Bloomberg News
Special to CNET News.com
March 19, 1999, 5:40 AM PT
Global Crossing, a provider of long distance phone services through an undersea fiber-optic network, paid former U.S. President George Bush in stock options now worth about $14.4 million for giving a speech to the company's customers, according to reports.
After addressing customers in Tokyo on behalf of the company, which was not yet publicly traded, Bush agreed to take shares in lieu of his $80,000 speech fee, the Wall Street Journal reported, citing people close to the situation.
The former president gave the company a 20 percent discount on his normal fee of $100,000 for overseas trips, the newspaper reported.
Global Crossing, which had its initial public share sale in August, agreed to buy Frontier for $12.5 billion in stock and assumed debt on March 17, giving it U.S. Internet access as well as voice and data services.
Copyright 1999, Bloomberg L.P. All Rights Reserved.
Asia Global Crossing Ltd.
Executive Biography
Lodwrick M. (Lod) Cook
Co-Chairman, Asia Global Crossing and Global Crossing Ltd.;
Chairman, Global Marine Systems;
Vice-Chairman and Managing Director, Pacific Capital Group, Inc.
Lodwrick (Lod) Cook became Co-Chairman of Global Crossing Ltd in 1998 and Chairman, Global Marine Systems, a wholly-owned subsidiary of Global Crossing, in 1999. In April 2000, he became Co-Chairman of Asia Global Crossing Ltd. Cook also serves as Vice Chairman and Managing Director of Pacific Capital Group, which he joined in September 1997. Pacific Capital played a principal role in the founding of Global Crossing and continues to invest in the real estate, financial services, media, health care, and telecommunication industries. Prior to joining Pacific Capital Group and Global Crossing, Cook had a 39-year distinguished career at Atlantic Richfield Company (ARCO), the 7th largest US oil company. He began in 1956 as an engineer trainee and went on to hold management positions in Labor Relations, Refining, Marketing, Planning, Supply and Transportation and was elected Vice President in 1970.
He became President and CEO of ARCO in October 1985 and during this time served as Chairman of the Owners' Committee of the Trans Alaska Pipeline System. He became Chairman and CEO in January 1986 and upon retirement in June 1995, became Chairman Emeritus. Cook's philanthropy has had a particular focus on education, youth and minority programs.
His national and international volunteer work includes serving as a Trustee of the George Bush Presidential Library Foundation, Director of the Louisiana State University Alumni Association and a member of the Chancellor's Court of Benefactors of Oxford University in England. He is a former member of the Board of Advisors of the Carter Center of Emory University and former Chairman and current Director of the Ronald Reagan Presidential Foundation. His California community interests include serving as a member of the Library Foundation of Los Angeles (of which he is Founder Chairman) and Life Regent of Pepperdine University. Cook has also had a long association with Junior Achievement and serves on the Southern California Board of Governors and is Director Emeritus - National Junior Achievement. This year he was inducted into the J.A. Business Hall of Fame. In November 1994, upon appointment by Her Majesty the Queen, Cook was invested by The Prince of Wales with the insignia of Honorary Knight Commander of the Most Excellent Order of the British Empire (KBE) for his contribution to Anglo-American relations and support for philanthropic projects around the world. Cook is a member of the Board of Directors of Global Crossing Ltd, Asia Global Crossing Ltd, Global Marine Systems, Pacific Capital Group and Castle & Cooke Inc. He is Chairman and a member of the Board of Directors of Litex Inc and 911Notify.com. Cook was born and raised in Louisiana. He received BS degrees in Mathematics and Petroleum Engineering at Louisiana State University in 1950 and 1955, respectively, the latter after a tour of duty in the US Army. Later, while working, he finished an evening MBA program at Southern Methodist University. Honorary degrees have also been conferred by Louisiana State University, Pepperdine University, California Lutheran University and St. Augustine's College. Cook is married to Carole Diane Cook and has five grown children, four granddaughters, and two grandsons.
Former President Bush Joins Telecom Elite As Speech Reaps $14M Bonanza
March 19, 1999: 8:59 a.m. ET
LONDON (CNNfn) - Former U.S. President George Bush has made one of the most lucrative speeches in history. Bush was able to net a fortune after he agreed to take shares in the fast-growing telecom firm Global Crossing in lieu of his $80,000 fee, according to a newspaper report Friday.
