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United Defense of Profits
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BUZZFLASH READER COMMENTARY
by YT Cai
How can the Democrats watch George W. Bush visit United Defense Industries, a division of the Carlyle Group where his father cashes in, and not make an issue out of the crony capitalism that this hubristic stopover promotes?
What a marvelous scheme Carlyle formulated with United Defense. They purchased the company in the late 90's for approximately $850 million dollars. They then had an IPO that raised $400 million dollars, which was mainly distributed to the principles of Carlyle, but still allowed them to retain majority interest in the company. All without having to put up a dollar of their own money.
The windfalls do not stop there. United Defense was awarded billions of dollars worth of contacts to build the weighty Crusader Artillery System. Donald Rumsfeld, who is a lifelong friend of then Carlyle Chairman Frank Carlucci, puts the cabash on Crusader. Sounds like a non-partisan move to deflect attention from the administration's ties to Carlyle and United Defense, but then comes the payoff - due to existing contracts, United Defense still gets between $300 to $500 million dollars NOT to build Crusader. Great work if you can get it.
In summary, the Carlyle Group buys United Defense on credit, cashes in for more than they acquired it for, retains ownership, and is promised hundreds of millions more of government moneys for future projects to replace Crusader.
As an aside, the only prominent elected Republican, J.C. Watts, quit partially because the rug was pulled out of the Crusader which was to be built in his home state of Oklahoma.
By allowing Bush to get away with visiting United Defense, or to give national security speeches at the American Enterprise Institute without reprisal, it only helps legitimize the relationships that have contributed to our nation's recent declines. If this sort of activity is allowed to be accepted in the mainstream, how many campaign issues will be left by the time the next election comes around the bend?
YT Cai
A BUZZFLASH READER COMMENTARY
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