Smash hit

The Crusader was the most advanced artillery system the US Army had ever conceived. It is the kind of weapon that makes the United States unbeatable in large-scale, open warfare, lobbing multiple shells at varying trajectories so that they rain down at their desired target at the same time. It is a fearsome weapon. It was also United Defence’s cash cow.

But times had changed considerably since Crusader was first conceived in the early 1990s. In fact, the very nature of war had changed and had left Crusader behind. The gun had two very serious problems. It was too big, and it was designed to fight a type of battle that no longer presented itself to the US armed forces. At 40 tons each plus a supply vehicle that weighed another 50 tons, the Crusader was a Cold War-inspired weapon, rapidly approaching obsolescence in an age of swift deployment and agile forces. There were those in the Pentagon who wanted the Crusader programme dramatically scaled back and some wanted it cancelled outright. But, losing the Crusader contract, originally valued at $20 billion, would jeopardise the future of United Defence and would be a mighty hit to Carlyle.

The effort Carlyle put forth to save their precious gun would illustrate exactly how the Iron Triangle of defence, government and business work together to the benefit of all three. Carlyle had been built to prevail in situations like these, when the large amounts of money were riding on the decisions of a few men in public office. It was time to call in a few favours.

Carlyle and United Defence mounted a political battle for Crusader. In the cycle leading up to the 1998 elections, United Defence made campaign contributions of only $49,500. But by 2000, under Carlyle’s leadership, the company had spread around more than $180,000 to more than 70 senate and house members. The bulk of the company’s largesse went to politicians on the house and senate arms committees. And often, a good deal of money found its way to the house and senate members whose districts were expected to participate in manufacturing the Crusader. It was also uncanny how United Defence planned to build manufacturing facilities for the Crusader in the back yards of key members of the arms committees, creating jobs and wealth. These are the kinds of things that get politicians re-elected, and get businesses what they want. Carlyle was thorough and strategic, and it was starting to make up ground. Reports of Crusader’s death had been greatly exaggerated.

Carlyle representatives assure the public that their high-profile hires like George Bush Sr. and James Baker do not lobby. That, of course, is true. But to say that the Carlyle Group doesn’t lobby is simply not true. Does the Carlyle Group register as lobbyists? No. Do they hire lobbying firms to do it for them? Yes. Do they influence key lawmakers and help shape policy? Of course they do. People like George Bush Sr. don’t need to lobby, in the traditional sense of the word. They already know the lawmakers involved in key decisions, and the lawmakers know them. There are memorandums and meetings. There are unspoken understandings that are reached over a drink and a wink.

“It’s impossible to say when people working for Carlyle are wearing more than one hat,’’ Peter Eisner, managing director at the Center for Public Integrity, told me. It would be ludicrous to imagine George Bush Sr. fighting it out in the trenches with all the other registered lobbyists. But does George Bush Sr. have a say in policy decisions made by this White House? This has already been proven.

Regardless of your definition of lobbying, in the case of the Crusader Carlyle lobbied hard, spending more than $1.2 million in 2000 to wage battle on Capitol Hill on behalf of United Defence. The Crusader was saved for the time being. When Bush’s proposed defence budget for 2002 was handed down in June 2001, it included funding for Crusader. And within two months of the decision by Bush, Carlyle took its first dividends from United Defence, a windfall of $289 million. But opponents continued to fight to have the programme cancelled.

The raging debate would not be settled until May 2002, when Secretary of Defence Donald Rumsfeld finally decided against Crusader and cancelled the programme. The last casualty was Secretary of the Army Thomas White, a former Enron executive, whose resignation followed a last-ditch battle for a hopeless cause.

Ultimately, the success of the Carlyle Group depends on its continuing ability to gain access to high-level government officials, thereby getting a jump on policy changes, both domestic and international. And that access hinges on Carlyle’s remarkable track record of hiring the most powerful men in the world.

The Iron Triangle by Dan Briody is published by John Wiley at £17.50. To order your copy at £14.00 + £1.95 p&p call Times Books Direct on 0870 160 8080 or visit our website at www.timesonline.co.uk/booksdirect

The author will be online to answer your questions on Monday, May 12. To send e-mails, go to www.timesonline.co.uk/talkingpoint