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A Look At Why The Carlyle Group Wanted to Drop George W.
Bush From Its Board A Decade Ago
Exposed: U.S. Secretly Built Mobile Germ Unit & Plans
to Vastly Expand Bioterrorism Labs
35 Nations Lose U.S. Military Aid For Not Exempting Americans
From International Criminal Court
A Look At Why The Carlyle Group Wanted to Drop George W.
Bush From Its Board A Decade Ago
In a broadcast exclusive, Democracy Now! airs a recording
of a recent talk by David Rubenstein, founder of the secretive
defense contractor Carlyle Group. He recalls how useless Bush
was as a board member of Carlyle’s firm Caterair and
his surprise that George W. is now president. We also talk
to Dan Briody, author of The Iron Triangle: Inside the Secret
World of the Carlyle Group.
THIS IS A RUSH TRANSCRIPT
DEMOCRACY NOW:In a column posted yesterday on Salon.com,
Joe Conason writes: "Preferring to avoid public scrutiny
for obvious reasons, executives at the Carlyle Group usually
say nothing about their firm's connections with the Bush
dynasty. But last April 23, Carlyle managing director David
Rubenstein spoke quite frankly about the comfy sinecure
he provided to George W. Bush more than a decade ago --
and how useless Bush turned out to be. Whether he knew it
or not, Rubenstein's remarks to the Los Angeles County Employees
Retirement Association were recorded."
A copy of the tape was obtained by freelance reporter Suzan
Mazur who recently posted a partial transcript on the Progressive
Review website. She also supplied Democracy Now! with a
copy of the tape.
Mazur notes that some within the Los Angeles County Employees
Retirement Association want to pull out of investments with
Carlyle which is the 11th largest defense contractor. The
group has deep ties to the Bush family and the military
industrial complex.
Let’s hear what Rubenstein had to say about Bush
and the company Caterair International on which Bush served
on the board of directors.
DAVID RUBENSTEIN:Let me talk about a bad deal. At the
beginning of Carlyle - early - we didn't have any funds.
We didn't have any dedicated funds. And we had a deal
that seemed like it would be the greatest deal since sliced
bread. It was handed to us. Marriott said to us, look,
we're going to sell our airline catering business.It's
number one in the world. Management team has been there
for 10 years. We dominate all the markets and we're not
going to do an auction. We're going to sell it to you
guys 'cause some of our people used to work at Marriott.
You know, what could be better?
So the financing was there. And we thought, this is
an easy business. So they're going to give us a company.
Number one in the world. Gold plated. Got all the equipment
you need. Good management team.
Well, then the Gulf War came. And all of a sudden people
stopped flying... So no matter how good you think a company
can be something can go wrong. We couldn't anticipate
the Gulf War. So the airline catering business has gone
this way.
I mention this because it reminds us all the time we
shouldn't have hubris. You know no matter how smart we
think we are or how good we are, something can go wrong.
And if something seems too good in life to be true, it
usually is. In this case, the only interesting thing about
the deal - and we lost all our money in it. Our money
and our investors' money in it. In that deal.
But when we were putting the board together, somebody
came to me and said, look there is a guy who would like
to be on the board. He's kind of down on his luck a bit.
Needs a job. Needs a board position. Needs some board
positions. Could you put him on the board? Pay him a salary
and he'll be a good board member and be a loyal vote for
the management and so forth.
I said well we're not usually in that business. But okay,
let me meet the guy. I met the guy. I said I don't think
he adds that much value. We'll put him on the board because
- you know - we'll do a favor for this guy; he's done
a favor for us. We put him on the board and spent three
years. Came to all the meetings. Told a lot of jokes.
Not that many clean ones. And after a while I kind of
said to him, after about three years - you know, I'm not
sure this is really for you. Maybe you should do something
else. Because I don't think you're adding that much value
to the board. You don't know that much about the company.
He said, well I think I'm getting out of this business
anyway. And I don't really like it that much. So I'm probably
going to resign from the board.
