1. Heady times for Carlyle in the wake of chaos and grief that gripped a natio... http://www.ratical.org/ratville/CAH/CarlyleHead1.html
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The Iron Triangle
Heady times for Carlyle
in the wake of chaos and grief that gripped a nation
Analysis by Dan Briody
UK Times Online
8 May 2003
Our correspondent, in the first of two extracts, reveals how p p
p people
close to the Bush Administration were in a position to gain financially
from 9/11
The Carlyle Group is one of the most powerful and successful private equity firms in
y p p p q y
the world with $13 billion under management and with more political connections
g p
than the White House switchboard. George Bush Sr, his former Secretary of State
g y
James Baker, former chairman of the Securities and Exchange Commission Arthur
g
Levitt, the retired IBM boss Lou Gerstner, and John Major, the former Prime
j
Minister, are among the big names on the Carlyle payroll. The chairman is Frank
g g y p y
Carlucci, a former Secretary of Defence and Deputy Director of the CIA, a close
y p y
friend of Donald Rumsfeld, who put Carlyle at the centre of the American defence
industry.
With the ascension of George W. Bush to the presidency, the White House is now
g p y
full of ex-Carlyle employees, friends and business p
y p y partners. And with the newly y
fattened defence budget, Carlyle has been able to extract massive profits from its
defence holdings.
THE same morning as American Airlines Flight 11 roared towards the north tower of
the World Trade Center the Carlyle Group was holding its annual investor
y p g
conference. Among those who gathered in the plush setting of the Ritz Carlton hotel
g g p g
in Washington were former world leaders, former defence experts and wealthy
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Arabs from the Middle East.
There with them, looking after the investments of his family, was Shafiq bin Laden,
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Osama bin Laden's estranged half-brother. George Bush Sr. was also at the
g half-brother.
f g
conference, but left before the terror attacks. It is impossible to say when it dawned
p y
on the partners at the Carlyle Group that what was to come, as a direct result of
p y p
September 11, would serve their financial interests. P Perhaps it was that very day, in
the midst of the chaos and grief that had gripped the nation
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2. Heady times for Carlyle in the wake of chaos and grief that gripped a natio... http://www.ratical.org/ratville/CAH/CarlyleHead1.html
the midst of the chaos and grief that had gripped the nation.
Or maybe it was the next day, when President Bush characterised the attacks in no
uncertain terms as "acts of war". Regardless, there was little doubt by the third day
y y
after the attacks that Carlyle was in for some heady times. Congress overwhelmingly
y y g gy
approved $40 billion in emergency funds, about half of which was earmarked for the
pp
armed services.
Also in the works was a massive increase in the Pentagon budget, $33 billion, in time
for the Department of Defence's 2002 fiscal year, beginning October 1, 2001.
But before cashing in Carlyle had to deal with a public relations crisis. Carlyle had
g y p y
been doing business with dozens of families and businesses throughout the Middle
g g
East since the early 1990s. And they had been extremely successful in the region.
After all, the company had been running the Saudi Economic Offset Program for
p y g g
years, a government-funded p g
y g programme designed to encourage foreign investment
g g g
into Saudi Arabia, under the condition that a portion of the profits be reinvested in
p p
Saudi Arabia. In a sense, Carlyle had become the gatekeeper to foreign investing in
Saudi Arabia.
Not many people were aware of any of this at the time of the September 11 attacks.
But by the end of September, the general public would know far more about
Carlyle's business than anyone Carlyle was comfortable with. In the weeks following
p
the attacks, the name Osama bin Laden leaped on to the forefront of America's
consciousness as public enemy number one. Then, on September 27, The Wall Street
p y p
Journal ran a story entitled "bin Laden Family Is Tied to U.S. Group". That group, of
l y
course, was Carlyle.
Carlyle had a relationship with the bin Ladens that began in the early 1990s, when
they tried to put together a deal for the Italian Petroleum (IP) company. At the time,
Basil Al Rahim, a young Carlyle associate, was travelling from Saudi Arabia to
Amman to Bahrain, to United Arab Emirates, drumming up support for Carlyle's
forthcoming international funds. One of the clients that Al Rahim helped secure was
the bin Laden family, which owned a $5 billion construction business by the name of
Saudi Binladin Group.
