than they should be.
Some senators charge that the FBI has pulled its punches, and that the royal family, as Richard Shelby puts it, has “got a lot of answering to do.”
Gen. Tommy Franks has already spent a fortune setting up a new base in Qatar because the Saudis are still dithering about letting us use our old bases in their country.
Noncommittal on the future, and uncooperative on the past, the Saudis have been stingy about helping the FBI with 9/11. The administration has helped the Saudis be evasive, with Dick Cheney stonewalling congressional investigators.
It would probably be far easier for America to reduce its dependence on Saudi oil than for the House of Saud and the House of Bush to untangle their decades-long symbiosis.
Bandar, the representative of an oil kingdom, is so close to the Bushes, an oil dynasty, that they nicknamed him Bandar Bush.
He contributed ver $1 million to the Bush presidential library.
The former president is affiliated with the Carlyle Group, which does extensive business with the Saudis.
It was terribly inconvenient for all the friends of the bin Sultans when the trail of checks led to the Saudi Embassy.
Many influential people in Washington were averting their eyes from the embarrassment. The prince and his panicky wife were defending themselves to The New York Times’ Patrick Tyler while Bandar anxiously flipped among seven television screens in their pool house to catch the latest news.
The Bush crowd was praying it wasn’t a last-days-of-disco scene similar to the one when the shah of Iran was overthrown by Islamic fundamentalists, and the jet-setting Iranian diplomats had to pour all the liquor down the drain at their embassy.
Will the Arab Gatsby end like the original – “borne back ceaselessly into the past”?
For more, GO TO > > > The Eagle Hooded
May 3, 2002
Chemical Weapons Mishandled, Worker Says
Incinerator near Salt Lake City is destroying stockpile
by Robert Gehrke, Associated Press
WASHINGTON – Managers at the nation’s only chemical weapons incinerator encouraged workers to cut corners so a deadly nerve agent stockpile could be destroyed before the Winter Olympics in nearby Salt Lake City, a plant employee says.
Brenda Mugleston, who has worked for eight years at the Tooele Chemical Agent Disposal Facility, told The Associated Press workers were promised a $750 bonus for meeting the deadline. She said they felt pressure from managers to increase productivity and they sometimes mishandled weapons.
Mugleston said she feared workers and the public were being endangered and told managers but nothing was done. She also reported problems to the Occupational Safety and Health Administration.
Stuart Young, attorney for EG&G Defense Materials, which runs the incinerator for the Army, said Mugleston’s allegations are being investigated and “at this point we don’t have any reason to believe there are any immediate health, safety or environmental concerns.
Mugleston said she has reported the problems to OSHA and provided a letter saying the agency is investigating. Agency spokesman Bill Wright said whistle-blower laws preclude him from identifying complainants.
Army spokeswoman Nancy Ray said the Pentagon is pleased with the work EG&G has done.
“It’s absolutely a professional operation,” she said.
Tooele, located 40 miles west of Salt Lake City, is home to the Pentagon’s incinerator, created to destroy 13,616 tons of the chemical weapons stockpile.
Other incinerators are being built in Anniston, Ala.; Umatilla, Ore., and Pine Bluff, Ark.
The incinerator was forced to shut down for several months in the summer of 2000 after a tiny amount of GB nerve agent escaped from its emissions stack.
The Centers for Disease Control and Prevention said the amount was small enough that it did not endanger the public. Plant managers say it is the only time nerve agent was released.
Mugleston’s allegations come as the plant prepares to process VX nerve agent, which the CDC and Environmental Protection Agency say is 36 times more deadly than the sarin gas the facility has been handling and much more difficult to detect....
THE MARISCO AFFAIR
February 14, 2002
Marisco sued over
Kalaeloa drydock
The dock was intended for native Alaskan use, competitor
Pacific Shipyards contends
By Russ Lynch, Honolulu Star-Bulletin
A Hawaii shipyard business has sued a local competitor and a native-Alaskan tribal business for what it says is a racketeering scheme to take over a surplus Navy floating drydock intended for use in Alaska.
The dock was intended to be used for the economic benefit of natives at St. Paul Island, Alaska, and instead has been put to work in competition with private enterprise in Hawaii, according to complainant Pacific Shipyards International.
The consortium of two Hawaii-owned local shipyards filed a federal racketeering and corrupt practices complaint yesterday against Alaskan Aleut business Tanadgusix Corp. and rival Oahu ship-repair business Marisco Ltd.
The lawsuit says Marisco is using the surplus drydock, donated by the Navy to Tanadgusix, for ship repair work at Kalaeloa, formerly the Barbers Point Harbor, when the conditions of the Navy's gift exclude its use outside Alaska.
Meanwhile, Pacific Shipyards invested about $4.5 million to bring a new floating drydock to Hawaii and is getting unfair and illegal competition from Marisco's use of the donated equipment, the lawsuit says.
Marisco did not return calls and the Alaska business could not be reached yesterday, but the lawsuit says they tried repeatedly to get permission to keep their equipment in Hawaii and were denied by the U.S. General Services Administration.
The lawsuit cites GSA letters saying the drydock was for use in Alaska only, for the benefit of the natives at St. Paul Island, Alaska, near Anchorage.
In their initial pitch to the state of Alaska and the federal government, the Alaskans said the drydock, called Ex Competent but officially AFDM-6, would be repaired at Marisco and towed to St. Paul Island.
The drydock, which is sunk under vessels and then floated until the ship to be repaired is dry, was worth more than $5 million according to federal documents filed with the lawsuit.
Then Tanadgusix, normally known as TDX, wrote to the government saying moving the equipment to Alaska wasn't financially feasible, it couldn't economically be used "anywhere but where it presently resides in Hawaii" and that allowing it to be used in Hawaii would immediately begin to benefit the Alaskan natives.
The GSA replied use outside Alaska would be illegal....
For more, GO TO > > > Snakes in Paradise: The Carlyle Group
Life Was Good, and Then...
PETER CHUNG, a young buy-side analyst in the Carlyle Group’s Seoul office, sent the following e-mail message to a group of 11 recipients––including one at UBS Warburg and another at Credit Suisse First Boston––on Tuesday, May 15, 2001, via Carlyle’s system.
One or more of Mr. Chung’s "friends" loosed it, and it has been circulating around Wall Street since.
According to Bloomberg News, Mr. Chung resigned from the firm on Friday. Neither he nor Carlyle returned calls for comment.
Re: Living Like a King.
So I’ve been in Korea for about a week and a half now and what can I say, LIFE IS GOOD....
I’ve got a spanking brand new 2000 sq. foot 3 bedroom apt. with a 200 sq. foot terrace running the entire length of my apartment with a view overlooking Korea’s main river and nightlife . . .
Why do I need 3 bedrooms?
Good question …… the main bedroom is for my queen size bed … where CHUNG is going to fu*k every hot chick in Korea over the next 2 years (5 down, 1,000,000,000 left to go) …… the second bedroom is for my harem of chickies, and the third bedroom is for all of you fu*kers when you come out to visit my ass in Korea.
I go out to Korea’s finest clubs, bars and lounges pretty much every other night on the weekdays and everyday on the weekends to (I think in about 2 months, after I learn a little bit of the buyside business I’ll probably go out every night on the weekdays).
I know I was a stud in NYC but I pretty much get about, on average, 5-8 phone numbers a night and at least 3 hot chicks that say that they want to go home with me every night I go out.
I love the buyside ... I have bankers calling me everyday with opportunities and they pretty much cater to my every whim - you know (golfing events, lavish dinners, a night out clubbing). The guys I work with are also all chill - I live in the same apt building as my VP and he drives me around in his Porsche (1 of 3 in all of Korea) to work and when we go out.
What can I say ... live is good ... CHUNG is KING of his domain here in Seoul ...
So ... all of you fu*kers better keep in touch and start making plans to come out and visit my ass ASAP, I’ll show you guys an unbelievable time ... My contact info is below ... Oh, by the way ... someone’s gotta start fedexing me boxes of domes ... I brought out about 40 but I think I’ll run out of them by Saturday . . .
Laters,
CHUNG
– James Verini (This column ran on page 25 in the 5/28/01 edition of The New York Observer.)
* * * * *
From Spice Trader, Hong Kong i mail:
The one thing executives at the Carlyle Group were dreading most happened yesterday.
The Peter Chung superstud story was picked up by the South Korean press.
The Chosun Ilbon, a daily newspaper, printed the tale in a disapproving tone, headlined: ``Email by Carlyle Exec Brings Shame to Banking Sector.''
Worse still, the paper left out Peter Chung's name, and instead printed the names of the top people involved with the Carlyle Group.
The group's Seoul office is run by Kim Byung Ju, the son-in-law of Park Tae Joon, a former prime minister of South Korea.
The board of advisers includes former United States president George Bush.
Until now, Peter Chung's much-distributed boastful email about his stunning sexual exploits was no more than a cause of hilarity in the east Asian financial community.
But executives fear he may have blackened the name of the US company, which is the largest shareholder of Korea's KorAm Bank.
The newspaper article said: "The email has been causing a stir in international financial circles and has embarrassed Korea, as the email reveals a sleazy side to the local banking industry.''
EXECUTIVE BRIEFING
A Global Agenda for the U.S. President
By Frank Carlucci, Robert Hunter, and Zalmay Khalilzad
The authors co-chaired Transition 2001, a panel of 54 American leaders in foreign and defense policy who were convened by RAND to forge a bipartisan agreement on the central tenets of U.S. national security policy and to offer bipartisan recommendations to the new U.S. president.
Frank Carlucci, a RAND trustee, was secretary of defense from 1987 to 1989.
Robert Hunter, a senior advisor at RAND, was ambassador to NATO from 1993 to 1998.
Zalmay Khalilzad, corporate chair for international security studies at RAND, was assistant deputy undersecretary of defense for policy planning from 1991 through 1992 and director of President George W. Bush's Department of Defense Transition Team in December 2000 and January 2001.
The conclusions of the panel are summarized below. . . .
Dear Mr. President:
Ten years after the end of the cold war, the United States finds itself with unrivaled military, economic, political, and cultural power. However, we are still struggling to understand what we must do abroad to support our interests and values, what are the limits of our power, and what we can do with others to help shape the kind of world in which we want to live. In the past decade, we learned anew that America cannot retreat from the world, that isolationism is impossible. We learned that American economic and military strength are as important as ever and that much of the world still depends on us to be engaged--and to lead.
