- Part 1 (Part 2: Bush Advisers Cashed In On Saudi Gravy
Train)
A steady stream of billion-dollar oil and arms deals between American corporate
leaders and the elite of Saudi Arabia may be hindering efforts by the West
to defeat international Islamic terrorism.
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- U.S. business and political leaders are so wedded to
preserving the gilded American-Saudi marriage that officials in Washington
D.C. continue to give the oil-rich Gulf monarchy a wide berth, despite
mounting evidence of support in Saudi Arabia for Osama bin Laden's terrorist
network, some experts say.
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- Since the Sept. 11 attacks, Saudi Arabia has been a reluctant
ally, refusing to let the U.S. use Saudi bases as staging areas for military
operations in Afghanistan.
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- The Saudis have also balked at freezing the assets of
organizations linked to bin Laden and international terrorism, some of
which are Saudi-run. Just last week, Bush administration officials embarked
on their second trip this month to the kingdom to try to convince the Saudi
government to cooperate.
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- ``If there weren't all these other arrangements - arms
deals and oil deals and consultancies - I don't think the U.S. would stand
for this lack of cooperation,'' said William Hartung, a foreign policy
and arms industry expert at the World Policy Institute. ``Because of those
relationships, they have to tread lightly.''
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- The Saudi government's refusal to publicly join the war
against terrorism is rooted in its own fragile internal politics, experts
say. Inside the gulf monarchy there is a deepening schism between the authoritarian
ruling elite and a politically powerless populace burdened by a rapidly
declining standard of living. The Saudi royal family, headed by the ailing
King Fahd bin Abdul Aziz Al-Saud, is seen by many in the country as bloated
and corrupt.
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- On top of that, the Saudi people, most of whom adhere
to a particularly harsh brand of conservative Islam called Wahabbism, have
become increasingly anti-American, alienated by their leaders' extensive
dealings with the non-Islamic West. This anger was revealed starkly in
the days following Sept. 11, when it was learned that 15 of the 19 suicide
hijackers were Saudis.
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- Nevertheless, the Saudi elite and corporate America continue
to do big business and reap the rich rewards of their close and longstanding
associations.
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- Jean Charles Brisard, a French security expert and co-author
of the recently released book, ``Bin Laden: The Forbidden Truth,'' said
the American addiction to Saudi oil and arms money threatens to undermine
national security in the West.
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- ``We have to have a critical look at 50 years of foreign
policy,'' Brisard said. ``We've had to close our eyes to the support (from
Saudi Arabia) of the radical fundamentalists.''
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- Brisard and other analysts say the extensive U.S.-Saudi
collaboration is increasingly risky because to Bin Laden, a Saudi exile,
and other Islamic terrorists, it is an unforgivable betrayal of Islam.
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- Bin Laden has already declared his aim of overthrowing
the Saudi royal family and expelling all Americans and other Westerners
from the kingdom's soil.
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- A Herald examination of corporate records, intelligence
reports and published accounts - as well as interviews with terrorism and
foreign policy experts - reveals an extraordinary array of U.S.-Saudi business
ventures which, taken together, are worth tens of billions of dollars.
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- They range from deals to pipe oil and natural gas out
of former Soviet republics and develop Saudi Arabia's own vast natural
gas reserves, to lucrative but rarely talked about arrangements pairing
private U.S. military contractors with virtually every branch of the Saudi
armed forces.
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- In the oil industry, U.S.-Saudi ventures include:
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- Two consortiums involving U.S. oil giant Unocal and a
pair of private Saudi oil firms - Delta Oil and Nimir Petroleum - which
won rights in the mid-1990s to develop Azerbaijan's vast oil reserves.
Both are multi-billion-dollar deals.
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- Another American-Saudi venture between U.S.-based Amerada
Hess and Delta Oil - called Delta-Hess - has won the rights to drill in
two other oil fields in Azerbaijan. Delta-Hess is also part of a group
in line to build a $2.4 billion oil pipeline from Azerbaijan to Turkey.
