INTERVIEW WITH DAN BRIODY, AUTHOR OF THE IRON TRIANGLE:
INSIDE THE SECRET WORLD OF THE CARLYLE GROUP, (WILEY, 2003)
The Carlyle Group is a multibillion dollar private investment firm.
Dan Briody is a business reporter. Briody has written a book about the
firm titled The Iron Triangle: Inside the Secret World of the Carlyle
Group (Wiley, 2003).
In it, Briody paints a picture of former politicians working the system
to improve the position of Carlyle Group controlled businesses.
Briody says that, to avoid the appearance of impropriety, George H.W.
Bush should resign from his position as Carlyle Group paid advisor
Last week, Christopher Ullman, a spokesman for the Group, appeared on
Terry Gross Fresh Air show on National Public Radio to counter Briody's
"You know what? It's about time that people either put up or shut up
regarding this issue, because people like George Bush, Frank Carlucci,
James Baker have served their countries well -- they are wonderful
public servants for decades. I mean, if you put it all together
cumulatively it would be probably close to 40, 50, 60 years they've
served this country, and they have stellar reputations," Ullman said.
"And you know, sadly none of them seems to be given in today's climate
any benefit of the doubt, that in Briody's book he implies that the
current and the former president would sell out their country to benefit
Carlyle. That is offensive, unsubstantiated and the mark of an
irresponsible journalist." (See "Bush Goes to California," page one)
We interviewed Briody on May 6, 2003.
CCR: You graduated in 1993 from Boston College. What have you
been doing since?
BRIODY: I have been writing for a number of magazines, including Industry
Standard, Wired, and Red Herring.
CCR: How did this book come about?
BRIODY: When I was with Red Herring, we were searching around for
a story after the September 11 attacks. I was in New York at the time.
We were all pretty devastated by what happened. We were devouring the
news. We were looking for something that we could do that made sense for
We ran across a company named the Carlyle Group. It was a large private
investment firm, which was what Red Herring covered at the time.
At that point, we had read some things about their investments with the
Bin Laden family and some extensive investing in Saudi Arabia and the
So, we decided to pursue a story on that basis. We found out that there
really was much to this company that we didn't know. It turned into a
fascinating little piece about the Carlyle Group. It was picked up all
around, in major media outlets. The book sprang up from that article.
CCR: When was that article published?
BRIODY: December 2001. I was working on the book for most of last
CCR: You lead the book with one of the founders of the Carlyle
Group, Stephen Norris.
BRIODY: Stephen Norris is a brilliant businessman. But he is also
very mercurial. He co-founded the company, but then at some point he became
persona non grata. The other co-founders, the other founders of the firm,
felt that he was conducting business a little irresponsibly, maybe running
up too many expenses on some of his trips, looking around for the home
run. Eventually, the differences between them grew so large that Stephen
was asked to leave the firm.
CCR: Where is he now?
BRIODY: He is still in the Washington, D.C. area. He started up a
couple of different private equity firms. He is still at it. And he still
has the nose for the big deal.
CCR: Did Carlyle Group buy him out?
BRIODY: I don't know what the financial settlement was.
CCR: The title of your book is The Iron Triangle. What does it
BRIODY: It is a euphemism for business, politics and the military.
Dwight Eisenhower, when he left the White House in 1961, warned the
country about the formation of what he called the military industrial
complex -- he idea that the military business, the defense industry could
actually influence decisions that could be made at the highest level,
possibly to steer our country towards war because of the financial
benefits of war, rather than the actual need for war.
The Carlyle Group, to some extent, has come to represent what Dwight
Eisenhower was warning against -- this group of very high profile, very
powerful ex-politicians, very influential, working in concert in the
defense industry, among other industries. Carlyle is a diversified
company, but about 14 percent of their business is in defense and
You see the dangers inherent in bringing those kinds of people together
with the defense industry at a time of war like this.
CCR: I was watching the President out in California last week.
He was at a United Defense plant in Santa Clara, California. United Defense
is controlled by the Carlyle Group.
BRIODY: Very few media outlets picked up on that.United Defense is
a major defense contractor. They make the Bradley Fighting Vehicles that
we see rumbling across the desert on television these past few months.
They make the Paladin Gun System, which is essentially an enormous howitzer.
We have seen those being used in the war.
They also make a gun called the Crusader, which was essentially a
mobile howitzer. It was a gun system that has been on the chopping
blocks for eight years now. It was heavily criticized for being a weapon
that is a cold war relic -- too heavy and too bulky to get into hot spots
quickly and not appropriate for today's modern warfare.