Yet American power and purpose alone cannot suffice to meet the array of global challenges to the welfare of the United States, of our friends and allies, and of the planet as a whole. Thus, we advocate selective global leadership by the United States, coupled with strengthened and revitalized alliances. The United States, together with its democratic allies in Europe and Asia, possesses an unparalleled ability to meet tomorrow's challenges. However, without the help of these allies, many emerging challenges will prove beyond our capacity to manage. Thus, strengthening our alliances is essential to America's future and should form the bedrock of U.S. engagement abroad.
None of this can be done without a price. The array of new global challenges and opportunities will significantly increase the demand for U.S. diplomacy and other nonmilitary involvement abroad. Therefore, nonmilitary spending on foreign policy and national security should increase substantially as well.
Thus, Mr. President, we urge that you ask Congress for a 20 percent hike in spending for the U.S. Department of State, for payment of U.N. dues, and for other critical nonmilitary requirements of foreign policy. We also recommend that you seek about a 10 percent increase in defense spending, or about $30 billion more for procurement plus another $5-$10 billion for property maintenance, recruitment, targeted pay raises, retirement, and medical care....
For more, GO TO > > > Rand Corporation
January 8, 2002
Carlyle's way
Making a mint inside "the iron triangle"
of defense, government, and industry.
By Dan Briody, Red Herring Magazine
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 important.
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 longer relevant."
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 eyebrows.
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 reenter 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 www.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....
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."
Additional reporting by Lawrence Aragon, Mark Chediak, Julie Landry, Christopher Locke, Eric Moskowitz, Mark Mowrey, and Michael Parsons.
Spectrezine
A spectre is haunting Europe.
The Carlyle Group
Alfred Mendes looks at a single US investment corporation
and asks some pertinent questions about
democracy, terrorism and power.
It is quite extraordinary, and not a little frightening, how little attention is paid to the unexpressed aims of Corporate America in its on-going act of achieving global economic and political domination. Whereas its expressed aims, such as promoting a ‘‘new’’ and ‘‘humanitarian’’ world freed of ‘‘terrorism’’, are constantly propounded in both print and speech, the causal problems underlying these recent crises (of which ‘‘terrorism’’ is the most prominent) are not being examined rationally.
That Americas’ expressed aims are false can be readily proven:
(1) financed to the tune of $2 billion and armed by the USA, its NATO ally, Turkey, has been ‘‘ethnically cleansing’’ its Kurdish minority for the past decade & a half - within view, as it were, of a US Intelligence Base just outside Diyarbakir - while it, the USA, has been bringing its ‘‘humanitarian values’’ to the Balkans;
(2) those two paradigms of ‘‘terrorism’’ - Osama bin Laden and Saddam Hussein - could not have achieved power without the active assistance of the USA.
To understand more clearly the role being played by this superpower, it is first necessary to accept the fact that the US Administration is - and has been for decades - under the control of its capitalist corporations, a group wielding enormous power due to its vast industrial capacity and world-wide capital investments - to say nothing of its cabalistic, cohesive nature.
To confirm this, one has only to scan the lists of the top individuals in both the US Administration and the corporate boards over the past few decades to see the close linkage between the two. As for the post of President: this is an executive post carrying such autocratic power that the Corporate Establishment ensures that ‘‘their man’’ is elected.
This election is, in effect, an auction, as exemplified by the fact that oil companies contributed $1.8 million towards George W. Bush’s campaign in the year 2000 - thirteen times as much as they gave his opponent!
Again, the Electric utilities donated $447,000 to Bush, but only $65,000 to Al Gore, etc. And, inasmuch as the President-to-be appoints administrators who are, in effect, the policy-makers, the Corporate Establishment - as the highest bidder in the ‘‘auction’’ - ensures that it is well-placed in the seat-of-power. Is this the form of democracy the Athenians had in mind!?
The following recent news report epitomises this close bond between government and business concisely: on the 27th September ‘01, the Wall Street Journal revealed that the bin Laden family firm in Saudi Arabia was a major investor (1 of 450 such investors) in the prestigious American investment firm, the Carlyle Group, and that George Bush Snr., on behalf of this group, had brokered the deal.
The report added that the FBI had subpoenaed the bin Laden family’s bank records, there being doubt that the family had broken all ties with Osama.
This calls for a closer examination of the Carlyle Group in order to unearth more germane facts., and an efficient way to accomplish this is to begin by listing the senior officers of the company - with very brief (incomplete) C.V’s added.
(It should be noted here that the European Chairman is John Major, the ex-British PM, but he warrants no further mention in this article as he is of little import to the subject in hand).
Chairman: Frank C. Carlucci - His ties with the US Administration go back to the ‘70’s, (Dept. of Health, Education & Welfare, etc.) and - more importantly - includes stints as Deputy Director of CIA (‘‘78 - ‘‘81) under Carter; Deputy Secretary of Defense (‘‘81 - ‘‘82) and National Security Adviser (‘‘87 - ‘‘89) both under Reagan.
Senior Counselor: James Baker III. Chief of Staff (‘‘81 -‘‘85), and Secretary of Treasury (‘‘85 - ‘‘89) both under Reagan; and Secretary of State (‘‘89 - ‘‘93) under Bush Snr.
Broker: George Bush Snr. Director of CIA (‘‘76 - ‘‘77) under Ford; Vice-President (‘‘81 - ‘‘89) under Reagan; and President (‘‘89 - ‘‘93).
The Corporate Establishment can readily be portrayed as a complex web of interlinked companies and executives, and the fact that Carlyle holds ownership stakes in 164 companies and ranks as the eleventh largest defence contractor in the US further emphasises its pre-eminence within this web, and the somewhat disproportionate links to the intelligence services listed above is reflected in its ownership - via BDM International - of the CIA-front company, Vinnell Corp., which has been operating under contract in Saudi Arabia since 1975.
It is of pertinence to note here (if only to stress the close relationship between the Administration and the corporate establishment) that BDM’s President & CEO is one Philip Odeen who served as Chairman of Clinton’s National Defense Panel.
Another filament of this web: in 1990 George W. Bush - now President - was on the board of directors of one of Carlyle Group’s subsidiaries, Caterair, an airline catering company.
It needs little delving into the background of the senior Carlyle officers listed above to trigger memories of events that have a direct bearing on today’’s crisis of ‘‘terrorism’’.
(1) One week after his inauguration as President, and with Vice-President Bush Snr. by his side, Reagan called a cabinet meeting to discuss ‘‘terrorism’’ - the overthrow of Iran’s Shah by the Ayatollah Khomeini still fresh in memory. As reported by Bob Woodward in his book The Veil, Anthony Quaint, the State department’s expert on terrorism, stated at that discussion that “it’s possible for a terrorist group to strike directly at the United States in the United States. The United States is vulnerable”. Now, 20 years later, the US government can hardly claim they were not forewarned!
(2) As reported by Leslie Cockburn in her book Out Of Control covering the Nicaraguan Iran/Contra crisis: while the notorious Lt. Col. Oliver North was serving “on the Interdepartmental Group on Terrorism and on the Terrorist Incident Working Group, both of which reported to the Crisis Pre-Planning Group and the Special Situation Group, both of which in turn shared the same chairman: Vice-President George Bush”, the US government was, at the same time, engaged in trading guns for drugs, as revealed by one of the pilots so engaged, ‘‘Mickey’’ Tolliver, in a CBS interview in 1987 (Cockburn had worked for CBS since 1978).
On one trip he had carried 28,000 lbs. of guns and ammunition to the Contra supply base in Honduras, and returned with a 25,360 lb. load of marijuana - landing at Homestead Air Force Base in Florida!
(3) In the aftermath of the disastrous bombing of both the US Embassy and the US Marine Base in Beirut in ‘83, there ensued a spate of hostage-taking. America accused Iran of aiding the suspect ‘‘terrorist’’ groups guilty of these activities.
Result: America arranged for Israel to sell 508 TOW missiles to Iran in exchange for the release of the hostages!
(4) In the aftermath of the Lockerbie bombing in ‘86, America for the first 2 or 3 years accused Iran (once again) and Syria of responsibility for the act - only to drop all accusations against them when it became necessary to co-opt Syria as an ally in the inevitable war against Iraq, the new ‘‘Satan’’.
There were a number of other subsequent events of a similar ‘‘terrorist’’ nature, and in retrospect, it is clear that America was using the term ‘‘terrorism’’ in order to conceal their real aim, which was to achieve economic and political domination on a global scale - as expressed in the opening sentence of this article.
This subject of terrorism is best treated by drawing attention to the crux of the problem - the inequity and bias inherent within the capitalist system itself, whereby a comparative few garner profit from the labour of many, inevitably fostering that most dangerous of emotions: frustration.
Is not frustration the mother of terrorism?
And would not the most rational means of solving this problem be to examine the source of this frustration? Which is precisely why America cannot afford to take this rational road: to do so would mean questioning the system itself - Mammon forbid!
In view of the foregoing, is it not thus reasonable to harbour grave doubts as to the validity of America’s declared aim in this conflict with Afghanistan?
A further delving into the background of the listed Carlyle officers is called for here - and whom better to start with than its chairman, Carlucci.
As noted in his C.V. above, he had strong ties with the intelligence agencies, as confirmed by Philip Agee in his book, On The Run: “Carlucci had been on the team in Kinshasa when Patrick Lumumba was assassinated and the Congolese revolution stopped. Then he worked four years in Brasil following the military coup in 1964”.
Agee was in Portugal not long after the April ‘75 coup by the communist-led Armed Forces Movement had overthrown the dictatorship of Salazar - as a result of which, President Ford had sent Carlucci as ambassador to Portugal.
As Agee writes: “If the new ambassador, Frank Carlucci, was any indication, the Ford administration was determined, both alone and in concert with European allies to stop the revolution”...”He would be in charge of coordinating all efforts to ‘‘save Portugal”.
But more pertinent to his role in later years were the many directorships he held, among which were General Dynamics, Westinghouse Electrics, the Rand Corp.-and Ashland Oil (among others).
He had also been a college classmate of Donald Rumsfeld, the present Secretary of Defense.
Perhaps his most interesting relationship was with the very right-wing Dr. Constantine Menges of the Hudson Institute who had worked for Carlucci in the Department for Health, Education and Welfare.
