Tuesday, November 6, 2007

Yahoo Needs Carlyle's China Protection

While the House Foreign Affairs Committee ripped Yahoo's CEO and attorney for being complicit in human rights abuses in China, I could only envision the red carpet treatment they would've gotten from the same committee if they were an affiliate of The Carlyle Group. Consider China's high priority in the eyes of the politically connected private equity underwriter (PEU) with the Pennsylvania Avenue address. How has the federal government treated the PEU in the past, other than sending boatloads of government business to their affiliates? Let's see:

1) Between all the outrages of selling American ports and stock exchanges to Dubai based firms, Carlyle sold two maintenance and service companies with operations at over 50 North American airports to Dubai Aerospace. Yet, not one word hit the media. Senator Chuck Schumer ruffled his feathers over the NASDAQ sale but not a peep on Dubai Aerospace's closing on Carlyle affiliates Landmark Aviation and Standard Aero just weeks before.

2) The White House Lessons Learned report omitted any mention of the LifeCare Hospital of New Orleans, the facility with the largest patient death toll. Carlyle purchased LifeCare just weeks before Katrina struck.

3) LifeCare attorneys claim the federal government (which was so kind as to leave them out of the LL report) did it in their wrongful death civil lawsuits. The defense asserts their long term acute care patients became "wards of the government" as soon as FEMA evacuation teams set up in the New Orleans area.

4) While Carlyle failed patients in one of twenty one LTAC hospitals, this has zero bearing in their planned purchase of ManorCare with 550 facilities, most of them nursing homes. One might expect the government to closely examine the purchase given Carlyle's poor track record of caring for patients in a time of crisis.

5) Calryle's David Rubenstein recently said there is nothing more important to his company than China. They clearly plan on making yacht loads of money there, regardless of human rights conditions.

If Yahoo were part of the infamous private equity firm, Rep. Tom Lantos might not swing so hard. While defending human rights across the globe is important, the dress down looks shallow as Congress works to pass telecom immunity for their role in government spying on its own citizens. Why should these U.S. companies get off Scott Free for illegal information requests when Yahoo is taken to task? We should be raising the bar internationally, not lowering it.

Congress has no credibility when it trashes other countries for its own offenses, illegal spying, torture, and refusing to produce evidence regarding questionable behavior. Both corporations and our elected officials should raise the bar on ethics, even at the short term expense of profits. Yahoo-China, Chevron-Myanmar, U.S. Telecoms-America, The Carlyle Group-The White House & Congress.