Jan 21, 2002
On December 14, an investment company called the Carlyle Group made 237 million dollars in a single day by selling stocks for a military contractor it owns, United Defense Industries. This was not so surprising since only a day before Congress had passed a defense authorization bill which included 487 million dollars for 480 Crusaders, a massive high-tech cannon produced by the same United Defense Industries.
What was behind such good luck? A Carlyle spokesman said that the company hadn’t “lobbied” for the Crusader. Who needs to hire lobbyists to influence Congress when Carlyle’s chairman is Frank Carlucci, a former Secretary of Defense and a close personal friend of the man currently holding the post, Donald Rumsfeld? Or when George Bush, former President and father of the current President, is on the company’s payroll?
In fact, Carlyle’s management looks just like a club of former top politicians and military men, including former British prime minister John Major; former chairman of the U.S. Joint Chiefs of Staff, John Shalikashvili; former chairman of the Securities and Exchange Commission, Arthur Levitt; and elder Bush’s secretary of state, James Baker, among others. In fact, the current Bush president was a director of a Carlyle subsidiary from 1990 to 1994.
Carlyle specializes in buying military contractors that are not doing well, then re-selling them after getting big government contracts for them. It has returned a 34% rate of profit over the last 10 years and currently has 12.5 billion dollars in investments.
And who are the investors who have reaped these profits? Whoever has the kind of money for such big investments, of course, including a certain, very wealthy family from Saudi Arabia – the bin Ladens. Until last October, that is. That’s when Carlyle bought out the shares of the bin Laden family. “This wasn’t done because anyone thought they did anything wrong,” a Carlyle executive said. “We didn’t do it with relish or great glee. We felt and they felt that it was something that was causing more attention than it deserved.”
After all, Carlyle was jumping on the bandwagon to profit from the “war on terrorism” after September 11. And it’s hard to look “patriotic” when consorting with the family of the man Bush designated as the main enemy.
Thus “America’s war on terrorism” continues – and business looks as good as ever for the great patriotic leaders of the Carlyle Group.