Carlyle to Buy Dubai Ports World's US Operations?

Submitted by shystee on Fri, 2006-03-10 11:45.

One potential private-equity buyer is Washington’s Carlyle Group, which bought the U.S. container-shipping business of CSX Corp. in 2002 for $300 million, selling it two years later for $650 million. Also, the Dubai government has been an investor in Carlyle’s investment funds and put $100 million into its latest, $7.85 billion buyout fund.

A source at Carlyle, however, said the firm will probably not be interested in P&O’s port operations, given the political scrutiny such a deal would invite.

Political scrutiny? Why would that be? Three questions that have not been asked by the Corporate Media throughout this whole flap:

1. How much, if any, stake does the Bush family have in the Carlyle Group?

2. Did the Carlyle group stand to benefit from the P&O sale?

3. Why did President Bush take such a “risky” stand on this issue (threatening a veto)?

As Jessica Wilson noted at Leiter Reports, even the progressive blogosphere has kept away from the money angle. With a couple of notable exceptions. Could it be that bloggers were scared off by the Bushies’ “racism” talking point? Or is the answer to be found in wingnutty conspiracy theories involving George Soros (Major Carlyle investor)?

About the Racism/Xenophobia/Isolationism meme: if you look at it from a class standpoint, the Administration’s position becomes clearer. The Bushies have no problem using fear of Arabs “as a club” (John Murtha’s words) over the heads of US citizens, and they have no problem sending the US Army across the world to murder thousands of economically poor brown people whose only guilt is racial/religious commonality with the 9-11 terrorists. But when you dare to be suspicious of fantastically wealthy Arab sheiks whose government has real connections to 9-11, well then you’re a racist.

The last-minute concession by Dubai Ports World was touted on yesterday’s nightly news shows as a “stunning defeat” for President Chimpy. Really?

Let’s look at who benefits or loses from yesterday’s events.

President Chimpy:
He didn’t have much to gain or lose on this, politically. He’s a lame-duck president, he’s not running for re-election. His interest (if the answers to questions 1 and 2 above are “yes”) was financial. Nobody is going to lose money on this deal.

DP World (which is owned by the UAE government, which is a family oligarchy):
Yesterday’s DP World press release states: “This decision is based on an understanding that DP World will have time to effect the transfer in an orderly fashion and that DP World will not suffer economic loss.” I’m sure they’re feeling the pain. Their interest was purely financial as well and that interest will be protected. Also there is no guarantee that the “US entity” that will buy out DP World’s stake won’t be a shell company which UAE will continue to control. If they did sell to Carlyle, they would basically be selling it back to themselves since they are major investors in Carlyle’s funds.

Republicans in Congress:
Avoid a veto showdown with Bush, while at the same time “proving” to their constituents that they are not his lapdogs. The Corporate Media is full of the “Republicans are distancing themselves from Bush” storyline these days. That distance is not very great, I’d say it’s about the length of an arm.

Democrats in Congress:
“Prove” to their constituents that they are willing to take a “bold” stand (especially when Rethugs are on their side) against Bush. While at the same time not doing a damn thing to secure US ports.

Sounds like a win-win situation for everyone. Except for US citizens. This incident has been reduced to the “confusing, complicated” state which will allow the issue to disappear. Along with it the larger issue of port security and the fact that less than 5% of containers entering the US are inspected. Mission accomplished.