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CARLYLE: THE OCTOPUS
Or when the Bush family rubbed
shoulders with the Bin Ladens
BY MICHEL PORCHERON
—Special for Granma International—
MARLENE Dietrich and Eartha Kitt sang to Cole Porter
and the Gershwin brothers there. Not in the
prestigious night club of Manhattan’s legendary
Carlyle Hotel, but in the highly exclusive rooftop
bar where two “golden boys” David Rubenstein and
William Conway arranged to meet in order to set up a
financial venture. Initial investment: $5 million.
Rubenstein had been an advisor to President Jimmy
Carter and Conway was financial director of MCI
Communications.
That
day in 1987, these two financial adventurers were a
long way from imagining that the Carlyle Group –
born after several rounds of gin fizz – would become
a ferocious octopus of international finance with
capital worth almost $14 billion and, above all, an
annual investment recovery rate of 34%. Carlyle is
currently a private firm belonging to 500
particularly wealthy shareholders from 50 different
countries. With just 500 employees in some 20
countries, it has ramifications in the United
States, Europe and Asia and contacts in tax havens
throughout the world.
If
someone had told Rubenstein and Conway then that, in
order to achieve such results, their Carlyle Group
was going to bring together a magnificent dream team
— as all dignified speculators worthy of the name
dream of
having — both would probably have dropped to the
thickly carpeted floor of the Carlyle Bar, victims
of a simultaneous fainting fit. Today, their pulses
don’t miss a beat thanks to the Carlyle Group’s
distinguished godfathers, including George Bush Snr.,
James Baker (Bush’s Secretary of State 1989-1992
after having headed Ronald Reagan’s presidential
team from 1981-1985), Frank Carlucci (Reagan’s
defense secretary and ex-deputy director of the
CIA), John Major (former British prime minister),
and Fidel Ramos (former Filipino president). Or
rather, the crème de la crème… respectable people
who, despite everything,
dedicate themselves to top-level lobbying just like
all those who aspire to money, like the magnet
attracts iron or moths flutter to a flame and money
to money.
George W. Bush played a secondary role in the
company some years ago before being elected as
governor of Texas. In just two lines, history tells
us how he was a member of the administration board
for Caterair, a Texan organization providing
in-flight meals.
But
it is not so much the tangle of Carlyle’s tentacled
operations — today the group represents one of the
planet’s principle investment funds — that is a tad
fishy, but also the terrible image it has developed
despite its repeated denials to the contrary: a
member of the millionaire Saudi Bin Laden family was
also one of Carlyle’s investors, to the tune of
several million dollars…loose change!
François Missen, a French journalist who
investigated the company over several months,
recalls the following episode and a scene he eye
witnessed.
On
September 11, an important meeting of the Carlyle
group took place at the Ritz Carlton in Washington,
a luxurious five-star hotel on 22nd St., when
someone whispered something into company president
Frank Carlucci’s ear.
“What?” They turned on the television.
“The
men were thunderstruck,” recalls Missen, “absorbed
in the barbaric drama taking place 400 kilometers
away”.
Two
days later, they attended an executive meeting on
the third floor of No. 70, Boulevard de Courcelles
in Paris – the headquarters of Otor, a holding
company with 3,000 employees and France’s principal
recycled paper manufacturer. Otor and Carlyle were
in negotiations and Frank Falezan, second in command
at Carlyle-France was among those attending.
“Discussions were difficult. A break was very
welcome,” recalls Missen.
“Any
news Frank?”
“No,
nothing else. I’ve got a big surprise for you.
“?????”
“One
of the Bin Laden family was here.”
“Bin
Laden?”
“Shafig Bin Laden…yeah, Bin Laden. One of Osama’s
half brothers was sitting at the table. It’s OK.
He’s a Carlyle shareholder. So what…”
“But
that’s terrible Frank…”
“Yeah, if you like… That’s business….”
“But
Bin Laden… That’s going too far.”
“When they showed the first images of the Twin
Towers, he got up. He went to the bathroom, I don’t
where. When he came back, he wasn’t wearing the ID
with his name on it anymore. He apologized: “That’s
better isn’t it?”
Carlyle didn’t cut its business ties with the Saudi
Bin Laden Group until a month later… How long had he
been a shareholder in Carlyle, the company whose
emblematic figurehead was already Daddy Bush?
History doesn’t mention these facts. A shame really
because it was Daddy Bush that they went to “every
time they needed to enter one of Ali Baba’s caves
under the control of some emir in some kingdom or
another”, emphasizes Missen. Incidentally Daddy Bush
continued charging $80,000 each time they wanted him
to make a speech for that or any other just cause.
In
January 1989, less than two months after the birth
of Rubenstein and Conway’s creation, Frank Carlucci
– a key individual in Carlyle’s game – took up the
post of director general before rising to become
president. He was a veteran of politics, diplomacy
and the secret service who had many contacts. It was
he who initiated Carlyle’s system based essentially
on the imperial internal law of the so-called
“cooling-off period”. Or rather, a politician who
leaves his official tasks must observe a one-year
cooling-off period before throwing himself into the
luxury of pro-Carlyle lobbying.
