War profiteering is evil no matter how you cut it.
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If your family was in a position to make huge money by war profiteering, what would you do?
If you found yourself President of the United States, you might move to eliminate the federal inheritance tax, so you and your siblings could get richer in a few years.
You might even start a war.
War profiteering explains a lot when we consider how President George W. Bush rushed to start a major war with Iraq. But now, as we review recent history, with hundreds of thousands of Iraqi war dead, more than 4,000 American war dead, and no ‘weapons of mass destruction’ ever found, the greed factor becomes much more clear.
One way to make Billions from War
In 1997 the Carlyle Group, a Washington DC investment firm, made an $850 million purchase of United Defense Industries, (UDI) a long time maker of military equipment, including Bradley Fighting Vehicles, guided missile systems, and howitzers. The company’s fortunes were lagging. Sales of its flagship products, Bradley Fighting Vehicles had sharply fallen in the 1990s.
On December 14, 2001, Carlyle took UDI public through a stock offering on the New York Stock Exchange, retaining private ownership of a substantial share of the stock.
On March 20, 2003 the US began major combat operations against the nation of Iraq.Thus began a phenomenal rise in UDI earnings as a defense contractor and record-breaking profits for the Carlyle Group, through huge weapons sales to the Pentagon.
The Financial Times reported a $6.6 billion windfall for Carlyle investors a few years into the Iraq War.
Among those benefiting from their affiliation with the Carlyle Group were former US President George H.W. Bush, former Secretary of State James Baker, former US Defense Secretary Frank Carlucci, former US Secretary of State Henry Kissinger, and former British Prime Minister John Major.
President George W. Bush served on the board of a Carlyle Group subsidiary for three years, but left prior to his campaign for governor of Texas. In 2001, Bush successfully persuaded congress to phase out all federal inheritance taxes for wealthy Americans. This was one of his top legislative priorities and also positioned Bush and his siblings to inherit their parents’ estate, including war profits, with no tax.
In 2005 Carlyle sold United Defense Industries to BAE Systems in Europe for $75 a share, a 29 percent premium to the UDI closing price of $58. This generated an additional $4.2 billion for Carlyle investors.
Carlyle is a huge investment company with holdings around the globe. The company also made substantial profits when it invested in 1998 in a small Michigan vaccine company, BioPort. The firm was for many years, the only U.S. maker of Anthrax vaccine. BioPort received multi-million government contracts to supply anthrax vaccine to soldiers and civilians. Demand spiked when anthrax fears spread around the nation following the 911 terrorist attacks on the United States. Defense Secretary Donald Rumsfeld was forced to defend BioPort from charges of incompetence and fraud when major quality control problems came up with the vaccine, and large numbers of American service men and women refused to take the vaccine.
These are just a couple of specific examples from the ‘Shock Doctrine- Disaster Capitalism’ approach to investing. Need a war to make big money? Create one, run up the federal deficit at taxpayer expense, and funnel the money to the business wing of the Military-Industrial Complex.
Postscript: Congress in recent years partially restored the inheritance, or estate tax, but with continued GOP efforts to eliminate it, the status of the Bush family estate and all those war profits remain uncertain.
More on this story of war profiteering can be found in historical archives through internet searches. Much of the material for this article was drawn from financial publications such as the Wall Street Journal, The Financial Times and Reuters.
More on Carlyle and United Defense Industries
dupagepeacethroughjustice.org
Rumsfeld works to save well-connected BioPort:
motherjones.com
Harry Truman, among others, once referred to war profiteering as ‘treason.’
thenation.com
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