Interests Of The Carlyle Group example essay topic

he Carlyle Group is a Washington, D.C. based private investment firm. It is a private equity firm that employs numerous high-ranking government officials with ties to both political parties. A private equity is a form of investing in which companies such as Carlyle invest in private companies and real estate. The Group was established in 1987 pioneering investing in the defense and national security markets. It is now one of the world's largest private equity firms with more than $18.9 billion under management.

William E. Conway, Jr., Daniel A. D'Aniello, and David M. Rubenstein founded Carlyle. They named the firm after the Upper East Side hotel in New York City, "The Carlyle". The current chairman is Lou Gerstner, former chairman and CEO of IBM. The firm employs more than 300 investment professionals in 14 countries. The firm has multiple offices in North America, Europe, and Asia. It operates four investment disciplines, which include management-led buyouts, real estate, leveraged finance, and venture capital.

Carlyle specializes in a list of industries: Aerospace & Defense, Automotive, Customer & Industrial, Energy & Power, Healthcare, Real Estate, Technology & Business Services, Telecom & Media, and Transportation. Unlike other well-known defense firms like Lockheed Martin and Boeing Co., Carlyle itself is not a manufacturer. It manages investments. 60 percent of Carlyle's defense business is brought in by United Defense Inc., which manufactures combat vehicles, artillery, naval guns, missile launchers, and precision munitions. The Carlyle Group was ranked 9th largest Pentagon contractor from 1998 to 2003. The Company's "edge is its ability to leverage local insight of its investment professionals, collaborating across the firm's investment disciplines from deal sourcing and due diligence through portfolio company development".

The Carlyle Group plays a significant role in the defense sector of the Iraqi war. Government divisions such as the Pentagon outsource companies by using them as contractors or financiers. The Carlyle Group plays a part in both of these dealings. As a private equity firm, the company facilitates investments in the defense and national security markets. They help to service the pentagon financially, and ranked 9th according to cost of defense contracts (many billions of dollars); as high as those companies who actually manufacture defense mechanisms, such as Boeing and Lockheed Martin.

The Carlyle Group has managed investments from over 600 persons and companies in at least 55 different countries and is helping to make money for these investors. Investors have earned sums totaling $18.4 billion. A majority of the identities of these investors has never been disclosed to the Securities and Exchange Commission or any other government sector. In addition to funding for the Pentagon, the Carlyle Group also aids in the Pentagon's non-financial defense interests. They help companies who specialize in defense to obtain contracts with the Pentagon.

United Defense was one of Carlyle's largest and most profitable units. The Carlyle Group itself has no defense contracts with the Pentagon, and offers no services to the US government. However the companies that it has owned or controlled have done business with the pentagon worth billions of dollars. The Carlyle Group acquires controlling interests in underperforming defense contractors.

The company carries in new management, and team arrangement, and basically restores these companies. Primarily because of the restoration, the companies are able to acquire huge Pentagon contracts. Then, Carlyle sells these contractors to investors for a hefty profit. Much of the Carlyle Group's investments are made with the expertise of former high-ranking government officials; those of which the company courted and hired at almost the time of their inception in 1987. Much of these investments are due in part towards the leadership of former Defense Secretary, Frank Car lucci. James Baker, former Secretary of State, also supposedly lead pursuit of defense deals.

When analyzing the Carlyle Group, especially its members, it is astonishing to find so many links between them and the US government. As the main investors, former secretaries of defense, secretaries of state, as well as the former president George H. Bush, it isn't surprising that the current government is very interlocked with the interests of the Carlyle Group. As heavy investors of companies benefiting from US waged wars on terror whether it is in Iraq or Afghanistan, they are being assured of their profits by current government policies. And in return, how will President George W. Bush personally make millions (if not billions) from the War on Terror and Iraq? The old fashioned way, he " ll inherit it. By acting in the interests of those who " ve invested millions in the military, he has assured himself rewards just as promising.

Therefore bringing up the possible theory of whether our current military strategy is really helping everyone including the rest of the world, or only those who hold stock in the war supply producing companies. We see clear evidence of a revolving door where the predecessors to our current government, have laid a foundation so thick causing our current legislators to sell their legislative abilities. When the demand and price willing to pay for certain desired conditions is as high as with the Carlyle Group, whose members live on Pennsylvania Ave. between the White House and the Capitol Building, then current military policy can easily be sold to those desiring it. And those desiring it clearly got to that point through a revolving door or basically high places in Washington DC. Adding to the scandal, there was a consistent pattern of campaign contributions that the Carlyle group made to the Bush Administration. In 2000, the year Bush won the election, they made a huge contribution of about $800,000 while two years before that they had given $300,000.

In return they received around 1 billion dollars in contract awards that year. Since Bush has been in office, they still contribute a couple hundred thousand and the Carlyle group has received around 9 billion dollars in contract awards from the government. The actions that the Carlyle group has taken have the potential to be unethical. First, the President's father is a paid advisor for the Carlyle group. This can explain the reason Bush wanted to spend more money in defense spending. In the end, he would be inheriting the money from his father anyways.

Also the Carlyle group is a global monopoly. This means they have no competition and can do anything they desire. Finally the Carlyle group is nothing but a revolving door for top level government officials. While they are in office, they make decisions that will benefit the Carlyle group. Once out of office, they will work for them and receive the benefits from the decisions they made while they were in office. According to a report done by Brookings Institute, there are currently between 10,000 and 20,000 private military workers in Iraq.

The nature of their service in the Iraqi war ranges from planning operations to the supply of linguistic services and cooking. As of right now, there are around 90 private companies holding military contracting work. The logical question to ask is: what are the benefits and costs of privatizing a traditionally governmental role in the war. Some of the benefits include: a decrease in the count of casualty; private contract workers help make up for the lack of soldiers and enrollment in the army; and lastly; private companies have better technology and capabilities.

According to recent statistics, over 30 private workers have been killed and more than 180 injured in Iraq. None of these accidents have been reported in military casualty reports, however. Because contract workers are not considered "military soldiers" by the Pentagon, the government does not have to pay their families compensation nor do the families receive any benefits, and thus it reduces the cost of the war The costs of privatizing the war include: conflict of interest for the government to start war; U.S. Security personnel, including private contractors, are immune to criminal sanctions; possible conflicts between the contract workers and soldiers. Because it is in the interest of private contract companies for the country to be involved in a war (that's where their business comes from), they would most likely financially support the campaigns of candidates that would get U.S. involved in wars, as well as lobby in one way or another in support of wars. A great example is from very recent past. Former President Bush Sr. worked for Carlyle group as a senior advisor on Asia from 1998 to 2003.

His son President George W. Bush, to very little surprise, started a war with Iraq for reasons still questionable. In the end, the costs of privatizing the war seem to outweigh the benefits for the public and U.S. soldiers who risk their lives every day yet get paid next to nothing. On the other hand, this arrangement is a gold mine for the government and the corporations who currently have around $140 billion in contracts. Looking into the future, is it possible that the military will be taken out of the hands of the government and put into the hand of private companies? Why would one enlist him / herself in the military if they can make three, four, even five times as much working for a corporation yet doing the same sort of work. ?