Latest Carlyle News
FRIDAY, MAY 16
FOR IMMEDIATE RELEASE: May 16, 2008
CONTACT: Jo-Ann Mort, 718-954-0352
Carlyle Group Buyout of Booz-Allen Would Add Billions in Sensitive U.S. Contracts to Portfolio Partially Owned by Abu Dhabi Government
$2.54 Billion Deal Warrants Close Scrutiny, Heightened Standards for Review, Given “Critical Services” Involved
WASHINGTON, D.C. – Today’s announcement that global buyout firm Carlyle Group will pay $2.54 billion for Booz Allen’s government consulting arm demands immediate congressional attention to examine any national security implications and to clarify present and future control issues before the deal receives regulatory approval. Last September, Carlyle announced that the Mubadala Development fund of the government of Abu Dhabi paid $1.35 billion for a 7.5% ownership stake in Carlyle. Driven by rising oil prices and the falling dollar, foreign countries are increasingly investing in the U.S. economy through the purchase of stakes in leading American companies by sovereign wealth funds.
Carlyle’s acquisition of Booz-Allen’s government business, which held $1.2 billion in Department of Defense contracts last year, raises the question if foreign governments could potentially gain access to sensitive national security information through their stakes in private equity firms. The stakes are becoming alarmingly high, as the Carlyle Group announced its intention to invest billions in developing U.S. infrastructure such as toll roads, water and sewer systems, bridges, tunnels, highways and airports.
In a report released last month, “Sovereign Wealth Funds and Private Equity: Increased Access, Decreased Transparency,” the Service Employees International Union outlined issues that arise when opaque foreign funds team up with secretive buyout firms. SEIU is sharing its concerns about the proposed Booz Allen buyout with Senate and House committees on armed services.
“Current U.S. rules exempting private equity from many disclosure requirements coupled with gaps in laws concerning foreign ownership have inadvertently left a door open for virtually unregulated foreign ownership of American assets,” according to the report, which included the following recommendations:
1)The beneficial ownership structure of the general partnership/management company and/or limited partnerships controlling funds must be disclosed—particularly if their portfolio companies contract for the U.S. government; 2) Mandatory CFIUS investigation of proposed deals involving private equity firms and SWFs; 3) New SEC rules concerning Regulation D should be rescinded; 4) Representatives of a sovereign wealth fund, including private equity advisers, fund managers, or others acting on its behalf, must register under the Foreign Agents Registration Act. For more information, visit www.behindthebuyouts.org www.behindthebuyouts.org .
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WEDNESDAY, APRIL 23rd
New SEIU Report on Sovereign Wealth Funds and Private Equity Calls for More Transparency of SWF Investment in U.S. Buyout Funds
“Sovereign Wealth Funds And Private Equity: Increased Access, Decreased Transparency,” a new report released today by the 1.9 million member Service Employees International Union (SEIU) to coincide with tomorrow’s (April 24) U.S. Senate Committee on Banking, Housing and Urban Affairs Hearing on sovereign investments, calls on Congress to equip itself and the public with the tools necessary to make informed decisions about sovereign wealth fund (SWF) investment in United States private equity firms.
Current U.S. rules exempting private equity from many disclosure requirements, coupled with gaps in laws concerning foreign ownership, have inadvertently left a door open for virtually unregulated foreign ownership of American assets, which could have a broad effect, according to the SEIU report.
“Families are working hard to make their house payments and to send their kids to college. When a private equity firm and its foreign government partners swoop in, the public should know who is making the decisions and what immediate and long-term impact these deals could have on their lives,” said Stephen Lerner, director of SEIU’s Private Equity Project.Find out more about sovereign wealth funds and private equity.
To read the full press release, click here.
MONDAY, APRIL 14th
Do You Know Who You're Doing Business With?
According to government sources, thousands of federal contracts – worth an estimated total of $4.8 billion - were awarded between 2000 and 2006 to companies in The Carlyle Group’s investment portfolio as of June 2007. Some Carlyle portfolio companies with federal contracts and the amounts of their contracts through part of the 2007 fiscal year are listed below:
Portfolio Company FY 2007 Dollars*
ARINC $104,866,695
AxleTech $759,385
Compusearch $7,709,410
DHS Technologies $1,947,205
Wesco Aircraft Hardware Corp $160,688
*Note: FY 2007 dollars only includes the total dollars obligated for the listed portfolio companies through the second and part of third quarter of the fiscal year. Agencies voluntarily provide this information.
Find out more about sovereign wealth funds and private equity. Download this PDF.
To learn more about the Carlyle Group, which owns companies with hundreds of government contracts, click here.
Check www.CarlyleExposed.org regularly for additions to this list, updates on Carlyle’s lucrative federal contracts, and more information on the buyout firm.
MONDAY, MARCH 31st
Residents Concerned Sewer Sludge Toxic
Call for Synagro-Owner Carlyle to Disclose Distribution Practices, Report Testing of Product
Environmental activists and residents from around Pennsylvania staged a speakout Sunday at a Residual and Biosolids conference, calling for the expanded testing of Synagro sewer sludge, and for public reporting on its toxicity and disposal from the Carlyle Group, Synagro's private equity owner.
"Community members don't know everything that is in the sludge dumped nearby," said Sue Fox of the Shrewsbury Township Environmental Protection Community (STEPCO) "Without more information, I worry about possible health effects and diminished quality of life. Until there is more scientific data and more testing that inspires real confidence, I think sewage sludge land application should be ceased. Sludge testing by the sewage treatment plants seems to me like the fox watching the chicken house."
Could the Carlyle Group Buyout of Booz Allen Government Consulting Arm Be a Threat to National Security?
Reported deal between global buyout firm in which Abu Dhabi government owns significant stake and top government contractor warrants close scrutiny, tightening of standards for review of national security concerns
Global buyout firm the Carlyle Group’s announcement that it seeks to acquire Booz Allen’s government consulting business should raise serious questions about the ramifications for national security and demands immediate government oversight to ensure adequate controls exist should the deal be completed. This arm of Booz Allen had $1.2 billion in Department of Defense contracts last year. The Carlyle Group already owns a large number of US defense contractors.
Carlyle Group Sewer Sludge Business May Increase Health Risks to Communities
People who live near the operations of a Carlyle Group sewer sludge business could be at an increased health risk if Carlyle does not provide information to those communities about toxins and other hazards associated with its business.
About the Carlyle Group
You may not know it, but if you have recently purchased a cup of coffee from Dunkin' Donuts, rinsed your hair under a WaterPik showerhead, tracked your favorite band on the Billboard ratings, flown into the Orlando airport or taken a Metro North train out of New York City, you've interacted with the Carlyle Group. Read more »
David Rubenstein
Estimated to be worth $2.5 billion, Carlyle co-founder David Rubenstein easily nabbed a spot on the 2007 Forbes Richest 400 Americans list. Read more »
Health Care
Environment
In April of 2007 Washington D.C.-based Carlyle Group completed its buyout of Synagro Technologies, Inc. for $772 million.1 Part of a fund dedicated to purchasing critical infrastructure, Carlyle calls investments like these, "A true win-win proposition."2 But when it comes to Synagro and its products, communities stand to lose. Read more »
Taxes
The Carlyle Group was literally born out of profits made from tax loopholes. Read more »
Human Rights
In September 2007, Carlyle announced that one of Abu Dhabi's government funds was paying $135billion into the private equity firm in exchange for a 7.5% ownership stake. Read more »