Juan Cole of Informed Comment posited the connection between war profiteering and U.S. policy makers. In doing so he linked to an article about BAE Systems recent outstanding profits. Bloomberg reported:
BAE Systems Plc, Europe’s biggest weapons maker, said first-half profit rose 28%, more than analysts estimated, on US orders for Bradley fighting vehicles used in Iraq. BAE purchased United Defense Industries Inc, the maker of the Bradley, in June 2005 to become the Pentagon’s seventh-biggest contractor.
What the article didn’t say is who owned United Defense Industries prior to June 2005? The infamously politically connected Carlyle Group with the Pennsylvania Avenue address owned UDI from 1997 to the sale. The value of the transaction was $4.2 billion per the UDI website. Carlyle purchased the company in 1997 for $850 million. The prospectus indicates owners include Carlyle Offshore affiliates in the Cayman Islands. Didn't that other pair of Bush insiders, Charles and Sam Wyly uses such offshore transactions to defraud the federal government? The Wyly's practices occupied hundreds of pages in the Senate's report "Tax Haven Abuses: The Enablers, the Tools and Secrecy".
During their years of ownership Carlyle sold some of their shares and gave others to directors. As of the sale to BAE, the infamous investment house owned 64.3% of the shares, taking home $2.7 billion on the final sale. They made money by selling stock along the way, $210 million here, $153 million there, $50 million for pocket change, an offering netting $260 million, just after a $211 million deal. Carlyle and its insiders made well over $3.5 billion on the sale of UDI.
Who joined the UDI board as a result of the Carlyle acquisition? William E. Conway, Jr., Frank C. Carlucci, General J.H Binford Peay III, Peter J. Clare, and Allan M. Holt. All but the general are Carlyle high ups. How much did each make off the sale? Conway pocketed almost $15 million, Carlucci netted just over $2.25 million, General Peay took home $4.9 million, and Clare nearly $900,000.
Now who has done work for Carlyle? The President’s father George H.W. Bush, British Prime Minister John Major, ex. Secretaries of Defense Frank Carlucci and Colin Powell. Frank became Chairman Emeritus with the hiring of ex-IBM chief Lou Gertsner. Some former SEC and FCC chairman also joined the group. Does that help answer Juan’s question?
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