As Bob Woodward revealed in The Veil: “ In a 1980 article (The New York Times), Menges stated that events in Iran, Afghanistan and Nicaragua marked a ‘turning point in the invisible war between radical and moderate forces’ for control of oil (this authors italics), in the Middle East and Central America”.
This was a significant slip-of-the-tongue on the part of Menges, and was to prove correct. After the collapse of the USSR, the American oil companies wasted no time in moving in on the Caucasian oil & gas fields (see author’s article “The Thin End Of The Wedge”).
In ‘81, William Casey, Director of CIA, made Menges Intelligence Officer for Latin America, a position he held until, in 1983, and on the advice of Carlucci, he was transferred to the National Security Council, under Reagan.
It is of significance to note that Carlucci was not the only one of the three Carlyle officers covered by this article to be connected to an oil company (he was chairman of Ashland Oil); Bush Snr., had founded the oil drilling firm, Zapata; and last - but not least - Baker is on the board of the Azerbaijan International Oil Co. (AIOC) as legal representative, which should please him as his good friend from the days of the USSR, Eduard Shervardnadze, is President of neighbouring Georgia.
It is necessary to note here that, contrary to the generally accepted belief that the US troops recently deployed in Uzbekistan was the first such deployment on ex-Soviet soil, Reuters reported, in June of this year, 2001, that 4000 troops from eleven countries (including the USA) held NATO exercises near the Georgian port of Poti on the Black Sea, and were welcomed whole-heartedly by Shervardnadze, who stated that this was “confirmation of the readiness of our country to move towards deeper Euro-Atlantic integration.”
This, from the man who was Foreign Minister of the USSR when it collapsed! (Any causal linkage here?).
The filaments of the oil web are too numerous to be covered in detail in an article of this length, but, with the AIOC fresh in mind, a few more examples of the role played by oil companies in the sensitive area of the Caucasus region would not be amiss. As its name implies, AIOC is an Azerbaijan consortium - in which US oil companies hold a 40% stake.
Two of these companies are Amoco and Pennzoil.
(1) Zbigniew Brzezinski, who had been National Security Advisor to Jimmy Carter, was on Amoco’s payroll, and
(2) General Brent Scowcroft, who had been National Security Advisor to George Bush Snr., was on Pennzoil’s payroll. But, had not the US Congress in ‘92 passed Section 907 of the Freedom Support Act to restrict US assistance to Azerbaijan until such time as it, Azerbaijan, stopped its offensive and adopted a more ‘‘humanitarian’’ attitude to its neighbours, Armenia and Ngorno Karabahk?
The answer is found in the short paragraph of the Act which reads: “Section 907 does not prevent Trade and Development Agency guarantees and insurance for US firms, or Foreign Commercial Service operations, or the activities of the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank. Thus, US businesses are not placed at a competitive disadvantage.” (authors’ italics).
1997 saw the formation of the Central Asia Gas Pipeline consortium (Centgas) with the intention of running a 790-mile-long pipeline from the gas fields of Turkmenistan through neighbouring Afghanistan to Multan, in Pakistan (at a cost of $1.9 billion) - with a possible future extension to New Delhi, in India (cost: $600 million).
This was a project under the control of the California oil company, UNOCAL, who held the controlling stake of 46.5% in the consortium.
At the instigation of UNOCAL, a Taliban ministerial delegation held talks in Washington with the US Undersecretary of State, Karl Underforth, in December 1997 to discuss this pipeline project - but, due to the ever-worsening instability in Afghanistan, UNOCAL aborted the project in December 1998.
However, as reported in the Pakistani publication “Business Recorder” in 2000, the remaining members of Centgas - Delta Oil Group of Saudi Arabia, the Turkmenistan government, Indonesian Petroleum, ITOCHU of Japan, Hyundai of South Korea and the Crescent Group of Pakistan - had not given up hope.
The crucial point to note here is that, without the participation of an American oil partner such a project is impossible, and given the very influential clout carried by the oil industry in the US Administration (as noted above), it is reasonable to assume that these considerations would have been in the forefront of the minds of the US government officials, and would thus have played a crucial role in determining America’s response to Afghanistan in the aftermath of the WTC bombing.
This attack, in affect, had supplied the US with a convenient reason for taking control of Afghanistan under the pretext of destroying ‘‘terrorism’’ when, in fact, already well-ensconced in the nearby ex-Soviet republics of the Caucasus region, this was merely another step in Corporate America’s inexorable advance eastwards in its search for more lucrative markets - for its oil industry in particular.
This poses the obvious, crucial question: which of the two protagonists in this struggle is the real terrorist?
Alfred Mendes was born in Trinidad in 1920 and is of Portuguese extraction. His varied career included wartime service both at sea and in the British Army and work as a coal miner and oil driller in several parts of the world. He has been retired for twenty years.
November 30, 2001
Investigating The
Bush-Bin Laden Connection:
Judicial Watch To File FOIA Lawsuit
Over Carlyle Group Documents
"Judicial Watch...announced that it would be filing a Freedom of Information Act lawsuit against the State and Defense Departments in order to obtain documents concerning the Carlyle Group, an international consulting and investment firm which retains former President George H.W. Bush.
The Wall Street Journal reported in September that the former president...worked for the bin Laden family business in Saudi Arabia through the Carlyle Group. [He] met with the bin Laden family at least twice...
Reports have questioned whether members of his Saudi family have truly cut off Osama bin Laden. Osama's sister-in-law, in a recent interview with ABC News, said that she believed that members of her family still supported bin Laden...
And documents recently uncovered through Judicial Watch's FOIA to the Department of Defense show that the Carlyle Group has high-level access to the U.S. government." . . .
Copyright 2001 Democrats.com. All rights reserved.
November 30, 2001
The Carlyle Group Is A Key Player
in Media Consolidation
- With the Help of Colin Powell's Son
Frank Washington……heads a new company these days called Moon Shot Communications. And his new goal is to make a lot of money in the next several years by buying TV stations across the country, waiting for their value to increase, and then selling them to the highest bidders.
Washington believes the stations will command higher prices if the Federal Communications Commission [under Colin Powell's son Michael] loosens rules limiting the number of broadcast TV stations a media company can own in the same market -- a change he expects to happen over the next few years. The change would uncork a consolidation-driven buying frenzy like the one that began in radio 10 years ago. By buying now and selling later, Moon Shot would try to pocket some fat capital gains.
Washington and four partners are working with investors and the Carlyle Group of Washington, D.C., a major private-equity firm, to line up stations they might buy.
Copyright 2001 Democrats.com. All rights reserved.
November 16, 2001
Bush Sr, the Carlyle Group
and the Saudi Royals
From the archives of the Nation: "Carlyle has extensive interests in Saudi Arabia, and it has been pursuing a deal in partnership with SBC, the telecommunications giant (which owns Southwestern Bell, Ameritech, Pacific Telesis and Cellular One), to acquire about 25 percent of the Saudi phone system.
Accompanied by several Carlyle execs, Bush and Major--the leaders of the alliance that pushed Saddam Hussein out of Kuwait in 1991--were out to win friends and influence Saudis on behalf of Carlyle. (Bush, Major and the Carlyle officers also made a stop in Kuwait.)
A day or two after the short session with the Prince [Abdullah], Bush and Major were whisked by the Carlyle team, headed by Carlyle founder David Rubenstein, a former Carter White House aide, to the city of Jeddah.
They spent four hours on a yacht cruising the Red Sea with Saudi business officials and then attended a swank party at a private residence, again hobnobbing with prominent Saudis.
Copyright 2001 Democrats.com. All rights reserved.
November 3, 2001
Besides Bombs, Carlyle Group Is
Big in Web Commerce
The Carlyle Group is one of the world's largest weapons makers, and it controls the largest franchiser of non-cola soft drinks in the world.
According to Publishing Trends, "Carlyle joined the Tribune Company in plunking down a $30 million investment last August for VarsityBooks.com, giving it a minority stake in the online textbook discounter.
According to company documents, the VarsityBooks hit was part of a broader effort at Carlyle to target Internet-related firms with a special $210 million venture capital fund, which has brought on such diverse companies as Blackboard, an online learning firm that sells course website packages to colleges and universities, LatinForce.Net, an e-commerce portal targeting Hispanics in the US and Latin America, and MuniAuction, a website that has auctioned some $6 billion in bonds, notes, and certificates of deposit."
Copyright 2001 Democrats.com. All rights reserved.
November 4, 2001
John Major link to
bin Laden dynasty
Former Prime Minister chairs bank
which invests Osama's family fortune
By Neil MacKay Home Affairs Editor, Sunday Herald
JOHN MAJOR, the former Conservative Prime Minister, has been linked to the family of Osama bin Laden through his role as the European head of a multi-billion dollar US investment firm which took almost £1.5 million from the terrorist leader's relatives.
Evidence has also come to light which points towards some members of the bin Laden family still having close ties to Osama as well as links to terrorism, including a previous attack by the al-Qaeda organisation on the USS Cole in Yemen last year. Bin Laden's family claim they disowned him in 1994 and have repeatedly denounced terrorism.
The Carlyle Group, a Washington DC based merchant bank which has Major as its European chairman, received the funds from the bin Laden family through a London investment arm in 1995. The Carlyle Partners II Fund has now raised an estimated £1 billion.
It was used to buy several aerospace companies. So far the bin Laden family has received more than £1m back in completed investments, but should ultimately make £500m.
Financiers say that the family's actual contribution was far more than the £1.5m disclosed.
Judicial Watch, the Washington DC legal watchdog organisation, has accused any company which does business with the bin Laden family -- through its company the Saudi Binladin Group (SBG) -- of 'disloyalty to the USA'.
The FBI has issued subpoenas to banks used by the bin Laden family seeking records of family dealings. Investigations in the US and UK will also attempt to unravel whether any relative has given financial support to al-Qaeda or Osama bin Laden.
Despite claims that his family have cut off all contact with bin Laden, the terror leader's stepmother received a phone call from him on the eve of the September 11 attacks in which he told her that 'something big' was about to happen and he would not be able to see her again for a long time.
She also attended his son's wedding in Afghanistan earlier this year.
America believes that two of Osama bin Laden's brothers-in-law, Mohammad Jamal Khalifa and Sad al-Sharif, are also in contact with him. Both are alleged to have financial connections to al-Qaeda.
