Tweet
The Fall of the House of Saud
The Atlantic Monthly | May 2003
Americans have long considered Saudi Arabia the one constant in
the Arab Middle East-a source of cheap oil, political stability,
and lucrative business relationships. But the country is run by an
increasingly dysfunctional royal family that has been funding militant
Islamic movements abroad in an attempt to protect itself from them
at home. A former CIA operative argues, in an article drawn form his
new book, Sleeping With the Devil, that today's Saudi Arabia can't
last much longer-and the social and economic fallout of its demise
could be calamitous
by Robert Baer
In the decades after World War II the United States and the rest of
the industrialized world developed a deep and irrevocable dependence
on oil from Saudi Arabia, the world's largest and most important
producer. But by the mid-1980s-with the Iran-Iraq war raging,
and the opec oil embargo a recent and traumatic memory-the supply,
which had until that embargo been taken for granted, suddenly seemed
at risk. Disaster planners in and out of government began to ask
uncomfortable questions. What points of the Saudi oil infrastructure
were most vulnerable to terrorist attack? And by what means? What
sorts of disruption to the flow of oil, short-term and long-term,
could be expected? These were critical concerns. Underlying them all
was the fear that a major attack on the Saudi system could cause the
global economy to collapse.
The Saudi system seemed-and still seems-frighteningly vulnerable to
attack. Although Saudi Arabia has more than eighty active oil and
natural-gas fields, and more than a thousand working wells, half its
proven oil reserves are contained in only eight fields-including
Ghawar, the world's largest onshore oil field, and Safaniya, the
world's largest offshore oil field. Various confidential scenarios
have suggested that if terrorists were simultaneously to hit only a
few sensitive points "downstream" in the oil system from these eight
fields-points that control more than 10,000 miles of pipe, both
onshore and offshore, in which oil moves from wells to refineries
and from refineries to ports, within the kingdom and without-they
could effectively put the Saudis out of the oil business for about
two years. And it just would not be that hard to do.
The most vulnerable point and the most spectacular target in the Saudi
oil system is the Abqaiq complex-the world's largest oil-processing
facility, which sits about twenty-four miles inland from the northern
end of the Gulf of Bahrain. All petroleum originating in the south
is pumped to Abqaiq for processing. For the first two months after
a moderate to severe attack on Abqaiq, production there would slow
from an average of 6.8 million barrels a day to one million barrels,
a loss equivalent to one third of America's daily consumption of
crude oil. For seven months following the attack, daily production
would remain as much as four million barrels below normal-a reduction
roughly equal to what all of the opec partners were able to effect
during their 1973 embargo.
Oil is pumped from Abqaiq to loading terminals at Ras Tanura and
Ju'aymah, both on Saudi Arabia's east coast. Ras Tanura moves only
slightly more oil than Ju'aymah does (4.5 million barrels per day as
opposed to 4.3 million barrels), but it offers a greater variety of
targets and more avenues of attack. Nearly all of Ras Tanura's export
oil is handled by an offshore facility known as The Sea Island, and the
facility's Platform No. 4 handles half of that. A commando attack on
Platform 4 by surface boat or even by a Kilo-class submarine-available
in the global arms bazaar-would be devastating. Such an attack would
also be easy, as was made abundantly clear in 2000 by the attack on
the USS Cole, carried out with lethal effectiveness by suicide bombers
piloting nothing more than a Zodiac loaded with plastic explosives.
Another point of vulnerability is Pump Station No. 1, the station
closest to Abqaiq, which sends oil uphill, into the Aramah Mountains,
so that it can begin its long journey across the peninsula to the Red
Sea port of Yanbu. If Pump No. 1 were taken out, the 900,000 barrels
of Arabian light and superlight crude that are pumped daily to Yanbu
would suddenly stop arriving, and Yanbu would be out of business.
Even the short pipe run from Abqaiq to the Gulf terminals at Ju'aymah
and Ras Tanura is not without opportunity. If heavy damage were
inflicted on the Qatif Junction manifold complex, which directs
the flow of oil for all of eastern Saudi Arabia, the flow would be
stopped for months. The pipes that connect the terminals and processing
facilities can be replaced off the shelf, but those at Qatif require
custom fabrication.
Promoters of Alaskan, Mexican Gulf, Caspian, and Siberian oil all
like to point out that the United States has been weaning itself from
Saudi Arabian oil, for protection against the effects of just such an
attack on the Saudi oil system. Saudi Arabia may sit on 25 percent of
the world's known oil reserves, they argue, but it provides somewhere
around 18 percent of the crude oil consumed by the United States-and
that is down from 28 percent in only a decade. What these people
fail to mention is that Saudi Arabia has the world's only important
surplus production capacity-two million barrels a day. This keeps the
world market liquid. Not only that, but because the Saudis more or
less determine the price of oil globally by deciding how much oil to
produce, even countries that don't buy Saudi oil would be vulnerable
if the flow of that oil were disrupted.
The Saudis have repeatedly used their surplus production capacity
to stabilize the international oil market. They used it to break the
opec embargo (but not before they had enriched themselves by tens of
billions of dollars), in 1974. They used it again during the protracted
Iran-Iraq war, to keep oil flowing to the industrialized West. They
used it during the Gulf War, in 1990-1991; with help from a couple of
other Gulf states, they produced an extra five million barrels a day,
making up for the loss of Iraqi and Kuwaiti oil.
And they used it again on September 12, 2001. Less than twenty-four
hours after the attacks on the World Trade Center and the Pentagon,
the Saudis decided to send nine million barrels of oil to the United
States over the next two weeks. The result was that the United
States experienced only a slight inflation spike in the wake of the
most devastating terrorist attack in history. Had that same surplus
capacity been taken out of play with twenty pounds of Semtex, all
bets would have been off. The U.S. Strategic Petroleum Reserve can
support the domestic market for only about seventy days. And if Saudi
Arabia's contribution to the world's oil supply were cut off, crude
petroleum could quite realistically rise from around $40 a barrel
today to as much as $150 a barrel. It wouldn't take long for other
economic and social calamities to follow.
Americans have long considered Saudi Arabia the one constant in the
Arab Middle East. The Saudis banked our oil under their sand, and
losing Saudi Arabia would be like losing the Federal Reserve. Even if
the Saudi rulers one day did turn anti-American, the argument went,
they would never stop pumping oil, because that would mean cutting
their own throats. This, at any rate, is the way we looked at the
matter before fifteen Saudis and four other terrorists launched their
suicide attacks on September 11; before Osama bin Laden suddenly became
for the Arab world the most popular Saudi in history; before USA Today
reported last summer that nearly four out of five hits on a clandestine
al Qaeda Web site came from inside Saudi Arabia; and before a recent
report commissioned by the UN Security Council indicated that Saudi
Arabia has transferred $500 million to al Qaeda over the past decade.
Five extended families in the Middle East own about 60 percent of the
world's oil. The Saud family, which rules Saudi Arabia, controls more
than a third of that amount. This is the fulcrum on which the global
economy teeters, and the House of Saud knows what the West is only
beginning to learn: that it presides over a kingdom dangerously at
war with itself. In the air in Riyadh and Jidda is the conviction
that oil money has corrupted the ruling family beyond redemption,
even as the general population has grown and gotten poorer; that
the country's leaders have failed to protect fellow Muslims in
Palestine and elsewhere; and that the House of Saud has let Islam be
humiliated-that, in short, the country needs a radical "purification."
We can try to wish this away all we want. But the reality is getting
harder and harder to ignore. Per capita income in Saudi Arabia fell
from $28,600 in 1981 to $6,800 in 2001. The country's birth rate has
soared, becoming one of the highest in the world. Its police force is
corrupt, and the rule of law is a sham. Saudi Arabia almost certainly
leads the world in public beheadings, the venue for which is often
a Riyadh plaza popularly known as Chop-Chop Square. Illegal arms
routinely flow into and out of the country. Taking into account its
murky "off-budget"?defense spending, Saudi Arabia may spend more per
capita on defense than any other country in the world (some estimates
put the figure at 50 percent of its total revenues), and the House of
Saud believes this is necessary for its personal protection. The regime
is threatened by increasingly hostile neighbors-and by determined
enemies within the country's borders. Popular preachers all over
Saudi Arabia call openly for a jihad
against the West-a designation that clearly includes the royal family
itself-in terms as vitriolic as anything heard in Iran at the height
of the Islamic revolution there. The kingdom's mosque schools have
become a breeding ground for militant Islam. Recent attacks in Bali,
Bosnia, Chechnya, Kenya, and the United States, not to mention those
against U.S. military personnel within Saudi Arabia, all point back to
these schools-and to the House of Saud itself, which, terrified at the
prospect of a militant uprising against it, shovels protection money
at the fundamentalists and tries to divert their attention abroad.
Recent examples of Saudi support for the fundamentalists abound. In
1997 a high-ranking member of the royal family coordinated a $100
million aid package for the Taliban. In Los Angeles two of the 9/11
hijackers met with a Saudi working for a company contracted to the
Ministry of Defense. A raid on the Hamburg apartment of a suspected
accomplice of the hijackers turned up the business card of a Saudi
diplomat attached to the religious-affairs section of the embassy in
Berlin. Most of the more than 650 al Qaeda prisoners being held at the
Guantánamo Bay Naval Base in Cuba-"the worst of the worst," according
to Secretary of Defense Donald Rumsfeld-are rumored to be Saudis.
