Thursday, September 20, 2007

Portgate Redux: Dubai To Buy 20% Of NASDAQ

It's the ports deal all over again...our old friends in Dubai now want to buy a 20% stake in NASDAQ, and it has raised Congressional red well it should.

This would give Dubai, a country with major links to the funding of Islamic terrorism a key stake in ownership of a major U.S. stock exchange.

As part of the transaction, Dubai also will acquire 28 percent of the London Stock Exchange, one of the oldest and largest in the world.

As usual, the deal is being made through a front company, Borse Dubai, 100-percent owned by the government of the Emirate of Dubai and controlled by Mohammed bin Rashid al-Maktoum, the head of the Dubai ruling family.

This brand new holding company was only created as a corporate shell about a month ago as the holding company for Dubai Financial Market and Dubai International Financial Exchange, two other investment companies owned by Dubai's ruling family.

Unlike the ports deal, there's been scrutiny on this one from the day it was announced, to the point that President Bush was asked about it at a news conference today. According to Dubbyah, "We're going to take a good look at it, as to whether or not it has any national security implications involved in the transaction. I'm comfortable with the process to go forward."

I'm sure you are, Mr. President. Pity this one didn't slip through the cracks, hmm?

On July 26, Bush signed into law the Foreign Investment and National Security Act of 2007, a law passed as a direct result of the secretive attempt to sell control of 22 of our ports to Dubai Ports World, a company again wholly owned by the government of Dubai.

That law was passed to beef up the examination requirements of the Committee on Foreign Investment in the United States, or CFIUS, a bureaucratic panel committee that's part of the Treasury Department, which is supposed to vet deals which involve foreign investments in terms of any national security aspects.

Senator Chuck Schumer (d-NY) is all over this one.

In a letter today, Schumer asked Treasury Secretary Henry M. Paulson to conduct the Borse Dubai CFIUS review under the standards imposed by the new law, even though most of the requirements of the new law don't take effect until later this fall.

"Nasdaq is not just any exchange, but one of the world's largest," Schumer wrote Paulson. "With approximately 3,200 companies, it lists more companies and, on average, trades more shares per day than any other U.S. market."

Not only that, but remember,this exchange deals with technological companies, including those involved in national defense. I'm with Schumer on this one...and more.

Do we really want a country like Dubai to have an ownership stake in such a crucial area? And what about the economic influence and the concurrent clout when it comes to US foreign policy?

It's simply outrageous that something like this would even be considered.

And here's another piece of the puzzle I somehow don't think is unrelated:Abu Dhabi, another one of the the United Arab Emirates ( the group of Sheikdoms Dubai belongs to)just went and bought a 7.5% equity stake in the Carlyle Group.

For those of you who aren't familiar with the Carlyle_Group, it is a major, privately held equities firm with over $75.5 billion in assets. The firm invests in a wide variety of investments and has a major stake in the US defense industry, and itself is now valued at around $20 billion, as opposed to about $3.5 billion prior to the invasion of Iraq and Afghanistan. I'll let you draw your own conclusions from those figures. The Carlyle Group also has some very intimate connections with the Bush family, as well as a number of other well known people.

Let's start with Bush Sr. The ex-president was a senior advisor to the firm from April 1998 to October 2003,specializing in bringing in investment capital from the Arabs,including a couple of million from the bin-Laden family, which was liquidated after 9/11. Bush Sr. is still a highly paid consultant to the firm and is said to have a large amount of the Bush family money invested here.

James Baker III,Bush family consigliere worked in the capacity of Carlyle Senior Counselor from 1993 to 2005,in between representing his Saudi masters in court against his fellow Americans.

Richard Darman, former Director of the U.S. Office of Management and Budget under George H. W. Bush, Senior Advisor and Managing Director of The Carlyle Group from 1993 to the present.

Mack McLarty, White House Chief of Staff under President Bill Clinton, President of Kissinger McLarty Associates, Carlyle Senior Advisor from 2003 to the present.

And of course, George W. Bush,the current U.S. President. He was appointed in 1990 to the Board of Directors of one of Carlyle's first acquisitions, an airline food business called Caterair, until he left in 1992 to run for Governor of Texas.

There are lots of other interesting personalities involved and fascinating details, if anyone's interested enough to do a little research, but the above should be enough to raise a few hackles.

Are the two deals connected? I dunno...but here we have two major stock deals, both involving government owned companies from the UAE, both involving deals that have a lot to do with the US defense industry, and one of the deals involving a major cash influx to a privately held equity company that the Bush family is heavily invested in.

What are the odds,hmmmm?

Just like the Dubai ports deal, there seems to be more to it than meets the eye.

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