Bush worked in the private sector and the two firms he helped run went belly up. Caterair and Hakren Energy.
Fact check time again. Harken Energy is still alive and filing financial statements with the SEC:
sec.gov
As for Caterair, we have discussed this before. Carlyle bought it for $650 million and sold it for $500 million. He was only a director, he did not run it.
A repeat of my prior post to you on this issue:
If you are going to connect GWB to the Carlyle Group and insinuate that Bush had any significant responsibilities with the Caterair, it might be more intellectually honest for you to provide all of the details.
Caterair, originally owned by Marriott Corp. and named Marriott In-Flite Services, was purchased by its employees in 1989 for $650 million in what may have been the last significant LBO of the 1980’s. Carlyle had a stake in the new company and received a fee for serving as the investment banker on the deal.
Three of the founders of Carlyle (Frederic Malek, Stephen Norris and Dan D’Aniello) were former employees of Marriott and had worked with Dan Altobello, the Marriott executive who ran the In-Flite Services division and headed up the LBO. At the same time that he was putting together the Caterair deal, Malek was working with Al Checchi on the $3.65 billion LBO of Northwest Airlines. Checchi, a prominent California Democrat, later ran against Gray Davis in the 1996 California Gubernatorial primary. I would suggest that the Carlyle principles had some significant familiarity with the operations of the entity.
GWB joined the Caterair board in 1990. Dan Briody, hardly a friend of GWB and the author of “The Iron Triangle: Inside the Secret World of the Carlyle Group”, states “Bush’s involvement in the day-to-day activities of Caterair was nominal at best.” Briody quotes one board member as saying, “He was really smart but not really engaged in Caterair’s business.”
Shortly after the LBO, Caterair had to contend with an airline industry devastated by Gulf War I, higher oil prices, and a nationwide recession. The major airlines cut food costs by 8% in 1993.
Bush left the board in 1994 when he ran for Governor of Texas. His Caterair experience was a big issue for Ann Richards. It was certainly part of his resume in 1993.
Caterair was sold to Onex Foods Services in 1995 for $500 million, a loss of $150 million. Given the global and economic issues that the company had to deal with in the early 90’s and the number of LBO’s that cratered, this deal does not meet my definition for a disaster.
A couple of nit picks. The loss occurred over a six year period, not the two that you state. Additionally, you post implies that GWB was on the Carlyle Group board. Not true. GWB may have not mentioned Cateair in his most recent State of the Union speech, but is certainly was an issue with Ms. Richards in 1994.
An aside: Back in the mid-80’s, I audited an airline caterer. It is a low margin, cutthroat business. |
