Monday, July 14, 2008

Once Again, FBI Not Investigating Carlyle Group

The latest non-investigation of the Carlyle Group's use of political influence involves possible bribes made on behalf of Synagro Technologies, a Carlyle portfolio company. Detroit leaders are under the microscope for their role in awarding a $1.4 billion sewage sludge processing contract to Synagro. The politically connected private equity underwriter (PEU) purchased Synagro Technologies in April 2007.

Other free passes came courtesy of the Executive Branch. Frances Townsend completely omitted Carlyle's LifeCare Hospitals from its Hurricane Katrina Lessons Learned report. This seemed odd as LifeCare New Orleans had the largest hospital patient death toll post landfall. Also, this topic never came up as Carlyle pursued ManorCare, a huge nursing home provider. If Carlyle could fail patients in one of twenty one long term acute care hospitals in a time of crisis, what might it do with over 500 mostly nursing homes?

The good news with all these non-investigations is Carlyle gets to keep their good name, something very important to the PEU. But, I smell something and it's not sewage sludge.