The Mother of All Scandals
by Eric Margolis
by Eric Margolis
Anyone who wants to understand what really goes on in the Mideast should have a look at the scandal that erupted earlier this month over the outsized character of Prince Bandar of Saudi Arabia.
Bandar has long been a renowned mover, shaker, and charmer. As Saudi ambassador to the US, the influential Bandar schmoozed official Washington for two decades. He became an intimate of the Bush family. He invested a least $60 million in Saudi funds in the Carlyle Corp., in which the Bush family has important interests. Equally significant, Prince Bandar was a particular favorite at the CIA, where he was long considered one of its prime Mideast “assets.”
Bandar flew in his own personal Airbus A-340 painted in the colors of his favorite US football team, and threw lavish parties in his $135 million Aspen house and in Washington. He was Mr. SaudiAmerica. Congress, the media, and the rest of official Washington hailed Bandar as the kind of “good Arab” with whom the US was happy to do business.
After leaving Washington, Bandar returned home to become the highly influential head of national security and chief foreign policy advisor to Saudi Arabia's King Abdullah. Bandar's father, Crown Prince Sultan, is the nation's powerful defense minister and next in line to the throne. Many Saudi observers believed Bandar was being positioned to sit one day on the throne of Saudi Arabia.
On top of all this, Bandar is also a marketing genius.
The UK Guardian newspaper and BBC recently revealed that Bandar personally received over US $2 billion in “marketing fees” from the British defense firm BAE as part of the huge, 1985 al-Yamamah arms deal. Al-Yamamah means dove in Arabic. Charges of massive corruption over the Al-Yamamah deal have swirled for years. But even for the rich Saudis, $2 billion is a lot of money. That's twice what Washington's most important Arab ally, Egypt, was given.
For the Saudi royals, Britain's outgoing PM Tony Blair, and Washington, the “dove” and Bandar's $2 billion worth of payola have become one big albatross.
During the 1980's, Saudi Arabia sought to buy modern US warplanes. But the US pro-Israel lobby blocked the sale, costing the loss of billions in sales by US industry and 100,000 American jobs. The Reagan Administration advised the Saudis to go buy their warplanes from Britain.
Prime Minister Margaret Thatcher was only too happy have the British defense firm, known today as BAE, sell the Saudis 120 Tornado strike aircraft, Hawk trainers, military equipment, and lucrative training and maintenance programs worth some $90—100 billion and the 100,000 jobs America lost. Over their operational lives of 20 or so years, warplanes consume six times their original cost in spare parts. These supply contract also went to BAE and other British industrial firms.
The Saudis could barely operate the modern military equipment they bought from the US, Britain, and France. Their military forces were a big zero. Most of it stayed in storage, or was operated by foreign mercenaries. The Saudi arms deals were really about buying military protection from the western powers.
All arms sales to the west's Mideast clients routinely include 10—15% “commissions” to heads of state, generals, and their cronies. These funds are traditionally channeled through middlemen, the flamboyant Adnan Kashoggi being the most notorious.
Kickbacks, rechristened “marketing fees,” were of course expected in the Al-Yamamah deal. But Bandar's $2 billion set a record for size and venality. Thatcher ordered Bandar's payments carefully hidden from public gaze. They remained so until recent years when British and American government investigators began questioning secret, multi-million dollar payments to Prince Bandar routed from the UK to the shady Riggs Bank in Washington. Before it was shut down after a series of scandals, Riggs had become one of the favorite handlers of “black” money for pro-US autocratic regimes.
When Britain's Serious Fraud Office began probing BAE's secret payoffs to Bandar, Tony Blair sanctimoniously ordered the investigation shut down for “national security” reasons. The Saudis threatened to cancel their arms deals with Britain if payoff charges were made public by HM's government. Blair was trying to sell the Saudis BAE's new, high-tech Eurofighter. He blocked similar investigations by OECD, the international anti-bribery watchdog agency which was also closing in on the Saudi money trail.
Bandar denies any wrongdoing, claiming the “marketing” funds all went into a legitimate Defense Ministry account and were properly accounted for and audited.
Few believe him. The only “marketing” effort in the arms deal was payola to high Saudi officials. If the funds were legit, why all the secrecy and money laundering? Were the payments simply western “baksheesh” for Bandar and his clan? Were they to help him against his main power rival, Prince Turki Faisal, who is not seen as amenable to US and British interests as Bandar?
Could the billions have been used for covert operations, possibly with US participation? One recalls the Reagan years when money from Israel's secret sales of US arms to Iran were used to finance the Nicaraguan Contras.
The most significant effect of this revolting scandal is being felt in the Muslim world. One of the major reasons for the fast-spreading influence of militant Islamic groups like Hezbullah, Hamas, and Taliban has been their success in uprooting the Muslim world's endemic corruption and nepotism. We are so used to Islamists being demonized as “terrorists” that their highly effective and popular social accomplishments are rarely noted. In fact, their appeal and popularity is based primarily on their welfare and incorruptibility.
Islamic militants insist the west exploits their nations by keeping deeply corrupt regimes in power. In exchange for protection from their own people and neighbors, and fabulous wealth, these authoritarian Arab regimes — always termed “moderates” by western media — sell oil on the cheap to the west and do its bidding. US-installed governments in Lebanon, Palestine, Iraq, Somalia, and Afghanistan are all noted for egregious corruption, including secret payoffs from Washington to their leaders.
No wonder Prince Bandar was always so amiable and accommodating. Or that he managed to fly out a planeload of Saudis the day after 9/11 when all US flights were grounded. Or that the Bush administration was trying to position the always amenable prince as the next Saudi monarch.
The Bandar scandal is hugely embarrassing for Blair and Bush, who claim to be leading a crusade to bring democracy and good government to the benighted Muslim world. It starkly confirms Islamists' accusations that the west promotes corruption. And it dramatically exposes the dirty underbelly of the west's much-vaunted “special relationship” with the Saudi royal family.
June 19, 2007
Copyright © 2007 Eric Margolis