I served for twenty-one years with the CIA's Directorate of Operations
in the Middle East, and during all my years there I accepted on
faith my government's easy assumption that the money the House of
Saud was dumping into weaponry and national security meant that
the family's armed forces and bodyguards could keep its members-and
their oil-safe. "The royal family is like the fingers of a hand," my
colleagues at the State Department liked to say. "Threaten it, and they
become a fist." I no longer believe this. Saudi Arabia is more and more
a breathtakingly irrational state. For a surprising number of Saudis,
including some members of the royal family, taking the kingdom's oil
off the world market-even for years, and at the risk of destroying
their own economy-is an acceptable alternative to the status quo.
Saudi Arabia has existed as a formal nation only since 1932, when
the tribal leader Abdul Aziz ibn Saud gained control of much of the
Arabian Peninsula, named the territory after his clan, and proclaimed
himself king. But the House of Saud had been powerful in the region
ever since the eighteenth century, when the radical cleric Muhammad
ibn Abdul Wahhab, the founder of the puritanical Wahhabi movement,
wandered into Dar'iya, near present-day Riyadh, and made a bargain
with its ruler, Muhammad ibn Saud. The Saud family would provide the
generals, and the Wahhabis would provide the foot soldiers. Until
recently it was a marriage made in heaven.
If I had to pick a single moment when the House of Saud truly began
to fall apart, it would be when Abdul Aziz ibn Saud's son Fahd, who
has been king since 1982, suffered a near fatal stroke, in 1995. As
soon as the royal family heard about Fahd's stroke, it went on high
alert. From all over Riyadh came the thump-thump of helicopters and the
sirens of convoys converging on the hospital where Fahd had been taken.
Among the first to arrive were Jawhara al-Ibrahim, Fahd's fourth and
favorite wife, and their spoiled, megalomaniac twenty-nine-year-old
son Abdul Aziz-or "Azouzi" ("Dearie"), as Fahd called him. Anyone who
knew how Fahd's court ran knew the extent to which Fahd had come to
depend on Jawhara, who helped him with everything from remembering his
medicine to handling intricate problems of foreign policy. If a prince
wanted a matter immediately brought to Fahd's attention, he called
Jawhara. As for Abdul Aziz, he was the youngest of Fahd's children and
the apple of his father's eye. Fahd indulged him in everything. Stories
circulated widely about Abdul Aziz's riding a Harley-Davidson inside
his father's palace, chasing servants and smashing furniture. Most
of the royal family found the king's indulgence strange. Abdul Aziz
was pimply, craven, a bit slow. Apparently, though, he was regarded
as the king's good-luck charm. Fahd's favorite soothsayer had once
told him that as long as Abdul
Aziz was by his side, the king would have a long, fulfilling life. So
Fahd did not complain when Abdul Aziz spent $4.6 billion on a
sprawling palace and theme park outside Riyadh, because Abdul Aziz
was "interested" in history. The property includes a scale model
of old Mecca, with actors attending mosque and chanting prayers
twenty-four hours a day, and also replicas of the Alhambra, Medina,
and half a dozen other Islamic landmarks.
Next to arrive at the hospital, in a great show of solidarity, were
Fahd's full brothers-Sultan, the Defense Minister; Nayef, the Interior
Minister; and Salman, the governor of Riyadh province. To outsiders,
they were a tight bunch. Their mother, from the Sudayri clan, had
taught them from an early age to stick together or risk being elbowed
out by the forty-odd other children of their father.
Other princes-the children and grandchildren of Ibn Saud's
children-hurried to the hospital too, from all over the kingdom and the
rest of the world. Private executive jets were lined up wing to wing
at Riyadh's airport. These princes couldn't get anywhere near Fahd,
but by being close at hand they could pick up more-reliable news and,
just as important, demonstrate their fealty. Most of them lived off his
largesse-royal stipends, which ran from $800 to $270,000 a month. The
princes knew they were breaking the treasury-all told, their brethren
numbered 10,000 to 12,000. Would Crown Prince Abdullah-Fahd's half
brother, a seventy-one-year-old reformer who was next in line for
the throne-cut back on their stipends, or even eliminate them if Fahd
died? They had to stick around to find out.
At this point Fahd's brothers were calling doctors in the United
States and Europe. They wanted to know not whether Fahd would ever
recover his mental capacities, or what kind of life he would be able
to live, but what it would take to keep his heart beating and his
body warm. Money, of course, wasn't a problem. They told the doctors
they were prepared to lease as many Boeing 747 cargo jets as needed
to bring in mobile hospitals and medical teams. The doctors couldn't
understand the reasoning behind the questions-but only because they
didn't understand the politics of the kingdom. What the family knew
and the doctors didn't was that Crown Prince Abdullah had long been
eager to take power. The only way to keep him at bay was to keep Fahd
alive-God willing, until Abdullah died.
Abdullah had always been the odd prince out. To begin with, his mother
was from the Rashid tribe, traditional enemies of the Saud. Ibn Saud
had married her to cement a truce with the Rashid, and although
the Rashid were now loyal subjects, Abdullah was still mistrusted
by Fahd's full brothers. Almost alone among the top members of the
royal family, Abdullah had chosen the way of the desert, turning his
back on the luxuries of Riyadh, Jidda, and Ta'if. He never vacationed
lavishly in Europe, unlike King Fahd and his entourage, who typically
spent $5 million a day during visits to the palace at Marbella,
on the Spanish Riviera. Abdullah preferred to spend his time in a
tent, drinking camel's milk and eating dates. He interspersed his
conversation with Bedouin aphorisms and turns of phrase. All his
children were raised according to the customs of the desert. It is
Abdullah who has recently called publicly for democratic reforms,
the reining in of the conservative clergy, and military
disengagement from the United States.
The royal family hated being reminded that they had abandoned their
Bedouin roots, but they hated still more that Abdullah was trying to
cut back royal corruption and entitlements. Aping the senior members of
the family, the lesser princes had fantastic financial expectations,
and their stipends didn't suffice. The third-generation princes were
getting only about $19,000 a month-a fraction of what they needed for
the lifestyles they sought. To keep even a modest yacht on the French
Riviera requires a million dollars a year. What were they supposed to
do? In order to make ends meet they had been getting into nastier and
nastier business, taking bribes from construction firms (mostly the
bin Laden family's) seeking government contracts, getting involved
in arms deals, expropriating property from commoners, and selling
Saudi visas to guest workers. Another trick they'd discovered was
borrowing money from private banks and simply refusing to pay it
back. It wasn't as if the larger family
could somehow discipline or shame them. There were so many princes
that they didn't even all know one another.
Abdullah had made no secret of his intention to put an end to the
thievery when he became king-and for a while it looked as if he
might get his way even before becoming king. In the mid-1990s, as
Saudi Arabia was facing increasingly dire financial difficulties,
he persuaded King Fahd to appoint a handful of reformist
ministers. Abdullah first had them zero in on expropriations. The
practice had become so widespread among the lesser princes that it
was completely alienating Saudi Arabia's traditional merchant class
and fledgling middle class. A prince might walk into a restaurant,
see that it was doing well, and write out a check to buy the place,
usually well below market price. There was nothing the owner could
do. He knew that if he resisted, he'd end up in jail on trumped-up
charges.
The senior princes used their government positions to do the same
thing, but on a much grander scale. One of them would pick out a
valuable piece of property-maybe a particularly good location for a
shopping mall or a new road-and then order a court to condemn it in the
name of the state, which would clear the way for the king to award it
to him. The money to be earned was staggering, and senior princes had
started to rely on the practice to maintain their ever more bloated
personal budgets. In Abdullah's view, however, crooked property deals
and the like were only a small part of the problem. The off-budget
deals were a much bigger part. In off-budget spending, revenue from
oil sales goes directly to special accounts, bypassing the Saudi
treasury altogether. The money is then used to pay for pet projects,
from defense procurement to construction, with no government audits
or accountability of any sort. Commissions and bribes are enormous.
As a reformer, Abdullah was kept out of the tight circle that gathered
around Fahd after his stroke. Bitterness against Abdullah within the
family was so deep that he was in fact blamed for the stroke. One
version had it that Fahd and Abdullah had been on the telephone,
arguing about who would attend a meeting of the Gulf Cooperation
Council in Oman. It was a fundamentally unimportant decision, but
relations between the two men had become so toxic, it was said,
that Fahd's anger brought on the event. Another rumor in circulation
held that Fahd and Abdullah had been arguing about what they always
argued about-looming financial collapse. There were even whispers
that Abdullah had intentionally provoked Fahd, knowing his health
wouldn't withstand a shouting match.
It eventually became clear that Fahd would live, but the extent
of his impairment also became clear-embarrassingly so when, during
a therapy session not long after the stroke, Fahd defecated in his
pool, in front of his family. His mind was affected too. Those close
to him knew that he would never truly rule again, though he is still
led out for ceremonial appearances.
A year and a half after Fahd's stroke Sultan had come to so despise
Abdullah that he stopped attending cabinet meetings chaired by him. For
Abdullah, the feeling was mutual. In July of 1997 he simply bypassed
the Council of Ministers, which was heavily stacked in favor of the
Sudayri, and tried to get Fahd to sign off on decrees and laws he
thought needed passing. Jawhara and Abdul Aziz teamed up to thwart him.
ind you, it is not as if the rest of the Fahd clan is united. Sultan,
Salman, and Nayef may have arrived at the hospital together in a show
of solidarity, but they got a rude shock once they pushed through the
front doors. Jawhara and Abdul Aziz blocked them from seeing their
brother. The two had set up camp outside Fahd's hospital room and
were deciding who and what would or would not get in. That included
ministers, senior princes, and doctors, along with petitions, decrees,
and everything else.
