- Many of the same American corporate executives who have
reaped millions of dollars from arms and oil deals with the Saudi monarchy
have served or currently serve at the highest levels of U.S. government,
public records show.
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- Those lucrative financial relationships call into question
the ability of America's political elite to make tough foreign policy decisions
about the kingdom that produced Osama bin Laden and is perhaps the biggest
incubator for anti-Western Islamic terrorists.
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- Nowhere is the revolving U.S.-Saudi money wheel more
evident than within President Bush's own coterie of foreign policy advisers,
starting with the president's father, George H.W. Bush.
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- At the same time that the elder Bush counsels his son
on the ongoing war on terrorism, the former president remains a senior
adviser to the Washington D.C.-based Carlyle Group. That influential investment
bank has deep connections to the Saudi royal family as well as financial
interests in U.S. defense firms hired by the kingdom to equip and train
the Saudi military.
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- Last year, former President Bush visited Saudi Arabia's
King Fahd bin Abdul Aziz Al-Saud, but a Carlyle spokesman said the two
did not discuss Carlyle business as previously reported. The elder Bush
is reportedly paid between $80,000 and $100,000 for each Carlyle speech
he makes. The company declined comment on the former president's pay.
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- The Carlyle Group has also served as a paid adviser to
the Saudi monarchy on the so-called ``Economic Offset Program,'' an arrangement
that effectively requires U.S. arms manufacturers selling weapons to Saudi
Arabia to give back a portion of their revenues in the form of contracts
to Saudi businesses, most of whom are connected to the royal family. A
company spokesman said yesterday that arrangement was ended ``a few months
ago,'' but said he did not know whether it was terminated before or after
the Sept. 11 attacks.
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- A spokesman for former President Bush, reached yesterday,
had no immediate comment on his work for the Carlyle Group.
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- These intricate personal and financial links have led
to virtual silence in the administration on Saudi Arabia's failings in
dealing with terrorists like bin Laden, said Charles Lewis, executive director
of the Center for Public Integrity, a Washington, D.C.-based government
watchdog group.
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- ``It's good old fashioned `I'll scratch your back, you
scratch mine.' You have former U.S. officials, former presidents, aides
to the current president, a long line of people who are tight with the
Saudis, people who are the pillars of American society and officialdom,''
said Lewis.
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- ``So for that and other reasons no one wants to alienate
the Saudis, and we are willing to basically ignore inconvenient truths
that might otherwise cause our blood to boil. We basically look away,''
he said. ``Folks don't like to stop the gravy train.''
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- Some foreign policy observers said as long as American
power brokers in lucrative business deals with the Saudis do not simultaneously
craft U.S. foreign policy, there is no conflict of interest.
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- ``To have Bush Sr. on the board of Carlyle is not necessarily
a significant problem because Carlyle has interests all over the world,''
said Vincent Cannistraro, a former counter-intelligence chief for the Central
Intelligence Agency.
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- Companies regularly entice powerful political figures
to work for them, he said.
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- ``It's kind of business as usual. Where it really affects
things is when someone with a financial interest in a company also has
a policy position in the administration,'' Cannistraro said.
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- Insiders trading
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- A significant portion of the millions of dollars U.S.
companies and their politically influential executives have earned in deals
with the Saudis has been through military contracts.
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- The Carlyle Group had a major stake in the large defense
contractor B.D.M., which has multimillion-dollar contracts through its
subsidiaries to train and manage the Saudi National Guard and the Saudi
air force, U.S. Department of Defense records show. In 1998, Carlyle sold
its controlling interest in B.D.M. to defense giant TRW International.
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- Meanwhile, the boards of directors of the Carlyle Group,
B.D.M. and TRW are all stocked with high-level Republican policy makers.
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- Frank C. Carlucci, a former secretary of defense under
President Reagan, was chairman of B.D.M. for most of the 1990s. Carlucci,
who also served as Reagan's national security adviser and a deputy director
of the CIA, now heads the Carlyle Group.
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- Along with former President Bush, other officials from
past Republican administrations now at the Carlyle Group include: former
Secretary of State James A. Baker III; ex-budget chief Richard Darman;
and former Securities and Exchange Commission chairman Arthur Levitt.
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- President Bush is himself linked to the Carlyle group:
He was a director of one of its subsidiaries, an airline food services
company called Caterair, until 1994. Six years later, when Bush was governor
of Texas, the board of directors of the Texas teachers' pension fund -
some of whom were his appointees - voted to invest $100 million with the
Carlyle Group.
