BC Gas may go to shadowy Carlyle Group
The world’s biggest and most secretive private investment firm, staffed with ex-spooks, presidents, prime ministers, and a few of our own ex-premiers, looks to add our gas resources to its handsome portfolio of war-profiteering companies
By Kevin Potvin
The Republic
June 8,2006
A significant piece of news from the business world somehow slipped past our otherwise vigilant local media last week, news that you would think should cause the BC governing Liberals a gulp and a collar-loosening tug.
Just last year, the Liberals were defending the privatization and sale of BC Gas (whose name had been changed to Terasen to make it more marketable), to Texas-based Kinder Morgan Inc. Critics like NDP energy critic Corky Evans suggested the sale placed a critically-important resource in the hands of owners who may not have our best interests in mind. But they were dismissed, since Kinder Morgan was just another pipeline company, it was said. Also dismissed were complaints that, because of the USA Patriot Act’s application to US-based companies, more of our personal records were exposed to warrantless searchesjust as the sale of the records-keeping offices of BC Med to Texas-based Maximus already exposes our medical records to Homeland Security scrutiny.
Now, the New York Times is reporting less than one year later that Kinder Morgan is the subject of a US $22 billion takeover bid by a consortium led by none other than the Carlyle Group. The CBC reported only that Carlyle was “also involved” and Bloomberg.com only mentioned that Carlyle is one of two “buyout firms” taking part. But the Carlyle Group international investment company is no junior partner in anything it does. Carlyle was named by The New York Times in 2002 as the biggest defence company in the US, and the largest private defence company in the world, based on its controlling share of ownership in a vast range of defense, intelligence, and communications companies. The Wall Street Journal simply calls it the biggest private investment firm on the planet, bar none.
Because of Carlyle’s unusually close connections to defense and intelligence figures, questions about the role of Carlyle in world affairs go deep. So entwined is the Carlyle Group with the Pentagon and other US defense and intelligence agencies and companies, it is widely regarded as an extension of the US government, or at least the National Security Agency, the CIA, and the Pentagon. Not bad for a company started only 10 years ago . . . by a former Enron executive, as fate would have it. (It is former Enron accounting partner Arthur Anderson, now called Maximus, that does billing for BC Med. Convicted Enron CEO Ken Lay stood at fellow Texan President George W Bush’s right hand side at his first, contested, inauguration in 2001.)
Consider the list of men affiliated with the Carlyle Group: George W Bush, current president, was appointed to the board of directors of a Carlyle company in 1990; George Bush Sr, former US president and the current US president’s father, and former director of the CIA, is a senior advisor to Carlyle; James Baker III, Bush Sr’s secretary of state and Bush Jr’s lead counsel in the disputed 2000 presidential election, is a Carlyle senior counsel; Frank Carlucci, Ronald Reagan’s secretary of defense and national security advisor, and former Assistant Director of the CIA (and also a member of the Project for a New American Century), is chairman emeritus and strategic business advisor at Carlyle; Richard Darman, Bush Sr’s Director of the US Office of Management and Budget, is a senior advisor and managing director of Carlyle; William Kennard, former chair of the Federal Communications Commission, is managing director of Carlyle’s telecommunications and media group; Arthur Levitt, former chair of the US Securities and Exchange Commission, is another Carlyle senior advisor; and Mark McLarty, former President Clinton’s White House Chief of Staff, is also a Carlyle senior advisor.
Also on the Carlyle payroll is Colin Powell, former Bush Secretary of State; John Snow, the recently-resigned Secretary of the Treasurer; Robert Zoellick, the current Deputy Secretary of State; and John Rossotti, former commissioner of the IRS. Carlyle is a virtual shadow US government.
Among the small clique of 900 investors in Carlyle there was, until October 2001 anywayor so the private company saysmembers of the bin Laden family and ranking Saudi Arabian royalty. Also on the executive are a former prime minister of Thailand, a former prime minister of South Korea, a former president of The Philippines, and John Major, the former Prime Minister of Great Britain.
Strong memories might recall that in 2004, local billionaire Jim Pattison entertained Carlyle employees George Bush and John Major on his yacht anchored at Port Hardy. We don’t know if Pattison is invested in the Carlyle group, but Peter Bentley, former CEO and current chairman of the Pattison-controlled Canfor forest products company, is a member of the Canadian Advisory Board of the Carlyle Group.
