Earlier this year, at an early-morning meeting on the 40th floor of the Seattle Municipal Tower, the governing board of the city's Employee Retirement System voted to invest $15 million with the Carlyle Group, a massive defense and investment company made famous by Michael Moore's Fahrenheit 9/11, which accused the company of being too cozy with both former President George H. W. Bush and the Saudi Arabian government. The investment, part of the city's $1.6 billion employees' retirement fund, amounted to a relative pittance at $15 million. But the news is sure to be controversial among liberal, antiwar voters (and what city has more of those than Seattle?).
City Council Member Richard McIver, the only elected member of the city's retirement board, says he was unaware of Carlyle's controversial reputation. "To be honest, I do not know" of any issues with Carlyle, McIver says. "There was no discussion" at the March board meeting, and "nobody brought the issue up." McIver describes the move to invest in Carlyle as a strictly financial decision, adding, "I will certainly be happy to ask" the city's retirement director, Norm Ruggles, about Carlyle. City personnel director Norma McKinney, who sits on the board, directed questions to city finance director and board member Dwight Dively and Ruggles; neither was available for comment Monday.
Controversy has swirled around Carlyle since at least 2001, when news reports revealed that representatives of the firm, including H. W. Bush, had visited Saudi Arabia on Carlyle's behalf. Prior to 9/11, Osama bin Laden's estranged family had $2 million invested in the firm. The company made tens of millions training the Saudi National Guard, and has made many millions more from the invasions of Afghanistan and Iraq.
There is a precedent for divestment from controversial sources of city dollars. Back in the late 1980s, when black South African citizens were denied citizenship rights under apartheid, Seattle started dumping stocks it owned in companies that did business in the country. â
