Thursday, February 26, 2009

Economic Hit Man - Ch.16

Pimping, and Financing

Osama bin Laden

From the start, Prince W. let me know that whenever he came to visit me in Boston he expected to be entertained by a woman of his liking, and that he expected her to perform more functions than those of a simple escort . But he most definitely did not want a professional call girl, someone he or his family members might bump into on the street or at a cocktail party My meetings with Prince W. were held in secret, which made it easier for me to comply with his wishes .

"Sally" was a beautiful blue-eyed blond woman who lived in the Boston area. Her husband, a United Airlines pilot who traveled a great deal both on and off the job, made little attempt to hide his infidelities. Sally had a cavalier attitude about her husband's activities . She appreciated his salary, the plush Boston condo, and the benefits a pilot's spouse enjoyed in those days . A decade earlier, she had been a hippie who had become accustomed to promiscuous sex, and she found the idea of a secret source of income attractive . She agreed to give Prince W. a try, on one condition : she insisted that the future of their relationship depended entirely upon his behavior and attitude toward her.

Fortunately for me, each met the other's criteria.

The Prince W.-Sally Affair, a subchapter of the Saudi Arabia Money-laundering Affair, created its own set of problems for me . MAIN strictly prohibited its partners from doing anything illicit . From a legal standpoint, I was procuring sex — pimping — an illegal activity in Massachusetts, and so the main problem was figuring out how to pay for Sally's services. Luckily, the accounting department allowed me great liberties with my expense account . I was a good tipper, and I managed to persuade waiters in some of the most posh restaurants in Boston to provide me with blank receipts ; it was an era when people, not computers, filled out receipts .

Prince W. grew bolder as time went by. Eventually, he wanted me to arrange for Sally to come and live in his private cottage in Saudi Arabia. This was not an unheard-of request in those days ; there was an active trade in young women between certain European countries and the Middle East. These women were given contracts for some specified period of time, and when the contract expired they went home to very substantial bank accounts . Robert Baer, a case officer in the CIA's directorate of operations for twenty years, and a specialist in the Middle East, sums it up : "In the early 1970s, when the petrodollars started flooding in, enterprising Lebanese began smuggling hookers into the kingdom for the princes . . . Since no one in the royal family knows how to balance a checkbook, the Lebanese became fabulously wealthy."l

I was familiar with this situation and even knew people who could arrange such contracts. However, for me, there were two major obstacles : Sally and the payment . I was certain Sally was not about to leave Boston and move to a desert mansion in the Middle East. It was also pretty obvious that no collection of blank restaurant receipts would cover this expense.

Prince W. took care of the latter concern by assuring me that he expected to pay for his new mistress himself; I was only required to make the arrangements. It also gave me great relief when he went on to confide that the Saudi Arabian Sally did not have to be the exact same person as the one who had kept him company in the United States . I made calls to several friends who had Lebanese contacts in London and Amsterdam. Within a couple of weeks, a surrogate Sally signed a contract .

Prince W. was a complex person . Sally satisfied a corporeal desire , and my ability to help the prince in this regard earned me his trust . However, it by no means convinced him that SAMA was a strategy he wanted to recommend for his country. I had to work very hard to win my case . I spent many hours showing him statistics and helping him analyze studies we had undertaken for other countries, including the econometric models I had developed for Kuwait while training with Claudine, during those first few months before heading to Indonesia. Eventually he relented .

I am not familiar with the details of what went on between my fellow EHMs and the other key Saudi players . All I know is that the entire package was finally approved by the royal family. MAIN was rewarded for its part with one of the first highly lucrative contracts , administered by the U.S. Department of the Treasury. We were commissioned to make a complete survey of the country's disorganized and outmoded electrical system and to design a new one that would meet standards equivalent to those in the United States .

As usual, it was my job to send in the first team, to develop economic and electric load forecasts for each region of the country. Three of the men who worked for me — all experienced in international projects — were preparing to leave for Riyadh when word came down from our legal department that under the terms of the contract we were obligated to have a fully equipped office up and running in Riyadh within the next few weeks . This clause had apparently gone unnoticed for over a month. Our agreement with Treasury further stipulated that all equipment had to be manufactured either in the United States or in Saudi Arabia . Since Saudi Arabia did not have factories for producing such items, everything had to be sent from the States. To our chagrin, we discovered that long lines of tankers were queued up, waiting to get into ports on the Arabian Peninsula . It could take many months to get a shipment of supplies into the kingdom .

MAIN was not about to lose such a valuable contract over a couple of rooms of office furniture . At a conference of all the partners involved, we brainstormed for several hours . The solution we settled on was to charter a Boeing 747, fill it with supplies from Boston-area stores, and send it off to Saudi Arabia. I remember thinking that it would be fitting if the plane were owned by United Airlines and commanded by a certain pilot whose wife had played such a critical role in bringing the House of Saud around .