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- A 1998 joint venture between Texaco and Nimir Petroleum
has already begun drilling in a 1.5 billion barrel oil field in Kazakhstan.
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- For the last 13 years, half of Texaco's refining and
marketing operations in the U.S. have been owned by Saudi Aramco, the government-owned
company that controls all of Saudi Arabia's vasts oil reserves.
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- This year, some of the biggest U.S. oil firms were tapped
by the Saudi government to undertake a $25 billion project to extract and
sell 220 trillion cubic feet of the kingdom's natural gas.
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- One of the most revealing examples of how U.S.-Saudi
business interests seep into foreign diplomacy is a major pipeline deal
in the 1990s that almost resulted in the U.S. recognizing the Taliban regime
as the legitimate government in Afghanistan.
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- In 1995, U.S. oil giant Unocal formed a partnership with
the Saudi-owned Delta Oil and mounted a high-stakes international lobbying
campaign to build oil and natural gas pipelines from oil fields in Turkmenistan,
through Afghanistan and Pakistan, and out to the Arabian Sea.
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- The Unocal-Delta consortium, which included firms from
Indonesia, Japan, Korea and Pakistan, reportedly reached a tentative agreement
in January 1998 with the Taliban government under which the oil companies
would pay the radical Islamic regime for the right to run oil and gas through
their country.
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- The consortium, called CentGas, was prepared to pay the
Taliban more than $100 million a year.
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- Unocal spokesman Barry Lane downplayed the company's
dealings with the Taliban, insisting that the oil firm also discussed the
pipeline deal with opposition factions in Afghanistan.
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- ``No agreements were reached with anybody, outside of
Turkmenistan and Pakistan,'' Lane said. ``This was not an Afghanistan project.
Afghanistan was not the focus.''
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- In 1996, the Islamic extremist Taliban faction effectively
gained control of Afghanistan. From 1996 to 1998, as Unocal and Delta executives
were talking to the Taliban, the fundamentalist regime was allowing bin
Laden and his al-Qaeda organizations set down roots in their country.
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- But before the pipeline deal could go through, Unocal
needed the U.S. to recognize the Taliban as the legitimate government in
Afghanistan. To that end, company representatives arranged high-level meetings
between the Taliban and State Department officials in Washington, D.C.
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- On at least one occasion, in December 1997, Unocal officials
played host to high-ranking Taliban leaders in Texas. The American oil
executives reportedly wined and dined them and took them on a shopping
spree.
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- One of the Unocal representatives dining with the Taliban
was Zalmay M. Khalilzad. Khalilzad, a former assistant undersecretary of
defense in the first Bush administration, was working for Cambridge Energy
Research Associates on Unocal's behalf and advocating that the Clinton
administration ``engage'' with the Taliban.
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- Now Khalilzad is on President Bush's National Security
Council and is a key adviser in the administration's quest to destroy the
Taliban.
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- Despite the four-year effort by the Unocal-Delta consortium,
which cost the U.S. firm $15 million, the pipeline project collapsed in
late 1998 after terrorists allegedly under the direction of bin Laden bombed
two U.S. embassies in Africa. Then-president Clinton responded by firing
cruise missiles at a suspected bin Laden bunker in Afghanistan.
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- ``There was this idea that as bad as (the Taliban) were
on human rights, they were going to create a level of stability that would
allow things to take place, such as this pipeline deal,'' said Hartung.
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- The financial bond welding the U.S. and Saudi governments
begins with oil but it doesn't end there.
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- Between 1990 and 1999, the Saudi government paid U.S.
arms makers $30 billion for a wide array of weaponry - including F-15 fighter
aircraft, M-1A2 Abrams tanks, and Apache attack helicopters - as well as
for the training necessary to operate and maintain the U.S.-made arsenal,
according to Department of Defense statistics. Those arms and technology
deals are, by law, publicly disclosed.