Khalifa, who lives in Saudi Arabia, is suspected by US intelligence of using a charity called the International Islamic Relief Organisation to finance Islamic terrorists in the Philippines connected to al-Qaeda.
Vincent Cannistraro, the former CIA chief of counter-terrorism, said Khalifa may also have funded the Islamic Army of Aden, which claimed responsibility for the bombing of the USS Cole.
Al-Qaeda co-ordinated the attack on the American ship.
Khalifa was detained briefly in the USA in 1994 when immigration officials discovered he had been sentenced to death in absentia in Jordan for 'conspiracy to carry out terrorist acts'.
Bin Laden's brother, Mahrous, is also connected to an armed attack by Islamic fundamentalists in Saudi Arabia in 1979. He befriended Syrian members of the Muslim Brothers, an Islamic fundamentalist group, in exile in Saudi Arabia.
They later used bin Laden company trucks to smuggle arms into Mecca when at least 500 dissidents invaded and seized the Grand Mosque. All the men who took part in the attack were beheaded.
Mahrous was arrested but later freed. He is currently the manager of SBG at its Medina offices.
John Major's private secretary, Arabella Warburton, refused to accept that the bin Laden family could have links to terrorism, saying: 'They are thoroughly good people. Mr Major has nothing to be concerned about. Bin Laden's family have castigated him, distanced themselves from him and issued statements condemning the attacks on America. It's unfair to cast doubt on them. It's guilt by association.'
She said that Major, who became European chairman of the Carlyle Group on leaving Parliament in May, 'had never met a member of the bin Laden family, and could not comment on allegations against the family which he knew nothing about'.
Daniella Zuin, the European spokes woman for the Carlyle Group, said: 'The bin Laden family are investors of ours, but we do not discuss investors. We are sure that the bin Laden family have no dealings with Osama bin Laden.'
Major also sits on the Carlyle Group's Asia advisory board. The company is the world's largest global private equity firm and manages more than £10bn in capital.
The former US defence secretary, Frank Carlucci, is the company's chairman. Carlyle is extremely close to the Saudi Royal family, which in turn has a close friendship with the bin Laden family.
Former President George Bush is the company's senior adviser to its Asian Partners Fund, while his one-time secretary of state, James Baker, is its senior counsellor.
Bush, Carlucci and Baker have all visited the bin Laden family at their company headquarters in Jeddah.
New ambassador to Saudi Arabia is another Bush/Carlyle Group crony.
by Jonathan Ashley, Eyes On America
October 9, 2001
Dallas attorney Robert Jordan was confirmed Wednesday by the United States Senate to serve as ambassador to Saudi Arabia.
Jordan has no diplomatic experience. However, his connections leave no doubt as to why he was named to the post. He defended George W. Bush in a probe of insider trading allegations in 1990. The allegations involved the sale by Bush of 60% of his Harken Energy Corp. stocks two months before a 25% drop in the stock's price.
According to a 7 Sep 2000 article by the Associated Press, "At the time of the investigation, Bush's father was president of the United States and the SEC was run by one of his biggest political supporters, Richard Breeden.
The SEC's then-general counsel, James R. Doty, was another staunch presidential supporter who as a private attorney was George W. Bush's lawyer when he purchased his share of the Texas Rangers baseball team."
This is not Jordan's only connection to the Bush family. Jordan is a corporate lawyer in the Dallas office of Houston-based Baker Botts. Baker Botts has an office in Riyadh, Saudi Arabia. The client list at Baker Botts includes "more than half of the Fortune 100 companies".
The client list also includes The Carlyle Group. On the board of directors for Carlyle is former President George Herbert Walker Bush.
James A. Baker III is the current Baker in Baker Botts. Baker was Secretary of State under the first President Bush. He is currently senior counsel to The Carlyle Group.
Baker was a classmate of Donald H. Rumsfeld at Yale University. Rumsfeld, the current Secretary of Defense, was the roommate of Frank C. Carlucci at Yale.
Carlucci, who was head of the National Security Counsel under President Ronald Reagan, is currently chairman of The Carlyle Group.
The current President Bush was a director of Caterair during the years 1990-1994.
Caterair is owned by The Carlyle Group.
The board of directors of The Carlyle Group also includes: former Philippines President, Fidel V. Ramos; former director of the U.S. Office of Management & Budget, Richard Darman; former Assistant to the President (Bush I), Robert Grady; former Prime Minister of South Korea, Park Tae Joon; former SEC chairman, Arthur Levitt; former Prime Minister of Great Britain, John Major; former general director of the World Health Organization, Michael Orloff; retired U.S. Army General, J. H. Binford Peay; former president of Deutsche Bundesbank, Karl Otto Pohl; and former chairman of the Joint Chief's of Staff, John Shalikashvili.
Two-thirds of Carlyle's holdings are in defense and telecommunications companies.
At least $2 million of Carlyle funding has come from the bin Laden family of Saudi Arabia.
– Reprinted from Eyes On America : http://eyesonamerica.org/200110/10050102.html
April 24, 2001
BAE SYSTEMS enters agreement with the Carlyle Group to spin out imaging sensors business
BAE Systems North America has reached agreement with The Carlyle Group, Washington, DC, to spin out its Imaging Sensors business located at Milpitas, California. Imaging Sensors was previously part of BAE Systems Reconnaissance and Surveillance Systems of Syosset, New York. In the transaction, BAE Systems has provided the assets of Imaging Sensors to form a new company, Fairchild Imaging, Inc. Closing of the agreement occurred April 6, 2001.
The core competencies of the new company, Fairchild Imaging, are in charged coupled device (CCD) development and fabrication and electronic imaging systems. This company pioneered the development of CCD imaging technologies and has continued to innovate in a number of commercial product areas serving medical, dental and industrial surveillance markets. It currently employs 123 people.
"Fairchild Imaging is an excellent business. This transaction is part of our continuing strategic alignment to our aerospace core competencies, and provides Fairchild Imaging with great opportunity for future investment growth and success in its new commercial markets as well," said Mark Ronald, President and CEO, BAE Systems North America.
Under the terms of the transaction, BAE Systems North America retains an equity interest in Fairchild Imaging. The new company will continue to provide CCD products to the Reconnaissance and Surveillance Systems business within BAE Systems North America. Financial terms were not disclosed.
Note to Editors
BAE Systems is the truly global systems, defence and aerospace company. BAE Systems employs more that 120,000 people in eight home markets around the world and has annual sales of some 12 billion. The company offers an unrivalled global capability in air, sea, land and space with a world-class prime contracting ability supported by a range of key skills.
BAE Systems designs and manufacturers civil and military aircraft, surface ships, submarines, space systems, radar, avionics, communications, electronics, guided weapon systems and a range of other defence products.
BAE Systems North America employs 22,000 people in the design, development, integration, manufacture and support of a wide range of advanced aerospace products and intelligent electronic systems for government and commercial customers.
The Carlyle Group is one of the world's largest private equity firms, managing more than $13 billion of equity capital in buyout, venture, real estate, high yield, and energy funds, operating in the United States, Europe, Asia, and Japan.
Since its inception in 1987, Carlyle has invested $5.8 billion of equity capital, in more than 200 corporate and real estate transactions. The equity capital invested by Carlyle has been provided by more than 400 institutional and private investors from more than 50 countries. Headquartered in Washington, D.C., Carlyle has more than 225 investment professionals working in 22 offices in the United States and abroad.
For more, GO TO > > > The Buzzards On Board Airbus; BAE Systems: Buzzards Absent Ethics
Posted on the Internet:
An article from Newsday, Jan 31, 1995, by Karen Rothmyer, "Peso Hits Record Low As Bailout Is Debated," identifies some of the Council on Foreign Relations members involved in the cover-up.
They were "Former Presidents George Bush, Jimmy Carter and Gerald Ford [who] signed a declaration of support for the [bailout] plan. Also endorsing the plan was George Soros, probably the world's most influential international investor."
George Soros is also a member of the Carlyle Group. The Carlyle Group is an investor team led by Ronald Reagan's Defense Secretary Frank C. Carlucci III and funded in part by the Mellon family.
Carlucci is a sawed off runt with a Napoleon complex and a poor self image. The furniture in Carlucci's office is miniaturized so he feels bigger. When Carlucci is photographed with other men, they sit down, and he stands up, to give the perception he is bigger. As president and CEO of Sears World Trade Center, Carlucci left the company with a $60 million dollar loss, and went work for the government.
The managing director of the Carlyle Group is George Bush's White House Office of Management and Budget Director Richard Darman.
A partner in the group is George Bush's Secretary of State James A. Baker III.
Another member of the Carlyle group is Richard Nixon's White House Office of Management and Budget Deputy Director Frederic Malek.
George Bush Sr.'s son George Bush Jr., former CIA Director Robert Gates and current SEC Chairman Arthur Levitt are advisors to, investors in or board members of Carlyle's companies. Included in Carlyle's press kit are Vernon Jordan and Bob Strauss.
Carlucci, Darman, Gates, Jordan, Malek and Strauss are Council on Foreign Relations members.
The Carlyle group has exploited their governmental connections and ties to turn itself into one of the twenty-five largest defense contractors in the world.
All the members of the Carlyle group have been part of dubious investment activities.
Many have been exposed in scandals that involve the Central Intelligence Agency....
October 21, 1999
TOP POLITICIANS LINKED TO
PENSION FUND DEALS
The Hartford Courant
Connecticut State Treasurer Denise L. Nappier shone the light Wednesday on seldom-seen machinations that have put millions into the pockets of well-connected “finders” in state pension investment deals — and some of the state’s best-known politicians were caught in the glare.
Nappier, responding to the scandal surrounding her now-disgraced predecessor, Paul J. Silvester, released a list of those who have received finder’s fees and other compensation in treasurer’s office deals since 1991....
One firm that has given Nappier an incomplete response is the Carlyle Group — which has figured prominently in the Silvester scandal....
Silvester invested $50 million in pension funds with Carlyle, which has been a client of Wayne Berman, a Washington-based consultant and major fund-raiser for Texas Gov. George W. Bush’s presidential campaign....
Berman gave Silvester a job with his new business consulting firm, Park Strategies, after his term ended....
For more, GO TO > > > A Connecticut Yankee in King Kamehameha’s Court
April 23, 2001
Money Watch
By Vishesh Kumar
CityNet Telecommunications has
a dirty little secret
...but it still manages to walk away with $275 million in funding.