The bin Laden family consists of more than 50 brothers and sisters, all the progeny
of Mohammed bin Laden. Osama had his Saudi citizenship revoked in 1991, and was
reportedly cut off from his family. Since his father's passing, Bakr bin Laden became
the head of the business and the family, and as such he committed money to Carlyle
on several occasions. It was a fruitful relationship for both parties involved. But
now, in the most atrocious irony of Carlyle's history, the bin Laden family was in a
position to make millions from the war being waged against their own brother. The
news that George Bush Sr., James Baker and other Carlyle worthies had visited the
bin Ladens in recent years stunned the American public. It was, in fact, the Carlyle
Partners II fund in which the bin Laden family was invested. The same fund that
held a host of defence holdings.
Carlyle told the press that the bin Ladens were only in for $2 million, a relatively
small amount of money considering the whole fund was worth $1.3 billion. But one
bin Laden family financial representative says the number was much larger.
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3. Heady times for Carlyle in the wake of chaos and grief that gripped a natio... http://www.ratical.org/ratville/CAH/CarlyleHead1.html
Regardless of the actual amount, the irony ultimately proved too much for Carlyle,
and by the end of October, they severed ties to the family, liquidating their holdings.
But it wasn't until a member of Congress called out Carlyle by name that the
company started fighting back.
In April 2002, Representative Cynthia McKinney, a Democrat from Georgia, spoke
p p y y g p
out against "persons close to this administration who are poised to make huge profits
g p p g p
off America's new war". She went on to say, "We know there were numerous
y
warnings of the events to come on September 11 . . . what did this administration
g p
know and when did it know it . . . what do they have to hide?"
Naming the Carlyle Group as an example of the cronyism she was talking about,
g y p p y g
McKinney was implying that the Bush administration knew the attacks were coming,
y py g g
allowed them to happen, and was now reaping the profits, both financial and
pp p g p
p
political, through its connections to the Carlyle Group. The Republican counter
g y p p
attack lambasted McKinney for a total lack of responsibility. Senator Zell Miller
y p y
from Georgia called her "very dangerous and irresponsible". Kathleen Parker, a
g y g p
nationally syndicated columnist, called McKinney's statements "idiotic" and
y y
bordering on treason.
McKinney would eventually back off a little from her comments, saying, "I am not
aware of any evidence showing that President Bush or members of his
administration have personally profited from the attacks of 9/11." But at least part of
p yp p
what she said was dead on: persons close to the Bush administration were in fact in a
p
position to gain financially from the September 11 attacks.
By the beginning of 1993, Carlyle was a somewhat seasoned, if not terribly
y g g y y
successful, private equity firm with stakes in ten companies valued at around $2
p q y p
billion. But then began a rapid transformation, from bit-part player into an
g p p p y
international p
political and financial ppowerhouse. Starting with James Baker, former
g
Secretary of State under George Bush Sr., Carlyle brought in the high-priced,
y g y g
high-profile talent that would ultimately define the company.
Baker would prove to be an invaluable addition to the firm. He would help attract
money from some of the wealthiest people in the world. A trend that in turn would
make Carlyle itself one of the biggest investors in the world. The Carlyle Partners II
fund was set up to focus on aerospace, defence, healthcare, telecommunications and
insurance. The idea was to parlay the newly acquired political expertise that Carlyle
had gained through the hiring of Baker, and invest in industries that are heavily
dependent on federal regulation. This way, Carlyle could cash in on its ex-politicos
in two ways: first, to help them raise money by giving speeches at home and abroad,
packing the house with high net worth individuals; and, two, to leverage their
relationships with lawmakers to gain insight on the direction of policies that affect
their target industries. It was a brilliant strategy that was about to make all of them
very, very rich.
The goal for the fund was $500 million, a relatively modest sum in private equity
circles, but five times as much as Carlyle had ever raised. After rounding up almost
$150 million from banks and pension funds, the company went after an investor that
could contribute both money and fame and get them over the hump. They went after
George Soros.
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4. Heady times for Carlyle in the wake of chaos and grief that gripped a natio... http://www.ratical.org/ratville/CAH/CarlyleHead1.html
The Hungarian-American Soros already had a reputation as the most prescient and
successful investor in the world. So when he agreed to become a limited partner in
Carlyle's new fund he was bringing far more than just $100 million. With his
reputation for making gobs of money, Soros was also jump-starting a fund that would
go on to be the most successful in Carlyle's history. By the time Carlyle Partners II
closed in September 1996, the fund had raised more than $1.3 billion. From this
massive fund, the company would spread its investments all over the defence world.