And I said, thanks - didn't think I'd ever see him again.
His name is George W. Bush. He became President of the
United States. So you know if you said to me, name 25
million people who would maybe be President of the United
States, he wouldn't have been in that category. So you
never know. Anyway, I haven't been invited to the White
House for any things.
AMY GOODMAN: And that was David Rubenstein, founder and
managing director of the Carlyle group, an excerpt of a
talk he gave to investors with the Los Angeles county retirement
association who are thinking of divesting from Carlisle.
Joining us on the phone right now from the hospital where
his wife just had a baby, is Dan Briody, author of The Iron
Triangle: Inside the Secret World of the Carlyle Group.
Welcome to Democracy Now!
DAN BRIODY: Hi Amy, it’s good to be back.
AMY GOODMAN: Congratulations.
DAN BRIODY: Thank you very much
AMY GOODMAN: What did you have?
DAN BRIODY: We had a baby boy.
AMY GOODMAN: What is his name.
DAN BRIODY: Samuel David.
AMY GOODMAN: Congratulations. So, here you are in the hospital
listening to David Rubenstein.You have investigated this
company for years, does it surprise you?
DAN BRIODY: I'm very surprised. Normally David Rubenstein
is very circumspect in the public comments that he makes.
And it sounds to me as if these are the words of a man desperate
to down play the company's political connections in this
case, and the advantage of those political connections in
order to save an investment and save an investor from jumping
ship.
JUAN GONZALEZ: And for those of our listeners and viewers
who are not aware, could you talk a little bit about the
senior Bush's relationship to the Carlyle group?
DAN BRIODY: George H.W. Bush has been working for the Carlyle
group as a senior advisor since 1998 and recently has gotten
very, very close with the Rubenstein family. Actually the
Rubensteins and Bush senior and Barbara Bush, they are very,
very close friends, which has surprised some, considering
that David Rubenstein himself came out of the Carter administration.
He was considered a very dedicated public servant in those
years and since then has moved more and more towards the
conservative right over the years that he has been with
Carlyle. So he maintains a very close relationship with
the elder Bush and it was pretty well known that the younger
Bush was a useless part of the Caterair board, the company
that he was referring to in that clip.
But I'm very shocked to hear David Rubenstein actually
come out and say that and also to hear him say that basically
he couldn't imagine George W. Bush ever having been president.
Many of us harbor those feelings, some of us express them
publicly. But I would never expect David Rubenstein to do
it especially considering how closely tied his company is
to the current administration. It’s very shocking.
AMY GOODMAN: Can you talk about Fred Malek, who he says
came to him when they were putting the board together of
the company, and said, look, there's a guy who would like
to be on the board, he's kind of down on his luck, needs
a job, needs a board position, needs some board positions,
could you put him on the board.
DAN BRIODY: This is a classic kind of cronyism that we
see Carlyle engaging in throughout its history. Fred Malek
had a couple pans on the stove going at one time. At that
point in time, he was also chairman of Northwest Airlines
and bear in mind at this point George H.W. Bush was president
of the United States at that time. All these things were
converging at the same time Fred was doing some work for
the Carlyle group. So he sort of engineered his own personal
little triangle trade. He did he a favor for George W. Bush
to get him on the board of Caterair after George W. Bush
had had some failed business experiences in the oil industry,
which you guys have talked about at length. And so he put
him on the board of Caterair and in return he sort of got
these favors from the administration in terms of certain
F.A.A. restrictions and things like that for the airline
business. Those things had nothing to do with the Carlyle
group. Those were personal favors basically for Fred Malek.
And so Fred was able to engineer this brilliant little triangle
trade that it helped--advantaged him in the sense that it
furthered his airline business and then the airline business
was then able to hire Caterair to do its catering. So it
all wraps up very nicely and Fred Malek of course is the
former Nixon aid who was accused of counting the Jews when
Nixon was afraid that the Jews in the Bureau of Labor &
Statistics was undermining him, and that later came out
during George H.W. Bush's campaign for president.
JUAN GONZALEZ: Could you talk a little bit about how the
Carlyle group was related to the Bin Laden family and was
involved in the – and was involved in relationships
with the Bin Laden family.
DAN BRIODY: The Carlyle group has had a relationship with
the Bin Laden family since the mid 1990's. They have extensive
business interests in Saudi Arabia. They used to own the
company called Vinell which was recently bombed in Riyadh,
and was also operating as a C.I.A. cover up operation--
AMY GOODMAN: --and has just been given the contract to--here
it goes from training basically the private militia of a
despotic regime in Saudi Arabia for the last 25 years--now
got the contract to train the Iraqi military.
DAN BRIODY: That's right. This is a very controversial
company. Carlyle no longer owns them. They sold them to
T.R.W. a ways back and I believe T.R.W. is part of the Northrop
Grumman now, but they did own them back in 1995 when there
was another car bomb attack on the same company in Riyadh.
So they had an extensive presence in Saudi Arabia and they
wanted to increase that presence. And one of the families
that they met through the royal family was the Bin laden
family, which of course owns a very large construction concern
in Saudi Arabia called the Saudi Bin Laden group, a $5 billion
company. And that relationship proved to be very fruitful
for Carlyle as the Bin Ladens became investors in some of
Carlyle's funds. And one of the most significant funds that
they invested in was a fund called Carlyle Partners II which
is a very large defense oriented fund that the Bin Laden
family was invested in, and up until just after September
11th when it became appallingly clear to everyone that the
Bin Laden family, because they were invested in this defense
fund, stood to gain financially from the war on terrorism
which was being waged against their own brother, Osama,
so at that point the criticism in the press on Carlyle became
too great and they divested themselves from the Bin Laden
family.
AMY GOODMAN: And they were together on September 10, September
11.
DAN BRIODY: That's right. The Carlyle group annual investor
conference was taking place in Washington D.C. at the Ritz
Carlton on the morning of September 11th, so you had all
of these incredibly connected, powerful and wealthy ex-politicians,
like James Baker III, like George H.W. Bush, like Frank
Carluchi and the like, all together with Shafik Bin Laden
looking after his family's investment in the Carlyle group,
watching the events of September 11th unfold together. Quite
a scene.
AMY GOODMAN: Bush that morning, George Bush senior, flying
out and caught on a plane at that time.
DAN BRIODY: That's right.
AMY GOODMAN: Well, very interesting tape. I want to thank
Suzanne Mazur for that tape. And again, interesting, the
context that this was being said in, the fact that this
retireees association wants to divest the Los Angeles County
Employees Retirement Association wants to pull out investments
from Carlyle.
DAN BRIODY: I think that's a very encouraging sign. I think
that this company has gone unscrutinized for too long. They
epitomize the revolving door of Washington D.C. They are
just a barrel full of conflicts of interest when you have
the president's father working for a defense-oriented firm
while his son is waging war all over the world. And no one
is saying anything about it. No one is calling for the resignation
of this man from this company or pointing out the obvious
conflict of interest here. To see a public group like this
pension fund look to divest themselves. I don't know if
they actually did. But to have concerns about those things
and look to divest, is a very encouraging sign that maybe
people are starting to understand just how egregious of
a conflict of interest this is.
AMY GOODMAN: Well, Dan Briody, thank you very much for
being with us. He is the author of The Iron Triangle: Inside
the Secret World of the Carlyle Group and a father as well.
Congratulations.
DAN BRIODY: Thank you, Amy.
Guest Info:
- David Rubenstein, founder and managing director of the
Carlyle Group. This is an excerpt from a talk he gave to
investors with the Los Angeles County Retirement Association
on April 23, 2003.
- Dan Briody, author of The Iron Triangle: Inside the Secret
World of the Carlyle Group
Exposed: U.S. Secretly Built Mobile Germ Unit & Plans
to Vastly Expand Bioterrorism Labs
U.S. plans to spend about $2.5 billion to build new bioterrorism
defense laboratories around the country, many in densely populated
areas. 6,000 new employees may soon be given access to some
of the world's most dangerous pathogens. The New York Times
revealed yesterday that Dr. Steven Hatfill helped build a
U.S. secret germ lab even after he was cited as a suspect
in the 2001 anthrax attacks.
The New York Times reported yesterday that the U.S. has
been secretly building a mobile germ warfare plant that may
have violated the 1975 global ban on germ weapons. It was
built to help U.S. forces detect such mobile units in Iraq.
The Times reported that among those working on the top secret-project
was Dr. Steven Hatfill, who has been identified by the Justice
Department as a “person of interest” in the 2001
anthrax attacks.
Hatfill continues to be under constant surveillance even
though no formal charges were ever issued against him.
The Times also reported that Hatfill continued working on
the project after he was fired in March 2002.
Meanwhile a series of investigative articles called "Living
Terror," UPI reporters Dee Ann Divis and Nicholas M.
Horrock reveal that the U.S. plans to spend about $2.5 billion
to build bioterrorism defense laboratories around the country.
UPI found roughly 20 high-level biodefense labs and proposals
to double that number through new construction and upgrades.
Many of the new facilities are to be located in densely populated
cities, college campuses and residential neighborhoods.
The article also discusses how the new Bioterrorism Preparedness
and Response Act of 2002 includes an exemption clause to the
Freedom of Information Act. The clause makes it illegal for
a federal agency to reveal information about who has material
or what they are doing to them.
UPI reports,"Most important, no information is to be
made available about the ‘release of a listed agent
or toxin.'"
- Pat Clawson, friend and spokesperson for Dr. Steven J.
Hatfill
- Dr. Meryl Nass, anthrax expert, physician and writer.
Nass identified the 1979 anthrax outbreak in Zimbabwe (then
Rhodesia) as bio-terrorism. It was the largest outbreak
of human anthrax in history. She developed a model for analyzing
epidemics to assess whether they are natural or man-made.
Founder of the website www.anthraxcaccine.org
35 Nations Lose U.S. Military Aid For Not Exempting Americans
From International Criminal Court
The Bush administration cut off military aid to 35 friendly
countries on Tuesday because they have signed on to the International
Criminal Court without exempting Americans from possible prosecution.
Countries include Brazil, Columbia, Ireland, Peru, South Africa,
Switzerland and Venezuela. Democracy Now! hosts a debate on
the International Criminal Court.
Overall some $48 million dollars in aid will be blocked.
The cuts were mandated under the American Service Members
Protection Act which was passed by Congress last year. The
express purpose of the ASPA is to ensure the ICC can never
gain jurisdiction over members of the US military. The ASPA
also includes a provision giving the president authorization
to use all necessary means to free US servicemen being held
by the ICC.
Under the 1998 Rome Protocol, which has been ratified by
90 countries including Washington’s closest NATO allies,
the ICC was set up to investigate and prosecute war crimes,
crimes against humanity, and genocide.
Former president Bill Clinton signed the Protocol in December
2000, but the Bush administration renounced the signature
and withdrew from all negotiation to set up the ICC. The administration
has sought a permanent exemption from prosecutions but these
efforts have been blocked by the European Union. Under US
pressure the UN Security Council gave the US a second one-year
exemption earlier this month.
- Ari Fleischer, White House Press Secretary speaking on
July 1, 2003.
- John Washburn, convenor of the American Non-Governmental
Organizations on the International Criminal Court. He is
a former director in the Executive Office of the Secretary-General
of the United Nations from 1988 to 1993.
- Lee Casey, attorney for Baker & Hostetler and former
justice department lawyer under the Reagan and senior Bush
Administrations.
9:58-9:59 Outro and Credits
For a copy of today’s program, call 1 (800) 881 2359.
Our website is www.democracynow.org.
Our email address is mail@democracynow.org.
Democracy Now! is produced by Kris Abrams, Mike Burke, Angie
Karran, Ana Nogueira and Elizabeth Press. Mike Di Filippo
is our music maestro and engineer.
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