CityNet Telecommunications
CEO: Robert G. Berger
Location: Silver Spring, Md.
Funding: $275 million in equity and debt, following a $100 million investment in April 2000
The Pitch: Stringing optic cables inside sewer lines to bring broadband access to buildings
Don't laugh when you hear CityNet Telecommunications' dirty little secret: The company brings fiber-optic networks to office buildings by laying lines in sewers.
CityNet has outfitted robots with digital cameras and sent them into wastewater systems. The robots install stainless steel tubes containing fiber lines along the walls of sewer pipes. Initially developed by a Swiss firm to clean sewers, the robots go through tunnels as narrow as eight inches across.
The stingy private-equity market has opened the floodgates for CityNet. The company raised $175 million in equity and $100 million in debt financing last week, one of the largest private rounds of investment for any company this year.
The Carlyle Group, a buyout and private investment firm, led the charge, which also included Berkshire Partners, CIBC Capital Partners, Crescendo Ventures and Trimaran Capital Partners....
CityNet went to the Carlyle Group to lead the round because of the firm's global reach and track record in telecommunications. Carlyle has also invested in Global Crossing, Nextel and Nortel.
"In addition to being able to write a big check," says Rosenblum, "the fact that we have strong industry focus and operations in Europe and elsewhere will be a big help."
May 21, 2001
MERGER TALK- Carlyle wants more than political clout
By Dane Hamilton
NEW YORK (Reuters) - After a steady stream of superstar hires from the ranks of government, Carlyle Group finally is getting the recognition its founders think the private equity firm deserves. But for the wrong reasons.
Carlyle, one of the world's largest leveraged buyout firms, wants to be known as the Goldman Sachs Group (NYSE:GS - news) or Morgan Stanley (NYSE:MWD - news) of private equity. Instead, Carlyle is better known for employing more Washington heavy hitters than any other similar investment firm.
That growing list now includes former President George Bush, former Secretary of State James A. Baker III and Frank Carlucci, President Reagan's defense secretary. In recent weeks, the firm added John Major, the former British prime minister, and Arthur Levitt, the former Securities and Exchange commissioner, to its advisory panel.
David Rubenstein, a 51-year-old lawyer who helped build the Washington-based buyout firm into a $12.5 billion powerhouse over the last 14 years, bristles at the charge that politicians are too
“addled” to be effective in business. The names, he says, are mainly there bring in new business, especially in aerospace, telecommunications and other regulated industries....
To attract investors at a time when raising money is getting harder and returns smaller, Carlyle is looking to create a strong brand and a broad array of financial products, Rubenstein says.
That way, pension fund investors can undertake “one-stop shopping” for their “alternative investments” that include private equity.
Standard business school prescriptions? Perhaps. But for the veiled world of private equity firms, it's a big change.
A decade ago buyout firms were dominated by buyout pros who made huge bets on one or two transactions, epitomized by KKR's now legendary takeover of RJR Nabisco in 1989. Now big firms like Carlyle have scores of dealmakers who buy and manage dozens of private companies for years with thousands of employees.
But making the transition isn't easy. When Carlyle started in 1987, only a handful of financiers practiced the art of raising huge amounts of debt, or leverage, and buying out companies by using the target firm's assets as collateral. Later the target firm would be sold, often at a spectacular premium.
Now, with some 700 private equity firms with an estimated $200 billion in committed capital, competition for deals has gotten much tougher.
So Carlyle and others are looking to create lasting institutions that will outlast their founders.
``Investors should not have to worry that a partner might drop dead or leave the business,'' Rubenstein says.
Other buy-outs are wrestling with this issue.
``There are very few private equity firms today that aren't tied to one big guy, like a Tom Lee or Henry Kravis,'' says Joseph Malick, general counsel of Crossroads Group, a Dallas private equity firm. ``With that, you have a lot of risk of that guy getting hit by a bus. Succession issues are becoming big these days.''
Carlyle, though, isn't engineering the ego out of private equity, as its advisory board demonstrates. Rubinstein denies Carlyle is playing the age-old Washington game of influence peddling, using former officials to exert pressure on the government contract process.
The issue recently came up when United Defense LP, wholly owned by Carlyle, lobbied the Pentagon to keep funding its Crusader missile. Carlyle certainly has the expertise: Chairman Frank Carlucci is the former defense secretary.
The reason the firm hires big names is that, for better or worse, names open doors, Rubinstein says. It's much easier to attract the attention of corporate barons with a lunch invite from a John Major or other political luminary than with lesser known Carlyle managers.
And getting the inside track in an asset sale without an public auction is ``worth its weight in gold,'' says Rubinstein.
Carlyle's returns -- the firm boasts of 50 percent-plus gross overall returns in 2000 -- are what attracts investors, not prestigious names, its supporters say.
``The bottom line is that Carlyle has been successful and that is why they have been able to raise capital,'' says Rick Rickertsen, principal in the $1.2 billion fund Thayer Capital Inc. and author of the recent book ``Buyout.''
Last February, the $170 billion California Public Employees Retirement System, the world's biggest fund, put down $175 million for a minority stake in Carlyle.
CalPERS also put $250 million in new Carlyle funds with an option to invest $425 million later.
And at a time when other major buyout firms -- like Blackstone Group LP; Hicks, Muse, Tate & Furst; and Welch, Carson, Anderson & Stowe -- are grappling with financially troubled companies in their portfolios, Rubenstein brags that none of Carlyle's current companies are write-offs. That's a powerful lure for big investors who are slashing allocations to ``alternative investments'' like private equity.
``Big institutions say they have too many partnerships to manage with private equity firms,'' says Thayer's Rickertsen. ``They want relationships with fewer, very stable solid firms. I think Carlyle has played that trend brilliantly.''
(Posted on Free Republic, 109, on 07/11/2001 08:09:23 PDT by independentmind)
February, 2000
HOW GEORGE W. BUSH GOT RICH
By Joe Conason, Harper’s Magazine
A Heartwarming Tale of Influence,
Cronyism, and $1.7 Billion!
On December 6, 1994, one month after he defeated Ann Richards to become governor of Texas, George W. received a large but belated campaign contribution from an acquaintance named Thomas O. Hicks ...
Hicks was easily one of the wealthiest men in Texas, and more specifically, he was the chief executive of Hicks, Muse, Tate & Furst, an investment partnership he founded ...
Of the scores of appointments made by an otherwise weak governor under the Texas constitution, a seat on the University of Texas Board of Regents is among the most desirable. It carries significant prestige, opportunities for patronage, and preferred access to season tickets (or luxury boxes) at Longhorn football games. For someone like Tom Hicks, however, being a regent provided something far more valuable...
Hicks had conceived an ambitious plan for the state university system’s financial assets — more than $13 billion — that matched his own bold investment style....
Friends and long-time associates of Thomas Hicks, and his firm’s past and future business partners— as well as major Republican contributors and political supporters of the Bush family— received hundreds of millions of dollars from the University of Texas investment funds.
Under the guidance of Tom Hicks, a growing portion of the university’s investment choices had a decidedly Republican tinge. On March 1, 1995, the regents voted to place what would prove to be a comparatively modest $10 million with The Carlyle Group....
That a firm run by his father’s associates would be awarded an investment contract only weeks after George W. to office was unseemly at best.
But the Texas governor had his own long-standing and lucrative ties to Carlyle that dated back almost a decade. Among his more obscure business activities was a corporate directorship at Caterair, one of the nation’s largest airline-catering services, which was acquired by Carlyle in 1989.
The next year, a seat on the company’s board was arranged for George W. by the former Nixon White House aide and longtime Bush associate Fred Malek, who was then an adviser at Carlyle.
Although Bush remained on the catering company’s board until 1994, his earnings as a Caterair director are not specified on his personal financial forms filed with the Texas Ethics Commission....
These days it is the governor’s father who benefits from the Washington investment firm’s largesse.
Since leaving the White House, George Herbert Walker Bush has been paid by Carlyle for speeches at events sponsored by the merchant bank....
May 16, 2001
The Carlyle Group: ex-government
officials cash in
By Shannon Jones
The incestuous ties between the Bush administration and the corporate world are highlighted by its relationship with the Carlyle Group, a leading private equity firm.
Private equity companies buy undervalued businesses and then resell them for a profit. It is a highly profitable field open to only the wealthiest players. It has returned an average profit of 34 percent per year over the past decade.
The Carlyle Group became a major force on the world financial scene by employing prominent ex-officeholders, such as former President George Bush, to provide a foot in the door to government ministries around the world.
Recent activities of the senior Bush include a meeting last fall with King Fahd of Saudi Arabia. Bush also met with the prime minister of South Korea and other government officials, paving the way for Carlyle to acquire KorAm Bank, considered an important prize because of its relatively strong financial position.
Each speech he gives on behalf of Carlyle generally nets the former president $80,000 to $100,000.
Carlyle's ties to the Bush family date back more than a decade. In 1990 Carlyle placed George W. Bush on the board of directors of one of its subsidiaries, Caterair, an airline catering company.
Charles Lewis, executive director of the Center for Public Integrity, commented, “Carlyle is as deeply wired into the current administration as they can possibly be. George Bush is getting money from private interests that have business before the government, while his son is president. And, in a really peculiar way, George W. Bush could, some day, benefit financially from his own administration's decisions, through his father's investments.”
In addition to the elder Bush, Carlyle employs former Secretary of State James Baker and former British Prime Minister John Major. The firm's advisory board lists such international figures as former President Fidel Ramos of the Philippines and the former prime minister of Thailand. Karl Otto Pohl, former president of Germany's Bundesbank, is also an advisor.
According to a report in the March 5 edition of the New York Times, “Carlyle has ownership stakes in 164 companies which last year employed more than 70,000 people and generated $16 billion in revenues. About 450 institutions – mainly large pension funds and banks – are Carlyle investors...
“The California state pension fund invested $305 million with Carlyle, and the Texas teachers pension fund – whose board was appointed when George W. Bush was governor – gave Carlyle $100 million to invest in November.”
Carlyle is reportedly the eleventh largest defense contractor in the US because of its ownership of companies making tanks, aircraft wings and other equipment. It is also heavily invested in telecommunications, another field that is strongly affected by government policy.
Frank Carlucci, a former defense secretary under President Ronald Reagan, who is Carlyle's chairman, met with his former college classmate Donald Rumsfeld, Bush's secretary of defense, in February.
