GOP bigwig gets millions touting investment firm (Carlyle)

[deminks]

A top national Republican official criticized for collecting hefty payments as a consultant in Illinois has received $3.1 million in fees from an investment firm that does business with the state teacher pension board.

Robert Kjellander, who on Friday was named treasurer of the Republican National Committee, is a longtime friend of President Bush's political strategist Karl Rove. He is also one of the state's premier lobbyists and collected the fees as part of his representation of The Carlyle Group, whose board of directors once included the first President Bush.

Two years ago, Kjellander was criticized by some Democrats and fellow Republicans after he landed an $809,000 consulting fee from the lead firm handling a $10 billion pension bond sale for the state. Republicans objected to a GOP leader cashing in on the Democratic administration of Gov. Rod Blagojevich, while others said the sheer size of the fee called into question the role of consultants.

That would push the total take for Kjellander's Springfield Consulting Group to $4.5 million from Carlyle since 2002, the company said. During that time, officials said, Carlyle won commitments for $500 million from the teacher pension fund over six deals.

http://news.yahoo.com/news?tmpl=story&u=/chitribts/20050807/ts_chicagotrib/gopbigwiggetsmillionstoutinginvestmentfirm

More of the culture of corruption
:eyes:

[rodeodance]

1. whow--GREAT headline--not mincing words (chicago trib).

[UpInArms]

2. Carlyle's Way: Making a mint inside "the iron triangle" of defense, govern

Making a mint inside "the iron triangle" of defense, government and industry.

http://www.redherring.com/Article.aspx?a=6793&hed=Carlyle%27s+Way

December 11, 2001

Like everyone else in the United States, the group stood transfixed as the events of September 11 unfolded. Present were former secretary of defense Frank Carlucci, former secretary of state James Baker III, and representatives of the bin Laden family. This was not some underground presidential bunker or Central Intelligence Agency interrogation room. It was the Ritz-Carlton in Washington, D.C., the plush setting for the annual investor conference of one of the most powerful, well-connected, and secretive companies in the world: the Carlyle Group. And since September 11, this little-known company has become unexpectedly important.

That the Carlyle Group had its conference on America's darkest day was mere coincidence, but there is nothing accidental about the cast of characters that this private-equity powerhouse has assembled in the 14 years since its founding. Among those associated with Carlyle are former U.S. president George Bush Sr., former U.K. prime minister John Major, and former president of the Philippines Fidel Ramos. And Carlyle has counted George Soros, Prince Alwaleed bin Talal bin Abdul Aziz Alsaud of Saudi Arabia, and Osama bin Laden's estranged family among its high-profile clientele. The group has been able to parlay its political clout into a lucrative buyout practice (in other words, purchasing struggling companies, turning them around, and selling them for huge profits)--everything from defense contractors to telecommunications and aerospace companies. It is a kind of ruthless investing made popular by the movie Wall Street, and any industry that relies heavily on government regulation is fair game for Carlyle's brand of access capitalism. Carlyle has established itself as the gatekeeper between private business interests and U.S. defense spending. And as the Carlyle investors watched the World Trade towers go down, the group's prospects went up.

In running what its own marketing literature spookily calls "a vast, interlocking, global network of businesses and investment professionals" that operates within the so-called iron triangle of industry, government, and the military, the Carlyle Group leaves itself open to any number of conflicts of interest and stunning ironies. For example, it is hard to ignore the fact that Osama bin Laden's family members, who renounced their son ten years ago, stood to gain financially from the war being waged against him until late October, when public criticism of the relationship forced them to liquidate their holdings in the firm. Or consider that U.S. president George W. Bush is in a position to make budgetary decisions that could pad his father's bank account. But for the Carlyle Group, walking that narrow line is the art of doing business at the murky intersection of Washington politics, national security, and private capital; mastering it has enabled the group to amass $12 billion in funds under management. But while successful in the traditional private-equity avenue of corporate buyouts, Carlyle has recently set its sites on venture capital with less success. The firm is finding that all the politicians in the world won't help it identify an emerging technology or a winning business model.

<snip>

But the money flowing out of Saudi Arabia and into the Carlyle Group is of even more interest. Immediately after the September 11 attacks, reports surfaced of Carlyle's involvement with the Saudi Binladin Group, the $5 billion construction business run by Osama's half-brother Bakr. The bin Laden family invested $2 million in the Carlyle Partners II fund, which includes in its portfolio United Defense and other defense and aerospace companies. On October 26, the Carlyle Group severed its relationship with the bin Laden family in what officials termed a mutual decision. Mr. Bush Sr. and Mr. Major have been to Saudi Arabia on behalf of Carlyle as recently as last year, and according to reports, the Federal Bureau of Investigation is currently looking into the flow of money from the bin Laden family. Carlyle officials declined to answer any questions regarding their activities in Saudi Arabia.

...more...

:argh:

[Joanne98]

3. Nominated

[cosmicdot]

4. logged in to kick

also, voted the article five stars