A
charming idea of Carlucci’s: Aim for the military
sector, particularly in favor of the regular Saudi
troops and the national guard headed by Prince
Abdullah. In ten years Carlyle has become the
Pentagon’s 11th supplier. It’s biggest success?
Buying United Defense Industries, which produces
tanks, armored vehicles, missiles and space
vehicles. Buy, sell, buy again, sell
again…everything works out well for Carlyle people,
all essential details taken care of in the most
discreet way, if not in absolute secrecy.
Carlyle is a “secretive company. Its official
headquarters is at 1001 Pennsylvania Avenue,
Washington but its name doesn’t even appear on the
marble plaque listing the building’s residents,”
writes François Missen.
“Carlyle Group? I am sorry, there’s no office of
that name here sir..—But…— Please sir! –OK, OK—
Go away! –OK, OK. —. Does it have a kamikaze’s
face? “ asks Missen.
In
front, FBI headquarters; 500 meters away, the White
House. These days, Frank Carlucci is honorary
president of the Carlyle Group. But he continues to
be a close friend of Donald Rumsfeld, George W.
Bush’s defense secretary. They’re old university
buddies — they were in the same Princeton wrestling
team — but not companions-in-arms in the army.
Nevertheless they’re now united in fighting a war.
Writing in the monthly Red Herring, Dan Brody
informs that Carlyle has become the obligatory
portal between private industry and the ministry of
defense. But Carlyle has known how to diversify.
“Our field of action has grown considerably,”
explains Jean Pierre Millet, managing director for
Europe. Principally in “sovereignty industries” or
put another way, those where the U.S. federal state
is present: energy, communications, information
technology, aeronautics, nanotechnology and
pharmaceuticals.
Little by little since 1898, always depending on a
cooling-off period, numerous candidates have
presented themselves to Carlyle. Apart from the
above mentioned VIP’s, this also includes former
state and treasury department officials, many
Republicans, Democrats like Brian Bailey — former
Bill Clinton advisor — and Arthur Levitt, ex-chief
of the Security Exchange Commission (the stock
exchange “police”) plus foreigners such as a former
Thai prime minister, ex- Deutsche Bundesbank
president, etc…completing a dream team that is
constantly being renewed in the “revolving doors”
fashion. But in every case, the Carlyle Group is the
ideal way if we’re talking about how to open doors.
Carlyle’s function never differs: a brilliant
façade, grand names as a guarantee and image of
transparency, even though the operations are very
often murky, sometimes impenetrable. So much so that
there are those who have no doubts about calling
Carlyle “the CIA bank.”…”You never really know on
whose behalf Carlyle is buying or whose going to use
the technologies…It’s always investing in dual
technologies, that’s to say those that can be used
for both civil and military ends,” commented Pascal
Dallecoste, a researcher from the School of War
Economics.
The
list on which Carlyle’s name appears as either buyer
and/or seller or shareholder is a turbulent mass of
names of worldwide companies. Taking control, taking
possession, the offensive, public offers to buy,
circling its prey, financial attacks, buying up
stock: these are some of the words it uses when
describing its operations. Everything’s valid, even
contradictions that are all too apparent. To give an
example: Carlyle has signed a commitment to purchase
Fiat Avo, Fiat’s aeronautic associate and
Arianespace provider. But Carlyle has close ties
with Boeing, whose space division’s main competitor
is…Arianespace.
“Carlyle inspires fear. It’s a steamroller whose
objective is to capture the best of Europe’s
military industry,” considers a European expert who
applies the word “aggressive” to define the group.
Others are less damming. “You don’t have to look for
spooks,” says a former Carlyle member, “it’s not an
instrument of U.S. policy.” French Henri Martre, a
former advisor to the group, is even clearer still:
“Carlyle’s objective is to make money. It
understands the military sector, detects good
business. That’s all.” That’s all? We shouldn’t be
so sure. This light version is rather incomplete.
Better to say that Carlyle has a formidable foothold
in U.S. politics. As economic espionage expert Joel
Rey affirms, Carlyle’s strategy has never been one
of strictly business. He considers that above all,
the group is a political instrument...and in the
Washington/Paris crisis, its financial power
“represents the greatest coercive weapon against
French interests.”
After finding itself front-page news for the first
time —when one of its shareholders was discovered to
be a member of Bin Laden’s family — despite its
eternal desire to remain in the shadows, Carlyle
became a current topic. U.S. antiwar activists have
it in their sights. On March 24 when they held huge
demonstrations in New York and San Francisco,
Carlyle real estate was blockaded. Dozens of
protesters were arrested. Tom Fitton, director of
NGO Judicial Watch, remarked that it isn’t normal
for Bush the son to take decisions that could have
direct impact on businesses belonging to Bush the
father. U.S. director Michael Moore is preparing a
film on the subject after condemning Carlyle during
the last Oscars ceremony. Dan Broidy, who said,
“wartime is boom time” for Carlyle, has just
published the iconoclastic book The Iron
Triangle: Inside the Secret World of the
Carlyle Group.
However, the U.S. political class remains undaunted.
Seth Morris who heads the Project on Government
Oversight, an NGO that checks on the use of public
funds, tells us why. “Everyone wants to work for
Carlyle.”
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