The two reportedly spoke about “military matters” at a time when Carlyle has billions of dollars worth of defense projects under consideration by the government.
Carlyle is currently pushing for funding of the Crusader heavy-duty tank, which is built by one of the companies it owns.
Carlyle recently lodged a complaint with the government after another one of its companies lost a $4 billion contract to make a lightweight combat vehicle.
Copyright 1998-2001 - World Socialist Web Site, All rights reserved
September 7, 2000
Carlyle Asia Venture Partners II expected
to raise US$800 million
By Bloomberg, Singapore.CNET.com
WASHINGTON – Carlyle Group Inc, the private equity firm whose leaders include three former government chiefs, plans to raise as much as US$800 million for a venture capital fund to invest in Asian technology companies.
The fund, Carlyle Asia Venture Partners II, which will probably close in the fourth quarter is one of the Washington-based firm's three new Asian investment pools.
The fund will be run out of Hong Kong and a new office in Bellevue, Washington, overseen by Stephen Wu, a managing director at the firm. It will invest in closely held technology companies from early to late stages of development. The firm's first Asian venture capital fund had US$160 million of capital.
"We're not an Internet fund," said Wu, who will manage the new Asian fund along with two other Carlyle managing directors, Tony Jansz and Eric Levin, both based in Hong Kong and both formerly of Intel Corp's investment division.
Carlyle, whose board members include George H W Bush, John Major and Fidel Ramos, joins other US firms stepping up investments in venture capital and international private equity in search of high returns.
Carlyle has traditionally focused on buyouts, investing in undervalued companies it aims to turn around. This week, the firm and JP Morgan Corsair Inc signed an agreement to buy a 40-percent stake in Korea's KorAm Bank for US$450 million.
Wu said he plans to assemble a "small team" in Bellevue to support the US-based business. "There is a lot of good talent we can draw from the high-tech skill set in the area," he said.
Allocation
Carlyle's new Asian fund plans to invest about 70 percent of its capital in Korea, Taiwan, China, and India, Wu said. The rest will go to Australia, New Zealand, and southeast Asia, including Singapore, Malaysia, the Philippines, Thailand, and Indonesia.
The fund will invest in Asian companies doing business in Asia or seeking to expand into the US, as well as US companies that want to do business in Asia, said Wu.
Since March, Carlyle has made about 12 venture capital investments totaling US$45 million in Asia, said Wu. One of them was in LinkAir, a Chinese company with Silicon Valley operations that's developing technology for high-speed wireless telecommunications.
While the stated fund-raising target is US$500 million, Carlyle anticipates demand will be higher, said Wu, noting the firm generated average annual returns of about 35 percent since it was founded in 1987. "The fund will end up with between US$500 and US$800 million," Wu said.
Carlyle expects to raise the new fund from wealthy families, pension funds, and other institutions, said Wu, declining to identify potential investors.
Existing Carlyle investors include the government of Singapore, the Caisse de Depot et Placement du Quebec state pension fund, and the Abu Dhabi Investment Authority.
Earlier this year, Carlyle raised a US$750-million fund, Carlyle Asia Partners, for buyouts in Asia.
The firm plans to raise a separate fund of about US$1 billion for Japanese investments, including venture capital and buyouts, with the first capital commitments expected in 2001, Wu said. "Japan is such an important market, it deserves its own focus," said Wu.
Wu joined Carlyle in May after 11 years at Microsoft Corp, where he was most recently general manager for Asia in the division that includes the MSN Internet business....
The Buyout Kings of Washington
Carlyle Group's partners have parlayed their
political connections into a horde of new cash.
How will they spend it?
By Ida Picker
You can see the White House from Carlyle Group's ornate Washington headquarters, and that's not a coincidence.
"Our formula is taking advantage of the assets that surround you," says the buyout firm's co-founding partner Dan D'Aniello. "Not everyone wants to become a lobbyist or a lawyer. Some people want to make some money."
D'Aniello, 54, and the two other founding partners, David Rubenstein, 51, and Bill Conway, 51, have made plenty of money by exploiting their political connections since they set up shop in the heart of Washington back in 1987. The private firm makes leveraged investments in undervalued or start-up companies through its six U.S. funds and eight international funds.
Carlyle has averaged annual gross returns of 34 percent since inception, par for the course among similar buyout firms. . . . By the end of 2000 Carlyle had raised a total of $12.5 billion, which made it the fifth-largest private buyout firm in the U.S.
For Carlyle, being close to people on the inside of government has advantages. "The biggest thing is finding out what passes scrutiny so you can decide whether to go ahead with a deal," says Richard Aboulafia, an analyst at Virginia-based Teal Group, an aerospace and defense forecasting company. "You can learn if there are Federal Trade Commission or Defense Department objections."
The current White House occupant, George W. Bush, was on the board of a company that Carlyle invested in, and from the beginning the founders have recruited political heavyweights as consultants.
Carlyle won't disclose how much they earn; industry experts estimate their fees average about $1 million per year.
"Carlyle's political connections get them access to top business leaders overseas," says David Snow, editor in chief of PrivateEquity-Central.Net, an Internet buyout newsletter. "If they want a meeting with the leaders of Korean industry, which is going through quite a bit of restructuring, if they show up with [former president] George Bush, they will get a meeting for sure."
Former defense secretary Frank Carlucci, Carlyle's chairman, worked his Rolodex to put together Carlyle's defense company portfolio. George Bush the elder flew off to Saudi Arabia and Asia to ease the way for Carlyle's fund-raisers. Bush family campaign adviser James Baker III places calls to CEOs on Carlyle's behalf. Former British prime minister John Major opens European doors. And former Philippine President Fidel Ramos and former Thailand prime minister Anand Panyarachun provide entree in the Far East.
The firm's partners are adept fund-raisers. In February the California Public Employees' Retirement System spent $175 million for a 5 percent stake in Carlyle and may invest another $675 million in the firm's funds as well.
"As we start new funds, we still have to commit our own capital, and we were getting stretched thin," says Rubenstein. Carlyle's 18 partners and 180 investment professionals have invested $350 million of their own money in Carlyle's various funds.
Rubenstein says the investment by Calpers, as the fund is commonly known, will help the firm get more investors while competition for capital grows. "We now have an anchor investor," he says. "If we do a new U.S. venture fund, we can tell people we have Calpers." The retirement fund has the option of making an additional 5 percent investment in Carlyle.
Carlyle is trying to pull in more capital via a partnership with Fidelity Investments. Rubenstein says Carlyle's talks with Fidelity involve setting up a joint venture for Fidelity's 401(k) clients. They would have a chance to invest in funds offered by Carlyle and other buyout firms.
Last year Carlyle drummed up $6.5 billion in new funds, and that bundle is now a quandary. In this choppy market, the partners worry about what to do with all of that cash. "I'm concerned about not having a place to put the money," says D'Aniello. "We want to be comfortable that it has a better-than-even chance of making premium returns." Conway agrees. "Now's a good time not to be doing deals," he says. "Now is a good time to be afraid."
Still, institutional investors did not pour their money into Carlyle's 14 funds--which run the gamut from real estate to junk bonds--so the partners could sit on it, paralyzed with fear. "Carlyle is a fund-raising machine, but so far their investment acumen, to put it diplomatically, has been moderate," says Scott Myers, a director at Crossroads Group, a $1.9-billion Dallas fund that has invested with Carlyle.
Carlyle's intimate connections to the new Bush Administration may help. In addition to his father's advisory role, President Bush was a director of an ill-fated airline-food-service provider called Caterair International Corp. that lost money because airlines began cutting costs. Carlyle partners are careful to avoid any appearance of impropriety concerning their political connections. Rubenstein, who attended Barbara Bush's surprise 75th birthday party in Kennebunkport, Maine, last summer, says, "We don't do lobbying. We don't give to any politicians. We don't have a PAC [political action committee]. We try to be cleaner than Caesar's wife."
Rubenstein emphasizes the tasteful nature of former President Bush's excursions to visit the Saudis, Koreans, and Thai for Carlyle as senior adviser to its Asian advisory board. "President Bush is not asking anybody for money," says Rubenstein. "He speaks at lunches, dinners, and events on non-Carlyle matters and expresses his views on world events."
The firm's most profitable niche is buying military and aerospace suppliers at discount prices and selling them for a lot more. With Carlucci's knowledge of the Pentagon's inner workings, Carlyle felt confident putting investment dollars into defense companies when they were out of favor in the market.
"Because they have a good sense of the defense and aerospace business, they have an ability to project future earnings so they can calculate the true value," says Teal Group's Philip Finnegan, a senior analyst. "They're not prone to overestimate or underestimate what a property is worth."
These investments include Vought Aircraft Co., bought from LTV Corp. in bankruptcy, and Magnavox Electronic Systems, which had gross internal rates of return--annual returns on equity invested before a 20 percent charge for fees--of 85.5 percent and 205.6 percent, respectively.
Carlyle's bargain shopping has been less successful in other areas, like its hazardous-waste-removal plays in IT Group Inc. and Duratek Inc., whose one-year returns are minus 144.6 percent and minus 11.4 percent, respectively. "They've gotten into some businesses that a lot of people don't want to be in," says Finnegan. "It's high risk, low reward."
In 2001 Carlyle's anxious senior partners say they are sticking to companies in telecommunications, aerospace and defense, and health care. "We aren't branching out," says Conway. "We will continue to concentrate in industries we know well."
Rubenstein, Conway, and D'Aniello may lose sleep this year, trying to find cheap deals that won't turn sour, but at least they're not the buyout novices they were when they started out 14 years ago.
Rubenstein, a Baltimore native whose father was a postal worker, graduated from the University of Chicago Law School on a scholarship and landed his dream job working at age 27 as deputy domestic policy adviser to President Jimmy Carter.
When Ronald Reagan defeated Carter for reelection in 1980, Rubenstein joined the Washington law firm Shaw, Pittman, Potts & Trowbridge but soon branched out on his own. "The practice of law was not as noble a profession as I had thought in law school," he recalls. "It was really a business about how much the law firm was making. I thought, if law is like a business, I want to be in a real business."
Edward Mathias, a White House colleague and next-door neighbor who had worked at T. Rowe Price Group Inc., steered Rubenstein to his early backers: T. Rowe Price, Alex. Brown, First Interstate Bank of California, and the Mellon family, which together put in about $5 million for 50 percent of the new firm. In December 2000 Carlyle bought out the remaining 10 percent stake of its last original investor: Mellon.
