Private equity giant Investcorp is the subject of scrutiny in the state of New Jersey after state officials say they became concerned that the Bahrain-based firm may have ties to terrorist organisations.
An article in today’s Record (New Jersey) newspaper quotes two state officials as saying their primary source of information on Investcorp has been a 2002 book called Forbidden Truth: U.S.-Taliban Secret Oil Diplomacy, Saudi Arabia and the Failed Search for bin Laden.
The book, co-written by French counterterror “advisor” Jean-Charles Brisard, alleges a chain of relationships between the Middle-Eastern founders of Investcorp and the executives of failed bank BCCI. It also purports to draw a link between the Bush family, Saudi oil business, the Taliban and Osama bin Laden.
The Record reported that Paul Fader, chief counsel for acting New Jersey governor Richard Codey, said he found additional information on Investcorp through “surfing the Internet.”
Noting that his office was in contact with the New Jersey Office of Counter-Terrorism and the Attorney General’s Office, Fader said: “We’ve asked them to take a very thorough and careful look” at Investcorp.
Investcorp, through its US garbage collection platform company EnviroSolutions, is currently bidding for New Jersey-based Solid Waste Transfer. In an effort to root out organised crime from the waste management industry, the state Department of Environmental Protection years ago added a requirement that any proposed acquirer of such a business submit to extensive financial disclosure.
According to the report, Investcorp asked to be exempt from such disclosure. A state legislature representative, republican Henry McNamara, reportedly contacted the Department of Environmental Protection and state police upon learning of Investcorp’s request.
A spokesperson for Investcorp quoted in the article claims the Forbidden Truth tip was supplied by a competing bidder and that the book and its allegations are “trash”.
The spokesperson, managing director Sean Madden, who works in Investcorp’s New York office, said: “Is it the first time we’ve had stones thrown at us because we happen to do business in the Middle East? No. . . We don’t have anything to hide”.
Madden said his firm had only sought a “complete understanding” of state disclosure law in making its request to the Department of Environmental Protection.
A person close to the matter said Investcorp executives were unclear about how much detail needed to be provided about Investcorp beyond the officers affiliated with EnviroSolutions. Investcorp, a publicly traded entity, already provides extensive financial disclosure.
Fader responded: “The fact of the matter is that an issue was raised with respect to alleged ties that this parent company may have and the goal of this office is to investigate it thoroughly and to make sure that the citizens of the state are thoroughly protected'.
Officials at the governor’s office, the attorney general’s office and Investcorp were not available for comment on the report. A person who answered the phone at the Office of Counter-Terrorism said he hadn't heard of an investigation into Investcorp.
Investcorp, founded in 1982, manages a buyout, venture capital, real estate and fund of hedge funds programme valued at approximately $8.6 billion. The firm is publicly listed on the Bahrain Stock Exchange but has offices in London and New York.<P align=justi