February 23, 2006
"People don't need to worry about security"
Our president has spoken. Pay no attention to the men behind the curtain. Bush has told the American people, again and again, that his numero uno job is to protect them so they have no reason to worry their pretty little heads over who's in charge of our major ports of entry.
Ah, yes, but who are those men behind the curtain? Shouldn't the American people have a right to know what's going on behind the scenes of the George W. Bush presidency? Well, it turns out:
The oil-rich United Arab Emirates is a major investor in The Carlyle Group, the private equity investment firm where President Bush's father once served as senior adviser and is a who's who of former high-level government officials. Just last year, Dubai International Capital, a government-backed buyout firm, invested in an $8 billion Carlyle fund.Fascinating. Tell me more about this "Carlyle Group." Are you sure you want to know? You may not like what you hear:
Another family connection, the president's brother, Neil Bush, has reportedly received funding for his educational software company from the UAE investors. A call to his company was not returned.
Then there is the cabinet connection. Treasury Secretary John Snow was chairman of railroad company CSX/. After he left the company for the White House, CSX sold its international port operations to Dubai Ports World for more than a billion dollars.
...since the start of the "war on terrorism", the firm - unofficially valued at $3.5bn - has taken on an added significance. Carlyle has become the thread which indirectly links American military policy in Afghanistan to the personal financial fortunes of its celebrity employees, not least the current president's father. And, until earlier this month, Carlyle provided another curious link to the Afghan crisis: among the firm's multi-million-dollar investors were members of the family of Osama bin Laden...Think you can handle more? Just remember to breathe:
Carlyle partners, who include (Former Secretary of State and Sec. of Treasury James) Baker and the firm's chairman, Frank Carlucci - Ronald Reagan's defence secretary and a former deputy director of the CIA - own stakes that would be worth $180m each if each partner owned an equal slice. As in many areas of its work, though, Carlyle is not obliged to reveal the details, and chooses not to.
Among the defence firms which benefit from Carlyle's success is United Defense, a Virginia-based contractor which makes vertical missile launch systems currently on board US Navy ships in the Arabian sea, as well as a range of other weapons delivery systems and combat vehicles. Carlyle's other holdings span an improbable range, taking in the French newspaper Le Figaro and the company which bottles Dr Pepper...
The Carlyle Group does not employ anyone at its Washington headquarters to deal with the press. Inquiries about the links with the Binladins (as most of the family choose to spell their name) are instead referred to someone outside the company, on condition he is referred to only as "a source familiar with the relationship". This source says: "I can confirm the fact that any Binladin Group investment in Carlyle has been terminated or is being terminated. It amounted to a $2m investment in the Carlyle II Fund, which was anyway a very small portion of a $1.3bn fund. In the scheme of the investments and in the scheme of the business of either party it was very small. We have to get this into perspective. But I think there was a sense that there were questions being raised and some controversy, and for such a small amount of money it was something that we wanted to put behind us. It was just a business decision."
But if the Binladins' connection to the Carlyle Group lasted no more than six years, the current President Bush's own links to the firm go far deeper. In 1990, he was appointed to the board of one of Carlyle's first purchases, an airline food business called Caterair, which they eventually sold at a loss. He left the board in 1992, later to become Governor of Texas. Shortly thereafter, he was responsible for appointing several members of the board which controlled the investment of Texas teachers' pension funds. A few years later, the board decided to invest $100m of public money in the Carlyle Group. The firm's magic touch was already bringing results. Today, it is proving as fruitful as ever.
BUZZFLASH: I recall that reading in the British papers that Tony Blair was considering privatizing a portion of the intelligence apparatus in Britain, and that the Carlyle Group was going to be subcontracted to do some of that.No, nothing like that would ever happen...
DAN BRIODY (author of "The Iron Triangle: Inside the Secret World of the Carlyle Group"): He did, in fact. The new company is called Qinetiq. It’s spelled Q-I-N-E-T-I-Q. It’s the research arm of the ministry of defense in the U.K., which is essentially equivalent to DARPA [the Defense Advanced Research Projects Agency] here in the U.S. And the Carlyle Group was part of that transaction, so they own part of Qinetiq. It was a very controversial transaction in the U.K., obviously. I mean, if you could try to imagine a foreign company coming in and buying DARPA from the United States. It’s unimaginable. And particularly a company that’s so stockpiled with very powerful former politicians.
BUZZFLASH: So Tony Blair essentially condoned the privatization of a large section of the British defense intelligence apparatus to the Carlyle Group. It would be comparable for us to subcontract that to a foreign company.
BRIODY: Yes, which I don’t think would ever happen.
We're all doomed.