Names like Aerostructures Corp., United Defence, United States Marine Repair, and
US Investigations Services dominated the list of investments. And most of them had
one thing in common: they depended on government contracts to make a living.
Carlyle was really starting to hit its stride in the mid-1990s, both in raising capital
and cutting deals. They decided to hit the global scene, using ex-politicos to open
doors and wallets. By this time the company had George Bush Sr. casually working
for them on and off as a "senior advisor". So it wasn't difficult to hook former UK
Prime Minister John Major, as well. He had been America's ally during the Gulf
War, which put him largely in the good graces of Carlyle's Middle East investors.
And Carlyle had plans to create another massive buyout fund, this time targeted at
European companies. The fit was perfect, and in late 1997, John Major became a
member of the Carlyle European Advisory Board -- just months after he left his post
as prime minister in May.
Over the next two years, the company would raise funds for investments in Asia,
begin marketing funds to Latin America and Russia, and start up several venture
capital funds aimed at smaller investments of up-and-coming companies. It would set
up real estate funds in Europe and the US. By the end of the decade, Carlyle stood
with more than a dozen funds and close to $10 billion under management. It was
officially a juggernaut, and the world was taking notice.
The company was hiring politicians from all over the world to further their cause:
former President of the Philippines Fidel Ramos; Prime Minister of South Korea
Park Tae-joon; former SEC chairman Arthur Levitt. And, of course, George Bush Sr.
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5. FROM: http://www.carlyle.com/Company/item1676.html
In accordance with Federal Laws provided For Educational and Information Purposes – i.e. of PUBLIC Interest
Firm Profile
The Carlyle Group is a global alternative asset manager with $148
billion in assets under management in 89 active funds and 52 fund of
fund vehicles investing in Corporate Private
Equity, Real Assets, Global
Market Strategies and Fund of
Funds Solutions as of September
30, 2011. Carlyle combines global
vision with local insight, relying
on a top-flight team of 500+
investment professionals operating
out of 33 offices to uncover
superior opportunities in Africa, Overview
Asia, Australia, Europe, Latin Carlyle Co-Founders discuss
America, the Middle East and the firm's history and guiding
North America. principles.
While open to opportunities More Corporate Videos
wherever they can be found,
Carlyle focuses on sectors in which it has demonstrated expertise:
aerospace, defense & government services, consumer & retail,
energy, financial services, healthcare, industrial, real estate,
technology & business services, telecommunications & media and
transportation.
In a world awash with information, insight is often in short supply.
Carlyle's edge is its ability to leverage the local insight of its
investment professionals, collaborating across the firm's 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. Since its founding in 1987,
the firm has invested $48 billion in 414 Corporate Private
Equity transactions.
More than 1,400 investors from 72 countries entrust Carlyle with
their capital and their reputations. As one means of aligning its own
interests with those of its Limited Partner investors, since inception
Carlyle has committed more than $4.6 billion of its own capital to its
funds.

6. Dan Briody - Wikipedia, the free encyclopedia http://en.wikipedia.org/wiki/Dan_Briody
From Wikipedia, the free encyclopedia
is the author of the books The Halliburton Agenda: The Politics of Oil and Money (2004) and The
g
Iron Triangle: Inside the Secret World of the Carlyle Group (2003). B
Born in Ridgefield, Connecticut, he and his
[1]
family now live in Bridgewater.
1 Career
2 Books
3 References
4 External links
Prior to writing about corporations and their political ties, Briody was a technology journalist, including working
as an editor[2] and columnist[3] for InfoWorld. He later began writing for the magazine Red Herring, for whom
he initially wrote about the Carlyle Group in 2001.[4]
Briody expanded his Red Herring Carlyle Group article, turning it into his first book in 2003. The Iron Triangle
landed on several best-seller lists,[5] with The New York Times describing it as "one-stop shopping for anyone
who wants a laundry list of accusations against Carlyle since its inception in 1987."[4]
The Iron Triangle put Briody in the media spotlight, commenting to audiences curious about the confluence of
the military business and p
y politics. Briody appeared in Michael Moore's movie Fahrenheit 9/11, talking about
y pp g
how the Carlyle Group benefited from 9/11 and the Bush family's connections with the Carlyle Group and Saudi
Arabia.[1] Briody has since appeared on a number of national broadcasts including The Today Show, Nightline,
[
The NewsHour with Jim Lehrer, Countdown with Keith Olbermann, and NPR's Fresh Air.