The deal between the United States and Saudi Arabia transformed the kingdom practically overnight. The goats were replaced by two hundred bright yellow American trash compactor trucks, provided under a $200 million contract with Waste Management, Inc .2 In similar fashion, every sector of the Saudi economy was modernized , from agriculture and energy to education and communications . As Thomas Lippman observed in 2003 :

Americans have reshaped a vast, bleak landscape of nomads' tents and farmers' mud huts in their own image , right down to Starbucks on the corner and the wheelchair-accessible ramps in the newest public buildings . Saudi Arabia today is a country of expressways, computers , air-conditioned malls filled with the same glossy shops found in prosperous American suburbs, elegant hotels , fast-food restaurants, satellite television, up-to-date hospitals, high-rise office towers, and amusement parks featuring whirling rides .3

The plans we conceived in 1974 set a standard for future negotiations with oil-rich countries. In a way, SAMA/JECOR was the next plateau after the one Kermit Roosevelt had established in Iran . It introduced an innovative level of sophistication to the arsenal of political-economic weapons used by a new breed of soldiers for global empire .

The Saudi Arabia Money-laundering Affair and the Joint Commission also set new precedents for international jurisprudence . This was very evident in the case of Idi Amin . When the notorious Ugandan dictator went into exile in 1979, he was given asylum in Saudi Arabia. Although he was considered a murderous despot responsible for the deaths of between one hundred thousand and three hundred thousand people, he retired to a life of luxury, complete with cars and domestic servants provided by the House of Saud. The United States quietly objected but refused to press the issue for fear of undermining its arrangement with the Saudis. Amin whiled away his last years fishing and taking strolls on the beach . In 2003, he died in Jiddah, succumbing to kidney failure at the age of eighty .4

More subtle and ultimately much more damaging was the role Saudi Arabia was allowed to play in financing international terrorism. The United States made no secret of its desire to have the House of Saud bankroll Osama bin Laden's Afghan war against the Soviet Union during the 198os, and Riyadh and Washington together contributed an estimated 53.5 billion to the mujahideen .5 However, U.S. and Saudi participation went far beyond this .

In late 2003, US. News € ' World Report conducted an exhaustive study titled, "The Saudi Connection ." The magazine reviewed thousands of pages of court records, U .S. and foreign intelligence reports , and other documents, and interviewed dozens of government officials and experts on terrorism and the Middle East . Its findings include the following :

The evidence was indisputable : Saudi Arabia, America's longtime ally and the world's largest oil producer, had somehow become, as a senior Treasury Department official put it, "the epicenter" of terrorist financing . . .

Starting in the late 1980s — after the dual shocks of the Iranian revolution and the Soviet war in Afghanistan — Saudi Arabia's quasi-official charities became the primary source of funds for the fast-growing jihad movement . In some 20 countries the money was used to run paramilitary training camps, purchase weapons, and recruit new members .. .

Saudi largess encouraged U.S . officials to look the other way, some veteran intelligence officers say. Billions of dollars in contracts, grants, and salaries have gone to a broad range of former U.S. officials who had dealt with the Saudis: ambassadors, CIA station chiefs, even cabinet secretaries . . .

Electronic intercepts of conversations implicated members of the royal family in backing not only Al Qaeda but also other terrorist groups .6

After the 2001 attacks on the World Trade Center and the Pentagon, more evidence emerged about the covert relationships between Washington and Riyadh. In October 2003, Vanity Fair magazine disclosed information that had not previously been made public, in an in-depth report titled, "Saving the Saudis." The story that emerged about the relationship between the Bush family, the House of Saud , and the bin Laden family did not surprise me . I knew that those relationships went back at least to the time of the Saudi Arabian Money-laundering Affair, which began in 1974, and to George H . W. Bush's terms as U.S. Ambassador to the United Nations (from 1971 to 1973) and then as head of the CIA (from 1976 to 1977). What surprised me was the fact that the truth had finally made the press . Vanity Fair concluded:

The Bush family and the House of Saud, the two most powerful dynasties in the world, have had close personal , business, and political ties for more than 20 years .. .

In the private sector, the Saudis supported Harken Energy, a struggling oil company in which George W. Bush was an investor. Most recently, former president George H. W. Bush and his longtime ally, former Secretary of State James A. Baker III, have appeared before Saudis at fundraisers for the Carlyle Group, arguably the biggest private equity firm in the world . Today, former president Bush continues to serve as a senior adviser to the firm, whose investors allegedly include a Saudi accused of ties to terrorist support groups . ..

Just days after 9/11, wealthy Saudi Arabians, including members of the bin Laden family, were whisked out of the U.S. on private jets . No one will admit to clearing the flights, and the passengers weren't questioned . Did the Bush family's long relationship with the Saudis help make it happen? 7

- pages 93-98, Confessions of an Economic Hit Man, by John Perkins

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