A paranoic look at corporate cronyism

I'm pretty sure Dan Briody votes Democrat. And his greatest regret in recent times must be Al Gore conceding the race in 2000 for the American presidency.

Briody's book The Iron Triangle is meant to be a close examination of this Washington-based equity group, looking deeply into just how the Carlyle Group epitomises 'corporate cronyism'.

Instead, it's all about pointing fingers at George W Bush, his father and Republicans in general, questioning the intimacy between the president, the government and the Carlyle Group.

What is the "extraordinary reach of the Carlyle Group into the Bush administration"? Why was George Bush Sr meeting with Osama bin Laden's estranged half-brother in Washington DC on the morning of 9/11?

All valid questions, especially in the atmosphere of paranoia that has gripped the US post 9/11. An entire chapter of The Iron Triangle is devoted to how this group has profited from the September 11 attacks, and continues to gain from the ongoing 'war on terror' (the newly-fattened defence budget has helped the group's defence holdings rake in money).

The Carlyle Group is one of the largest private equity firms in the world. It is also one of the most secret "" the company hired its first public relations manager only in 2001, in the aftermath of 9/11.

The group banded together in the summer of 1987 at the hotel of the same name in New York; it wanted the company it was forming to sound like old money and Carlyle certainly fitted that slot. It has gone on to become a $13 billion giant with political connections that span the globe.

Take a look at its employee roster: George Bush Sr, James Baker III, John Major (former British prime minister), Arthur Levitt, Fidel Ramos (former president of the Philippines), Park Tae-joon (former prime minister of South Korea) and Anan Panyarachun (former Thai premier).

Even George W Bush and Colin Powell have put in their time with the company. Not so surprisingly, it is the first private equity firm of its kind to be based in Washington, rather than in New York or Chicago.

Briody says the cornerstone of the group's strategy for success is shady deals: defence buyouts for the most part. But even its beginnings are slightly murky.

The original founder was Stephen Norris (he has since been forced out of the firm), who figured out how to exploit a temporary tax-break for Eskimos who were seeking to leverage their losses from business.

Brokering deals between the Eskimos and profitable American companies for 1 per cent of the transaction earned Carlyle more than $10 million in just over a year. Not a bad start at all.

But that's not Briody's concern. The award-winning journalist is more burdened with the iron triangle "" the nexus between politicians, the military and big business. He's certainly done his homework, tracing the group's history right from its inception.

In 1988 rivals accused BDM Consulting "" one of the largest and most successful defence consultancies in the world "" of currying favour with the navy's procurement officer. Carlyle Group bought the company in 1990.

BDM did extensive work with the Saudi Arabian National Guard, and also conducted secret arms deals using the same broker from the Iran-Contra scandal.

War profiteering is commonplace for the Carlyle Group, implies Briody. The biggest scandal still haunting the company "" apart from its association with the bin Ladens, which is bad enough "" is the Vinnell Corporation, which was part of the Carlyle Group from 1992 to 1997.

Vinnell has been training the Saudi Armed Forces in how to protect their country's oilfields since the mid-1970s; even now there are up to 45,000 American soldiers for hire working for Vinnell and companies like it in Saudi Arabia.

Not interesting enough? Then wait till you read about Frank Carlucci, currently chairman emeritus of the group. He is a lifelong public servant, the former secretary of defence and former deputy director of the CIA.

'Spooky Frank' is still dogged with allegations that he began his career in the CIA with a foiled attempt to assassinate former president of Zaire, Patrick Lumumba. And his close friend is Donald Rumsfeld, the current secretary of defence.

Conspiracies, petty jealousies, behind-the-scenes scheming and clandestine meetings... this reads more like a whodunnit "" only, the villain of the piece has been identified on the book jacket itself.

It's still worth a read as a 'howdunnit'. Think about it "" in just 15 years this company is worth $15 billion, repeat, billion. How could it grow to that size?

Is it just a bunch of testosterone-loaded men jostling with each other to be alpha male? Or is it a tortuous maze of influence management and access capitalism exploited to the extreme?

Probably a mix of the two, going by one reading of The Iron Triangle . Briody's paranoia doesn't help when it comes to judging. Nothing is a coincidence: parentheses abound in the text as he attempts to connect the most bizarre happenings.

Even a commonplace fact like all Carlyle people went to Princeton "" at different periods in time, most probably for different streams of study. At another place he refers to the "long history" Norris has with saunas.

Briody has written this 'expose' with the air of a conjuror pulling out rabbits one by one "" but it is just a rehashing of news articles, some written by Briody himself. The extensive bibliography speaks for itself. His turn of phrase is at times excruciating ("killed two birds with one Bush", ouch).

Is any of this libellous? Legally speaking, probably not (the publishers wouldn't have allowed it). Does it sound defamatory? It sure does.

Some 12 months before US elections, protesters standing outside the White House often chant: "We'll remember, next November". They're an unforgiving lot. If American voters remember this book next election year, George W Bush will have to clear out of the Oval Office pretty fast.

THE IRON TRIANGLE:

Inside the secret world of the Carlyle Group

Dan Briody

Publisher: Wiley

Distributors: IBD

Pages: 210/ Price: Rs 1,247