Rubenstein then recruited D'Aniello, a merger maven at Marriott Corp. who had attended Syracuse University on a gymnastics scholarship and graduated magna cum laude, with a major in transportation management.
Rubenstein also brought in Bill Conway, a Nashua, New Hampshire, native who was chief financial officer of MCI Corp. Conway had an MBA from the University of Chicago, acquired in night school while he worked at First National Bank of Chicago specializing in troubled loans, one of which was to MCI.
In May 1987 Rubenstein and company moved into their Washington offices and began selling U.S. companies tax losses in struggling Native American businesses in Alaska.
The business started, says Rubenstein, when he stumbled upon a law that said corporations with tax losses could sell them to other companies--and he then became aware of the large losses the Alaskan businesses had amassed.
"It was a very good business. It paid the rent," Rubenstein recalls. He says that the U.S. Congress, once it was aware that Alaskan business losses had reached billions of dollars, closed the loophole within two years.
In late 1988 the Carlyle partners bumbled into an investment in Oakite Products Inc., a chemical company, for about $90 million, including $17 million in equity.
"It was a horrible deal, like hand-to-hand combat," Conway says. Carlyle paid too much, put in too little equity, did not get asset sales, discovered asbestos contamination on the company's land, and saw Oakite through a bankruptcy. Nine years later, Carlyle crawled out, making a small amount of money.
In 1989 Rubenstein asked a former law partner for an introduction to Frank Carlucci, President Reagan's former secretary of defense. Rubenstein persuaded Carlucci to become Carlyle's chairman: "He didn't want to be a lobbyist. Nobody had heard of us, but we were the only buyout firm in Washington."
Having a known entity like Carlucci in tow helped Rubenstein raise $100 million from investors for the first fund. The partners jumped into Caterair, then the largest airline catering company, in December 1989, paying $637 million to D'Aniello's former employer, Marriott. "We paid too much," Conway says, "and we were hit by the recession."
George W. Bush joined Caterair's board in 1990 and left about two years later. Carlyle sold the company in December 1995 for $7.2 million, for a loss of about $87 million.
In October 1990 Carlyle's partners learned that senior managers at BDM International Inc., a high-profile defense industry think tank, wanted to become independent from their owner, Ford Aerospace Corp. Carlucci convinced the partners that BDM – which had done strategic government contract work on the manned space station and the Strategic Defense Initiative, a proposed antimissile shield – would have a good sense of the Defense Department's priorities over the next 5-10 years.
Carlyle bought BDM for $125 million from Loral Corp., which had purchased Ford Aerospace, and eventually made about $411 million on its investment. There was a more subtle payoff as well: Carlyle used BDM engineers and military technology experts to analyze other acquisition targets in the defense industry.
"BDM helped Carlyle define how they would be different from New York firms," says Lehman Brothers banker Les Fabuss, who represented Loral. "They would specialize in ownership of businesses with a high degree of government participation."
The profitable returns on BDM did not come until 1997. From 1987 through 1993, the new buyout firm competed for capital against established players like Kohlberg Kravis Roberts and struggled to stay afloat. "We had no track record, so we had to plead our capabilities without proof," recalls D'Aniello. "It got to the point where we were very concerned about covering our overhead."
In 1991 Carlyle did only one deal: It advised Prince Alwaleed bin Talal on his $590-million investment in Citibank preferred stock for a 9.9 percent stake.
Carlyle and the prince shared the same Washington law firm, Hogan & Hartson, which brought the two parties together. When the partners met the prince, they did not mention their fee. "We said we were less interested in compensation than we were in the relationship," recalls D'Aniello.
In 1993 Carlyle bought Magnavox Electronic Systems for $165 million--including $25 million in equity--from Royal Philips Electronics NV. Magnavox made secret electronic boxes that analyzed radar imagery and other signal intelligence.
Carlyle sold the military supplier for nearly $300 million to Hughes Electronics Corp. in July 1997, a time when the partners were raising their second fund. "Magnavox opened the gates," says D'Aniello. Investors piled in, and the fund ballooned to $1.3 billion from $400 million.
Two years later, Carlyle and Thiokol Corp., a producer of space shuttle castings, bought Howmet Corp., one of the largest U.S. aircraft and gas-turbine casting manufacturers. Within two years, Carlyle made almost $700 million on this investment.
With Howmet's success, Rubenstein's team felt confident enough to diversify outside the U.S. and beyond defense, into telecommunications, health care, and consumer industries.
Rubenstein flew to Europe in 1996 and raised a new buyout fund there of 1 billion Eurodollars.
The firm expanded into venture capital and real estate. Always seeking bargains, the partners dipped into dicier investments in junk bonds, hazardous waste management, and a fund for Russia.
Carlyle's adventures in hazardous chemical and nuclear waste remediation have been problematic.
The theory, says D'Aniello, was to invest in these cleanup companies, which had been discounted by the market, and then land contracts to meet government environmental standards in a consolidating industry.
In 1995 Carlyle spent $34.3 million on Duratek, then known as GTS Duratek Inc., a nuclear waste removal outfit; in 1996 it bought IT Group, which cleans up contaminated soil and water, for $51 million; and in 1999 the firm picked up EG&G Technical Services, which cleans up hazardous waste on military bases.
IT Group and Duratek's revenues have grown about 3-fold and 10-fold, respectively, D'Aniello says, but the companies are still out of favor in the market, which makes exiting difficult. "We will not focus on this area in the future," D'Aniello says.
Added to their problem of where to invest, Carlyle's founders are grappling with coordinating their far-flung investments. "How do we get this global network with industry specialities and all these products to work together and make a well-oiled deal machine and not just have chaos?" asks Conway.
Good question--one that many global companies have contended with.
As PrivateEquityCentral.Net's Snow puts it, "Most people in the industry say that the growth of Carlyle is great for Carlyle, but it's too early to say whether it will be great for Carlyle investors."
The money keeps flowing in, and the ex-politicians keep signing on. Still, the partners' ability to cope with their rapid expansion--and to provide healthy returns for investors--will be the standard by which they are measured.
©2001 Bloomberg L.P. All rights reserved
Overcapacity Puts Squeeze
On Network Wholesalers
By Fred Donovan
This article first appeared in PBI Media's Fiber Optics News
WASHINGTON – Carriers that specialize in selling wholesale capacity are in for a bumpy ride because of overcapacity in deployed fiber optics networks. So concluded a panel of telecom executives participating in the Global Traffic Meeting (GTM) held here last week.
Although the GTM was not open to the public, a group of executives from major carriers shared their views of the international marketplace during a "telecom summit" held in conjunction with the meeting. . . .
James P. Martino, Bermuda-based Global Crossing's [GX] vice president for global cost of access, said the drop in prices the company is seeing in its wholesale business is pushing it to target the retail multinational corporate market. Global Crossing has deployed a global fiber optic network that links 200 cities in 20 countries, he explained....
Depressing Telecom Story
William Kennard, former chairman of the Federal Communications Commission and, currently, the managing director of the Washington-based Carlyle Group's telecom and media practice, observed that there is a "depression" in the telecom market. "The irrational exuberance has been replaced by an irrational pessimism," he said.
Kennard said that there is consensus among political leaders around the world that it's best to have open, privatized telecom markets in order to give consumers access to the Internet. . . .
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For more on Global Crossing, which filed for bankruptcy protection on January 28, 2002, GO TO > > > Global Crossing
And to see how a company called Sandwich Isles Communications is spending YOUR tax money, GO TO > > > Vultures in the Sandwich Isles
~ ~ ~
FOR THE STRONG OF STOMACH, TAKE A CLOSER LOOK AT
SOME DIRTY BIRDS
THAT DRINK FROM THE CARLYLE CESSPOOLS!
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Baker & Taylor - Book-seller which may have cooked the books.
February 4, 1997
Schools called targets of $200 million scam
Seth Rosenfeld, San Francisco Examiner
CALIFORNIA -- One of the nation's leading book discounters allegedly bilked public schools and libraries in California and other states out of as much as $200 million through a scheme that inflated prices for children's and other books, the U.S. Justice Department claims.
Baker & Taylor Books, owned by former high-level federal officials, deliberately miscategorized certain trade books on its computerized invoices so customers who bought books with public funds were denied the large discounts promised in contracts, according to a whistle-blower lawsuit joined by the federal government. The suit was filed in U.S. District Court in San Francisco and made public Monday.
It is believed to be the nation's largest-ever fraud in the book wholesaling industry, said a lawyer for the two whistle-blowers.
The case stems from complaints made by a former Baker & Taylor salesman and a Richmond, Va., librarian. A federal investigation found the complaint had merit, and the Justice Department joined the suit.
"The government doesn't like library fraud," said Assistant U.S. Attorney Mary Beth Uitti.
"Unconscionable' scheme”
Eric Havian, the San Francisco lawyer for the whistle-blowers, said, "It's particularly unconscionable that they (the targets) are largely victims who are least sophisticated and least able to afford the inflated prices. School budgets are tight enough."
Baker & Taylor, based in Charlotte, N.C., sells more than 40 million books a year, 70 percent of them to public schools, libraries, universities and other publicly funded institutions. Sales of books and videos by the firm totaled $785 million in 1995, according to Dun & Bradstreet.
Also named as a defendant is the Carlyle Group, a Washington, D.C., merchant banking firm that owns more than half of Baker & Taylor's stock.
Carlyle was founded by former Carter White House official David Rubenstein. Its executives include former Secretary of State James Baker and ex-Defense Secretary Frank Carlucci, both of the Reagan administration, and former Budget Director Richard Darman of the Bush administration.
A third defendant is W.R. Grace & Co., a Fortune 100 firm that owned the book dealer during part of the alleged scheme.
Baker & Taylor on Monday denied what it called the suit's "outrageous charges based on distorted information." It said it had been cooperating with the federal investigation and would clear its name.
"Baker & Taylor firmly stands behind its business practices," the firm said in a statement....
According to the suit, Baker & Taylor typically negotiated master price contracts under which certain categories of books would be sold at a specific discount. Trade books - books of broadest interest, like best sellers - were supposed to be sold at the deepest discount, as much as 40 percent off retail price, it says. Non-trade books, like textbooks, were usually discounted only 10 percent under the contract.
