The Mother of All Scandals
By Eric Margolis
06/20/07 "ich" -- -- 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
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
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
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
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
Eric Margolis, contributing foreign editor for Sun National
Media Canada, is the author of War at the Top of the World.
Visit his website.
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