Carlyle Group May Buy Major CIA Contractor: Booz Allen Hamilton

[struggle4progress]

by Tim Shorrock , Special to CorpWatch
March 8th, 2008

The Carlyle Group, one of the world’s largest private equity funds, may soon acquire the $2 billion government contracting business of consulting giant Booz Allen Hamilton, one of the biggest suppliers of technology and personnel to the U.S. government’s spy agencies. Carlyle manages more than $75 billion in assets and has bought and sold a long string of military contractors since the early 1990s. But in recent years it has significantly reduced its investments in that industry. If it goes ahead with the widely reported plan to buy Booz Allen, it will re-emerge as the owner of one of America’s largest private intelligence armies.

Reports of a potential Carlyle acquisition of Booz Allen’s government unit began circulating among U.S. military contractors in December 2007, after Booz Allen’s senior partners and board members – a group of 300 vice presidents who own the privately-held firm – gathered at company headquarters in McLean, Virginia, for an extraordinary two-day meeting.

According to a December 15 letter to Booz Allen employees from CEO Ralph W. Shrader that was released by the firm, the vice presidents signed off on a “new strategic direction” that would involve separating the company’s commercial and government units and operating them as separate companies. That was widely seen, both inside and outside the company, as a sign that a sale of one or both of the units was imminent. Shrader said the company hoped to come to a resolution of the issues involved by March 31, 2008.

In January 2008, major newspapers – each quoting unnamed people close to the situation – reported that discussions between Booz Allen and Carlyle about the sale of the government unit were underway. According to the Wall Street Journal, the deal will be “centered on Booz Allen’s influence in defense and intelligence contracting. If an agreement is reached the sale price will likely be around $2 billion.” ...

http://www.corpwatch.org/article.php?id=14963

[N4457S]

1. I Knew A Guy...

...once who worked for Booz, Allen, Hamilton. He was a networking guy who had been recruited for Quaker State corporate headquarters in Dallas.

He was a heavy hitter, too.

[no_hypocrisy]

2. You mean after it pays its margin call, right?

[CGowen]

3. Does this mean Carlyle will be doing the President's Daily Brief?

...

Across the board, US government intelligence agencies are now highly dependent upon the staff of companies for critical national security functions. Corporate intelligence professionals from companies such as Lockheed, Raytheon, Booz Allen Hamilton, SAIC and others are thoroughly integrated into analytical divisions throughout the Intelligence Community, including the Office of the Director of National Intelligence which produces the final document of the President’s Daily Briefing, based upon analytical products created by the Intelligence Community. It would be hard to find an analytical product that does not have contractor involvement in some way, shape, or form. And it’s not just the products. Raw intelligence gathered by contractors also goes into the pipeline.

...

http://www.thespywhobilledme.com/the_spy_who_billed_me/2007/07/corporate-conte.html