The Wall Street Journal reported that Global Crossing (GBLX) Chairman Lodwrick Cook invited Bush to make a presentation in Japan last year, before the company began trading on Nasdaq. Bush even cut 20 percent from his normal fee in testimony to his friendship with Cook. Bush made the speech and pocketed the low-priced shares ahead of Global Crossing's float last August.
The stock since has soared from its launch price of 9.5 to a high of 60. Following a two-for-one stock split, the shares closed at 48 Thursday.
Bermuda-based Global Crossing, which is building a fiber-optic network that will circle the globe, will see its market capitalization climb to $30 billion if this week's acquisition of Rochester, N.Y.-based Frontier Corp. (FRO), a local and long-distance operator, goes through. Bush's opportunism makes him leader of the global league of political speechmakers. Margaret Thatcher, the former U.K. prime minister, can claim only $150,000 per speech.
CityNet Telecommunications has a dirty little secret, but it still manages to walk away with $275 million in funding
Money Watch
By Vishesh Kumar
April 23, 2001
CEO: Robert G. Berger
Location: Silver Spring, Md.
Funding: $275 million in equity and debt, following a $100 million investment in April 2000
The Pitch: Stringing optic cables inside sewer lines to bring broadband access to buildings
Don't laugh when you hear CityNet Telecommunications' dirty little secret: The company brings fiber-optic networks to office buildings by laying lines in sewers.
CityNet has outfitted robots with digital cameras and sent them into wastewater systems. The robots install stainless steel tubes containing fiber lines along the walls of sewer pipes. Initially developed by a Swiss firm to clean sewers, the robots go through tunnels as narrow as eight inches across.
The stingy private-equity market has opened the floodgates for CityNet. The company raised $175 million in equity and $100 million in debt financing last week, one of the largest private rounds of investment for any company this year.
The Carlyle Group, a buyout and private investment firm, led the charge, which also included Berkshire Partners, CIBC Capital Partners, Crescendo Ventures and Trimaran Capital Partners. . . .
CityNet went to the Carlyle Group to lead the round because of the firm's global reach and track record in telecommunications. Carlyle has also invested in Global Crossing, Nextel and Nortel.
"In addition to being able to write a big check," says Rosenblum, "the fact that we have strong industry focus and operations in Europe and elsewhere will be a big help."
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Posted on 9/30/01 8:10 AM Pacific by liberallarry
FAMILY HAD RENOUNCED TIES TO TERRORIST SON BUT FAMILY STILL UNDER FBI INVESTIGATION
FATHER OF PRESIDENT SHOULD PULL OUT OF INTERNATIONAL CONSULTING FIRM
(Washington, DC) Judicial Watch, the public interest law firm that investigates and prosecutes government corruption and abuse, reacted with disbelief to The Wall Street Journal report of yesterday that George H.W. Bush, the father of President Bush, works for the bin Laden family business in Saudi Arabia through the Carlyle Group, an international consulting firm. The senior Bush had met with the bin Laden family at least twice. (Other top Republicans are also associated with the Carlyle group, such as former Secretary of State James A. Baker.) The terrorist leader Osama bin Laden had supposedly been “disowned” by his family, which runs a multi-billion dollar business in Saudi Arabia and is a major investor in the senior Bush’s firm. Other reports have questioned, though, whether members of his Saudi family have truly cut off Osama bin Laden. Indeed, the Journal also reported yesterday that the FBI has subpoenaed the bin Laden family business’s bank records.
Judicial Watch earlier this year had strongly criticized President Bush’s father’s association with the Carlyle Group, pointing out in a March 5 statement that it was a “conflict of interest (which) could cause problems for America’s foreign policy in Middle East and Asia.” Judicial Watch called for the senior Bush to resign from the firm then.
“This conflict of interest has now turned into a scandal. The idea of the President’s father, an ex-president himself, doing business with a company under investigation by the FBI in the terror attacks of September 11 is horrible. President Bush should not ask, but demand, that his father pull out of the Carlyle Group,” stated Judicial Watch Chairman and General Counsel Larry Klayman.
“This has the potential of making ‘Billygate’ (Jimmy Carter’s brother’s dealings with Libya) look like small potatoes,” added Judicial Watch President Tom Fitton.
See "Bin Laden Family Could Profit From a Jump In Defense Spending Due to Ties to U.S. Bank," by Daniel Golden, James Bandler, and Marcus Walker, The Wall Street Journal, 9/28/01 (www.wsj.com, subscription required).
