Tuesday, July 06, 2004

A thread for DC

A colleague of mine has many views that counter my own. We have had a number of discussions and they have been interesting but are, of course, undocumented. One of the typical things we end up doing is disagreeing on what the fundamental facts indeed are about the topic of discussion. This often limits how far we can go on the topic of choice. Personally, I'm a person that doesn't debate very well "on my feet" and I prefer to give more thought to my words than one can typically do in a passing convensation. So I'm opening a thread here where DC and I can record our discussion in black and white in the hopes of raising their effectiveness beyond the basic he-said-she-said level. Thread is now open. First on the list is
Thomas Frank: What the Matter with Kansas?
Fahrenheit 9/11

10 comments:

Dustin said...
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Kendall said...
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Kendall said...

God bless Google, the poor man’s Lexis/Nexis.

Judicial Watch has criticized GHW Bush’s association with the Carlyle Group to the point of calling for his resignation. The "conflict of interest could cause problems for America's foreign policy in Middle East and Asia."

"This conflict of interest has now turned into a scandal. The idea of the President's father, an ex-president himself, doing business with a company under investigation by the FBI in the terror attacks of September 11 is horrible. President Bush should not ask, but demand, that his father pull out of the Carlyle Group," stated Judicial Watch Chairman and General Counsel Larry Klayman.

I note that GHW Bush left the position in October, 2003.

Carlyle's directorship includes James Baker serves as a senior counselor, and Richard G. Darman, former director of the Office of Management and Budget as a managing director. The board also includes former Defense Secretary Carlucci.

According to William Thomas,
http://www.willthomas.net/Convergence/Newsletter/Bush_Carlyle_Group.htm
"The group found Bush Jr. a job as administrator for Caterair, a Texas company specialized in aerial catering in February 1990, while his father occupied the White House. When GW left Caterair in 1994 to become Governor of Texas, the company – like every enterprise ever run by the younger Bush, was in a flat financial spin."

I think it’s fair to say that the Carlyle Group is a solid Bush family crony, even before the former president joined the board. Therefore the 1.4 billion statement still stands in my mind. George Soros is a mere investor of $100 million and holds no managerial influence in the company that I know of.

Also according to Mr. Thomas in the same article, BDM, the beneficiary of the 1.18 billion Saudi investment, is a big player in the “Star Wars” arena. This is a rather unfortunate dovetail with the administrations focus on NMD. When an administration pushes a controversial defense project that financially benefits its friends, it just looks bad. It seems that either Carlyle needs to get out of the defense business or the people with connections to the administration need to get out of Carlyle.

Dustin said...

http://encyclopedia.thefreedictionary.com/Carlyle%20Group
discusses Carlyle group saying
"The Group's aerospace and defense investments are a source of criticism since the Group is alleged to have connections to the Middle East, and detractors state that defense industries cannot remain profitable unless wars and threats of war continue to occur. However, its investments are focused on Asia, Europe, and North America and defense investments represent only about 7% of the group's portfolio."
also saying
"The Saudi Arabia relatives of Osama bin Laden (not Osama bin Laden himself) were also minor investors in the Carlyle Group until October 2001 when the family sold its $2.02 million investment back to the firm in light of public controversy surrounding the family after the September 11, 2001 Terrorist Attack."
2.02 million in investment in a profitable business doesn't seem to be too shady.

Dustin said...

The reason for Bush Sr leaving the board was due to pressure from the press. Do you think that Teresa Hienz will be pressured to remover herself from Hienz if Kerry becomes president, will their children have to end all careers so that there is no inpropriety, defense spending isn't the only spending out there.

Carlyle contains many wealthy people more then even soros from http://msnbc.msn.com/id/5335853/site/newsweek/
"Its founding and still managing partner is David Rubenstein, a former top domestic policy advisor to Jimmy Carter. Among the firm’s senior advisors is Thomas “Mack” McLarty, Bill Clinton’s former White House chief of staff, and Arthur Levitt, Clinton’s former chairman of the Securities and Exchange Commission. One of its other managing partners is William Kennard, Clinton’s chairman of the Federal Communications Commission. Spokesman Ullman was the Clinton-era spokesman for the SEC."

and according to Micheal Moore (hehe)
http://www.michaelmoore.com/words/latestnews/f911facts/index.php?id=37
“Fred Malek, a senior advisor to Carlyle, who also served as the director of the 1988 Republican Convention, suggested to Carlyle that the President’s eldest son, George W. Bush, would ‘be a positive addition to Caterair’s board.’ Mr. Malek was also a Caterair director and vice chairman of Northwest Airlines, a major Caterair customer. ‘I thought George W. Bush could make a contribution to Caterair,’ stated Malek.”
Sounds like what happens all over the US everyday, you happen to know somebody and so you get a job.