Saudi succession doesn't operate according to primogeniture. By
tradition, senior princes come to a consensus on succession,
usually choosing one from their ranks who is thought to have the
necessary experience and wisdom. So far the system had served the
royal family well, even though Abdullah had become a gadfly, but now
Fahd's brothers were afraid that Abdul Aziz was trying to circumvent
custom and place himself higher in the line of succession. For one
thing, he had started getting more and more involved in national
security, from foreign affairs to intelligence. Even the Americans
noticed it. When the commander of U.S. forces in the Middle East,
General J. H. Binford Peay, came to Riyadh to meet with Fahd, in
July of 1997, he was surprised to find Abdul Aziz at Fahd's side,
whispering in his father's ear. Where was Abdullah? What had become
of Sultan? Peay had to meet with Abdullah separately, and even then
Abdullah didn't talk about the issues at hand.
What really worried some members of his family was that Abdul Aziz was
funding radical Wahhabi causes and was gaining strength and popularity
as a result. They had little doubt that money was going to clerics
and causes that were associated with Osama bin Laden. Abdul Aziz
hadn't rediscovered his faith, of course: he was courting favor with
the Wahhabis because he knew he would need their support to become
king. In September of 1997 he helped to coordinate that $100 million
aid package for the Taliban, even though the Taliban were protecting
bin Laden-a man who not only had vowed to overthrow the House of
Saud but also seemed increasingly capable of doing so. Abdul Aziz was
buying support wherever he could find it. In December of 1993 Abdul
Aziz authorized $100,000 for a Kansas City mosque. On September 15,
1995, he opened the King Fahd Academy, in Bonn, and two days later
he dedicated a new mosque there. Nine days after that he invited the
head of the Islamic Society of Spain,
Mansur Abdul Salam, to Riyadh. In May of 1996 he and Jawhara
arranged for King Fahd to release Muhammad al Fasi from prison. Al
Fasi had been imprisoned for opposing the Gulf War and the presence
of U.S. troops in Saudi Arabia; in other words, he shared some of
bin Laden's chief grievances. In December of 1999 the press finally
caught wind of Abdul Aziz's penchant for backing radical Islamic
causes. One regional account made available by U.S. translation
services noted that he was believed to have been funding an associate
of bin Laden's, Sa'd al Burayk, who in turn was giving the money to
Islamic groups dedicated to killing Russian soldiers and civilians
in Chechnya. Nayef promised to put a stop to Abdul Aziz and bring
his charity back under control-but he appears to have done nothing.
All the while, throughout the 1990s, the royal family kept growing
and growing. A prince might sire forty to seventy children during a
lifetime of healthy copulation; however, the resources to support the
growing population of the entitled were shrinking, not just in relative
terms but in absolute ones. Young royals were pushing up from below,
chafing at leaders who were slipping into their late seventies and
eighties. The incapacitated King Fahd will turn eighty this year;
Crown Prince Abdullah will turn seventy-nine. Many of the most active
court intriguers are also in their seventies.
The House of Saud currently has some 30,000 members. The number
will be 60,000 in a generation, maybe much higher. According to
reliable sources, anecdotal evidence, and the Saudi gossip machine,
the royal family is obsessed with gambling, alcohol, prostitution,
and parties. And the commissions and other outlays to fund their
vices are constant. What would the price of oil have to be in 2025 to
support even the most basic privileges-for example, free air travel
anywhere in the world on Saudia, the Saudi national airline-that
the Saudi royals have come to enjoy? Once the family numbers 60,000,
or 100,000, will there even be a spare seat for a mere commoner who
wants to fly out of Riyadh or Jidda? Reformers among the royal family
talk about cutting back the perks, but that's a hard package to sell.
Saudi Arabia operates the world's most advanced welfare state, a
kind of anti-Marxian non-workers' paradise. Saudis get free health
care and interest-free home and business loans. College education
is free within the kingdom, and heavily subsidized for those who
study abroad. In one of the world's driest spots water is almost
free. Electricity, domestic air travel, gasoline, and telephone
service are available at far below cost. Many of the kingdom's best
and brightest-the most well-educated and, in theory, the best prepared
for the work world-have little motivation to do any work at all.
About a quarter of Saudi Arabia's population, and more than a third
of all residents aged fifteen to sixty-four, are foreign nationals,
allowed into the kingdom to do the dirty work in the oil fields and
to provide domestic help, but also to program the computers and manage
the refineries. Seventy percent of all jobs in Saudi Arabia-and close
to 90 percent of all private-sector jobs-are filled by foreigners.
Among men, at least, the Saudis have an admirably high literacy
rate, especially for a place that only three generations back was
inhabited mostly by nomadic tribesmen. About 85 percent of Saudi men
aged fifteen and older can read and write, as opposed to less than 70
percent of Saudi women of the same age. But because in recent years
the Saudi education system has been largely entrusted to Wahhabi
fundamentalists, as a form of appeasement that many in the royal
family hope will direct the fundamentalists' animus at foreign targets,
its products are generally ill prepared to compete in a technological
age or a global economy. Today two out of every three Ph.D.s earned
in Saudi Arabia are in Islamic studies. Doctorates are only very
rarely granted in computer sciences, engineering, and other worldly
vocations. Younger Saudis are being educated to take part in a world
that will exist only if the Wahhabi jihadists succeed in turning back
the clock not just a few decades but a few
centuries.
Then there's the demographic problem. Saudi Arabia has one of the
highest birth rates in the world outside Africa-37.25 births for
every 1,000 citizens last year, compared with 14.5 per 1,000 in the
United States. Ninety-seven percent of all Saudis are sixty-four
or younger, and half the population is under eighteen. The simple
presence of so many people of working age, and especially so many
just now ready to enter the work force, places enormous pressure on
an economy-particularly one designed less to accommodate those who
want to work than to provide sustenance for those who would rather
contemplate original intent in the Koran. A middle class stabilizes
society. Saudi Arabia's middle class is imploding.
The functioning of the world's most advanced welfare state is
influenced overwhelmingly by fluctuations in the price of oil. In
1981, when the entire kingdom was in effect being put on the dole,
oil was selling at nearly $40 a barrel, and the annual per capita
income was $28,600. A decade later, just before Iraq invaded Kuwait,
refiners were able to buy oil for about $15 a barrel. The Gulf War sent
prices back up to about $36 a barrel before they quickly fell. Today a
barrel of oil once again fetches around $40, but twenty years' worth
of inflation, combined with a population explosion, has brought per
capita income down to below $7,000. Because roughly 85 percent of Saudi
Arabia's total revenues are oil-based, every dollar increase in the
price of a barrel of oil means a gain of about $3 billion to the Saudi
treasury. In the early 1980s the kingdom boasted cash reserves on the
order of $120 billion; today the figure is estimated to be $21 billion.
Given all these threatening forces, one might think that every map
in official Washington would have a red flag sticking out of Riyadh,
as a reminder that Saudi Arabia is on life support. The truth is quite
the opposite. Before 9/11 the United States never issued an advisory
indicating the obvious security problems for Americans traveling to
Saudi Arabia. Dependents of U.S. citizens residing there were never
advised to leave. According to official Washington, even today the
country is stable: its government is in undisputed control of its
borders; its police force and army are efficient and loyal; its people
are well clothed, well fed, and well educated.
Consider the way the State Department has handled visas for Saudi
nationals. Until 9/11, Saudis were not even required to appear
at the U.S. embassy in Riyadh or the consulate in Jidda for a visa
interview. Under a system called Visa Express a Saudi had only to send
his passport, an application, and the application fee to a travel
agent. The Saudi travel agent, in other words, stood in for the
U.S. government. Just about any Saudi who had the money could book
a flight to New York after a mere twenty-hour wait. Until recently
Saudis were exempt from the new anti-terrorism entry regulations that
apply to citizens of other Middle Eastern countries, despite the fact
that most of the 9/11 terrorists were Saudis.
"The Saudi Arabian Government, at all levels, continued to reaffirm
its commitment to combating terrorism," the State Department's 1999
report Patterns of Global Terrorism soberly asserted. The report
went on to state, "The Government of Saudi Arabia continued to
investigate the bombing in June 1996 of the Khobar Towers." This was
false; Prince Nayef, Saudi Arabia's grim Interior Minister, had been
stalling the investigation for years. Nayef told the kingdom's other
senior princes that he was reluctant to help the United States with
the Khobar investigation. In one heated meeting Nayef ignored Defense
Minister Sultan when Sultan warned that stonewalling the FBI would
end up causing a rift with the United States. To make his point Nayef
went out of his way to avoid meeting the FBI's director, Louis Freeh,
when Freeh showed up in Saudi Arabia to see what he could do to get
the Khobar investigation going. Nayef put himself out of reach-on
his yacht, anchored off the coast near Jidda, in
the Red Sea-and turned the chore over to two low-ranking officials
in the internal-security service, neither of whom knew anything
about the Khobar investigation.
Even after the 1998 attacks on the U.S. embassies in Kenya and
Tanzania, which were organized by Osama bin Laden from his bases in
Afghanistan, the Saudi royals continued to aid the Taliban and its
main supporter in the region, Pakistan. This was hardly a secret:
in July of 2000 Petroleum Intelligence Weekly, which calls itself
the "bible" of the international petroleum industry, reported that
Saudi Arabia was sending as many as 150,000 barrels of oil a day to
Afghanistan and Pakistan in off-budget foreign aid that had a value of
something like $2 million a day. Furthermore, the United States had
known since 1994 that the Saudis were supporting Pakistan's nuclear
development program, ultimately contributing upwards of a billion
dollars. More recently, because Saudi law does not allow foreign
agencies to directly question Saudi citizens, the FBI has not been
allowed to interview Saudi suspects, including the families of the
fifteen Saudi hijackers, about the 9/11 attacks. For more
than a year after September 11 Saudi Arabia refused to provide advance
manifests for flights coming into the United States-which could have
led to a basic and potentially fatal breach of security. Although
there are plenty of possible al Qaeda members awaiting trial, as
of this writing there hasn't been a single Saudi arrest related to
9/11-not even of a material witness.