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- What is less known, however, is that for the last 25
years Saudi Arabia's rulers have also employed a handful of politically
connected American companies to buttress the monarchy's military and internal
security forces.
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- These secretive U.S. firms, sometimes referred to as
``spook outfits,'' earned billions of dollars over the last decade alone,
equipping, training and managing virtually all branches of the Saudi Arabian
armed forces.
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- As a result of these contracts, tens of thousands of
American workers and their families have lived and still live on Saudi
soil. This year, private American military companies placed an estimated
35,000 to 40,000 workers inside the kingdom, according to the Congressional
Research Service, a non-partisan adjunct to the Library of Congress.
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- For many Saudi Islamic fundamentalists who oppose the
royal family's longstanding alliance with the west, that heavy U.S. presence
is deeply offensive.
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- Because of this, U.S. officials are reluctant to talk
about private American military companies operating inside Saudi Arabia.
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- David DesRoches, a spokesman for the Defense Department,
said access to information about U.S. activities inside Saudi Arabia is
limited because public disclosures could compromise Saudi security. He
also said Saudi officials raise objections when the U.S. releases this
sort of data. ``The Saudis are touchy,'' DesRoches said.
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- The work being done by private U.S. military contractors
inside Saudi Arabia is sanctioned by the Pentagon and much of it is carried
out by retired U.S. military personnel.
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- Those companies are working or have recently worked with
the Saudi Arabian air force, marines, navy, and national guard. One U.S.
firm, O'Gara Protective Services, has been hired directly to guard members
of the royal family.
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- The following U.S. firms are among those bolstering Saudi
Arabia's armed services:
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- Vinnell Corp., a subsidiary of TRW, is currently in its
26th year of helping ``modernize'' the Saudi Arabian National Guard. The
most recent five-year contract, awarded in 1998, was estimated at $831
million and involved 280 U.S. government personnel and 1,400 Vinnell representatives.
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- Vinnell has a long history of working side-by-side with
U.S. intelligence agents and armed forces personnel. In the 1960s and 1970s,
Vinnell earned hundreds of millions of dollars in Vietnam, first building
U.S. bases and later blowing them up following the U.S. withdrawal.
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- The firm also engaged in some secret programs in Vietnam.
In a March 1975 Village Voice interview, a Pentagon official called Vinnell
``our own little mercenary army.''
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- Vinnell's parent company, BDM, also has had numerous
contracts in Saudi Arabia.
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- From 1995 to 1997, a BDM subsidiary, BDM Federal, had
a $50 million contract ``developing, implementing and maintaining logistics,
supply, computer, reconnaissance, intelligence and engineering plans and
programs'' for the Saudi air force. The pact put 400 BDM employees in Saudi
Arabia.
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- In 1996 and 2000, BDM Federal won two contracts: $44.4
million deal to build housing at the Khamis Mushayt military base in Saudi
Arabia and a $65 million contract to provide 845 personnel for maintenance
of Saudi Arabia's fleet of U.S.-made F-15 fighter jets.
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- Until 1998 when BDM was purchased by defense giant TRW,
its largest stockholder was the Carlyle Group, an influential Washington,
D.C., investment firm loaded with former high-ranking national security
officials.
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- Science Applications International Corp., based in San
Diego, had two recent contracts totaling $166 million to upgrade the Royal
Saudi Naval Forces' communications and command systems.
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- Booz, Allen & Hamilton, based in McLean, Virginia,
had a five-year contract, which apparently ended in January 2000, working
for the Saudi Naval Forces. At the time it was awarded, the Pentagon estimated
the contract at $21.8 million. Officials would not disclose any details
about the contract's final value or current status.
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- Tomorrow: High-ranking U.S. policy makers who have made
a bundle in deals with the Saudis.
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- http://www.bostonherald.com/news/americas_new_war/saud12102001.htm
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