It had miraculously survived a number of cuts throughout the Clinton
administration and early in the Bush Administration. The Carlyle Group
took the company public in December 2001. The Carlyle Group made
hundreds of millions of dollars off of that IPO. And ultimately the
Crusader Gun program, which was crucial to United Defense's future -- was
cancelled by Donald Rumsfeld in a very public announcement. But on the
same day, the company was awarded a contract for a new gun.
CCR: Same amount of money?
BRIODY: Not the same amount of money. But these contracts are piecemeal.
They are given a couple of hundred million dollar contract to get the
program started. And then as it meets certain criteria along the way,
the amount of money poured into the program is gradually increased.
So, it is not clear how much money will be made from that program. But
it gives you an idea of the sort of safety net that these guys are
operating in the defense industry.
CCR: The Carlyle Group isn't a strictly Republican operation. It
is a bi-partisan Iron Triangle.
BRIODY: It is. Money is a bipartisan goal. And The Carlyle Group embodies
that. So, you see Arthur Levitt, the former chair of the Securities and
Exchange Commission there. You see William Kennard, the former chair of
the Federal Communications Commission there. Both served under President
Clinton. David Rubenstein, the co-founder of the company, was himself
an aide in the Carter Administration and has since become very close with
the Bush family.
The Republicans take the heat for this company because of the current
administration's ties to the Carlyle Group. But yes, this is very much a
CCR: What's the message you want people to get from this book?
BRIODY: These revolving door relationships need to be more closely
scrutinized, investigated further, by some official body. So far, this
type of activity has gone relatively unchecked.
There is something called a cooling off period, but it is considered a
joke. It is the only law that holds former officials from jumping right
back into the private sector and profiting immediately from their former
Out of that investigation, there should be some kind of regulation
beyond the one year cooling off period. There needs to be no direct
financial benefits from decisions that are being made at the highest
levels. Sending troops into battle and the financial gains of the Bush
family would be Exhibit A.
CCR: Let me throw out some of your cast of characters from the
book so that you can give me a nutshell version of their role in this
company. Let's start with George Bush Sr.
BRIODY: George Bush Sr. is a paid adviser to the Carlyle Group. He
is paid to give speeches and meet with business leaders and political
leaders around the world on behalf of Carlyle -- including South Korean
business leaders and political leaders, also political leaders from the
Middle East, like the Royal Family in Saudi Arabia, the bin Laden family
in Saudi Arabia, folks in Kuwait.
CCR: How much of the Carlyle Group's money comes from federal government
contracts, do we know?
BRIODY: We don't know. That's one of the difficult things about researching
a private equity firm. They are under no obligation to reveal any of their
financial information to the general public. So, they keep that information
close to the vest. Most of the work done by Carlyle and its subsidiaries
is in heavily government regulated industries -- defense, aerospace, telecommunications,
So, it is obvious to see what their business plan is. They get former
politicians on board who help them exploit these areas of government
It is impossible to say what percentage of their revenues come from
actual taxpayer funds. But I would venture to say that it is a large
CCR: How much of United Defense do they own?
BRIODY: They own half of the company. They used to own 100 percent
of the company, but then they took it public. And now they own half.
The Carlyle Group is a buyout firm. The first thing they need to do is
raise money for funds. They go out and meet with very wealthy
individuals, institutional investors, state pension plans -- people who
can pony up $10 million, $100 million a throw to build these billion
Once the fund is built, it works a lot like a mutual fund do -- only
instead of investing in stocks, they invest in companies. They may buy a
company outright. They may buy a private company. They may purchase
stock in a company. They may buy a stake in a company and go in with
another partner in a buyout deal.
The type of investing takes many forms. It is risky. It is very
profitable if done right. And the Carlyle Group has been extremely
profitable. They have a return on average something like 35 or 40
CCR: You say it is a $15.8 billion company. How many partners are
there? Who are they?
BRIODY: David Rubenstein, William Conway, Dan D'Aniello. Stephen Norris
left the firm in 1995.
CCR: So those three own the whole company?
BRIODY: Yes. That doesn't mean that they own $15.8 billion in cash.
Essentially what they own is a stake in each deal that the company completes.
So, if the company is doing well on a particular deal, the partners get
a cut of that transaction. The $15.8 billion under management is other
CCR: How much are their shares worth?
BRIODY: I have no idea. A lot. You can't know what Carlyle is worth
because they don't reveal any of their financial statistics. The only
people who know are the partners and their accountants.
CCR: Is it unconscionable for the President's father to be working
for the Carlyle Group at a time when defense appropriations are skyrocketing?