As for the CIA, the Agency let the State Department take the lead
and decided simply to ignore Saudi Arabia. The CIA recruited no Saudi
diplomats to tell us, for instance, what the religious-affairs sections
of Saudi embassies were up to. The CIA's Directorate of Intelligence
avoided writing national intelligence estimates-appraisals, drawn
from various U.S. intelligence services, about areas of potential
crisis-on Saudi Arabia, knowing that such estimates, especially when
negative, have a tendency to find their way onto the front pages of
U.S. newspapers, where they might have an undesired effect on public
opinion. The CIA's line became the same as State's: There's no need
to worry about Saudi Arabia and its oil reserves.
No need to worry, of course, means business as usual-and for decades
now that's meant that almost every Washington figure worth mentioning
has been involved with companies doing major deals with Saudi
Arabia. Spending a lot of money was a tacit part of the U.S.-Saudi
relationship practically from the very beginning: the Americans would
buy Saudi Arabia's oil and would provide the Saudis with protection and
security; the Saudis would buy American weapons, construction services,
communications systems, and drilling rigs. In the global-economics
game this is known as "recycling," and in this case it worked well:
two-way trade between Saudi Arabia and the United States grew from
$56.2 million in 1950 to $19.3 billion in 2000-an average annual
growth rate of nearly 70 percent.
Consider the case of the Carlyle Group-a private investment company,
founded in 1987, that almost since its inception has been conducting
immensely profitable business with Saudi Arabia. From 1993 to 2002
the chairman of Carlyle was Frank Carlucci, who served first as
Ronald Reagan's National Security Adviser and then as his Secretary
of Defense. Carlyle's senior counselor is James Baker, who served as
Secretary of State under George H.W. Bush-who in his post-presidency
also happens to be a Carlyle adviser. Others who hang their hats at
Carlyle include Arthur Levitt, the head of the Securities and Exchange
Commission under Bill Clinton, and now Carlyle's senior adviser;
John Major, a former Prime Minister of Great Britain and the current
chairman of Carlyle Europe; William Kennard, who chaired the Federal
Communications Commission during the second Clinton Administration;
Afsaneh Mashayekhi Beschloss, a former treasurer and chief investment
officer of the World Bank; and Richard
Darman, who ran the Office of Management and Budget under the first
President Bush and also served as deputy secretary of the treasury
under Reagan.
Carlyle isn't the only company in this business. Halli-burton, run
by Dick Cheney between his stints as Secretary of Defense under the
first George Bush and Vice President under the second, has been
a frequent beneficiary of Saudi money. In late 2001 Halliburton
landed a $140 million contract to develop a new Saudi oil field. For
many years Condoleezza Rice, now President Bush's National Security
Adviser, served on the board of Chevron, which merged in 2001 with
Texaco. The new corporation, ChevronTexaco, is a partner with Saudi
Aramco in several ventures and has recently joined forces with Nimir
Petroleum to develop oil fields in Kazakhstan. Currently on the board
of ChevronTexaco are Carla Hills, who served as the Secretary of
Housing and Urban Development under Gerald Ford and as a U.S. trade
representative under George H.W. Bush; the former Louisiana senator
J. Bennett Johnston, who made a specialty of energy issues while in
Congress; and the former Georgia senator Sam Nunn, who
served most notably as head of the Senate Armed Services Committee.
Elsewhere, Nicholas Brady, the Secretary of the Treasury under the
first President Bush, and Edith Holiday, a former assistant to the
first President Bush, serve on the board of Amerada Hess, which has
teamed with some of Saudi Arabia's most powerful royal-family members
to exploit the rich oil resources of Azerbaijan. In 1998 Amerada
Hess formed a joint venture, Delta Hess, with the Saudi-owned Delta
Oil to explore and exploit petroleum resources in Azerbaijan. The
Houston-based Frontera Resources Corporation joined the Azerbaijan
hunt the same year, teaming with the newly created Delta Hess. Among
the members of Frontera's board of advisers: the former Texas senator,
former Secretary of the Treasury, and 1988 Democratic vice-presidential
candidate Lloyd Bentsen; and John Deutch, a former CIA director.
Just to make sure that no one upsets the workings of this system,
perhaps by meddling in internal Saudi affairs, Saudi Arabia
now keeps possibly as much as a trillion dollars on deposit in
U.S. banks-an agreement worked out in the early eighties by the
Reagan Administration, in an effort to get the Saudis to offset
U.S. government budget deficits. The Saudis hold another trillion
dollars or so in the U.S. stock market. This gives them a remarkable
degree of leverage in Washington. If they were suddenly to withdraw
all their holdings in this country, the effect, though perhaps not as
catastrophic as having a major source of oil shut down, would still
be devastating.
The U.S.-Saudi relationship would not be as cozy as it is without
there being someone well connected on both sides who can move
comfortably between them. That someone is the fifty-four-year-old
Prince Bandar. Although he ranks low on the royal bloodline (his
father is King Fahd's brother Sultan, the Saudi Defense Minister,
but his mother was a house servant), Prince Bandar has been the Saudi
ambassador to the United States since 1983. He is the only foreign
ambassador to have a security detail assigned to him by the State
Department. A daredevil fighter pilot in his younger years, a Muslim
with a taste for single-malt Scotch, and an envoy with a perpetually
open wallet, Bandar has proved adept at working both the public and
the private sides of diplomacy. As the Saudi military attaché to
the United States, he scored a stunning coup in 1981 by persuading
Congress to approve the sale of awacs air-defense technology to his
country, over the objections of aipac, the pro-Israeli
Washington lobby. Later, as ambassador, Bandar conveyed the kingdom's
thanks by secretly placing $10 million in a Vatican City bank, as
reported last year in The Washington Post; the money, deposited at
the request of William Casey, then the director of the CIA, was to
be used by Italy's Christian Democratic Party in a campaign against
Italian Communists. Later still, in June of 1984, Bandar started
paying out $30 million from the royal family so that Lieutenant
Colonel Oliver North could buy arms for the Nicaraguan contras.
It is on the personal front, however, where Bandar shines. A visit
in the early nineties to the summer home of George H.W. Bush,
in Kennebunkport, Maine, earned the prince the affectionate family
sobriquet "Bandar Bush." Bandar reciprocated by inviting Bush to hunt
pheasant on his estate in England. For good measure he also contributed
a million dollars to the construction of the Bush Presidential Library,
in College Station, Texas. King Fahd sent another million to Barbara
Bush's campaign against illiteracy. (He had donated a million dollars
to Nancy Reagan's "Just Say No" campaign against drugs four years
earlier.) Bandar was once Colin Powell's racquetball partner.
Press accounts portrayed Bandar as largely on the outside during
the Clinton years, passing melancholy weeks at his mountain compound
in Aspen, Colorado (more than 50,000 square feet, thirty-two rooms,
sixteen bathrooms). If Bandar was less physically present, however,
he was his usual useful self. In 1992 he persuaded King Fahd to donate
$20 million to the University of Arkansas's new Center for Middle
Eastern Studies, a gesture of respect for the Arkansas governor who
had just been elected President. He is said to have played a role
in persuading the Libyans, in 1999, to turn over two intelligence
operatives suspected in the 1988 bombing of Pan Am Flight 103,
over Lockerbie, Scotland. As he reportedly does at the end of every
administration, whether he is perceived as friend or foe, Bandar
also invited each of the Clinton Cabinet members out to dinner,
at a restaurant of their choice, in a private room or a public one,
depending on their willingness to be seen with him.
Prince Bandar once told associates that he is very careful to look
after U.S. government officials when they return to private life. "If
the reputation then builds that the Saudis take care of friends when
they leave office," Bandar has observed, according to a source cited
in The Washington Post, "you'd be surprised how much better friends
you have who are just coming into office." Practically every deal
with the Saudis eventually becomes hard to trace, lost in some desert
sandstorm back near the wellheads where the money sprang from in the
first place. Many of Washington's lobbyists, PR firms, and lawyers
live off Saudi money. Just about every Washington think tank has taken
it. So have the John F. Kennedy Center for the Performing Arts, the
Children's National Medical Center, and every presidential library
built in the past thirty years.
Bandar hurtled back to prominence after the election of George W. Bush,
occupying a spot somewhere between ambassador and permanently enthroned
visiting head of state. But after 9/11 he began to experience some
difficulty in maintaining a positive Saudi image. In March of last
year agents of the Treasury Department raided the northern-Virginia
offices of four Saudi-based charities: the SAAR Foundation, the Safa
Trust, the International Institute for Islamic Thought (IIIT), and
the International Islamic Relief Organization (IIRO). Also raided was
the local headquarters for the Muslim World League, an umbrella group
funded by the Saudi government. All five organizations are located only
a few miles from Bandar's mansion overlooking the Potomac River. The
organizations can point to a long list of genuinely humanitarian
causes they have aided and supported; but they also have a long list
of alarming associations. Testifying before Congress in August of 2002,
Matthew Levitt, a senior
fellow with the Washington Institute for Near East Policy, noted
that Tarik Hamdi, an IIIT employee, had personally provided Osama bin
Laden with batteries for his satellite phone-a critical link in the
stateless world that bin Laden inhabits. IIIT and the SAAR Foundation
are suspected of helping to finance Hamas and the Palestinian Islamic
Jihad, the sponsors of some of the most lethal suicide bombers
in the Middle East. From 1986 to 1994 Muhammad Jamal Khalifa, a
brother-in-law to Osama bin Laden, ran the IIRO's Philippine office,
from which he channeled funds to al Qaeda. Only excellent work by
the Indian police prevented another IIRO employee, Sayed Abu Nasir,
from bombing the U.S. consulates in Calcutta and Madras.
