Republican-controlled Carlyle Group poses serious
Ethical Questions for Bush Presidents
     by Alice Cherbonnier

AN IMPORTANT TENET 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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