The Mother of All Scandals
by Eric Margolis
http://www.lewrockw ell.com/margolis /margolis79. html


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.