In mid-2002 word leaked to the press that the semi-official
Defense Policy Board, chaired by the notorious cold warrior Richard
Perle, had sponsored a report declaring Saudi Arabia to be part
of the problem of international terrorism rather than part of the
solution. Saudi Arabia, the report stated, was "central to the
self-destruction of the Arab world and the chief vector of the Arab
crisis and its outwardly-directed aggression." It went on to say,
"The Saudis are active at every level of the terror chain, from
planners to financiers, from cadre to foot-soldier, from ideologist to
cheerleader." Within hours Colin Powell was on the phone to the Saudi
Foreign Minister, assuring him-and through him, the royal family-that
such apostasy was not and never would be the official stance of the
Bush Administration. To reinforce the message, President Bush invited
Bandar down to the family ranch at Crawford, Texas.
And yet the image problems have continued. In October of 2001, nato
forces raided the offices of the Saudi High Commission for Aid to
Bosnia, founded by Prince Salman, and discovered, among other items,
photos of the U.S. embassies in Kenya and Tanzania, before and after
they were bombed; photos of the World Trade Center and the USS Cole;
information on the use of crop-duster planes; and materials for forging
U.S. State Department badges. His job wasn't made any easier when,
in the fall of last year, Bandar found himself having to explain away
the fact that about $130,000 in charitable contributions from his wife,
Princess Haifa, might have ended up with two of the 9/11 hijackers.
In the wake of these revelations a U.S. delegation headed by Alan
Larson, President Bush's undersecretary of state for economic affairs,
traveled to Riyadh last November, ostensibly to prod the Saudis
toward increasing the surveillance of their charities and financial
networks. But U.S. and Saudi sources say that one of the main reasons
for Larson's trip was to ensure that if the United States invaded
Iraq, the Saudis would guarantee the flow of extra oil into the world
market. The U.S. embrace of the House of Saud was as tight as ever.
Washington's answer for Saudi Arabia-apart from repeating that
nothing is wrong-is to suggest that a little democracy will cure
everything. Talk the royal family into ceding at least part of
its authority; support the reform-minded princes; set up a model
parliament; co-opt the firebrands with a cabinet position or two,
a minor political party, and some outright bribery; send Jimmy
Carter in to monitor the first election; and in a few generations
Riyadh will be Ankara, maybe even London. The governmental mechanism
may be faulty, the Washington view maintains, but the people who
administer the government are for the most part committed to rooting
out corruption, rounding up terrorists, and recognizing the right
of the people to self-government.
It's utter nonsense, of course. If an election were held in Saudi
Arabia today, if anyone who wanted to could run for the office of
president, and if people could vote their hearts without fear of having
their heads cut off afterward in Chop-Chop Square, Osama bin Laden
would be elected in a landslide-not because the Saudi people want to
wash their hands in the blood of the dead of September 11, but simply
because bin Laden has dared to do what even the mighty United States
of America won't do: stand up to the thieves who rule the country.
Saudi Arabia today is a mess, and it is our mess. We made it the
private storage tank for our oil reserves. We reaped the benefits of a
steady petroleum supply at a discounted price, and we grabbed at every
available Saudi petrodollar. We taught the Saudis exactly what was
expected of them. We cannot walk away morally from the consequences of
this behavior-and we really can't walk away economically. So we crow
about democracy and talk about someday weaning ourselves from our
dependence on foreign oil, despite the fact that as long as America
has been dependent on foreign oil there has never been an honest,
sustained effort at the senior governmental level to reduce long-term
U.S. petroleum consumption.
Not all the wishing in the world will change the basic reality of
the situation.
* Saudi Arabia controls the largest share of the world's oil and
serves as the market regulator for the global petroleum industry.
* No country consumes more oil, and is more dependent on Saudi oil,
than the United States.
* The United States and the rest of the industrialized world are
therefore absolutely dependent on Saudi Arabia's oil reserves, and
will be for decades to come.
* If the Saudi oil spigot is shut off, by terrorism or by political
revolution, the effect on the global economy, and particularly on
the economy of the United States, will be devastating.
* Saudi oil is controlled by an increasingly bankrupt, criminal,
dysfunctional, and out-of-touch royal family that is hated by the
people it rules and by the nations that surround its kingdom.
Signs of impending disaster are everywhere, but the House of Saud has
chosen to pray that the moment of reckoning will not come soon-and the
United States has chosen to look away. So nothing changes: the royal
family continues to exhaust the Saudi treasury, buying more and more
arms and funneling more and more "charity" money to the jihadists,
all in a desperate and self-destructive effort to protect itself.
The fact is that the West, especially the United States, has left
the Saudis little choice. Leading U.S. corporations hire and rehire
known Saudi crooks and known financiers of terrorism to represent
their interests, so that they can land the deals that will pay the
commissions back in Saudi Arabia-commissions that will further erode
the budget and thus further divide the ruling class from everyone
else. Former CIA directors serve on boards whose members have to hold
their noses to cut deals with Saudi companies-because that's business,
that's the price of entry, that's the way it's done. Ex-Presidents,
former prime ministers, onetime senators and congressmen, and Cabinet
members walk around with their hands out, acting as if they're doing
something else but rarely slowing down, because most of them know it's
an endgame too. But sometime soon, one way or another, the House of
Saud is coming down.
The URL for this page is http://www.theatlantic.com/doc/200305/baer
--Boundary_(ID_nAH4ubiUn/VO6LQolPcG5g)--
The Atlantic Monthly | May 2003
Americans have long considered Saudi Arabia the one constant in
the Arab Middle East-a source of cheap oil, political stability,
and lucrative business relationships. But the country is run by an
increasingly dysfunctional royal family that has been funding militant
Islamic movements abroad in an attempt to protect itself from them
at home. A former CIA operative argues, in an article drawn form his
new book, Sleeping With the Devil, that today's Saudi Arabia can't
last much longer-and the social and economic fallout of its demise
could be calamitous
by Robert Baer
In the decades after World War II the United States and the rest of
the industrialized world developed a deep and irrevocable dependence
on oil from Saudi Arabia, the world's largest and most important
producer. But by the mid-1980s-with the Iran-Iraq war raging,
and the opec oil embargo a recent and traumatic memory-the supply,
which had until that embargo been taken for granted, suddenly seemed
at risk. Disaster planners in and out of government began to ask
uncomfortable questions. What points of the Saudi oil infrastructure
were most vulnerable to terrorist attack? And by what means? What
sorts of disruption to the flow of oil, short-term and long-term,
could be expected? These were critical concerns. Underlying them all
was the fear that a major attack on the Saudi system could cause the
global economy to collapse.
The Saudi system seemed-and still seems-frighteningly vulnerable to
attack. Although Saudi Arabia has more than eighty active oil and
natural-gas fields, and more than a thousand working wells, half its
proven oil reserves are contained in only eight fields-including
Ghawar, the world's largest onshore oil field, and Safaniya, the
world's largest offshore oil field. Various confidential scenarios
have suggested that if terrorists were simultaneously to hit only a
few sensitive points "downstream" in the oil system from these eight
fields-points that control more than 10,000 miles of pipe, both
onshore and offshore, in which oil moves from wells to refineries
and from refineries to ports, within the kingdom and without-they
could effectively put the Saudis out of the oil business for about
two years. And it just would not be that hard to do.
The most vulnerable point and the most spectacular target in the Saudi
oil system is the Abqaiq complex-the world's largest oil-processing
facility, which sits about twenty-four miles inland from the northern
end of the Gulf of Bahrain. All petroleum originating in the south
is pumped to Abqaiq for processing. For the first two months after
a moderate to severe attack on Abqaiq, production there would slow
from an average of 6.8 million barrels a day to one million barrels,
a loss equivalent to one third of America's daily consumption of
crude oil. For seven months following the attack, daily production
would remain as much as four million barrels below normal-a reduction
roughly equal to what all of the opec partners were able to effect
during their 1973 embargo.
Oil is pumped from Abqaiq to loading terminals at Ras Tanura and
Ju'aymah, both on Saudi Arabia's east coast. Ras Tanura moves only
slightly more oil than Ju'aymah does (4.5 million barrels per day as
opposed to 4.3 million barrels), but it offers a greater variety of
targets and more avenues of attack. Nearly all of Ras Tanura's export
oil is handled by an offshore facility known as The Sea Island, and the
facility's Platform No. 4 handles half of that. A commando attack on
Platform 4 by surface boat or even by a Kilo-class submarine-available
in the global arms bazaar-would be devastating. Such an attack would
also be easy, as was made abundantly clear in 2000 by the attack on
the USS Cole, carried out with lethal effectiveness by suicide bombers
piloting nothing more than a Zodiac loaded with plastic explosives.
Another point of vulnerability is Pump Station No. 1, the station
closest to Abqaiq, which sends oil uphill, into the Aramah Mountains,
so that it can begin its long journey across the peninsula to the Red
Sea port of Yanbu. If Pump No. 1 were taken out, the 900,000 barrels
of Arabian light and superlight crude that are pumped daily to Yanbu
would suddenly stop arriving, and Yanbu would be out of business.
Even the short pipe run from Abqaiq to the Gulf terminals at Ju'aymah
and Ras Tanura is not without opportunity. If heavy damage were
inflicted on the Qatif Junction manifold complex, which directs
the flow of oil for all of eastern Saudi Arabia, the flow would be
stopped for months. The pipes that connect the terminals and processing
facilities can be replaced off the shelf, but those at Qatif require
custom fabrication.