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- The president of B.D.M. is Philip A. Odeen, a former
high-level Pentagon official in the Nixon administration. During the Clinton
administration, Odeen chaired the Pentagon task force that planned the
restructuring of the U.S. military for the 21st century. Currently, he
is the vice-chair of the Defense Science Board, which advises the Pentagon
on emerging threats.
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- TRW, the new owner of B.D.M., has its own noteworthy
board members, including former CIA director Robert M. Gates and Michael
H. Armacost, who served as undersecretary of state under President Reagan
and as ambassador to Japan for former President Bush.
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- Big Saudi money also makes its way back to Texas and
the Bush family. The family of Saudi Arabia's longtime U.S. ambassador,
Prince Bandar bin Sultan bin Abdul Aziz, gave $1 million to the Bush Presidential
Library in College Station, Texas.
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- The revolving door
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- Another example of the complex web connecting U.S. and
Saudi powerbrokers is Dick Cheney, who moved from the Pentagon to the international
oil business and back as vice president last year.
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- After serving as the elder Bush's secretary of defense,
Cheney was hired to run oil-services giant Halliburton Co., where he worked
until he resigned last year to campaign with the younger Bush. In 2000,
his last year with Halliburton, Cheney received $34 million when he cashed
out from the company.
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- Not surprisingly, Halliburton's links to Cheney and other
Washington power brokers appear to have helped the company's business prospects
in the Middle East.
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- Just last month, Halliburton was awarded a $140 million
contract to develop an oil field in Saudi Arabia by the kingdom's state-owned
petroleum firm, Saudi Aramco, and a Halliburton subsidiary, Kellogg Brown
& Root, along with two Japanese firms, was hired by the Saudis to build
a $40 million ethylene plant.
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- Cheney isn't the only member of President Bush's inner
circle whose work for firms connected to the Saudis has paid big dividends.
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- The current national security adviser, Condoleezza Rice,
is a former longtime member of the board of directors of another giant
oil conglomerate with business in the Saudi desert, Chevron, which merged
with Texaco this year. Rice even has a Chevron oil tanker named after her.
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- Substantial profits received by U.S. leaders in private
sector deals with the Saudis have helped to squelch criticism of the royal
family's refusal to address the role its country has played in fueling
Islamic terrorism, Lewis said.
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- ``There's a disconnect there,'' Lewis said. ``I'm fascinated
that we don't lay this at Saudi Arabia's doorstep. But the chances to cash
in and the amount you can cash in for are starting to become absolutely
astronomical. Who wants to look like the Boy Scout complaining about it
and potentially jeopardize their own post-employment prospects?''
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- Former advisers to the president's father also hold key
positions with U.S. firms which have teamed up with the Saudis on major
oil deals.
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- Former Bush Secretary of the Treasury Nicholas Brady
and a former Bush assistant, Edith E. Holiday, are both on the board of
directors of Amerada Hess, an American petroleum firm currently teaming
up with several powerful Saudi families to develop oil fields in Azerbaijan.
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- Another company that has done business with wealthy Saudis
is international energy firm Frontera Resources Corp. based in Houston.
Until recently, Frontera was a 30 percent investor in a $900 million project
to develop oilfields in Azerbajian. Also investing in the project were
Azerbaijan's state-run oil company and Delta-Hess, a joint-venture created
by the Saudis' Delta Oil and Amerada Hess.
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- Randy Theilig, a Frontera spokesman, said the company
relinquished its interest in the project in July because it was no longer
``economically viable,'' and has no current business dealings with the
Saudis or in Azerbajian.
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- Members of Frontera's board of advisers, which includes
former CIA director John Deutch and former Secretary of the Treasury and
U.S. Sen. Lloyd Bentsen, have been active financial supporters of the Democratic
Party.
-
- Shining a bright light on the web of financial connections
between the power elite in the U.S. and Saudi Arabia is critical, Middle
Eastern foreign policy experts said.
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- ``I think the fact that they have these connections makes
it important for this information to be made public,'' said Henry Siegman,
a senior fellow on the Middle East at the Council on Foreign Relations.
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- Larry Noble, executive director of the Center for Responsive
Politics in Washington, D.C., a non-partisan group that examines money
and politics, said the Bush-Carlyle connection is a concern.
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