Carlyle Group's IT Group and anthrax connections

["Charles Jannuzi" <jannuzi@xxxxxxxxxxxxxxxxxxxxxxxxx>]

I posted this to LBO Talk, but I thought I might try here because right now
I'm only participating a response from Chip Berlet on that list.

I was researching Carlyle Group investments in waste management (wanted to
see if any of their companies were up to anything like the alleged fraud at
Waste Management--and in fact, CG has made some major mostly bad investments
in this area). Without wanting it to, this led me to another Carlyle
Group -Anthrax connection.

A review:

Theories for the anthrax mystery seem stalled at the following two:

1. a lone nut case, most likely right-wing and quite possibly anti-Arab

2. someone in the 9-11 terrorist cells

However, I think that there are reasons to at least consider financial
motives.

First, consider the people and companies associated with the military's
stalled vaccination development programs. The companies that got the
contracts were typically small pharmaceutical boutiques with more boasts
than real products or business plans that could actually float. But the US
military was going to spend tens of billions of dollars on a series of
vaccines, not just ones for anthrax. When the anthrax program, which was
supposed to showcase BioPort and show how it was supposed to be done, bogged
down, there might have been someone or some group willing to use an anthrax
scare to help out their own investments.

 The scientists and researchers hired from government and large
pharmaceutical companies to come to BioPort apparently put their life
savings into BioPort stock thinking it was a sure bet because their new
company was designated to be the sole supplier of the vaccine (btw, Sec. of
Def. Rumsfeld himself has extensive ties to pharmaceuticals, some of which
are competing to get vaccine contracts). Such people at BioPort are also the
types of people most likely able to get their hands on small quantities of
weaponized anthrax, since it would be needed to test the effectiveness of
the vaccine against pulmonary anthrax.

Now I've  found another company that could be the center of suspicion.
Caryle Group's IT Group is, among other things, a waste management
contractor with the exclusive contract to clean up Washington DC in the
event of an anthrax attack.

 That the IT Group should be linked to the interests of Carlyle Group should
hardly be surprising. Their business plan in any sort of waste management is
based on being able to get government contracts.

This does NOT mean that conspiracy to terrorize and murder with weaponized
anthrax has to go to the top. But if you could find someone making
investments with BioPort and/or IT Group who is also an anthrax research
scientist, you might find someone with quite a bit of economic motivation.

As it happens, that might well mean people who work at BioPort and IT Group.
And they might be clever enough to use  the double cover of 9-11 terrorists
and the numerous right wing nut cases the US has to pull it off.


 Here is a Hoover's description of IT Group. Note again that it is 25% owned
by Carlyle Group and that it has the contract with the federal government to
provide emergency services for an anthrax attack!

    http://www.hoovers.com/co/capsule/4/0,2163,10802,00.htm

Premium Features Indicated By    Learn More  2790 Mosside Blvd. Monroeville,
PA 15146-2792    (Map)  Phone: 412-372-7701 Fax: 412-373-7135 Toll Free:
800-444-9586

http://www.theitgroup.com

Subsidiary Locations Corporate Hierarchy

What IT is, is The IT Group. What IT does is manage hazardous waste. The
company assesses risks and provides property and equipment decontamination
and restoration, including land disposal sites that contain hazardous
chemicals or radioactive materials. With about 100 offices worldwide, it
also offers environmental engineering, construction, facilities management,
and consulting services. US government contracts (including a contract to
provide anthrax emergency support services in Washington, DC) account for
50% of sales. Burdened by debt, The IT Group has has filed for Chapter 11
bankruptcy protection and has announced plans to be acquired by The Shaw
Group. Investment firm    Carlyle Group owns about 25% of the company.


-----
End of Hoover's capsule

Did you get all that? The company relies on gov't contracts for much its
real profits (as well as contracts to oil rich ME states, typical of CG's
government service company holdings). It's bankrupt. AND, it has contracts
for anthrax clean up in DC.

Check it out, we should all sleep better knowing this:

http://www.theitgroup.com/emergency/index.asp


Next little twist in the plot. The company is bankrupt, creditors are
screaming bloody murder (though I'm not sure where CG and their 25% stake
are in this, afterall they don't hold bonds but owners equity--actually
elsewhere it's been reported they own ITG flat out).

Now Shaw Group is going to buy IT Group, but the reason everyone is
complaining is the amount they are paying is way too low, even given all the
debt ITG is supposed to have. It would be nice to figure out what CG gets in
the deal? Are they relieved from owning a dog? Or do they keep their stock
and see a big pay off with Shaw taking a majority stake? Or perhaps both,
selling off when it gets 'turned around'.

And what about Shaw? I know they are a direct competitor with Carlyle
Group's Groupe Genoyer, and both are into supplying and supporting
construction, pipelines, power plants, process industries. Does the ITG deal
point to a tie up between Shaw and Carlyle Group (CG does similar such
things with defence contractors like Thiokol tied up with companies like
Alcoa--which was headed by now Tres. Sec. O'Neill).