Promoters of Alaskan, Mexican Gulf, Caspian, and Siberian oil all
like to point out that the United States has been weaning itself from
Saudi Arabian oil, for protection against the effects of just such an
attack on the Saudi oil system. Saudi Arabia may sit on 25 percent of
the world's known oil reserves, they argue, but it provides somewhere
around 18 percent of the crude oil consumed by the United States-and
that is down from 28 percent in only a decade. What these people
fail to mention is that Saudi Arabia has the world's only important
surplus production capacity-two million barrels a day. This keeps the
world market liquid. Not only that, but because the Saudis more or
less determine the price of oil globally by deciding how much oil to
produce, even countries that don't buy Saudi oil would be vulnerable
if the flow of that oil were disrupted.
The Saudis have repeatedly used their surplus production capacity
to stabilize the international oil market. They used it to break the
opec embargo (but not before they had enriched themselves by tens of
billions of dollars), in 1974. They used it again during the protracted
Iran-Iraq war, to keep oil flowing to the industrialized West. They
used it during the Gulf War, in 1990-1991; with help from a couple of
other Gulf states, they produced an extra five million barrels a day,
making up for the loss of Iraqi and Kuwaiti oil.
And they used it again on September 12, 2001. Less than twenty-four
hours after the attacks on the World Trade Center and the Pentagon,
the Saudis decided to send nine million barrels of oil to the United
States over the next two weeks. The result was that the United
States experienced only a slight inflation spike in the wake of the
most devastating terrorist attack in history. Had that same surplus
capacity been taken out of play with twenty pounds of Semtex, all
bets would have been off. The U.S. Strategic Petroleum Reserve can
support the domestic market for only about seventy days. And if Saudi
Arabia's contribution to the world's oil supply were cut off, crude
petroleum could quite realistically rise from around $40 a barrel
today to as much as $150 a barrel. It wouldn't take long for other
economic and social calamities to follow.
Americans have long considered Saudi Arabia the one constant in the
Arab Middle East. The Saudis banked our oil under their sand, and
losing Saudi Arabia would be like losing the Federal Reserve. Even if
the Saudi rulers one day did turn anti-American, the argument went,
they would never stop pumping oil, because that would mean cutting
their own throats. This, at any rate, is the way we looked at the
matter before fifteen Saudis and four other terrorists launched their
suicide attacks on September 11; before Osama bin Laden suddenly became
for the Arab world the most popular Saudi in history; before USA Today
reported last summer that nearly four out of five hits on a clandestine
al Qaeda Web site came from inside Saudi Arabia; and before a recent
report commissioned by the UN Security Council indicated that Saudi
Arabia has transferred $500 million to al Qaeda over the past decade.
Five extended families in the Middle East own about 60 percent of the
world's oil. The Saud family, which rules Saudi Arabia, controls more
than a third of that amount. This is the fulcrum on which the global
economy teeters, and the House of Saud knows what the West is only
beginning to learn: that it presides over a kingdom dangerously at
war with itself. In the air in Riyadh and Jidda is the conviction
that oil money has corrupted the ruling family beyond redemption,
even as the general population has grown and gotten poorer; that
the country's leaders have failed to protect fellow Muslims in
Palestine and elsewhere; and that the House of Saud has let Islam be
humiliated-that, in short, the country needs a radical "purification."
We can try to wish this away all we want. But the reality is getting
harder and harder to ignore. Per capita income in Saudi Arabia fell
from $28,600 in 1981 to $6,800 in 2001. The country's birth rate has
soared, becoming one of the highest in the world. Its police force is
corrupt, and the rule of law is a sham. Saudi Arabia almost certainly
leads the world in public beheadings, the venue for which is often
a Riyadh plaza popularly known as Chop-Chop Square. Illegal arms
routinely flow into and out of the country. Taking into account its
murky "off-budget"?defense spending, Saudi Arabia may spend more per
capita on defense than any other country in the world (some estimates
put the figure at 50 percent of its total revenues), and the House of
Saud believes this is necessary for its personal protection. The regime
is threatened by increasingly hostile neighbors-and by determined
enemies within the country's borders. Popular preachers all over
Saudi Arabia call openly for a jihad
against the West-a designation that clearly includes the royal family
itself-in terms as vitriolic as anything heard in Iran at the height
of the Islamic revolution there. The kingdom's mosque schools have
become a breeding ground for militant Islam. Recent attacks in Bali,
Bosnia, Chechnya, Kenya, and the United States, not to mention those
against U.S. military personnel within Saudi Arabia, all point back to
these schools-and to the House of Saud itself, which, terrified at the
prospect of a militant uprising against it, shovels protection money
at the fundamentalists and tries to divert their attention abroad.
Recent examples of Saudi support for the fundamentalists abound. In
1997 a high-ranking member of the royal family coordinated a $100
million aid package for the Taliban. In Los Angeles two of the 9/11
hijackers met with a Saudi working for a company contracted to the
Ministry of Defense. A raid on the Hamburg apartment of a suspected
accomplice of the hijackers turned up the business card of a Saudi
diplomat attached to the religious-affairs section of the embassy in
Berlin. Most of the more than 650 al Qaeda prisoners being held at the
Guantánamo Bay Naval Base in Cuba-"the worst of the worst," according
to Secretary of Defense Donald Rumsfeld-are rumored to be Saudis.
I served for twenty-one years with the CIA's Directorate of Operations
in the Middle East, and during all my years there I accepted on
faith my government's easy assumption that the money the House of
Saud was dumping into weaponry and national security meant that
the family's armed forces and bodyguards could keep its members-and
their oil-safe. "The royal family is like the fingers of a hand," my
colleagues at the State Department liked to say. "Threaten it, and they
become a fist." I no longer believe this. Saudi Arabia is more and more
a breathtakingly irrational state. For a surprising number of Saudis,
including some members of the royal family, taking the kingdom's oil
off the world market-even for years, and at the risk of destroying
their own economy-is an acceptable alternative to the status quo.
Saudi Arabia has existed as a formal nation only since 1932, when
the tribal leader Abdul Aziz ibn Saud gained control of much of the
Arabian Peninsula, named the territory after his clan, and proclaimed
himself king. But the House of Saud had been powerful in the region
ever since the eighteenth century, when the radical cleric Muhammad
ibn Abdul Wahhab, the founder of the puritanical Wahhabi movement,
wandered into Dar'iya, near present-day Riyadh, and made a bargain
with its ruler, Muhammad ibn Saud. The Saud family would provide the
generals, and the Wahhabis would provide the foot soldiers. Until
recently it was a marriage made in heaven.
If I had to pick a single moment when the House of Saud truly began
to fall apart, it would be when Abdul Aziz ibn Saud's son Fahd, who
has been king since 1982, suffered a near fatal stroke, in 1995. As
soon as the royal family heard about Fahd's stroke, it went on high
alert. From all over Riyadh came the thump-thump of helicopters and the
sirens of convoys converging on the hospital where Fahd had been taken.
Among the first to arrive were Jawhara al-Ibrahim, Fahd's fourth and
favorite wife, and their spoiled, megalomaniac twenty-nine-year-old
son Abdul Aziz-or "Azouzi" ("Dearie"), as Fahd called him. Anyone who
knew how Fahd's court ran knew the extent to which Fahd had come to
depend on Jawhara, who helped him with everything from remembering his
medicine to handling intricate problems of foreign policy. If a prince
wanted a matter immediately brought to Fahd's attention, he called
Jawhara. As for Abdul Aziz, he was the youngest of Fahd's children and
the apple of his father's eye. Fahd indulged him in everything. Stories
circulated widely about Abdul Aziz's riding a Harley-Davidson inside
his father's palace, chasing servants and smashing furniture. Most
of the royal family found the king's indulgence strange. Abdul Aziz
was pimply, craven, a bit slow. Apparently, though, he was regarded
as the king's good-luck charm. Fahd's favorite soothsayer had once
told him that as long as Abdul
Aziz was by his side, the king would have a long, fulfilling life. So
Fahd did not complain when Abdul Aziz spent $4.6 billion on a
sprawling palace and theme park outside Riyadh, because Abdul Aziz
was "interested" in history. The property includes a scale model
of old Mecca, with actors attending mosque and chanting prayers
twenty-four hours a day, and also replicas of the Alhambra, Medina,
and half a dozen other Islamic landmarks.
Next to arrive at the hospital, in a great show of solidarity, were
Fahd's full brothers-Sultan, the Defense Minister; Nayef, the Interior
Minister; and Salman, the governor of Riyadh province. To outsiders,
they were a tight bunch. Their mother, from the Sudayri clan, had
taught them from an early age to stick together or risk being elbowed
out by the forty-odd other children of their father.
Other princes-the children and grandchildren of Ibn Saud's
children-hurried to the hospital too, from all over the kingdom and the
rest of the world. Private executive jets were lined up wing to wing
at Riyadh's airport. These princes couldn't get anywhere near Fahd,
but by being close at hand they could pick up more-reliable news and,
just as important, demonstrate their fealty. Most of them lived off his
largesse-royal stipends, which ran from $800 to $270,000 a month. The
princes knew they were breaking the treasury-all told, their brethren
numbered 10,000 to 12,000. Would Crown Prince Abdullah-Fahd's half
brother, a seventy-one-year-old reformer who was next in line for
the throne-cut back on their stipends, or even eliminate them if Fahd
died? They had to stick around to find out.
At this point Fahd's brothers were calling doctors in the United
States and Europe. They wanted to know not whether Fahd would ever
recover his mental capacities, or what kind of life he would be able
to live, but what it would take to keep his heart beating and his
body warm. Money, of course, wasn't a problem. They told the doctors
they were prepared to lease as many Boeing 747 cargo jets as needed
to bring in mobile hospitals and medical teams. The doctors couldn't
understand the reasoning behind the questions-but only because they
didn't understand the politics of the kingdom. What the family knew
and the doctors didn't was that Crown Prince Abdullah had long been
eager to take power. The only way to keep him at bay was to keep Fahd
alive-God willing, until Abdullah died.
