Sleeping With The Devil (9 page)

    As we were about to order, the Kuwaiti minister of petroleum, ‘Ali Al
Sabah, entered the restaurant, pulling in his wake a score of retainers. Passing our table, he
nodded vaguely to my Kuwaiti friends, then stopped dead in his tracks when he caught sight of
me. Normally, Gulf Arabs keep to themselves when they go out at night in cities like Paris and
London. I was definitely out of place.

    The petroleum minister came over to find out who I was. Shaking hands
around the table, he pointedly came to me last, trying to make believe I was the furthest thing
from his mind. I gave up only my name.
Make the bastard work to find out what I do for a
living,
I thought to myself.

    “And what brings you to Paris?” he finally asked.

    The minister swallowed hard when I told him I worked at the American
embassy. In those dark days before Coalition Forces gathered, stumbling across an American
official meeting with the opposition was certain to ruin a Kuwaiti oil minister’s day. Not only
did Kuwait’s ruling elite wonder if it was going to get its kingdom back; it was uncertain it
would be allowed to rule even if it did. Having overrun Kuwait with nary a peep of opposition,
Saddam Hussein might bypass the Amir and cut a deal directly with the Kuwaiti people to share
power - the same people I was having dinner with. But that could happen only if the United
States went along. Hence, the interest in
moi
.

    The minister paused and then did what he knew best - threw money at the
problem. With a crooked finger, he summoned the maître d’. “These gentlemen are my
honored
guests,” the minister said loudly enough for half the restaurant to hear. “Give
them
anything
they ask for.”

    Before the maître d’ could get away, the minister grabbed him by the
arm. “And for my American friend, your
best
bottle of Bordeaux.”

    For a split second, I considered telling the esteemed oil minister that
while the Amir might be able to buy and sell the U.S. Treasury, our air force could still turn
his sandbox into molten glass. I couldn’t, though; I had to think about my guests. A tussle
over the check with the minister of petroleum would have caused them problems for years on end.
As for the Bordeaux, halfway through dinner, I faked my own trip to the bathroom to check the
wine list. It set back the Sabah something like $5,200, hardly worth a blink in Kuwait City.

    Saudi Arabia’s seduction of Washington worked the same way: They paid,
we took, and everyone politely averted their eyes. It all began with a lesson the Saudis
learned at San Clemente, California, after the 1968 presidential election: America might be the
most powerful nation on earth, but its leaders couldn’t say no.

    ADNAN KHASHOGGI is almost a cartoon of the Saudi wheeler-dealer: a
sometime venture capitalist and arms middleman, ridiculously rich (in fits and starts), and
unapologetic for it. One day Khashoggi turns up in the newspapers accused of obtaining $64
million in illegal loans from the collapsed Bangkok Bank of Commerce. The next day he’s in the
New York society columns, attending charity balls in the Hamptons and donating millions to help
American farmers.

    The son of the personal physician of Ibn Sa’ud, who founded the modern
Saudi kingdom in 1932, Khashoggi was serving by the mid-1970s as middleman on an estimated 80
percent of all arms deals between the United States and Saudi Arabia. From Lockheed alone, he
pocketed $106 million in commissions from 1970 to 1975. Other defense contractors contributed
hundreds of millions more during the decade. Northrop officials told a Senate subcommittee
looking into foreign payments by U.S. corporations that it had given Khashoggi $450,000 to
bribe Saudi generals into buying the company’s wares - an allegation that didn’t prevent the
Reagan administration from using Khashoggi as its own middleman during the Iran-Contra fiasco.
(Having served as basically a pimp for the Shah of Iran in the 1970s, Khashoggi knew how to cut
a dirty deal as well as anyone.)

    In the late 1970s Khashoggi made a splash by trying to donate nearly
$600,000 to three prestigious Philadelphia-area colleges - Swarthmore, Haverford, and Bryn Mawr
- to establish a Middle East studies program that would create understanding and sympathy for
the Arab point of view. That plan fell apart after the Northrop bribe charges surfaced.
Undeterred, the civic-minded Khashoggi jumped back into higher education in 1984 with a $5
million gift to American University, on Massachusetts Avenue in D.C., halfway between the White
House and the Beltway. AU had planned to honor Khashoggi’s money by naming the school’s new
sports center and convocation hall after him, but administrators changed their minds in the
wake of the Iran-Contra hearings. Even universities have consciences, apparently.

    By January 1987, when
Time
put Khashoggi on its cover as the
prototype of the new international operator, he was a regular at Marbella, the jet-set-hot
retreat on the Spanish Riviera, where he maintained a five-thousand-acre estate. Other
addresses included Paris, Cannes, Madrid, the Canary Islands, Rome, Beirut, Riyadh, Jeddah,
Monte Carlo, a 180,000-acre ranch in Kenya, and a $30 million, thirty-thousand-square-foot
apartment on Fifth Avenue in New York with a pool overlooking the spires of Saint Patrick’s
Cathedral. To get to and among his many homes, Khashoggi had his choice of the 282-foot yacht
Nabila
, the same one used in the James Bond movie
Never Say Never Again;
a DC-8,
where he could rest on a ten-foot-wide bed beneath a $200,000 spread of Russian sable; two
other commercial-size jets; twelve Mercedes stretch limos; and so on. (
Time
estimated
the cost of Khashoggi’s lifestyle at $250,000 a day in early 1987, servants included, or a
little over $91 million a year, roughly a quarter of the annual budget of Haiti, a nation of
seven million people.) At Marbella, there was a small warehouse devoted to nothing but the
Saudi’s wardrobe: over a thousand handmade suits alone, cleaned, pressed, encased in plastic,
and ready to be shipped to any golden shore where their owner might happen to wash up for a few
nights or more.

