Carlyle Group
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The story...

Both the Bush and bin Ladin families have significant financial interests in the Carlyle Group, a major defence contractor which has made billions from the Iraq war.

Our take...

The Carlyle Group is not a "defence contractor", it's a private equity group, that buys shares in a range of companies. As we write, the breakdown of their investments is given as follows:

22%: Telecoms and media
17%: Auto and transport
12%: Aerospace
12%: Industrial
11%: IT
6% : Energy
6% : Health
5% : Consumer
1% : Defence
1% : Other

There are many different sectors here, and although some may have benefited from Iraq, others may not. Especially as the 9/11 attack, followed by uncertainties about terrorism and the global political situation, has contributed to holding back equity prices overall.

Some still point to Carlyle's ownership of a company called United Defense Industries. It was awarded a valuable contract to produce the Crusader (a heavyweight howitzer-type weapon) shortly after 9/11, they say, allowing Carlyle to take UDI public and make a killing.

Neat idea, except that the Crusader project actually began in 1994. And the US later cancelled it. The result?

"Among the smaller defense stocks, product portfolios tend to be narrower, so such companies are more vulnerable than their larger counterparts if one of their defense contracts is cancelled. Witness the 17% drop in shares of United Defense Industries (nyse: UDI - news - people ) due to reports in May that the Crusader artillery system was likely to be killed".

At this point Carlyle still owned over 40% of the company, so took a significant financial hit over this. They since sold their UDI shares in May 2004.

Still, the Bush family have investments in Carlyle, right? Possibly. Bush Senior worked for them as senior advisor to the Asia Board, between April 1998 to October 2003. It's claimed that he also gave speeches for them, and was awarded with stakes in the firms investments (,1300,583869,00.html). We don't know how much, which investments, or whether he still owns them, though.

The bin Ladin situation is clearer, as the family pulled out of Carlyle shortly after 9/11. A newspaper report on October 31st 2001 said:

"I can confirm the fact that any Binladin Group investment in Carlyle has been terminated or is being terminated. It amounted to a $2m investment in the Carlyle II Fund, which was anyway a very small portion of a $1.3bn fund. In the scheme of the investments and in the scheme of the business of either party it was very small. We have to get this into perspective. But I think there was a sense that there were questions being raised and some controversy, and for such a small amount of money it was something that we wanted to put behind us. It was just a business decision.",1300,583869,00.html

So no bin Ladin profits from Crusader, or Iraq. But surely it's still suspicious that both Bush and bin Ladin were connected to the same company?

Some will always say that, but it's a little simplistic. Billioniare George Soros, for instance, has invested in Carlyle Group, and he's not exactly a supporter of Bush (see his press ads in 2004, "Why we must not reelect President Bush" and "A Final Appeal: Don't Fall for the Politics of Fear"). Perhaps buying shares in the Carlyle group is just an investment decision, after all?

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