Abdullah had always been the odd prince out. To begin with, his mother
was from the Rashid tribe, traditional enemies of the Saud. Ibn Saud
had married her to cement a truce with the Rashid, and although
the Rashid were now loyal subjects, Abdullah was still mistrusted
by Fahd's full brothers. Almost alone among the top members of the
royal family, Abdullah had chosen the way of the desert, turning his
back on the luxuries of Riyadh, Jidda, and Ta'if. He never vacationed
lavishly in Europe, unlike King Fahd and his entourage, who typically
spent $5 million a day during visits to the palace at Marbella,
on the Spanish Riviera. Abdullah preferred to spend his time in a
tent, drinking camel's milk and eating dates. He interspersed his
conversation with Bedouin aphorisms and turns of phrase. All his
children were raised according to the customs of the desert. It is
Abdullah who has recently called publicly for democratic reforms,
the reining in of the conservative clergy, and military
disengagement from the United States.
The royal family hated being reminded that they had abandoned their
Bedouin roots, but they hated still more that Abdullah was trying to
cut back royal corruption and entitlements. Aping the senior members of
the family, the lesser princes had fantastic financial expectations,
and their stipends didn't suffice. The third-generation princes were
getting only about $19,000 a month-a fraction of what they needed for
the lifestyles they sought. To keep even a modest yacht on the French
Riviera requires a million dollars a year. What were they supposed to
do? In order to make ends meet they had been getting into nastier and
nastier business, taking bribes from construction firms (mostly the
bin Laden family's) seeking government contracts, getting involved
in arms deals, expropriating property from commoners, and selling
Saudi visas to guest workers. Another trick they'd discovered was
borrowing money from private banks and simply refusing to pay it
back. It wasn't as if the larger family
could somehow discipline or shame them. There were so many princes
that they didn't even all know one another.
Abdullah had made no secret of his intention to put an end to the
thievery when he became king-and for a while it looked as if he
might get his way even before becoming king. In the mid-1990s, as
Saudi Arabia was facing increasingly dire financial difficulties,
he persuaded King Fahd to appoint a handful of reformist
ministers. Abdullah first had them zero in on expropriations. The
practice had become so widespread among the lesser princes that it
was completely alienating Saudi Arabia's traditional merchant class
and fledgling middle class. A prince might walk into a restaurant,
see that it was doing well, and write out a check to buy the place,
usually well below market price. There was nothing the owner could
do. He knew that if he resisted, he'd end up in jail on trumped-up
charges.
The senior princes used their government positions to do the same
thing, but on a much grander scale. One of them would pick out a
valuable piece of property-maybe a particularly good location for a
shopping mall or a new road-and then order a court to condemn it in the
name of the state, which would clear the way for the king to award it
to him. The money to be earned was staggering, and senior princes had
started to rely on the practice to maintain their ever more bloated
personal budgets. In Abdullah's view, however, crooked property deals
and the like were only a small part of the problem. The off-budget
deals were a much bigger part. In off-budget spending, revenue from
oil sales goes directly to special accounts, bypassing the Saudi
treasury altogether. The money is then used to pay for pet projects,
from defense procurement to construction, with no government audits
or accountability of any sort. Commissions and bribes are enormous.
As a reformer, Abdullah was kept out of the tight circle that gathered
around Fahd after his stroke. Bitterness against Abdullah within the
family was so deep that he was in fact blamed for the stroke. One
version had it that Fahd and Abdullah had been on the telephone,
arguing about who would attend a meeting of the Gulf Cooperation
Council in Oman. It was a fundamentally unimportant decision, but
relations between the two men had become so toxic, it was said,
that Fahd's anger brought on the event. Another rumor in circulation
held that Fahd and Abdullah had been arguing about what they always
argued about-looming financial collapse. There were even whispers
that Abdullah had intentionally provoked Fahd, knowing his health
wouldn't withstand a shouting match.
It eventually became clear that Fahd would live, but the extent
of his impairment also became clear-embarrassingly so when, during
a therapy session not long after the stroke, Fahd defecated in his
pool, in front of his family. His mind was affected too. Those close
to him knew that he would never truly rule again, though he is still
led out for ceremonial appearances.
A year and a half after Fahd's stroke Sultan had come to so despise
Abdullah that he stopped attending cabinet meetings chaired by him. For
Abdullah, the feeling was mutual. In July of 1997 he simply bypassed
the Council of Ministers, which was heavily stacked in favor of the
Sudayri, and tried to get Fahd to sign off on decrees and laws he
thought needed passing. Jawhara and Abdul Aziz teamed up to thwart him.
ind you, it is not as if the rest of the Fahd clan is united. Sultan,
Salman, and Nayef may have arrived at the hospital together in a show
of solidarity, but they got a rude shock once they pushed through the
front doors. Jawhara and Abdul Aziz blocked them from seeing their
brother. The two had set up camp outside Fahd's hospital room and
were deciding who and what would or would not get in. That included
ministers, senior princes, and doctors, along with petitions, decrees,
and everything else.
Saudi succession doesn't operate according to primogeniture. By
tradition, senior princes come to a consensus on succession,
usually choosing one from their ranks who is thought to have the
necessary experience and wisdom. So far the system had served the
royal family well, even though Abdullah had become a gadfly, but now
Fahd's brothers were afraid that Abdul Aziz was trying to circumvent
custom and place himself higher in the line of succession. For one
thing, he had started getting more and more involved in national
security, from foreign affairs to intelligence. Even the Americans
noticed it. When the commander of U.S. forces in the Middle East,
General J. H. Binford Peay, came to Riyadh to meet with Fahd, in
July of 1997, he was surprised to find Abdul Aziz at Fahd's side,
whispering in his father's ear. Where was Abdullah? What had become
of Sultan? Peay had to meet with Abdullah separately, and even then
Abdullah didn't talk about the issues at hand.
What really worried some members of his family was that Abdul Aziz was
funding radical Wahhabi causes and was gaining strength and popularity
as a result. They had little doubt that money was going to clerics
and causes that were associated with Osama bin Laden. Abdul Aziz
hadn't rediscovered his faith, of course: he was courting favor with
the Wahhabis because he knew he would need their support to become
king. In September of 1997 he helped to coordinate that $100 million
aid package for the Taliban, even though the Taliban were protecting
bin Laden-a man who not only had vowed to overthrow the House of
Saud but also seemed increasingly capable of doing so. Abdul Aziz was
buying support wherever he could find it. In December of 1993 Abdul
Aziz authorized $100,000 for a Kansas City mosque. On September 15,
1995, he opened the King Fahd Academy, in Bonn, and two days later
he dedicated a new mosque there. Nine days after that he invited the
head of the Islamic Society of Spain,
Mansur Abdul Salam, to Riyadh. In May of 1996 he and Jawhara
arranged for King Fahd to release Muhammad al Fasi from prison. Al
Fasi had been imprisoned for opposing the Gulf War and the presence
of U.S. troops in Saudi Arabia; in other words, he shared some of
bin Laden's chief grievances. In December of 1999 the press finally
caught wind of Abdul Aziz's penchant for backing radical Islamic
causes. One regional account made available by U.S. translation
services noted that he was believed to have been funding an associate
of bin Laden's, Sa'd al Burayk, who in turn was giving the money to
Islamic groups dedicated to killing Russian soldiers and civilians
in Chechnya. Nayef promised to put a stop to Abdul Aziz and bring
his charity back under control-but he appears to have done nothing.
All the while, throughout the 1990s, the royal family kept growing
and growing. A prince might sire forty to seventy children during a
lifetime of healthy copulation; however, the resources to support the
growing population of the entitled were shrinking, not just in relative
terms but in absolute ones. Young royals were pushing up from below,
chafing at leaders who were slipping into their late seventies and
eighties. The incapacitated King Fahd will turn eighty this year;
Crown Prince Abdullah will turn seventy-nine. Many of the most active
court intriguers are also in their seventies.
The House of Saud currently has some 30,000 members. The number
will be 60,000 in a generation, maybe much higher. According to
reliable sources, anecdotal evidence, and the Saudi gossip machine,
the royal family is obsessed with gambling, alcohol, prostitution,
and parties. And the commissions and other outlays to fund their
vices are constant. What would the price of oil have to be in 2025 to
support even the most basic privileges-for example, free air travel
anywhere in the world on Saudia, the Saudi national airline-that
the Saudi royals have come to enjoy? Once the family numbers 60,000,
or 100,000, will there even be a spare seat for a mere commoner who
wants to fly out of Riyadh or Jidda? Reformers among the royal family
talk about cutting back the perks, but that's a hard package to sell.
Saudi Arabia operates the world's most advanced welfare state, a
kind of anti-Marxian non-workers' paradise. Saudis get free health
care and interest-free home and business loans. College education
is free within the kingdom, and heavily subsidized for those who
study abroad. In one of the world's driest spots water is almost
free. Electricity, domestic air travel, gasoline, and telephone
service are available at far below cost. Many of the kingdom's best
and brightest-the most well-educated and, in theory, the best prepared
for the work world-have little motivation to do any work at all.
About a quarter of Saudi Arabia's population, and more than a third
of all residents aged fifteen to sixty-four, are foreign nationals,
allowed into the kingdom to do the dirty work in the oil fields and
to provide domestic help, but also to program the computers and manage
the refineries. Seventy percent of all jobs in Saudi Arabia-and close
to 90 percent of all private-sector jobs-are filled by foreigners.
