Dan Snyder's Latest Signing: War Profiteer

From donuts to daisy cutters to defensive backs

I cannot say I was surprised when I read in today's Washington Post that Dan Snyder had brought over a buyout specialist to evaluate takeover and 'investment' opportunities for his equity firm, not with the recent announcement that Dan had bought Johnny Rockets, and less than a year after Dan signed a three-year development deal with fallen matinee idol Tom Cruise. Dan has cash on hand and he did not become a billionaire putting it in commercial paper.

What did surpise me was that the analyst Dan hired, Steven Ham, would come from the Carlyle Group, a military-industrial complex and war profiteer of epic proportions. Dan's equity fund, Red Zone II, will focus on 'under-marketed' properties and companies that Dan can buy or take control of and turn around with his marketing genius. Take Johnny Rockets as an example. Dan sees opportunity there and has plans to expand the chain by 1000 stores in the next five years after the previous management had only expanded by 65 stores over the last five years. The formula? Formula. Each store is a cookie cutter and you can cookbook them into a franchise in no time.

But the Carlyle Group? Although they allegedly bear no relationship to the infamous 19th-century Scottish man of letters and racist historian Thomas Carlyle, whose theories on hero-worship helped to usher in the 20th century's concepts of fascism, the Carlyle Group is in a truly ugly business: access capitalism. Manufacturing no products and directly owning no contracts, Carlyle Group is made up of a who's who of former high level government and military officials who parlay their contacts into investments in defense and government contracting firms, often with alarmingly coincidental and profitable timing to major national and international events.

Former president George HW Bush and former secretary of state James Baker, Bush family fixer and consigliere, are world emissaries to Carlyle, which was supposedly named for the Carlyle Hotel in New York, where the original plotters investors met to discuss business. The former president and former secretary of state, still heavily entwined in the US government, represent Carlyle's private interests in its massive business dealings with the Saudi royal family, managing billions in contracts for the Saudis, among them weapons systems and telecommunications programs.

James Baker was the attorney called in by George W. Bush to run the legal effort challenging the Florida recount in 2000 and also by the the Saudis to defend the royal family from trillion-dollar lawsuits by a group of 9/11 families alleging that millions of dollars from the crown went to Sunni Muslim extremist groups through Islamic front charities, and more recently called to lead the *kaff kaff* bi-partisan Iraq Study Group (gee, no conflict of interest there). Six years prior to September 11, 2001, George HW Bush had convinced Shafiq bin Laden, Osama bin Laden's half brother, to invest 2 million dollars in the Carlyle Group, and George HW and Shafiq were together at a Carlyle Group meeting at the Four Seasons Hotel in Washington DC on the Tuesday morning of 9/11.

Among Carlyle investments: United Defense, a defense contractor and manufacturer that held the ill-fated Crusader self-propelled uber-tank-howitzer contract, among others. UD had declined a higher takeover bid from General Dynamics and instead chose a lower bid from Carlyle to take the company public in 2001. DOD magically announced the death of the Crusader after Carlyle had made their money taking the company public, and by 2004 Carlyle had shed their entire investment in UD; Vought Aircraft, makers of the iconic WWII Corsair, who had fallen on hard times by 2000 when bought outright by Carlyle, and has had a remarkable resurgence to the tune of billions in contracts for the C-117, F-22 and Apache, thanks to Afghanistan and Iraq; USIS, a former federal agency-turned-billion-dollar-private-contractor charged with conducting background checks for the government. USIS had been privatized at the urging of among others, James Baker, and then bought by James Baker's company Carlyle.

Carlyle's luminaries include former president George HW Bush, James Baker, conservative former British Prime Minister John Major, former Bush SEC head Arthur Leavitt, former Reagan Defense Secretary (and successor to current Virginia Democratic Senator Jim Webb) Frank Carlucci and former IRS commissioner Charles Rossotti. Steven Ham, the former Carlyle senior associate hired by Dan Snyder for Red Zone II specialized in "U.S. buyout opportunities in the defense, aerospace, technology and business services sectors..." (op. cit.)

Carlyle Group makes a lot of money profiting on national defense and national security interests and they are also in a position as elder statesmen to advise the president and world leaders. I see a conflict there. In football it would be a bit like hiring a general manager that was also a player agent and then being surprised when all 53 players under contract are represented by that GM-agent. Maybe the quality of the football team's play is not the paramount interest.


Carlyle Group sources: Wikipedia, Boston Herald via CommonDreams, CounterPunch, UK Guardian, SourceWatch, GlobalSecurity.org, Center for Public Integrity, Slate.



Eye of Providence, detail from reverse of one dollar bill: Wikimedia here.