In 2004, Briody p
y published The Halliburton Agenda, a detailed account of Halliburton, the oil services and
g
logistics company formerly run by Dick Cheney. In particular, he covered its subsidiary KBR (formerly named
Kellogg Brown & Root).
More recently, Briody writes freelance articles for a variety of magazines, including Martha Stewart Living,
Golf Digest, BusinessWeek, MSN, and Inc. He is also the founder of a communications consultancy for Fortune
500 companies.
Briody, Dan (2004). The Halliburton Agenda: The Politics of Oil and Money. John Wiley & Sons.
ISBN 978-0-471-63860-5.
—— (2003). The Iron Triangle: Inside the Secret World of the Carlyle Group. John Wiley & Sons.
ISBN 978-0-471-28108-5.
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7. Dan Briody - Wikipedia, the free encyclopedia http://en.wikipedia.org/wiki/Dan_Briody
1. ^ Lefferts, E.L. (July 1, 2004). "Beyond 'Fahrenheit'" (http://www.zwire.com/site/news.cfm?BRD=2303&
dept_id=478844&newsid=12178663) . Litchfield County Times. http://www.zwire.com/site/news.cfm?BRD=2303&
dept_id=478844&newsid=12178663. Retrieved February 7, 2010.
2. Fost, Dan (May 6, 1999). "Nat Semi Exiting Microchip Business" (http://www.sfgate.com/cgi-bin/article.cgi?f=
/c/a/1999/05/06/BU12452.DTL) . San Francisco Chronicle: p. B-1. http://www.sfgate.com/cgi-bin/article.cgi?f=
/c/a/1999/05/06/BU12452.DTL. Retrieved February 7, 2010.
3. Briody, Dan (November 30, 1999). "Opinion: Table for two, cell phone or noncell phone" (http://www.cnn.com
/TECH/computing/9911/30/nocellzone.idg/index.html) . CNN. http://www.cnn.com/TECH/computing/9911/30
/nocellzone.idg/index.html. Retrieved February 7, 2010.
4. ^ Cowan, Alison Leigh (April 13, 2003). "Weaving a Power Web on the Potomac" (http://www.nytimes.com
/2003/04/13/business/business-off-the-shelf-weaving-a-power-web-on-the-potomac.html) . The New York Times:
p. 35. http://www.nytimes.com/2003/04/13/business/business-off-the-shelf-weaving-a-power-web-on-
the-potomac.html. Retrieved February 7, 2010.
5. "The BusinessWeek Best-Seller List" (http://www.businessweek.com/magazine/content/03_26
/b3839024_mz005.htm) . BusinessWeek. June 30, 2003. http://www.businessweek.com/magazine/content/03_26
/b3839024_mz005.htm. Retrieved February 6, 2010.
Official website (http://danbriody.blogs.com)
Works by or about Dan Briody (http://worldcat.org/identities/lccn-n2002-117434) in libraries (WorldCat
catalog)
Book excerpts:
Briody, Dan (May 8, 2003). "Heady Times For Carlyle in the Wake of Chaos and Grief That
Gripped a Nation" (http://business.timesonline.co.uk/tol/business/columnists/article881598.ece) .
The Times. http://business.timesonline.co.uk/tol/business/columnists/article881598.ece. Retrieved
February 6, 2010.
Briody, Dan (May 9, 2003). "The Blurred Boundary That Helped Carlyle to Reap Benefits"
(http://business.timesonline.co.uk/tol/business/article883004.ece) . The Times.
http://business.timesonline.co.uk/tol/business/article883004.ece. Retrieved February 6, 2010.
Briody, Dan (July 22, 2004). "Book extract: The Halliburton Agenda" (http://www.guardian.co.uk
/books/2004/jul/22/usa.politics) . The Guardian. http://www.guardian.co.uk/books/2004/jul
/22/usa.politics. Retrieved February 6, 2010.
Retrieved from "http://en.wikipedia.org/w/index.php?title=Dan_Briody&oldid=492026996"
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