Carlyle Group

[Magda Hassan]

Factual Back-Up for Fahrenheit 9/11: Section Four
THE FOLLOWING IS THE LINE BY LINE FACTUAL BACKUP FOR 'FAHRENHEIT 9/11'
Section Four covers the facts in Fahrenheit 9/11 regarding the Carlyle Group and Saudi money in the United States and its connection to the Bush family, their friends and associates.
FAHRENHEIT 9/11: “The Carlyle group is a multinational conglomerate that invests in heavily government-regulated industries like telecommunications, healthcare and, particularly, defense.”

• “The Carlyle Group is one of the world’s largest private equity firms, with more than $18.3 billion under management. With 23 funds across five investment disciplines (management-led buyouts, real estate, leveraged finance, venture capital and turnaround), Carlyle combines global vision with local insight, relying on a top-flight team of nearly 300 investment professionals operating out of offices in 14 countries to uncover superior opportunities in North America, Europe, and Asia. Carlyle focuses on sectors in which it has demonstrated expertise: aerospace & defense, automotive & transportation, consumer, energy & power, healthcare, industrial, real estate, technology & business services, and telecommunications & media.” Carlyle Group web site, http://www.thecarlylegroup.com/eng/company/index.html
  

FAHRENHEIT 9/11: The Bin Laden and Bush families were both connected to the Carlyle Group, as were many of the Bush family’s friends and associates.

• In the early 1990s, George W. Bush served on the board of directors for CaterAir, an airline catering company. CaterAir was owned by the Carlyle Group. Kenneth N. Gilpin, “Little-Known Carlyle Scores Big,” The New York Times, March 26, 1991. “George W. Bush left the company in 1994, a year after his father’s presidency ended.” Ross Ramsey, et al., “Campaign ’94 Fisher’s Staff Slips Up On Spanish,” The Houston Chronicle, September 17, 1994.
  

• In the mid-1990s, George H.W. Bush joined up with the Carlyle Group. “Under the leadership of ex-officials like Baker and former Defense Secretary Frank C. Carlucci, Carlyle developed a specialty in buying defense companies and doubling or quadrupling their value. The ex-president not only became an investor in Carlyle, but a member of the company's Asia Advisory Board and a rainmaker who drummed up investors. Twelve rich Saudi families, including the Bin Ladens, were among them. In 2002, the Washington Post reported, ‘Saudis close to Prince Sultan, the Saudi defense minister ... were encouraged to put money into Carlyle as a favor to the elder Bush.’ Bush retired from the company last October, and Baker, who lobbied U.S. allies last month to forgive Iraq's debt, remains a Carlyle senior counselor. Kevin Phillips, “The Barreling Bushes; Four Generations of the Dynasty Have Chased Profits Through Cozy Ties with Mideast Leaders, Spinning Webs of Conflicts of Interest,” Los Angeles Times, January 11, 2004.
  

• The bin Laden family first invested in Carlyle in 1994. Representing Carlyle’s Asia Board, George H.W. Bush visited the bin laden family's headquarters in Jeddah, Saudi Arabia. Kurt Eichenwald, “Bin Laden Family Liquidates Holdings With Carlyle Group,” The New York Times, October 26, 2001.
  

• James Baker was a Carlyle Senior Counselor beginning in 1993. Carlyle Group web site, [URL="http://www.thecarlylegroup.com/eng/team/l5-team391.html"] http://www.thecarlylegroup.com/eng/team/
  l5-team391.html[/URL].
  

• Bush's OMB chief, Richard Darman, was with Carlyle by 1994. Bob Cook, Mergers & Acquisitions Report, December 12, 1994.
  

• George W. Bush was with Caterair -- owned by Carlyle -- until 1994, after 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 would “be a positive addition to Caterair’s board.” Kenneth N. Gilpin, “Little-Known Carlyle Scores Big,” New York Times, March 26, 1991.
  