"I think it’s fair to say that the Carlyle Group is a solid Bush family crony, even before the former president joined the board." not justified also I researched the 1.18 billion from Saudi and the company BDM in question had been doing work for the Saudi gov training the National Guard since 75. The group knew this and bought it after the Iraqi war, sounds like a great business decision
http://www.vinnell.com/ArabiaRecruiting/recruiting.htm
Also the business was sold before Bush Sr got on board. I wasn't able to see if they where a big "Star Wars" player but once again sold in 97 makes it a mute point for Bush Jr bringing it up in campaings. But while on that note there is one weapons program that is trying to be pushed through the congress that Rumsfeld with Bush's blessing decided to cut, the Crusader project 13 Billion for a tank like artillery vehicle, this project actually is form Carlyle and it won't be done because obviously we have very little need for land based artillery. That cut has angered many in the military and excpecilly congress where vehilces were supposed to be made.

As far as defense spending going towards Carlyle it has gone up no faster then it has for most every other major military supplier
http://www.dior.whs.mil/peidhome/procstat/p01/fy2000/P01t3.htm
http://www.dior.whs.mil/peidhome/procstat/p01/fy2003/P01FY03-Top100-table3.pdf
from 1,194,713 to 1,670,173,704 while lockheed the largest supplier went from 15,125,846 to 21,927,183,277. Carlyle even went down on the list from 13th to 15th for military spending. More could be said about Haliburton but we discussed that yesterday.

Kendall said...

From the Carlyle Home page:
"Carlyle’s edge is its ability to leverage the local insight of its investment professionals, collaborating across the firms’ investment disciplines from deal sourcing and due diligence through portfolio company development. The result: A broader view of potential investment opportunities and deeper level of expertise, creating value for Carlyle portfolio companies that translates into superior returns for Carlyle investors."

I read this as saying "our people benefit from special knowledge and access". With James Baker and Carlucci on all the advisory boards and no notables on the boards that are outside that political circle, I remain of the opinion that the Carlyle Group is a member of the Bush crony circle.

In regards to Caterair, I wonder if GWB has ever felt the need to achieve some success on his own merits and turned down a "sweetheart" offer on that basis.

Dustin said...

The Carlyle Group Senior Management
Chairman - Louis V. Gerstner, Jr. - Chairman of the board for IBM 1993-2002 after Executive Officer of RJR Nabisco and American Express Company, where he was President of the parent company and Chairman and CEO of its largest subsidiary
Chairman Emeritus - Frank C. Carlucci - Assistant to the President for National Security Affairs under President Reagan after Chairman and CEO of Sears World Trade and various director jobs in the government (under republican presidents)
Founders
William E. Conway, Jr. - Senior Vice President and CFO of MCI Communications Corporation and The First National Bank of Chicago in the areas of corporate finance, commercial lending, workout loans and general management
Daniel A. D'Aniello - Vice President for Finance and Development at Marriott Corporation after being financial officer at Pepsico and TWA
David M. Rubenstein - partner in law firm of Shaw, Pittman, Potts & Trowbridge, where he was counsel on a number of major corporate acquisitions and mergers after being Deputy Domestic Policy Assistant to the President of the United States, a position he held until 1981 (that would be under Carter)
Senior Counselor - James A. Baker, III - Various jobs under Republican presidents
Senior Advisor
Richard G. Darman - Various jobs under Republican presidents after being Managing Director of Shearson Lehman Brothers and Principal and Director of ICF
Arthur Levitt - Chairman of the United States Securities and Exchange Commission (under Clinton) after New York City Economic Development Corporation and Chairman of the American Stock Exchange
Thomas F. "Mack" McLarty - served in several senior positions in the Clinton White House after Chairman and Chief Executive Officer of Arkla
If you continue to look at the other less important Senior Advisor we end up with:
Afsaneh Mashayekhi Beschloss - Treasurer and Chief Investment Officer of the World Bank
Thomas A. Corcoran - various aerospace companies like Gemini Air Cargo, Lockheed Martin and GE Aerospace.
Wilfred A. Finnegan - several senior capacities at Chase Manhattan
David L. Squier - Chairman of Firth Rixson/Forgings International and United Components and President and Chief Executive Officer of Howmet Corporation
Julian Browne - British Army from 1968-1993, retiring rank of Brigadier followed by various British defense companies
Kent Kresa - Chairman Emeritus of Northrop Grumman Corporation
Charles O. Rossotti - Commissioner of Internal Revenue 1997-2002 (mainly under Clinton but Bush was Pres while he was employed)
A few members of the group have a political past the majority are business men in various fields, and even so the "Bush crony circle" involves only a few republicans and just as many democrats. What it looks more like is a group of movers and shakers in business and politics that work on investment together. Oh and of the 3 founders only one had political connections and that was with democrats.

As far as GWB's "sweetheart" deal only one of my jobs that I have gotten was due to strictly merit every other job was due to who I knew, merit is how I kept the job. Most people I know aren't suprised when poeple get jobs due to knowing somebody.

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Fantastic blog. I do apartment loans as well.

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