The Carlyle Group
1001 Pennsylvania Ave. NW
Washington DC

The Carlyle Group is one of the world's largest private investment management companies and the 11th largest U.S. defense contractor. It is also one of the most well-connected companies in Washington. The company payroll includes George H.W. Bush, Frank Carlucci (Defense Secretary during the Reagan Administration), James Baker III (former president Bush's secretary of state), John Major (the former British prime minister), and former SEC chairman Arthur Levitt. Carlyle also employs former Philippines President Fidel Ramos and former World Bank treasurer Afsaneh Masheyekhi.

When President George W. Bush suggested North Korea couldn't be trusted, Bush Sr., who chairs the company's Asia Advisory Board, sent his son a memo urging the new Administration to ease its hard-line policies. Carlyle has an investment stake in South Korea worth over $2 billion.

Even the president once got in on the lucrative action doled out to Carlyle cronies: In the early 1990s, Carlyle put Bush on the board of Caterair, an airline catering company that, like many Bush business ventures, flopped.

"Carlyle has brought political influence to a new level and created a twenty-first-century version of capitalism that blurs any line between politics and business. In a sense, Carlyle may be the ultimate in privatization: the use of a private company to nurture public policy - and then reap its benefits in the form of profit," explains investigative journalist Tim Shorrock in a "Profile of Carlyle" for The Nation.

The Carlyle Group owns 49.5% of Arlington, VA-based United Defense Industries. United Defense makes the much-criticized and ineptly-named "Crusader" mobile artillery system, one of the few weeapons systems that current Secretary of Defense Donald Rumsfeld has been able to cancel. It also makes the Bradley Fighting Vehicle and other weapons systems. United Defense's board of directors includes former government heavyweights like John M. Shalikashvili of the Joint Chiefs.

After September 11 2001, the Wall Street Journal reported that the bin Laden family of Saudi Arabia had at least $2 million invested in one of Carlyle's funds. (Carlyle quickly returned the money). Carlyle's long relationship with Saudi Arabia includes subsidiary contracts to train the Saudi National Guard. Bush Sr. has also led Carlyle delegations to Turkey.

As Fortune reported in 2002, "While most of the conspiracy theories are amusingly overblown, this is a firm that's been built on the backs of Bush and other big shots who have lent Carlyle their names, their golden networks of friends in high places, and their insights into how government works."

Last Updated March 26, 2003