Presto, like magic, a couple phone calls later, and:
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Posted on 10/26/01 12:30 PM Pacific by Theresa
WASHINGTON (AP) - Osama bin Laden's wealthy family in Saudi Arabia is cutting its financial ties with the Carlyle Group, a politically-connected U.S. private investment firm, by mutual agreement, a source familiar with the relationship said Friday.
The bin Laden family decided to sell its investment worth $2.02 million back to the firm mainly because of public controversy over its stake in a Carlyle fund that invests in buyouts of military and aerospace companies, said the source, who spoke on condition of anonymity. The source was confirming a report in Friday's editions of The New York Times.
There had been criticism in Saudi Arabia after the Sept. 11 terror attacks that the family, which disowned exiled Islamic militant Osama bin Laden years ago, might profit from increased military spending in the U.S. war against terrorism.
The family, whose construction company is one of the largest in the Middle East, also has invested with a number of other investment funds and financial institutions around the world, reportedly including U.S. financial services giant Citigroup, Deutsche Bank of Germany and the Dutch bank ABN Amro.
Carlyle has some $14 billion in assets under management. Its chairman is Frank Carlucci, a former U.S. defense secretary. Former President George Bush, former secretary of state James Baker and Arthur Levitt, who had been chairman of the Securities and Exchange Commission through most of the Clinton administration, are senior advisers to the firm.
Executive Biography
John F. Harris
Managing Director and CFO
Mr. Harris is a Partner and Managing Director of The Carlyle Group and is based in Washington, DC. He serves as Carlyle’s Chief Financial Officer with overall responsibility for the firm’s investor reporting, internal controls and financial management. Prior to joining Carlyle in April 1997, Mr. Harris was a Vice President with Golub Associates, a private equity firm, where he focused on middle market principal investment transactions. Previously, Mr. Harris was a Senior Manager with 
Arthur Andersen, LLP. Mr. Harris is a graduate of the University of Virginia and is a CPA.
Source: The Carlyle Group, 2001
Enron unleashes more US horror
The amount of gimmickry and outright fraud dwarfs any period since the early 1970s, when major accounting scams such as Equity Funding surfaced, and the 1920s, when rampant fraud helped cause the crash of 1929 and led to the creation of the SEC, he says.
Enron paid Andersen, its auditor, $US27 million in fees unrelated to auditing and $US52 million in total fees last year, according to Enron's proxy statement.
Last year, Arthur Levitt, then chairman of the commission, tried to restrict the consulting work that accounting firms could do, but he backed down in the face of strong opposition from the firms. Mr Levitt, now a senior adviser at the Carlyle Group, did not return calls for comment."
[end of partial transcript]
Just making a dishonest buck or two
"Last but not least, I must look at another company, this one prospering more than ever. Founded in 1987, it is called the Carlyle Group and is now thought to be worth around $12.5bn. It is run by Frank Carlucci, Ronald Reagan's defence secretary and a close chum of Donald Rumsfeld (they used to wrestle together at Princeton). It specialises in buying defence companies that are performing indifferently, and injecting them with new blood. One such typical company was United Defense Industries, a firm that manufactures the $20bn, 42-ton Crusader Advanced Field Artillery System - a system about to get the chop when Bill Clinton left office, but restored by Rumsfeld.
Carlyle's reach is staggering: until it speedily divested itself last October, its investors included the Binladin Group, the $5bn family business run by Osama's half-brother Bakr. And on its payroll you will find such luminaries as George Bush I, James Baker, the former secretary of state, and John Major: it helps, you see, if a chap trying to beef up the defence business has a little governmental star pulling power. Bush I and Major went to Saudi Arabia last year on behalf of Carlyle, I am told (when Bush II, lest we forget, was already US president); Bush I netted $17m in his first coup for Carlyle and has probably now accrued around $50m. The current President Bush, apparently, sees nothing wrong with what Dad is now doing.
The shenanigans of Enron, meanwhile, are now being investigated by six Congressional committees, the labour department, the justice department (from which Ashcroft has recused himself) and the Securities and Exchange Commission. Arthur Andersen, which destroyed key documents during its audit of Enron, is now the subject of a criminal investigation. But where was Arthur Levitt, chairman of the SEC and crusader against "greed and arrogance" while the Enron mayhem was unfolding? Er, we don't know. Where is he now? Working for Carlyle, that's where."
