This story was written by Keith Dawson for the Media Unspun email newsletter and is Copyright 2002 by Keith Dawson.
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From Big Blue to 'The Chamber'

Louis V. Gerstner, Jr. must have either a killer publicist or the world's best timing. The former IBM CEO and soon-to-be-former chairman has been getting rivers of ink this week, almost all of it favorable, some of it bordering on adoration. He's been on a tour promoting his new book, "Who Says Elephants Can't Dance," about how he dragged IBM back from death's door beginning in 1993. Reporters can't get enough -- imagine, a '90s CEO who isn't steeped in scandal! And yesterday came the news that Gerstner will devote 20% of his time to chairing the Carlyle Group, a Washington-based buyout and equity firm.

The New York Times nutshelled Carlyle as "a private investment firm known for its financial performance and its stable of former government officials." Business Week nailed Carlyle's image as "right out of a John Grisham novel" -- a secretive firm of bigwigs that buys up lucrative defense businesses, wins hush-hush military contracts, and manipulates governments around the world to wring private profit out of public policy. Carlyle has achieved a realized rate of return of 36% return for its wealthy private and institutional investors since its founding in 1987.

Many press accounts mentioned the big names on Carlyle's board -- presidential daddy George H.W. Bush, former British Prime Minister John Major, former SEC Chairman Arthur Levitt. The Times and AP also noted that until September of last year, the firm numbered among its investors several members of the bin Laden family of Saudi Arabia. Carlyle's retiring chairman is a former head of the Defense Department. Why did it pick a big name from private enterprise? Gerstner is "one phone call away from every chief executive officer in the United States," a Carlyle founder explained to the Times. And Gerstner represents a move away from "Carlyle's image of cashing in on the old Washington Rolodex," the Times quoted an investment watchdog.

For an inside look at how Carlyle operates, turn to Business Week. Reporter Mike McNamee noted the firm's roots in defense -- "What credibility would a Washington-based firm have bidding on, say, a retailer?" he paraphrased its founders -- but stressed the quick diversification that has turned it into the world's largest private-equity manager. Carlyle aims to become "the Fidelity Investments of private equity," McNamee wrote, but his sources came down on the skeptical side on Carlyle's chances of pulling away from the small, focused firms that now dominate the buyout field.

So how is Gerstner's book? Most of the reporters covering a stop on his book tour seem not to have cracked it. The Washington Post ran a review by Allan Sloan, who did plow through. Sloan's assessment: Gerstner is no writer, but a determined reader can find gems "scattered on the forest floor" of a book that is "tough sledding even for a business junkie." Carlyle tapped him for his Rolodex, not his writing skills. - Keith Dawson

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