But Baker & Taylor allegedly devised a scheme to fool customers into believing that certain trade books were non-trade books that didn't deserve the larger discount, the suit says.
The wholesaler concealed the fraud by mispricing books published by lesser-known houses, that sounded like technical books or that were not carried by competitors, the suit says. These included children's books.
The firm carried out the alleged scheme by directing its staff to assign codes to certain book titles entered into its national pricing computer, so customers were automatically overcharged and given false invoices, the suit says.
The fraud stretched from the late 1970s to at least 1994, it says.
The suit contends that the Carlyle Group and W.R. Grace knew of the fraud but failed to stop it.
The allegations were first made by Robert Costa, head librarian for Richmond, Va., and Ronald Thornburg, a former Baker & Taylor salesman.
The suit was filed under federal and state whistle-blower laws that allow the government to seek three times the cost of the fraud.
Blackstone Group - A New York-based private investment bank.
From The Conspirators: Secrets of an Iran-Contra Insider, by Al Martin:
GOVERNMENT FRAUD, CORPORATE FRAUD,
AND MORE FRAUD
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 Iran-Contra?
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 Blackstone.
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....
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....
For more, GO TO > > > The Blackstone Group; Dirty Money, Dirty Politics & Bishop Estate; Predators in Paradise
Credit Suisse First Boston - The bank which, according to Dr. John Coleman in “The Conspirator’s Hierarchy,” was a marriage of convenience of two members of the Committee of 300.
From The Laundrymen: . . .
In 1983, Sal Amendolito resurfaced, arrested for fraud in New Orleans. . . .
Agents from the FBI, Customs, the DEA, the IRS and the Bureau of Alcohol, Tobacco and Firearms put a case together that brought grand jury indictments against thirty-nine members of the ring for their participation in drug trafficking and money laundering.
Sal Amendolito became a government witness, testified against the others, and was never charged. . . .
Because some of the culprits were hiding in Italy, including Della Torre, only twenty-two actually stood trail in New York. After 17 months of hearings, 55,000 FBI wire taps — most of them in Italian — and the murder of one suspect, the 21 defendants were found guilty.
The judge sentenced the five Mafia ring leaders to terms of 20 to 45 years. He also ordered four defendants to pay $2.5 million to help fund treatments for heroin addicts....
The group had smuggled 750 kilos of heroin into the States, with an estimated street value of $1.6 billion. Some major financial institutions had also been embarrassed; namely, Merrill Lynch, EF Hutton, and Chemical Bank in New York, Handelsbank in Zurich, and, especially Credit Suisse in Bellinzona.
One of the accounts at Credit Suisse was secretly called “Wall Street 651.” The owner was Oliviero Tognoli, a well-known industrialist to whom the mafia chieftains secretly turned for financial advice. Nearly $20 million passed through his account....
* * *
April 8, 2002
Enron Shareholders' Suit
to List Banks, Brokerages
Class-Action Filing Seeks to Take Aim at Wall Street
Tactics With Potential Conflicts of Interest
By David S. Hilzenrath and Peter Behr, Washington Post
Several of Wall Street's most prominent banks and brokerages played a crucial and deliberate role in Enron Corp.'s fraud on investors, lawyers for Enron shareholders allege in an expanded class-action lawsuit they plan to file today....
Enron's "house of cards" would have collapsed much earlier if it had not been propped up by investment banks and brokerages, the suit alleges. Enron in December sought Chapter 11 protection in the nation's largest-ever bankruptcy filing.
Financial institutions named as defendants in the lawsuit include J.P. Morgan Chase & Co., Citigroup Inc., Credit Suisse First Boston USA Inc., Bank of America Corp., Merrill Lynch & Co. and Lehman Brothers Holding Inc. . . .
The lawsuit also targets two law firms that worked for Enron or a related partnership: Vinson & Elkins LLP and Kirkland & Ellis. In statements, the law firms said they did their jobs properly.
The suit reflects the Enron shareholders' quest for deep pockets to cover the billions of dollars they lost when the Houston energy trader collapsed. In November, Enron disclosed that, since 1997, it had overstated profits and understated debts.
Initial lawsuits aimed at Enron executives and directors and the company's longtime auditor, Arthur Andersen LLP, which put its stamp of approval on the company's false financial statements....
Banks "structured and/or financed" Enron's off-the-books partnerships, at times helping them carry out bogus transactions, the suit says.
Banks also "played an indispensable role in helping to inflate and support Enron's stock price," the suit says.
As a reward, "banks and/or their top executives" were allowed to invest in one of Enron's key partnerships, where they stood to profit from self-dealing transactions with Enron, the suit says.
"Secret or disguised transactions by J.P. Morgan, Citigroup and CS First Boston also concealed billions of dollars of loans to Enron," the suit says....
© 2002 The Washington Post Company
For more, GO TO > > > The Story of Enron
EG&G Defense Materials - A Humpty-Dumpty kind of defense contractor.
May 3, 2002
Chemical Weapons Mishandled,
Worker Says
Incinerator near Salt Lake City is destroying stockpile
by Robert Gehrke, Associated Press
WASHINGTON – Managers at the nation’s only chemical weapons incinerator encouraged workers to cut corners so a deadly nerve agent stockpile could be destroyed before the Winter Olympics in nearby Salt Lake City, a plant employee says.
Brenda Mugleston, who has worked for eight years at the Tooele Chemical Agent Disposal Facility, told The Associated Press workers were promised a $750 bonus for meeting the deadline. She said they felt pressure from managers to increase productivity and they sometimes mishandled weapons.
Mugleston said she feared workers and the public were being endangered and told managers but nothing was done. She also reported problems to the Occupational Safety and Health Administration.
Stuart Young, attorney for EG&G Defense Materials, which runs the incinerator for the Army, said Mugleston’s allegations are being investigated and “at this point we don’t have any reason to believe there are any immediate health, safety or environmental concerns.
Mugleston said she has reported the problems to OSHA and provided a letter saying the agency is investigating. Agency spokesman Bill Wright said whistle-blower laws preclude him from identifying complainants.
Army spokeswoman Nancy Ray said the Pentagon is pleased with the work EG&G has done. “It’s absolutely a professional operation,” she said.
Tooele, located 40 miles west of Salt Lake City, is home to the Pentagon’s incinerator, created to destroy 13,616 tons of the chemical weapons stockpile. Other incinerators are being built in Anniston, Ala.; Umatilla, Ore., and Pine Bluff, Ark.
The incinerator was forced to shut down for several months in the summer of 2000 after a tiny amount of GB nerve agent escaped from its emissions stack.
The Centers for Disease Control and Prevention said the amount was small enough that it did not endanger the public. Plant managers say it is the only time nerve agent was released.
Mugleston’s allegations come as the plant prepares to process VX nerve agent, which the CDC and Environmental Protection Agency say is 36 times more deadly than the sarin gas the facility has been handling and much more difficult to detect.
Mugleston said she is concerned what will happen when VX incineration begins because she has witnessed problems that undermined worker safety, including:
>> Backup generators routinely failed during power outages, compromising systems meant to protect workers from contamination.
>> Workers were sent into contaminated areas breathing through air hoses that already had tested positive for nerve agents.
>> Sarin-contaminated waste was stored for several days in an unprotected area.
>> Last September, dust and ash left over from the incineration process and supposedly free of any contamination billowed out of a waste bin, triggering a chemical alarm 40 feet away.
She provided internal documents to support her claims.
Company officials declined to comment on specific allegations....
For more, GO TO > > > Down the Rabbit-Hole
Fidel Ramos - Former president of the Philippines; now a director of The Carlyle Group.
From Asia Week Magazine:
'Do the Right Things Right'
A lively chat with Budget Secretary Enriquez
AS PRESIDENT FIDEL RAMOS’s budget secretary, Salvador Enriquez Jr., 63, is primarily responsible for cutting fat in government and modernizing the bureaucracy. In 1994, he announced the country's first budget surplus in 20 years.
A declared leftist and nationalist, he makes no secret of his aversion to World Bank-International Monetary Fund dictates.
Recently, Enriquez was put in charge of a probe into the Ramos administration's biggest corruption scandal -- the sale of 750 hectares of Manila Bay shoreland to Philippine-Thai group Amari Coastal Development Corp.
Critics want the deal nixed, saying the government sold the land at an incredible discount after brokers and friendly officials took $61.5 million in bribes.
Last week Enriquez sat still for an exclusive three-hour interview with Asiaweek Senior Correspondent Antonio Lopez.
Excerpts ...
On official corruption
Maybe 20% to 30% of the government budget is wasted through stupidity, graft and corruption. Corruption in the Ramos administration is less now than in previous administrations. [But] it will take more than a Ramos to do something about corruption. It requires a revolution of the hearts and minds of the people.
This is like a boil. You must hasten its ripening for it to burst. We pray we may be able to make another revolution, hopefully not a bloody one.
But history tells us, it has to be a bloody one.
On World Bank-IMF influence
I hate it. I wonder about the necessity of cabinet ministers having to sit across from IMF representatives explaining why this and that happened as if we are accountable to them. They seem to me still the imperial masters of the country.
What I don't like is the IMF being credited for the economic turnaround. They make it appear to the world that the Philippines is their baby and that we are succeeding because of the IMF -- which is not true.
Even without the IMF, we would have the same economic recovery which we have achieved because of the tremendous sacrifices of the Filipino people and our prudence in spending.
IMF mission head John Hicklin insisted the government pay the two-billion-peso deficit in the Oil Price Stabilization Fund to the oil companies.
I asked him, "Are you the collector of the oil companies?"
He explained it was to show the world that the Philippines pays its debts. I asked him, "Has there been an instance when the Philippines did not pay a single centavo of its debt?"
* * *
18-20 MARCH 1998
1ST PRIZE——1998 JVO INVESTIGATIVE JOURNALISM AWARDS
by SHEILA S. CORONEL and ELLEN TORDESILLAS
ON FRIDAY, April 28, 1995, George Triviño, a convicted gold smuggler with a long history of wheeling-dealing, received 31 checks totaling P300 million from the Amari Coastal Bay Resources Corp., a Thai-Filipino company that had just entered into a P1.8-billion contract with the government to buy reclaimed property off the Manila-Cavite coastal road.
All the checks were deposited into an account at the U.N. Avenue branch of the Traders Royal Bank. As soon as they cleared, on Tuesday, May 2, just nine days before the local elections, P273 m