Re: Opportunities in airport security

["Charles Jannuzi" <jannuzi@xxxxxxxxxxxxxxxxxxxxxxxxx>]

As it turns out, Carlyle Group does have connections to private airport
security. For a start, they own the company that makes high tech security
equipment for airports. This by the way is a well written article on CG.
Notice how ex-SEC head Levitt is giving his opinions everywhere about more
light on accounting and corporate practices while he helps run a very
secretive one, Carlyle Group.

http://www.taipanonline.com/theories/022602.html

Carlyle's Mysterious Connections Is it Time for Sodium Pentothal?

By Jay Salomon

Back in the early 90s?during the previous round of Middle Eastern
terrorism?Taipan recommended EG&G (EGG:NYSE), a maker of high-tech airport
security equipment.

I was asked to do a follow-up.

For days, I found nothing about this large defense contractor. It was no
longer traded. Then, I discovered that EG&G had been taken over by the
Carlyle Group, an enterprise about which I knew nothing.

Months later?and after exhaustive research?I begin my reports on the Carlyle
Group, an almost secret society and a multibillion-dollar powerhouse about
which almost no one knows anything. And that’s exactly the way Carlyle wants
to keep it.

Carlyle earns special attention not only because of its huge presence in the
defense sector, but also because of the imposing list of persons in its
employ, either directly or as consultants. I doubt the names of James Baker,
Frank Carlucci, and John Major will ring hollow with any reader. Add to them
ex-President George H. W. Bush and (in a more convoluted way) current
President George W. Bush and you have only a brief listing of the
individuals who may be using their influence to generate profits and
policies.

But don’t think for a minute that Carlyle houses only very conservative
Republicans?this company includes high rollers of many political
persuasions. Not to mention a long association with the Bin Laden family and
assorted Saudis and other internationals who carry some dubious baggage.

As an investigative journalist, I would expect an enterprise like Carlyle to
be on the radar screen of many who ply my trade. It may be so. But the
mainstream press has been incredibly silent on the large number of issues
raised by the activities of Carlyle. The most inquisitive and successful of
the fact-finders has been the Guardian. But a recent article demonstrates
the problems raised by Carlyle’s refusal to discuss much of anything. For
information for an October report on the Carlyle/Bin Laden connection,
Carlyle referred the Guardian to someone outside the company who reported
himself only as a "source familiar with the relationship." And this source
did little more than "confirm" that the Bin Laden crowd was no longer
connected to Carlyle.

At the time, the Guardian noted that Carlyle did not employ anyone at its
Washington headquarters to deal with the press.

Since then, Chris Ullman has been named vice president for corporate
communications?and the long-blank website (which used to contain nothing but
a disclaimer stating that "the Carlyle Group does not provide investment or
other services to the general public") has now been revitalized. But the
news section of the website has not one offering of any news following the
November 13, 2001, announcement of Mr. Ullman’s appointment.

Of course, my job normally would be to stick a foot in the Carlyle door and
try every bit of subterfuge to talk to Mr. Ullman.

That’s the way this game is traditionally played.

Carlyle has been uniquely successful in avoiding the scrutiny of the
mainstream press as well as public regulatory oversight of its activities.
But more and more articles, mostly web-based and nontraditional, are
surfacing about it.

And there’s no guarantee that once the ball starts rolling, mainstream press
coverage will be any less hostile than that on the web.

What’s more, certain members of Congress are beginning to take an interest
in the intriguing convergence between influence and profits at Carlyle.

The Enron situation will fuel the need to know more about the activities of
the company and its principals. For several weeks, the former head of the
SEC, Arthur Levitt, was lauded on most of the talk shows for his
unsuccessful attempts to limit the ability of accounting firms like Arthur
Andersen to both "account" and "consult." I was struck by the fact that
Levitt was only identified by his former job?never a mention of his current
position. Not once did anyone ask: "Thanks for being on our show, Mr.
Levitt. What have you been doing since you left the SEC?" For the record,
Levitt is Carlyle’s "senior adviser."

When was the last time any executive of a worthy company did not use free
airtime to give a plug to his enterprise?

Back to Enron. We have the Bush family position in Carlyle and the family’s
strong ties with former Enron head, Ken Lay, coinciding with a scandal
inside and outside the Beltway that threatens the integrity of significant
portions of our financial system. And that’s potentially just a sideshow
compared to the questions raised by Carlyle-owned United Defense’s important
position as the eleventh largest defense contractor in the United States.

One troubling Enron question leads to an even more troubling question about
United Defense. In the case of Enron, the Administration has proudly stated
that its close ties to the company did not influence its decisions, as
witness the fact that no effort was made to bail Enron out. And, so far as
anyone knows, the assertion is true. But many have pointed out that because
of the appearance of impropriety a bailout would have involved, the
Administration was precluded from doing the very thing that would have been
most in the public interest. So, what will it do with a company (to which it
has demonstrably even closer ties) if questions of ethics or performance
arise in the middle of a contract?

Early in my research, I came across a curious contract handed one Carlyle
subsidiary. As I understand it, the Federal Government sought a contractor
to assist in the sale of assets seized in drug raids. But this was not a
contract to sell the assets?instead, it was a contract to find a contractor
to sell the assets!

Multi-billion dollar Carlyle earned the prize. Talk about apparent
bureaucratic waste…

Which brings us to the question at hand?can Carlyle continue its silence
much longer?

And if it can’t?and it can’t?then to whom should it talk?

I for one would be happy to volunteer.

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Posted by Charles Jannuzi