There are also some Enron footnotes to all this. I think given the business
that Groupe Genoyer and Shaw Group do, exposure to Enron is possible, but
probably not as major creditors. They were in on the same big infrastructure
projects as contractors and suppliers, with Enron being the lead--such as
the power plant deal in India. They would both benefit from Caspian oil and
gas development, and they would both benefit when Bush opens up more
national wildlife reserves for exploitation. When Enron plunged into the
construction side of things, these companies benefited.

Of course none of this proves a conspiracy over the anthrax or connections
to 9-11 or Enron, but I think there is ample possibility of financial motive
for someone or some group that would benefit from either the anthrax vaccine
program or the anthrax clean up business at IT Group. The fact that the
anthrax and other vaccination programs were in deep trouble and the fact
that IT Group is bankrupt seem to make an anthrax scare all the more
lucrative.

As I said to Hakki A off list: " I think naked financial motives are far
more solid, and we know these are often tied to right wing ideology,
'national interests' and the military establishment anyway."

Also, here' s more about Shaw Group's deal to buy ITG and then there is a
small
bit about Duratek, another fascinating gem in the CG portfolio (more like
'how are they going to pump up and unload this piece of crap?).

http://www.hoovers.com/cgi-bin/offsite?site=HBN&url=http://www.theitgroup.co
m

IT Group also obtained court approval, on an interim basis, for Sugar
Acquisition (NVDIP) Inc, a subsidiary of The Shaw Group, to provide a
debtor-in-possession (DIP) credit facility of $55 million.

The Court has set a hearing for February 12, 2002 to approve bidding
procedures for the receipt of qualified bids. The IT Group currently
contemplates that, absent a superior competing proposal, the transaction
with Shaw will be completed before the end of the first quarter. During this
period, The IT Group is open for business and remains focused on serving its
customers. The closing of this transaction is subject to, among other
things, court approval, higher or otherwise better offers, and receipt of
required regulatory approvals.

The Shaw Group Inc. is the world's only vertically integrated provider of
complete piping systems and comprehensive engineering, procurement and
construction services to the power generation industry. Shaw is the largest
supplier of fabricated piping systems in the United States and a leading
supplier worldwide, having installed piping systems in power plants with an
aggregate generation capacity in excess of 200,000 megawatts. While the
majority of Shaw's backlog is attributable to the power generation industry,
the company also does work in the process industries, including
petrochemical, chemical and refining, and the environmental and
infrastructure sector. The company currently has offices and operations in
North America, South America, Europe, the Middle East and Asia-Pacific; and
has more than 13,000 employees. For additional information on The Shaw
Group, please visit the company's web site at www.shawgrp.com .

The IT Group addresses the infrastructure and environmental needs of both
private and public sector clients as a leading provider of diversified
services, including environmental, engineering, facilities management,
water, construction, emergency response, remediation, liability transfer and
information management. Additional information about The IT Group can be
found on the Internet at http://www.theitgroup.com . The IT Group's common
stock and depositary shares have been suspended from trading by the New York
Stock Exchange. Information about the status of the common stock will be
posted on the Company's web site as events warrant.

In addition to historical facts or statements of current condition, this
press release may contain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. You may identify forward-looking statements by the use
of words in the statements such as "anticipate," "believe," "expect,"
"should," "confidence" and other words and terms of similar meaning. Actual
events will be dependent upon factors and risks including, but not limited
to the outcome of the Company's Chapter 11 process as well as the Company's
ability to successfully: consummate the transactions described above;
continue to operate in the ordinary course and manage its relationships with
its creditors, including its lenders, vendors and suppliers, employees and
customers given the company's financial condition; sell all or parts of the
company, whether to Shaw or otherwise; continue to do business with
qualified subcontractors; continue to obtain bonding capacity; participate
in bidding opportunities and have success therein; general economic
conditions; and the company's ability to manage other uncertainties and risk
factors, such as those described from time to time in the company's filings
with the Securities and Exchange Commission, including its reports on Form
10-K, Form 10-Q and Form 8-K. SOURCE The IT Group, Inc.

CONTACT: Investors, Richard R. Conte +1-412-372-7701, or Media, William L.
Mulvey, +1-202-682-1147, ext. 412, both of The IT Group/

Premium Features Indicated By    Learn More  10100 Old Columbia Rd.
Columbia, MD 21046    (Map)  Baltimore City Guide and Travel Services Phone:
410-312-5100 Fax: 410-290-9112

http://www.gtsduratek.com

Subsidiary Locations Corporate Hierarchy

Hazardous waste is a terrible thing to mind, but Duratek (formerly GTS
Duratek) does just that. The company treats radioactive, hazardous, and
other wastes using methods such as incineration, vitrification, compaction,
ion exchange, and metal decontamination. Formed by the 1990 merger of
General Technical Services and Duratek Corporation, the firm processes waste
(such as low-level radioactive waste) at its plants in South Carolina and
Tennessee. Duratek also provides on-site waste management, environmental
restoration, and nuclear facilities management at U.S. Department of Energy
facilities (including the Hanford site in Washington and the Oak Ridge site
in Tennessee). The Carlyle Group owns 23% of the firm.


Posted and commented on by Charles Jannuzi