    None of this normally would make the slightest difference to us as
Americans. We all grew up with stories about the fabulous wealth of Arab sheikhs and their
viziers. It started to make a difference, though, when the money slopped over into Washington
or, rather, San Clemente. In late 1968, days after Richard Nixon won the White House, Khashoggi
was one of the first to fly out to congratulate the president-elect. He didn’t forget to pass
on the regards of Interior Minister Fahd - the prince who’d sent him to San Clemente and the
current brain-dead king. When Khashoggi got up to leave, he “forgot” his briefcase, which
happened to be stuffed with $1 million in hundreds. No one said a word. Khashoggi went back to
his hotel to wait for a telephone call. The phone never rang. It never would. A couple days
later, and Khashoggi knew the trick had worked: Washington was for sale. Like original sin,
that changed everything.

    You won’t find that tale in the history books. You can barely find
anyone still alive to confirm or deny it. Having paid out so many bribes in his life, even
Khashoggi probably doesn’t remember it. I heard the story from a source who was directly
involved. Is it true? I don’t know. But it’s taken as gospel inside the palaces of Riyadh and
Jeddah. Thanks to that story and a lot of others, Saudis believe Washington is no different
from Rabat, Paris, London, or any other capital that has its hand out. And if anyone had any
doubts, Nixon’s first visitor in the White House was Fahd. Nixon put him up at Blair House, the
official White House guest residence strictly reserved for heads of state. See: It was all
about money.

    Five years later, when Nixon Treasury Secretary William Simon set out
for Riyadh hoping to sell T-bills and bonds to a kingdom newly awash in petrodollars, he was
armed with talking points like a pitchman making cold calls. “Investment directly with the U.S.
Treasury can provide great convenience and protection against the adverse movements otherwise
likely to face an investor when placing or liquidating large investments,” read one of the
slides prepared for Simon.

    The idea was to get the Saudis to underwrite the U.S. budget deficit.
Eager to become America’s lender of last resort, with all the leverage that implied, the Saudis
took the bait and happily swallowed it. Soon William Simon and Secretary of State Henry
Kissinger had cooked up another scheme: the Saudi-U.S. Joint Commission on Economic
Cooperation, which would create an infrastructure for “the new Saudi Arabia,” one modeled on
the United States. The Saudis jumped on that one, too, and the commission worked after a
fashion, a miracle considering Saudi Arabia is a theocratic tyranny without property or
individual rights. But the only important thing was that the Saudis paid for everything - U.S.
salaries, Saudi salaries, living expenses for American commission workers detailed to Saudi
Arabia, the whole shooting match, depositing over $1 billion in a U.S. Treasury account.

    Washington knows fast money when it sees it, but it had never seen
anything like this. The cookie jar was bottomless. It wasn’t long before the Saudis were
spreading money everywhere, like manure on a winter’s field. The White House put out its hand
to fund pet projects that Congress wouldn’t fund or couldn’t afford, from a war in Afghanistan
to one in Nicaragua. Every Washington think tank, from the supposedly nonpartisan Middle East
Institute to the Meridian International Center, took Saudi money. Washington’s boiler room -
the K Street lobbyists, PR firms, and lawyers - lived off the stuff. So did its bluestocking
charities, like the John F. Kennedy Center for the Performing Arts, the Children’s National
Medical Center, and every presidential library of the last thirty years. The Saudis even kicked
in a quarter of a million dollars on a winter sports clinic for disabled American veterans.

    Saudi money also seeped into the bureaucracy. Any Washington bureaucrat
with a room-temperature IQ knows that if he stays on the right side of the kingdom, some way or
another, he’ll be able to finagle his way to feed at the Saudi trough. A consulting contract
with Aramco, a chair at American University, a job with Lockheed - it doesn’t matter. There’s
hardly a living former assistant secretary of state for the Near East; CIA director; White
House staffer; or member of Congress who hasn’t ended up on the Saudi payroll in one way or
another, or so it sometimes seems. With this kind of money waiting out there, of course
Washington’s bureaucrats don’t have the backbone to take on Saudi Arabia.

    What’s going on here? The way I look at things, it amounts to an
indirect, extralegal tax on Americans. Saudi Arabia raises the price of gasoline, then remits a
huge percentage to Washington, but not just to anyone. A big chunk goes to pet White House
projects; part goes into the pockets of ex-bureaucrats and politicos who keep their mouths shut
about the kingdom. And a lot goes to keeping our defense industry humming in bad times. Add it
all up, and Saudi Arabia is one of Washington’s biggest hitters.

    Washington likes to describe all this with an inoffensive, neutral
economic term: recycling petrodollars. But it’s plain old influence peddling. And by the way,
the Saudi tax is a lot more efficient than the IRS. The Saudis do both the collecting and the
spending, keeping Washington’s visionless bureaucrats out of it. The General Accounting Office
and the Office of Management and Budget would only demand some pointless accounting for all
that money.

    THE SAUDI ARABIA of today isn’t the gold mine it was in the 1970s and
early’80s, when it had more cash than sand. Back then the huge remittances to the U.S. didn’t
put a dent in the Saudi budget. That all changed when the Gulf War ate up Saudi Arabia’s entire
budget surplus. Since then the country has been living off credit and begging for money. But
Riyadh knew it couldn’t back out, couldn’t quit running a parallel IRS. Pissing off
Washington’s power elite was as dangerous as pissing off its fanatics.