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The Iron Triangle

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The Iron Triangle

Inside the Secret World of the Carlyle Group

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Is the Carlyle Group a powerful, if meddlesome, multinational corporation — or a conservative cabal of sinister intent?

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Editorial Rating

5

Qualities

  • Innovative

Recommendation

This book is worth reading, given that the Carlyle Group employs important former politicians (such as the first President Bush) and deals with politically sensitive companies. This history of the mammoth private equity firm with its fingers in many government pies reminds you that the right relationships and the right schools can compensate for professional ineptitude. And, if a fraction of author Dan Briody’s implications about it are true, democracy is in serious trouble. But is even a fraction true? Indeed, given the innuendoes he delivers in breathless, clichéd prose, you could ask if the book just might include a stretcher or two. You’ll find this novelistic report intriguing, if you take it with a grain of salt.

Summary

What is The Carlyle Group?

Founding partners Stephen Norris and David Rubenstein named their private equity firm the Carlyle Group after New York City’s Carlyle Hotel, where they first met to plan the venture. The name “Carlyle” suggested old-money respectability, an impression they wanted to convey. But the only thing stereotypically “old money” about the Carlyle Group was a measure of eccentricity.

The idea that launched the firm in 1987 was an obscure tax code provision that allowed “Eskimos” to sell tax losses. In 1971, the Native Americans of Alaska negotiated a $962 million cash settlement for their land. They invested this cash in money-losing ventures, and in 1984, Congress passed a tax bill with a special provision allowing them to sell tax losses to investors. An investor might pay $7 million for a tax loss of $10 million, thereby getting a $3 million tax benefit.

A little more than a decade later, the Carlyle Group was enormously profitable, thanks largely to its impressive political connections, especially among conservative politicians. Today, Carlyle operates in the “Iron Triangle,” the marketplace where big business, big politics and big military...

About the Author

Dan Briody is a business journalist who has written for Forbes, Wired, Red Herring and Industry Standard. This book stemmed from his Red Herring article, “Carlyle’s Way.”

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