Friday, April 9, 2010
PEU Partners in Death: Wilbur Ross & The Carlyle Group
Wilbur Ross and The Carlyle Group partnered to save BankUnited, a dead financial institution. The FDIC provided $4.9 billion in subsidies for the deal. However, Wilbur Ross and Carlyle face wrongful death lawsuits related to companies they own, firms that paid them substantial management fees.
Wilbur Ross formed International Coal Group, owner of the Sago Mine. A 2006 explosion killed 12 miners. Ross charged ICG $2 million in management fees.
The Carlyle Group's LifeCare Hospitals lost 24 patients in the aftermath of Hurricane Katrina. They are vigorously fighting lawsuits five years later. LifeCare pays Carlyle $500,000 per year in management fees, over $2 million to date.
The Carlyle Group's energy joint venture, Riverstone Holdings, hired Lord John Browne of the Texas City refinery disaster. A 2005 explosion killed 15 workers. James A. Baker, III published a whitewash, similar in quality to Fran Townsend's Katrina Lessons Learned report. Who leaves out the hospital with the highest patient death toll (LifeCare)? Townsend did, only to land a job at Baker Botts, James A.'s law firm.
While progressive talking heads pound Don Blankenship of Massey Coal, they ignore Wilbur Ross and Carlyle's David Rubenstein. How do heavy debt loads, large interest burdens, huge profit requirements and dividend siphoning manifest in the workplace?
Who does due diligence anymore? Not the FDIC. Anybody?
Update: The latest on PEU management fees.
Posted by PEU Report/State of the Division at 11:18 PM