BRIODY: It is confounding to me why he continues to do it despite
the scandal that it is creating. I had a tremendous amount of respect
for George Bush Sr. But I cannot understand why he would continue to work
on behalf of Carlyle Group, a company that owns defense and aerospace
companies, at a time when his son is making very difficult decisions surrounding
these wars, both in Afghanistan and Iraq. It tarnishes the reputation
of George Bush Sr. and undermines the credibility of his son while he
CCR: What is Vinnell?
BRIODY: Vinnell is a company that Carlyle owned in the mid 1990s.
It is a military outsourcer, which means that they have done everything
from building airstrips and heavy construction, to doing some of the training
of Saudi Arabian troops and troops in other foreign nations. It is a very
controversial business. In Saudi Arabia -- they have been training the
Royal National Guard -- the army. It's charter is to protect the Royal
Vinnell has been training these guys how to fight. And in the Gulf War
they were seen actually fighting alongside the Royal National Guard. So,
it's not clear whether these guys are mercenaries, military for hire --
what exactly their role is over there. Regardless, Carlyle sold the
company off to TRW in the late 1990s.
CCR: Michael Moore is talking about doing a movie about the bin
Laden/Bush/Carlyle connection. What do you think of this whole theory
that there is some kind of connection?
BRIODY: I certainly hope that Michael Moore doesn't take the vast
right wing conspiracy path. Those kind of viewpoints, a la Cynthia McKinney,
tend to undermine what is really important in this story, which is the
general level of acceptance by the American people of the revolving door
in Washington, D.C.
I don't believe that there was any conspiracy between the Bushes and
the bin Ladens. The bin Laden family was an investor in the Carlyle
Group. As such, they were a perfectly legitimate investor -- a well
recognized and respected business, called the Saudi bin Laden Group.
And by the way, they disavowed Osama bin Laden. Now whether you believe
that they have truly disavowed him and are not funding him in any way is
up to your own personal beliefs. That depends on how deep your
suspicions run. But you don't want to take your eye off the ball.
Theories like that are easily dismissed by the Carlyle Group and by the
folks involved in this. They can make you look like an Oliver Stone
figure, wave a hand, and dismiss you quickly and question your
credibility when you start bringing stuff like that up.
It's important to keep focused on the fact that these guys still have
tremendous influence in Washington, D.C. They are still very important
politicians, even though they have left public office. The fact that
many policy decisions are making them wealthy is something that we need
to be concerned about.
CCR: Did the company speak with you?
BRIODY: No, they refused to speak with me upon every request. And
it has been frustrating. I certainly want to tell their side of the story.
CCR: Could you have written this book without speaking to Norris?
BRIODY: It certainly would not have been as good of a book. It wouldn't
have as much detail or background. I would have written it anyway without
Norris was very valuable for the early years. But he was out since
1995. So the rest of the reporting had to be done from other sources.
CCR: Is there bad blood between Norris and the remaining partners?
BRIODY: It's hard to say. It seems like there is a little bad blood
between Norris and William Conway. But Norris and Rubenstein remain cordial
and still communicate regularly. The real trouble came between Norris
and Conway. That's where the real trouble was.
Conway is a very conservative businessman. The way Conway felt that the
business should be run varied greatly from the way that Norris thought
it should be run.
CCR: Frank Carlucci.
BRIODY: Carlucci had been chairman of The Carlyle Group for the past
ten years. He was responsible for getting Carlyle into the defense buyout
business. He had spent most of his time in the Pentagon forming policy
on Pentagon spending and defense spending.
And then when he left the Pentagon and came over to the Carlyle Group,
he was able to work that same system that he had created to help benefit
Carlyle financially, and identify good defense buyout targets.
CCR: George Soros.
BRIODY: George Soros is an investor in the Carlyle Group. He has done
very well for himself. He invested about $100 million in one of the Carlyle
funds back in the late 1990s.
CCR: How do we know that?
BRIODY: Carlyle announced it at the time. They felt that the connection
to Soros lent them some real credibility and some grey hair.
CCR: Is Carlyle the biggest player on the block?
BRIODY: They have $15.8 billion under management. They are public
about that. We know that they have somewhere around 400 to 500 employees.
Compare that to a company like Kolberg Kravitz or Forstmann Little, which
are the other big buyout players here in the United States. They have
more along the lines of 50 to 100 employees.
So, Carlyle is very large, very diversified. They have offices all over
the world. And they have employees all over the world.
CCR: Carlucci has a dark side.
BRIODY: Carlucci has been involved in controversial activity over
the years. He's been called Spooky Frank Carlucci. He's been called Creepy
Much of that comes from his history of working in developing nations,
like the Congo and Portugal, back in the 1960s and 1970s. Many people
felt he was stationed in those places to effect regime change, to seed
democracy, to subvert revolution, or support revolution, depending on
CCR: He's been linked to the assassination of Lumumba.