FAHRENHEIT 9/11: “Carlyle Group was holding its annual investor conference on the morning of September 11th in the Ritz Carlton Hotel in Washington, D.C. At that meeting were all of the Carlyle regulars, James Baker, likely John Major, definitely George H. W. Bush, though he left the morning of September 11th. Shafiq bin Ladin, who is Osama bin Laden’s half-brother, and was in town to look after his family’s investments in the Carlyle Group. All of them, together in one room, watching as the uh the planes hit the towers.”

• On the morning of September 11, 2001, “in the plush setting of the Ritz-Carlton hotel in Washington, DC, the Carlyle Group was holding its annual international investor conference. Frank Carlucci, James Baker III, David Rubenstein, William Conway, and Dan D’Aniellow were together, along with a host of former world leaders, former defense experts, wealthy Arabs from the Middle East, and major international investors as they terror played out on television. There with them, looking after the investments of his family was Shafiq bin Laden, Osama bin Laden’s estranged half-brother. George Bush Sr. was also at the conference, but Carlyle’s spokesperson says the former president left before the terror attacks, and was on an airplane over the Midwest when flights across the country were grounded on the morning of September 11. In any circumstance, a confluence of such politically complex and globally connected people would have been curious, even newsworthy. But in the context of the terrorist attacks being waged against the United States by a group of Saudi nationals led by Osama bin Laden, the group assembled at the Ritz-Carlton that day was a disconcerting and freakish coincidence.” Dan Briody, The Iron Triangle, John Wiley & Sons, Inc., 2003, p. 139-140. See also, Melanie Warner, “What do George Bush, Arthur Levitt, Jim Baker, Dick Darman, and John Major Have in Common? (They All Work for the Carlyle Group),” Fortune, March 18, 2002,
  

FAHRENHEIT 9/11: “With all the weapons companies it owned, The Carlyle Group was in essence, the 11th largest defense contractor in the United States.”

• “By virtue of its holdings in companies like U.S. Marine Repair and United Defense Industries, Carlyle is the equivalent of the eleventh-largest defense contractor in the nation. It has $16.2 billion under management and claims an average annual return of 35%.” Phyllis Berman, “Lucky Twice,” Forbes, December 8, 2003.
  

FAHRENHEIT 9/11: “It owned United Defense, makers of the Bradley armored fighting vehicle. September 11th guaranteed that United Defense was going to have a very good year. Just 6 weeks after 9-11 Carlyle filed to take United Defense public and in December made a one day profit of $237 million dollars.”

• “On a single day last month, Carlyle earned $237 million selling shares in United Defense Industries, the Army's fifth-largest contractor. The stock offering was well timed: Carlyle officials say they decided to take the company public only after the Sept. 11 attacks. … On Sept. 26, [2001], the Army signed a $665-million modified contract with United Defense through April 2003 to complete the Crusader's development phase. In October, the company listed the Crusader, and the attacks themselves, as selling points for its stock offering. Mark Fineman, “Arms Buildup is a Boon to Firm Run by Big Guns,” Los Angeles Times, January 10, 2002.
  

• "Still, in its annual report for 2001, United announced that it had been awarded a three-year, $697 million contract to complete full upgrading of 389 Bradley units and had added a $ 655 million contract modification to complete the Crusader's 'definition and risk-reduction phase contract,' which would be worth $ 1.7 billion through 2003. Together, the Crusader and Bradley programs contributed 41 percent of United sales in 2001, the report said. With Crusader and the Bradley upgrade in hand, a decision was made to sell United stock to the public in late 2001." Walter Pincus, “Crusader a Boon to Carlyle Group Even if Pentagon Scraps Project,” Washington Post, May 14, 2002.
  

FAHRENHEIT 9/11: “With so much attention focused on the bin Laden family being important Carlyle investors, the bin Ladens eventually had to withdraw.”

