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The Baltimore
Chronicle & Sentinel, by Alice Cherbonnier, October 1, 2001
An important tent of journalism is
that you should always ask, “Who benefits?”
In the case of a war, the answers
to this question become of paramount importance. Suppose, for example,
that profits from military contracting were to go in the pockets of a
former U.S. President whose son (and a presumed future heir) is now
President? Suppose further that such profits escalate in times of
conflict. Wouldn’t this be of concern to the public? Wouldn’t you expect
the media to be all over such an important ethical (not to mention moral,
and maybe legal) angle?
Though described by the Industry
Standard as “the world’s largest private equity firm,” with over $12
billion under management, chances are readers haven’t ever heard of The
Carlyle Group. Isn’t that a little odd, considering it is run by a
veritable who's who of former Republican political leaders. Former Defense
Secretary Frank Carlucci is Carlyle’s chairman and managing director (who,
by the way, was college roommate of the current Defense Secretary, Donald
Rumsfeld). And that partners in this mammoth venture include former U.S.
Secretary of State James A. Baker III, George Soros, Fred Malek (George
H.W. Bush’s campaign manager, forced to resign when it was revealed he was
Nixon’s “Jew counter”), and—presumably—George H.W. Bush?
We say “presumably” because the
privately-held Carlyle doesn’t have to reveal information about its
partners or investments to the SEC or to anyone else. Our former President
is reported to be active in seeking investments for the Carlyle Group from
the Asian market, and word is he’s paid between $80,000 to $100,000 per
presentation.
All told, Carlyle has about 420
partners all over the globe, from Saudi princes to the former president of
the Philippines. Its investments run heavily in the defense sector; they
make money from military conflicts and weapons spending. But who in
Baltimore knows about it?
A search of the Baltimore Sun’s
website reveals no mentions whatsoever of The Carlyle Group, though it’s
been around since 1988 and has been involved in numerous buy-outs and
buy-ins, sometimes with SEC-regulated companies that have to report these
things. Contrast this news blackout with the Washington Post’s 378
mentions, and the New York Times’ 332 hits. Even the Philadelphia Inquirer
weighed in with 15 mentions.
Not only have some newspapers and
magazines brought The Carlyle Group out of the shadows it prefers, but
this enterprise has attracted the attention of The Center for Public
Integrity and Judicial Watch, both of which have concerns about the
ethical propriety of having high-placed former government
officials—trained at taxpayer expense, too—out there reaping over 20% to
40% a year by working their connections. You have to wonder if these
former public servants are just simply greedy, or if they’re telling
themselves they’re true patriots by doing behind-the-scenes
cloak-and-dagger stuff.
This is a big story. We were
wondering if, in the wake of current events, we were the only newspaper
that was asking that question, “Who benefits?” And then we found that the
Wall Street Journal was asking the right questions, too, and we were
vastly relieved not to be left hanging out to dry. On Sept. 27, the WSJ
published a “Special Report: Aftermath of Terror” with the headline “Bin
Laden Family Could Profit From a Jump In Defense Spending Due to Ties to
U.S. Bank.” The “bank” is actually The Carlyle Group (and by the way, we
peons can’t invest in it, and it sure isn’t taking deposits from the
general public). The lead sentence reads: “If the U.S. boosts defense
spending in its quest to stop Osama bin Laden’s alleged terrorist
activities, there may be one unexpected beneficiary: Mr. bin Laden’s
family.” And, though the WSJ curiously did not mention this, another
beneficiary may be George H.W. Bush’s family.
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