BRIODY: Yes he has been linked, but he denies it. A movie came out
a couple of years ago by Raul Peck. The name of the movie is Lumumba.
In one scene in that movie, Frank Carlucci was portrayed as being in on
a decision that was being collectively made to assassinate Patrice Lumumba.
Carlucci threatened a lawsuit. And eventually, Peck had the scene edited
so that the scene doesn't appear in the movie.
Raul Peck has spent his entire life researching the life of Patrice
Lumumba. He still believes the original scene is accurate and wishes
that he didn't have to edit it out for fear of a lawsuit.
CCR: Fred Malek.
BRIODY: Malek was known as "the ax," because he was President Nixon's
strongman. He ran into some controversy of his own before he joined the
Carlyle. He was fingered as the man who helped Nixon count the Jews in
the Bureau of Labor Statistics back when Nixon was at the height of his
paranoia. Nixon believed that there was a Jewish cabal in the BLS. So
Fred Malek went out and counted how many Jews were working in the BLS.
Ultimately, a couple of those Jews were let go.
That controversy didn't erupt until well after Nixon left office. In
fact, it didn't happen until Fred Malek had just been appointed the head
of George Bush Sr.'s election campaign. At that point, he was forced to
retire. And he headed over to the Carlyle Group.
CCR: You quote Bill Conway as saying that "no one wants to be a
beneficiary of September 11." But the Carlyle Group was a beneficiary
of September 11, right?
BRIODY: They were in many ways. First and foremost the United Defense
IPO was very successful. Carlyle made $237 million in one day. They never
would have been able to take United Defense public in that manner had
the defense budget not been upped so dramatically following September
That was a real bonanza for the defense industry. And United Defense
going public at that time was a real stroke of luck.
They were also part owners of a company called the IT Group.
The IT Group did clean up of biochemical hazards. And they won some
very lucrative contracts to clean up the Hart Senate Office Building,
which was contaminated with anthrax at that point.
They also own US Investigative Services (USIS). This is an amazing
company. It is located in an underground bunker somewhere in
Pennsylvania. This company investigates the backgrounds of government
employees -- airline employees, baggage handlers. So, they had a
phenomenal growth in government contracts.
They also own companies that do biometrics. They own companies that do
x-ray machines at airports. So, they were very well positioned after the
events of September 11.
CCR: Melvyn Paisley.
BRIODY: Paisley was part of the Operation Ill Wind, which was the
sweeping investigation of the Pentagon and procurement scandals which
took place during the Reagan Administration. Vicky Paisley, Melvin Paisley's
wife, worked for BDM, a company that was owned by Carlyle in the mid-1990s.
After he left the Navy, he ended up doing some work for BDM as well.
BDM scored a number of big Navy contracts during that time.
There was huge controversy. There was an investigation. But everyone
was eventually cleared during that investigation.
CCR: But Paisley went to jail.
BRIODY: He did go to jail, and he is no longer with us.
CCR: I heard your interview with Brian Lamb on C-Span. And it seemed
like the callers were mostly conspiracy theorists.
BRIODY: Folks who call in to call-in programs are a rare breed. And
they have strong opinions one way or another. So, you are going to get
these sort of extremes on the left and the right when you watch a show
Certainly, what I try and do with the book is bring to the fore the
issue of how tightly knit this community is, how the concentration of
wealth doesn't leave the beltway in some cases and how there are very
clear and very disconcerting conflicts of interests involved with a
company like this.
And like I said before, when you get the very knee-jerk partisan
responses to this book, you tend to lose a great deal of the potential
And that is not a good thing. And this is something that needs further
examination. And people need to be on top of it and not be dismissive of
it. So, it is disheartening to see people dismiss it either as
conspiracy theory or as left-wing operative material.
Either way, you lose something when people look at it in those terms. I
try and keep people focused on what is really important here. And that
is this confluence of power in the military.
CCR: Has your book been reviewed anywhere?
BRIODY: Yes, by the New York Times last month. The Times of London
will serialize it. I'm doing talk radio. I did Fresh Air with Terry Gross
today. I did about 40 minutes, and they did about 20 minutes with a spokesperson
from the Carlyle Group.
The Carlyle Group person told Terry Gross that people like Dan Briody
are writing these things about us but they don't bother to ask us our
side of the story -- which is completely untrue. I could not have asked
them more times to speak on the record for this book.
[Contact: Dan Briody, c/o Wiley, 111 River Street, Hoboken, New Jersey
07030. Phone: (201) 748-6000 (Publicist: Alison Bamberger). E-mail: