Posted August 21st, 2006 by dougzilla
Tegenlicht
48 min 4 sec
Note: The first one minute forty seven seconds of this program is in broadcast in Dutch, The remainder is in English.
The Bush family, the Saudi Royal family, Osama Bin Laden's family and Donald Rumsfeld's inner circle - these are just some of the high profile figures who have played a direct role in the rise of one of the most powerful and influential and secretive firms in Washington.
The company is called The Carlyle Group. And in the wake of the events of September 11th and the invasion of Iraq, its power and influence have become significantly stronger.
The company operates within the so-called iron-triangle of industry, government and the military. Its list of former and current advisers and associates includes a vast array of some of the most powerful men in America and indeed around the world.
This program exposes the history of the Carlyle Group, from it's inception as a private equity firm to it's precent status as one of the largest defence contractors in the world.
Carlyle Group
From Wikipedia, the free encyclopedia
The Carlyle Group is a Washington, D.C. based global private equity investment firm with more than $40 billion of equity capital under management. The firm operates four fund families, focusing on leveraged buyouts, venture & growth capital, real estate and leveraged finance investments. The firm employs more than 300 investment professionals in 14 countries with multiple offices in North America, Europe and Asia. It has on its staff 138 MBAs, 24 JDs and 14 Ph.D/MDs from many of the world's most prestigious universities. Today, Carlyle serves 900 investors in 55 countries and its portfolio companies employ 184,000 people worldwide.
Origin
Carlyle was founded in 1987 by William E. Conway, Jr., Daniel A. D'Aniello, Stephen L. Norris, and David M. Rubenstein. Only Norris has since left the Group, at the behest (some say demand) of the other founders. The three remaining founders are reported to collectively own around a 50% interest in the group's general partnership. The California Public Employees Retirement System (or CalPERS) is the only institution which owns a stake in the partnership, holding 5.5 percent of Carlyle. However, as journalist James K. Glassman writes, CalPERS "has a reputation as an advocate for socially responsible investing . . . That's the business equivalent of the Good Housekeeping Seal."
As they wanted the firm to outlive them, the founders named the firm after the upper east side hotel in New York City, "The Carlyle," where they first met to discuss the idea. Carlyle's current chairman is Lou Gerstner, former chairman and CEO of IBM.
Specialization
Carlyle specializes in the following industries: Aerospace & Defense, Automotive, Consumer & Retail, Energy & Power, Healthcare, Industrial, Real Estate, Technology & Business Services, Telecommunications & Media, and Transportation. The Carlyle Group's investments are focused on East Asia, Europe and North America, with most investment money coming from the United States (65%), Europe (25%), Asia (6%), Latin America, and the Middle East. Defense investments represent about 1% of the group's current portfolio -- though this translates, for example, into a 33.8% ownership of QinetiQ, the UK's recently privatized defence company.
Current Portfolio and Major Acquisitions
Though known for its expertise in aerospace & defense, more than 30 percent of Carlyle's invested assets are in the telecommunications & media sector. Noted portfolio companies are Dex Media, the former directories business of Qwest Communications; Willcom, a Japanese wireless company; Casema, a Dutch cable company; and Insight Communications, the ninth largest cable company in the U.S.
Brand-name companies that Carlyle owns include: rental car company Hertz, Dunkin Brands, which owns Dunkin' Donuts and Baskin-Robbins, and dental hygiene company Water Pik.
Controversy
Critics of the Carlyle Group frequently note its connections to various political figures. Some of the sectors and companies in which it invests are highly sensitive to political activity, indeed, its actions may be viewed as a form of political arbitrage. This may create conflicts of interest when political decision makers have their own personal wealth [1] linked to such investments. Unlike most private equity firms which are predominantly located in New York, Boston or around San Francisco, Carlyle is the only large private equity firm located in Washington, DC. Corporate headquarters are on Pennsylvania Avenue.
Critics refer to Carlyle as a private defense contractor, but this is not accurate. It is a private equity firm that owns controlling or partial interests in a portfolio of companies, some of which are contractors for the military (though this is the area for which it is most well known). For example, it used to own United Defense Industries, which was developing the Crusader artillery project. This project was funded in eight consecutive Clinton budgets but was cancelled soon after Bush became president, which eliminated the remaining $9 billion of the original $11 billion contract. A much smaller contract was awarded to United Defense to capture technologies developed during the eight years of development.
In the book House of Bush, House of Saud, author Craig Unger states that Saudi Arabian interests have given $1.4 billion to firms connected to the Bush family. That figure was again quoted by Michael Moore in his film Fahrenheit 9/11. Nearly 90% of the 1.4 billion, about 1.18 billion, refers to Saudi Arabian government contracts awarded to defense contractor BDM in the early to mid 1990s. Carlyle sold its interest in BDM before former President George H.W. Bush joined as an advisor, therefore seemingly debunking these assertions.
The connection to the Bush family, however, is somewhat tenuous. Former President George H.W. Bush retired from Carlyle in October 2003. He never invested in any defense deals or any companies that do business with the government and his only role as a Senior Advisor to the Carlyle Asia Advisory Board was to give speeches at Carlyle events. Meanwhile, while it is true that President George W. Bush served on the Board of Directors of early Carlyle acquisition Caterair, he was asked to leave two years later by one of the founders and has had no personal dealings with Carlyle ever since.
The Saudi Arabian relatives of Osama bin Laden (not Osama bin Laden himself) were also minor investors in Carlyle until October 2001 when the family sold its $2.02 million investment back to the firm in light of the public controversy surrounding bin Laden's family after September 11. However, the Binladin family has disowned the al-Qaeda leader, who has no economic interest whatsoever in Saudi Binladin Group (SBG). While the Carlyle Group did invest on SBG's behalf, said financial arrangement was terminated by mutual consent.
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Politicians affiliated with Carlyle
- James Baker III, former United States Secretary of State under George H. W. Bush, Staff member under Ronald Reagan and George W. Bush, Carlyle Senior Counselor, served in this capacity from 1993 to 2005.
- George H. W. Bush, former U.S. President, Senior Advisor to the Carlyle Asia Advisory Board from April 1998 to October 2003.
- George W. Bush, current U.S. President. Was appointed in 1990 to the Board of Directors of one of Carlyle's first acquisitions, an airline food business called Caterair, which Carlyle eventually sold at a loss. Bush left the board in 1992 to run for Governor of Texas.
- Frank C. Carlucci, former United States Secretary of Defense from 1987 to 1989; Also, former Princeton wrestling partner of present US Secretary of Defense, Donald Rumsfeld. Carlyle Chairman and Chairman Emeritus from 1989 to 2005.
- Richard Darman, former Director of the U.S. Office of Management and Budget under George H. W. Bush, Senior Advisor and Managing Director of The Carlyle Group from 1993 to the present
- William Kennard, Chairman of the U.S. Federal Communications Commission (FCC) under President Bill Clinton, Carlyle's Managing Director in the Telecommunications & Media Group from 2001 to the present.
- Arthur Levitt, Chairman of the U.S. Securities and Exchange Commission (SEC) under President Bill Clinton, Carlyle Senior Advisor from 2001 to the present
- John Major, former British Prime Minister, Chairman, Carlyle Europe from 2002 until 2005
- Frank McKenna, Canadian ambassador to the United States and former member of Carlyle's Canadian advisory board
- Mack McLarty, White House Chief of Staff under President Bill Clinton, President of Kissinger McLarty Associates, Carlyle Senior Advisor from 2003 to the present
- Anand Panyarachun, former Prime Minister of Thailand(twice), former member of the Carlyle Asia Advisory Board until the board was disbanded in 2004
- Fidel Ramos, former president of the Philippines, Carlyle Asia Advisor Board Member until the board was disbanded in 2004
- Park Tae-Joon, former prime minister of South Korea, Founder/Honorary Chairman of POSCO
