Early Briefing: Anatomy Of A Collapse


Carlyle Group founders, from left, Daniel D'Aniello, David Rubenstein and William Conway, saw their $500 million deal to save Carlyle Capital collapse. (By Julia Ewan -- The Washington Post)

*Staff writer Tom Heath offers an inside glimpse of Carlyle Group's attempt to save Carlyle Capital before the European fund collapsed. The failure was a shock to the District-based private-equity giant, but co-founder David Rubenstein tried to put the incident in perspective.

"I don't think that today the reputation of the Carlyle Group will be enhanced," Rubenstein said. "However, we have a 20-year reputation and track record of yielding probably the highest rate of return of any private-equity firm that has invested as much money as we have."

Going forward, he said, "the way we hope to handle this is to be honest, forthright and recognize mistakes were made and reassure people around the world about Carlyle. It's important that people say that Carlyle are people who stand behind what they do. That they are honest, reputable people. And they are the kind of people who we think are appropriate custodians of our money. Unfortunately, in this case it did not work."

*Columnist Steven Pearlstein explains why he and others seem to have soured on homegrown investment bank Friedman, Billings, Ramsey: "Sad as it is to say, I'm coming to the conclusion that FBR has come to represent everything that's bad about Wall Street, quick to jump on every fad, substitute hype for solid research and earn big fees for peddling junk," he writes.

*Maryland Gov. Martin O'Malley joined the call for a repeal of the state's new tax on computer services, saying he would like to see legislators agree on another source of revenue before adjourning next month. See story

*AOL, with operations in Dulles, said it is going to buy Bebo, the third-largest social-networking site, for $850 million. Buying the site, which has 40 million members, and is popular in Britain, is an attempt to grab more young users and expand its online-ad business. See story

*Moody's Investors Service put its ratings for Radio One under review for possible downgrade because of weak fourth-quarter results. Revenue was down 5 percent. The Lanham company owns or operates 54 radio stations in 17 markets, primarily targeting black listeners.

Many radio advertisers have shifted to other media, particularly the Internet. Audiences have diminished as Internet radio becomes more popular, satellite radio expands and more people have digital music players in their cars.

*DynCorp International of Falls Church said the Army is allowing work to resume on a $4.6 billion contract for translation services, after L-3 Communications' protest of the contract award was withdrawn. DynCorp is doing the work with McNeil Technologies. See press release.

*Craig Dubow, chief executive of newspaper publisher Gannett, received salary and other compensation valued at $7.9 million in 2007, 36 percent more than in 2006. Of that amount, $3.35 million was in the form of stock options, according to a proxy statement filed with the Securities and Exchange Commission.

In the past 12 months, shares of McLean-based Gannett have lost about half their value, to $29.97 yesterday.

*Capital One Financial of McLean launched online savings accounts. The accounts will pay an interest rate of 3 percent for balances of less than $10,000 and 3.85 percent for higher balances. They join money-market accounts and certificates of deposit as part of the bank's suite of online accounts. See press release.

By Terri Rupar  |  March 14, 2008; 5:00 AM ET  | Category:  Morning Brief
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