[end of partial transcript]
Apteka-Holding, established in late 1997, is ranked among the top five distributors of pharmaceutical products in Russia. In 1999 the international investment fund The Carlyle Group became a partner and shareholder of Apteka-Holding.
"At the request of The Carlyle Group the business processes of the company were surveyed at the first stage of the project by the specialists of Arthur Andersen, one of the Big Five consultancies."
[End of partial transcript]
The CIA's Role in the Anthrax Mailings
"The preceding year (September 1998), Bioport Corporation took over a failing anthrax vaccine business from state-owned Michigan Biologic Products Institute. Less than a month later, the company landed an exclusive $29 million contract with the Department of Defense to "manufacture, test, bottle and store the anthrax vaccine." Admiral William J. Crowe, Jr., a former Chairman of the Joint Chiefs of Staff and close personal aid to President Clinton, with no financial investment of his own, received 22.5% of Bioport's stock to promote, secure, and manage military anthrax vaccine contracts.(14)
3. Bioport's principal investor was Saudi business man Fuad El-Hibri-a close friend of the bin Laden family, and a previous merger and acquisitions manager for the Rockefeller-linked Citigroup in New York.(14,15)
According to some investigators,(16) additional Bioport shares were believed to be held by The Carlyle Management Group-America's 11th leading defense contractor largely directed by past CIA director Frank Carlucci, James Baker III, George H.W. Bush, and former British Prime Minister John Major.
4. According to the Associated Press, Past President George H.W. Bush acts as a business agent for the Carlyle Group and wealthy Saudi families including the bin Ladens.(17)"
[end of partial transcript]
Papers on BioPort [Anthrax Vaccine Maker] found in office of terrorist suspects
Bin Laden Family Could Profit From a Jump In Defense Spending Due to Ties to U.S. Bank
"If the U.S. boosts defense spending in its quest to stop Osama bin Laden's alleged terrorist activities, there may be one unexpected beneficiary: Mr. bin Laden's family. Among its far-flung business interests, the well-heeled Saudi Arabian clan -- which says it is estranged from Osama -- is an investor in a fund established by Carlyle Group, a well-connected Washington merchant bank specializing in buyouts of defense and aerospace companies.
Through this investment and its ties to Saudi royalty, the bin Laden family has become acquainted with some of the biggest names in the Republican Party. In recent years, former President Bush, ex-Secretary of State James Baker and ex-Secretary of Defense Frank Carlucci have made the pilgrimage to the bin Laden family's headquarters in Jeddah, Saudi Arabia. Mr. Bush makes speeches on behalf of Carlyle Group and is senior adviser to its Asian Partners fund, while Mr. Baker is its senior counselor. Mr. Carlucci is the group's chairman.
...A Carlyle executive said the bin Laden family committed $2 million through a London investment arm in 1995 in Carlyle Partners II Fund, which raised $1.3 billion overall. The fund has purchased several aerospace companies among 29 deals. So far, the family has received $1.3 million back in completed investments and should ultimately realize a 40% annualized rate of return, the Carlyle executive said.
But a foreign financier with ties to the bin Laden family says the family's overall investment with Carlyle is considerably larger. He called the $2 million merely an initial contribution. "It's like plowing a field," this person said. "You seed it once. You plow it, and then you reseed it again."
The Carlyle executive added that he would think twice before accepting any future investments by the bin Ladens.
[end of partial transcript]
BioPort - The military's guinea pigs
Institutional Holders - Global Crossing Ltd(NYSE:GX)
| Top Institutional Holders of GX | Shares | Value | ||
| Citigroup Inc. | 23,523,639 | $15,055,129 | ||
| Barclays Bank Plc | 21,621,911 | $13,838,023 | ||
| Jennison Associates LLC | 16,969,234 | $10,860,310 | ||
| Merrill Lynch & Co., Inc. | 14,176,599 | $9,073,023 | ||
| State Street Corporation | 13,918,741 | $8,907,994 | ||
| Oppenheimerfunds, Inc. | 13,784,500 | $8,822,080 | ||
| Vanguard Group, Inc. (The) | 11,264,893 | $7,209,532 | ||
| Massachusetts Financial Services Co - Other | 9,338,730 | $5,976,787 | ||
| Mellon Bank, N.A. | 7,397,813 | $4,734,600 | ||
| Renaissance Technologies Corp | 5,838,200 | $3,736,448 |