"So you know if you said to me, name 25 million people who would
maybe be President of the United States, [GWB] wouldn't have been
in that category." - David Rubenstein, founder of Carlyle Group
...

http://www.democracynow.org/article..../07/03/1429210

A Look At Why The Carlyle Group Wanted to Drop George W. Bush
From Its Board A Decade Ago

Thursday, July 3rd, 2003

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
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: So, here you are 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