Former Canadian ambassador to the US Allan Gotleib is also on the Carlyle advisory board, as is former ambassador to the US Frank McKenna, the former New Brunswick premier, who was chair; Paul Desmarais, chair of Power Corporation of Canada, and at whose home Brian Mulroney, Jean Chretien, and Paul Martin spent each Christmas while they were respective Prime Ministers, is on the Carlyle board also, along with former Alberta premier Peter Lougheed and Bombardier’s chair and CEO Laurent Beaudoin. Filling out the Canadian Advisory Board at Carlyle is Andre Bisson, CEO of Bank of Nova Scotia and formerly on the Hollinger Board; David O’Brien, CEO of Encana energy company; Hartley Richardson, head of JRI, a dominant 150-year-old agribusiness company in Winnipeg; William Sinclair, co-founder of JDS Uniphase; and Lynton Wilson, CEO of Bell Canada Enterprises, the largest communications company in the nation. (Wilson is also a board member of Nortel, whose chairman emeritus is Frank Carlucci, Carlyle’s chairman emeritus too). It seems Carlyle, the company buying British Columbia’s gas resources and pipelines, is a virtual shadow Canadian government as well.
As The Guardian newspaper noted in 2001, “it is hard to imagine [a company] closer to the heart of American power . . . Carlyle’s position [is] at the very centre of the Washington establishment.” It would also appear to be pretty close to the centre of the Canadian establishment too. Carlyle, the paper said back in 2001, “has become the thread that indirectly links American military policy in Afghanistan to the personal fortunes of its celebrity employees.” It was in that year that Canada deployed a military force to Afghanistan in support of US efforts at regime change and occupation therea policy a majority of MPs and business leaders continue to support, but which a majority of Canadians oppose. Hartley Richardson, Carlyle member, is chair of The Canadian Council of Chief Executives, which vocally lead the charge in this country in support of Canada’s deployment to Afghanistan.
The Red Herring business magazine noted in 2002 that Carlyle had by then amassed US$12 billion in funds under its management by “walking that narrow line that is the art of doing business at the murky intersection of Washington politics, national security, and private capital.” At its website, Carlyle currently boasts that it now has US$39 billion under managementa staggering growth rate of 80% per annum since the launching of war on Iraq, pushed most conspicuously by the neo-con group called The Project for a New American Century, which includes Carlyle luminaries Frank Carlucci and Robert Zoellick.
In addition to being essentially a huge defense and intelligence company, Carlyle, through its octopus-like investment arms, is also a huge media company, owning, for instance, Le Figaro, the biggest French daily newspaper, Medimedia, the world’s fourth-largest healthcare educational material provider, Pacific Telecom Cable in Washington State, Videotron, the largest phone and internet company in Quebec, Insight, the ninth-largest US cable company, and many more cable, internet, and phone companies around the world. It also owns Loews Cineplex and Cineplex Odeon movie theatres. It is the biggest private investment firm in the world.
If the deal Carlyle is trying to make to take over Kinder Morgan, as reported in The New York Times, goes through, then the cheque you write for your monthly gas bill will ultimately be going to these men at Carlyle. More importantly, whatever information is available about you through your gas bill will now in the hands of this shadowy but highly influential company, just as whatever information is available about you through your use of BC medical services is now in the hands of the equally shadowy Maximus.
Gordon Campbell could have stopped the sale of Terasen to Kinder Morgan, but didn’t. He can do nothing now that the former crown corporation is about to pass into the hands of the highly suspicious Carlyle Group.
All of this is thanks to careless and thoughtless privatization policies brought to us by the governing BC Liberal Party. Or is it thoughtless? Recent reports suggest Tony Blair, Labour Prime Minister of Britain, has been offered a position at Carlyle for when he leaves his government post. Former premiers of Alberta and New Brunswick joined Carlyle after leaving their government posts. Does Gordon Campbell, lame-duck Liberal premier of BC, also have an offer on file from Carlyle? He did as much as hand them our enormous and globally-critical gas resources, didn’t he. In a question to Carlyle about whether Peter Lougheed, Frank McKenna or Gordon Campbell are, or were ever, in any way associated to the Carlyle Group, Chris Ullman, Director of Global Communications, told The Republic, “We decline to comment on these questions.” His staff earlier told The Republic, “Carlyle's Canadian Advisory Board was dissolved more than a year ago.” Sure it was.
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