• "Following the attacks on September 11, the bin Laden family’s investments in the Carlyle Group became an embarrassment to the Carlyle Group and the family was forced to liquidate their assets with the firm." Kurt Eichenwald, “Bin Laden Family Liquidates Holdings with Carlyle Group,” The New York Times, October 26, 2001.
  

FAHRENHEIT 9/11: “Bush’s dad stayed on as Senior Advisor to Carlyle’s Asia Board for another 2 years.”

• “Former President Bush was at one time the Senior Advisor to the Carlyle Asia Advisory Board but retired from that position in October 2003. He holds no other positions at Carlyle.” [URL="http://www.thecarlylegroup.com/eng/news/l4-presskit681.html#8"] http://www.thecarlylegroup.com/eng/news/
  l4-presskit681.html#8[/URL]
  

• “The former president is no longer a company adviser, but he still has investments there, Mr. Ullman (vice president for corporate communications) said.” Dallas Morning News, "Michael Moore keeps heat on at premiere", May 18, 2004
  

FAHRENHEIT 9/11: George H. W. Bush receives daily CIA briefings.

• "One of the people who corresponded with [former ambassador Joseph] Wilson is George H. W. Bush, the only president to have been head of the C.I.A.-- he still receives regular briefings from Langley." Vicky Ward, “Double Exposure,” Vanity Fair, January 2004.
  

• Former President Bush has made efforts to keep abreast of foreign affairs, partly by exercising his right to be briefed by CIA personnel about developments around the globe. Ha'aretz, “George Bush Sr. Vouches for Son's Support of Israel to the Saudis”, July 16, 2001.
  

FAHRENHEIT 9/11: “They are benefiting from the confusion that arises when George H. W. Bush visits Saudi Arabi[B]a[/B], on behalf of Carlyle, and meets with the royal family and meets with the bin Laden family. Is he representing the [B]United States of America, or is he representing an investment firm in the United States of America or is he representing both?”[/B]

• Few firms could have rivaled the Carlyle Group for its array of high-powered friends. The Washington-based venture capital house had been likened to a retirement home for Gulf War veterans, and the likes of George Bush Sr, James Baker, and John Major ‘can take credit for its rapid rise.’ The Observer noted in a profile, “It used to be fashionable to deride Carlyle as a second-rate influence-peddler and dismiss its stable of retired politicians as superannuated ‘access capitalists.’” … Carlyle had sponsored visits by Bush Sr. to South Korea and China, and his clout with the Saudi government – perhaps Carlyle’s most important customer – is also likely to be valued. Conal Walsh, “The Carlyle Controversy: With Friends in High Places: Former World Leaders Give Carlyle Group Unrivalled Prowess in Lobbying for Business,” The Observer, September 15, 2002.
  

• “’It should be a deep cause for concern that a closely held company like Carlyle can simultaneously have directors and advisers that are doing business and making money and also advising the president of the United States,’ says Peter Eisner, managing director of the Center for Public Integrity, a non-profit-making Washington think-tank. ‘The problem comes when private business and public policy blend together. What hat is former president Bush wearing when he tells Crown Prince Abdullah not to worry about US policy in the Middle East? What hat does he use when he deals with South Korea, and causes policy changes there? Or when James Baker helps argue the presidential election in the younger Bush's favour? It's a kitchen-cabinet situation, and the informality involved is precisely a mark of Carlyle's success.’" Oliver Burkeman Julian Borger, “The Winners: The Ex-Presidents' Club,” The Guardian, October 31, 2001.
  

• “The Saudi family of Osama bin Laden is severing its financial ties with the Carlyle Group, a private investment firm known for its connections to influential Washington political figures… In recent years, Frank C. Carlucci, the chairman of Carlyle and a former secretary of defense, has visited the family's headquarters in Jeddah, Saudi Arabia, as have former President George Bush and James A. Baker III, the former secretary of state. Mr. Bush works as an adviser to Carlyle, and Mr. Baker is a partner in the firm.” Kurt Eichenwald, “Bin Laden Family Liquidates Holdings With Carlyle Group,” New York Times, October 26, 2001.
  

FAHRENHEIT 9/11: “Another group of people invest in you, your friends, and their related businesses $1.4 billion over a number of years.”

• “In all, at least $1.46 billion had made its way from the Saudis to the House of Bush and its allied companies and institutions.” Craig Unger, House of Bush, House of Saud, p. 200, (Scribner: New York, 2004). For a complete breakdown of the investments, see Unger’s Appendix C, pp. 295-298.
  

• This number includes investments made and contracts awarded at the time that Bush’s friends were involved in the Carlyle Group:
  

James Baker was a Carlyle Senior Counselor beginning in 1993. Carlyle Group web site, [URL="http://www.thecarlylegroup.com/eng/team/l5-team391.html"] http://www.thecarlylegroup.com/eng/team/
l5-team391.html[/URL].
Bush's OMB chief, Richard Darman, was with Carlyle by 1994. Bob Cook, Mergers & Acquisitions Report, December 12, 1994.
George W. Bush was with Caterair -- owned by Carlyle -- until 1994, after 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 would “be a positive addition to Caterair’s board.” Kenneth N. Gilpin, “Little-Known CarlyleScores Big,” New York Times, March 26, 1991
Bush Sr. was first involved in Carlyle by the mid-1990s and no later than 1997.Kevin Phillips, “The Barreling Bushes; Four Generations of the Dynasty Have Chased Profits Through Cozy Ties with Mideast Leaders, Spinning Webs of Conflicts of Interest,” Los Angeles Times, January 11 , 2004; Dan Briody, The Iron Triangle, John Wiley & Sons, Inc., 2003.

• Additional back up for these numbers is as follows:
  

Saudi investments in the Carlyle Group worth $80,000,000. Craig Unger, “Saving the Saudis,” Vanity Fair, October 2003. The number was reported to Unger by the head of Carlyle, David Rubenstein, in an interview.
In 1994, Carlyle owned military contractor BDM was “awarded a contract to provide technical assistance and logistics support to the Royal Saudi Air Force.” Worth: $46,200,000. PR Newswire, “BDM Federal Awarded $46 Million Contract To Support Royal Saudi Air Force,” October 27, 1994.
During the 1990s, the Vinnell Corporation (a BDM subsidiary) held contracts to train the Saudi Arabian National Guard, worth $819,000,000.Robert Burns, “US Advises Saudi Military On Range Of Threats—Including Terrorism,” Associated Press, November 13, 1995.
In 1995, BDM collected a contract to “augment Royal Saudi Air Force staff in developing, implementing, and maintaining logistics and engineering plans and programs.” Worth: $32,500,000. Defense Daily, “Defense Contracts,” June 23, 1995, as cited by Craig Unger.
In 1996, BDM was awarded a contract “to provide construction of 110 housing units at the MK-1 Compound, Khamis Mushayt, Saudi Arabia, for Technical Support Program personnel assisting the Royal Saudi Air Force…. This effort supports foreign military sales to Saudi Arabia.” Worth: $44,397,800. Department of Defense News Release, “BDM Federal, Incorporated,” April 1, 1996.
During the late 1990s, Vinnell was awarded a contract “for the Saudi Arabian National Guard (SANG) Modernization Program. The three-year contract, awarded competitively, calls on Vinnell to continue to support SANG training operations and related activities.” Worth: $163,300,000 . PR Newswire, “Vinnell Selected for Award of $163.3 Million Contract for Saudi Arabian National Guard Modernization Program,” May 3, 1995. Kashim Al-An, “Saudi Guard Gets Quiet Help from US Firm with Connections,” Associated Press, March 22, 1997.
In 1997, BDM was awarded a contract “to provide for 400 contractor personnel to support the Royal Saudi Air Force in developing, implementing, and maintaining logistics, supply, computer, reconnaissance, intelligence and engineering plans and programs.” Worth: $18,728,682 (note: this is a “face value increase to a firm fixed price contract). Defense Daily, “Defense Contracts,” February 4, 1997.
Note: Carlyle purchased BDM and its subsidiary Vinnell in 1992 and sold it to TRW in Dec, 1997.
In November 2001, Dick Cheney’s former company Halliburton was awarded “a contract to provide services for the Saudi Arabian Oil Company’s (Saudi Aramco) Qatif Field development project in the eastern province of Saudi Arabia.” Worth: $140 million. Halliburton press release, “Halliburton Awarded $140 Million Contract by Saudi Aramco,” November 14, 2001.
The same month, a consortium of three companies led by Halliburton subsidiary KBR won a “contract for engineering, procurement, and construction of an ethylene plant for Jubail United Petrochemcial Company, a wholly owned company of Saudi Basic Industries Corporation.” Worth: $40 million. MaggieMulvihill, et al., “Bush Advisers Cashed in on Saudi Gravy Train,” Boston Herald, December 11, 2001 ; Halliburton press release, “Halliburton KBR, Chiyoda, and Mitsubishi Win SaudiArabian Ethylene Project,” November 19, 2001. (Note: The $40 million figure cited for this contractin all likelihood is much too low. Three separate energy industry journals place the value of the contract at $350 million. While there are two other companies involved, all reports point out that Halliburton KBR led the consortium and thus, if the contract were $350 million, it is likely that their cut would be—as lead contractor—significantly more than $40 million. See, Petroleum Economist, “News in Brief,” January 14, 2002; Chemical Week, “KBR, Chiyoda, Mitsubishi Win Jubail Ethylene Contract,” December 5, 2001; Middle East Economic Digest, “Projects Update: Petrochemicals,” March 7, 2000.
Soon after Harken bought out George W. Bush’s company Spectrum 7 in 1986 and placed Bush on their board of directors, a Saudi sheik swooped in to save the troubled Harken. Abdullah Taha Bakhsh purchased a 17% stake in the company. Worth: $25,000,000. Thomas Petzinger Jr., et al., “Family Ties: How Oil Firm Linked to a Son of Bush Won Bahrain Drilling Pact; Harken Energy Had a Web of Mideast Connections; In the Background: BCCI; Entrée at the White House,” Wall Street Journal, December 6, 1991.
In 1989 Saudi Arabias King Fahd donated money to the Barbara Bush Foundation for Family Literacy. At the time, Ms. Bush was the First Lady of the United States. The King’s contribution represented almost half the amount the organization was able to raise that year. Worth: $1,000,000. Thomas Ferraro, “Saudi King also Contributed to Barbara Bush’s Foundation,” United Press International, March 13, 1990.
Following George H. W. Bush’s departure from office, Saudi Ambassador to the United States, Prince Bandar, donated money to the Bush Sr. Presidential Library fund. Worth: At least $1,000,000. Dave Montgomery, “Hail to a Former Chief,” Fort Worth Star-Telegram, November 7, 1997.
Both George H. W. Bush and George W. Bush attended the elite Phillips Andover Academy in Massachusetts. In the summer of 2002 the Academy announced it had established a scholarship in Bush Sr.’s name. Saudi Prince Alwaleed binTalal bin Adul Aziz Alsaud -- the same Prince who bailed out EuroDisney in the mid-Nineties -- was among the donors to the scholarship. Worth $500,000. Phillips Academy-Andover press release, “A Statement from Phillips Academy-Andover Regarding the Bush Scholars Program,” December 31, 2002.
Among the many presents George W. Bush has received from foreign leaders and dignitaries during his term as President, perhaps none is grander than the one Prince Bandar bestowed upon him. Bandar gave the current president a “C.M. Russell oil canvas painting of a native American buffalo hunt….” Worth: $1,000,000. Siobhan McDonough, “Gifts to President are Gratefully Received, Quickly Carted into Storage,” Associated Press, July 14, 2003.

http://www.michaelmoore.com/warroom/f911....php?id=19