Among men, at least, the Saudis have an admirably high literacy
rate, especially for a place that only three generations back was
inhabited mostly by nomadic tribesmen. About 85 percent of Saudi men
aged fifteen and older can read and write, as opposed to less than 70
percent of Saudi women of the same age. But because in recent years
the Saudi education system has been largely entrusted to Wahhabi
fundamentalists, as a form of appeasement that many in the royal
family hope will direct the fundamentalists' animus at foreign targets,
its products are generally ill prepared to compete in a technological
age or a global economy. Today two out of every three Ph.D.s earned
in Saudi Arabia are in Islamic studies. Doctorates are only very
rarely granted in computer sciences, engineering, and other worldly
vocations. Younger Saudis are being educated to take part in a world
that will exist only if the Wahhabi jihadists succeed in turning back
the clock not just a few decades but a few
centuries.
Then there's the demographic problem. Saudi Arabia has one of the
highest birth rates in the world outside Africa-37.25 births for
every 1,000 citizens last year, compared with 14.5 per 1,000 in the
United States. Ninety-seven percent of all Saudis are sixty-four
or younger, and half the population is under eighteen. The simple
presence of so many people of working age, and especially so many
just now ready to enter the work force, places enormous pressure on
an economy-particularly one designed less to accommodate those who
want to work than to provide sustenance for those who would rather
contemplate original intent in the Koran. A middle class stabilizes
society. Saudi Arabia's middle class is imploding.
The functioning of the world's most advanced welfare state is
influenced overwhelmingly by fluctuations in the price of oil. In
1981, when the entire kingdom was in effect being put on the dole,
oil was selling at nearly $40 a barrel, and the annual per capita
income was $28,600. A decade later, just before Iraq invaded Kuwait,
refiners were able to buy oil for about $15 a barrel. The Gulf War sent
prices back up to about $36 a barrel before they quickly fell. Today a
barrel of oil once again fetches around $40, but twenty years' worth
of inflation, combined with a population explosion, has brought per
capita income down to below $7,000. Because roughly 85 percent of Saudi
Arabia's total revenues are oil-based, every dollar increase in the
price of a barrel of oil means a gain of about $3 billion to the Saudi
treasury. In the early 1980s the kingdom boasted cash reserves on the
order of $120 billion; today the figure is estimated to be $21 billion.
Given all these threatening forces, one might think that every map
in official Washington would have a red flag sticking out of Riyadh,
as a reminder that Saudi Arabia is on life support. The truth is quite
the opposite. Before 9/11 the United States never issued an advisory
indicating the obvious security problems for Americans traveling to
Saudi Arabia. Dependents of U.S. citizens residing there were never
advised to leave. According to official Washington, even today the
country is stable: its government is in undisputed control of its
borders; its police force and army are efficient and loyal; its people
are well clothed, well fed, and well educated.
Consider the way the State Department has handled visas for Saudi
nationals. Until 9/11, Saudis were not even required to appear
at the U.S. embassy in Riyadh or the consulate in Jidda for a visa
interview. Under a system called Visa Express a Saudi had only to send
his passport, an application, and the application fee to a travel
agent. The Saudi travel agent, in other words, stood in for the
U.S. government. Just about any Saudi who had the money could book
a flight to New York after a mere twenty-hour wait. Until recently
Saudis were exempt from the new anti-terrorism entry regulations that
apply to citizens of other Middle Eastern countries, despite the fact
that most of the 9/11 terrorists were Saudis.
"The Saudi Arabian Government, at all levels, continued to reaffirm
its commitment to combating terrorism," the State Department's 1999
report Patterns of Global Terrorism soberly asserted. The report
went on to state, "The Government of Saudi Arabia continued to
investigate the bombing in June 1996 of the Khobar Towers." This was
false; Prince Nayef, Saudi Arabia's grim Interior Minister, had been
stalling the investigation for years. Nayef told the kingdom's other
senior princes that he was reluctant to help the United States with
the Khobar investigation. In one heated meeting Nayef ignored Defense
Minister Sultan when Sultan warned that stonewalling the FBI would
end up causing a rift with the United States. To make his point Nayef
went out of his way to avoid meeting the FBI's director, Louis Freeh,
when Freeh showed up in Saudi Arabia to see what he could do to get
the Khobar investigation going. Nayef put himself out of reach-on
his yacht, anchored off the coast near Jidda, in
the Red Sea-and turned the chore over to two low-ranking officials
in the internal-security service, neither of whom knew anything
about the Khobar investigation.
Even after the 1998 attacks on the U.S. embassies in Kenya and
Tanzania, which were organized by Osama bin Laden from his bases in
Afghanistan, the Saudi royals continued to aid the Taliban and its
main supporter in the region, Pakistan. This was hardly a secret:
in July of 2000 Petroleum Intelligence Weekly, which calls itself
the "bible" of the international petroleum industry, reported that
Saudi Arabia was sending as many as 150,000 barrels of oil a day to
Afghanistan and Pakistan in off-budget foreign aid that had a value of
something like $2 million a day. Furthermore, the United States had
known since 1994 that the Saudis were supporting Pakistan's nuclear
development program, ultimately contributing upwards of a billion
dollars. More recently, because Saudi law does not allow foreign
agencies to directly question Saudi citizens, the FBI has not been
allowed to interview Saudi suspects, including the families of the
fifteen Saudi hijackers, about the 9/11 attacks. For more
than a year after September 11 Saudi Arabia refused to provide advance
manifests for flights coming into the United States-which could have
led to a basic and potentially fatal breach of security. Although
there are plenty of possible al Qaeda members awaiting trial, as
of this writing there hasn't been a single Saudi arrest related to
9/11-not even of a material witness.
As for the CIA, the Agency let the State Department take the lead
and decided simply to ignore Saudi Arabia. The CIA recruited no Saudi
diplomats to tell us, for instance, what the religious-affairs sections
of Saudi embassies were up to. The CIA's Directorate of Intelligence
avoided writing national intelligence estimates-appraisals, drawn
from various U.S. intelligence services, about areas of potential
crisis-on Saudi Arabia, knowing that such estimates, especially when
negative, have a tendency to find their way onto the front pages of
U.S. newspapers, where they might have an undesired effect on public
opinion. The CIA's line became the same as State's: There's no need
to worry about Saudi Arabia and its oil reserves.
No need to worry, of course, means business as usual-and for decades
now that's meant that almost every Washington figure worth mentioning
has been involved with companies doing major deals with Saudi
Arabia. Spending a lot of money was a tacit part of the U.S.-Saudi
relationship practically from the very beginning: the Americans would
buy Saudi Arabia's oil and would provide the Saudis with protection and
security; the Saudis would buy American weapons, construction services,
communications systems, and drilling rigs. In the global-economics
game this is known as "recycling," and in this case it worked well:
two-way trade between Saudi Arabia and the United States grew from
$56.2 million in 1950 to $19.3 billion in 2000-an average annual
growth rate of nearly 70 percent.
Consider the case of the Carlyle Group-a private investment company,
founded in 1987, that almost since its inception has been conducting
immensely profitable business with Saudi Arabia. From 1993 to 2002
the chairman of Carlyle was Frank Carlucci, who served first as
Ronald Reagan's National Security Adviser and then as his Secretary
of Defense. Carlyle's senior counselor is James Baker, who served as
Secretary of State under George H.W. Bush-who in his post-presidency
also happens to be a Carlyle adviser. Others who hang their hats at
Carlyle include Arthur Levitt, the head of the Securities and Exchange
Commission under Bill Clinton, and now Carlyle's senior adviser;
John Major, a former Prime Minister of Great Britain and the current
chairman of Carlyle Europe; William Kennard, who chaired the Federal
Communications Commission during the second Clinton Administration;
Afsaneh Mashayekhi Beschloss, a former treasurer and chief investment
officer of the World Bank; and Richard
Darman, who ran the Office of Management and Budget under the first
President Bush and also served as deputy secretary of the treasury
under Reagan.
Carlyle isn't the only company in this business. Halli-burton, run
by Dick Cheney between his stints as Secretary of Defense under the
first George Bush and Vice President under the second, has been
a frequent beneficiary of Saudi money. In late 2001 Halliburton
landed a $140 million contract to develop a new Saudi oil field. For
many years Condoleezza Rice, now President Bush's National Security
Adviser, served on the board of Chevron, which merged in 2001 with
Texaco. The new corporation, ChevronTexaco, is a partner with Saudi
Aramco in several ventures and has recently joined forces with Nimir
Petroleum to develop oil fields in Kazakhstan. Currently on the board
of ChevronTexaco are Carla Hills, who served as the Secretary of
Housing and Urban Development under Gerald Ford and as a U.S. trade
representative under George H.W. Bush; the former Louisiana senator
J. Bennett Johnston, who made a specialty of energy issues while in
Congress; and the former Georgia senator Sam Nunn, who
served most notably as head of the Senate Armed Services Committee.
Elsewhere, Nicholas Brady, the Secretary of the Treasury under the
first President Bush, and Edith Holiday, a former assistant to the
first President Bush, serve on the board of Amerada Hess, which has
teamed with some of Saudi Arabia's most powerful royal-family members
to exploit the rich oil resources of Azerbaijan. In 1998 Amerada
Hess formed a joint venture, Delta Hess, with the Saudi-owned Delta
Oil to explore and exploit petroleum resources in Azerbaijan. The
Houston-based Frontera Resources Corporation joined the Azerbaijan
hunt the same year, teaming with the newly created Delta Hess. Among
the members of Frontera's board of advisers: the former Texas senator,
former Secretary of the Treasury, and 1988 Democratic vice-presidential
candidate Lloyd Bentsen; and John Deutch, a former CIA director.
Just to make sure that no one upsets the workings of this system,
perhaps by meddling in internal Saudi affairs, Saudi Arabia
now keeps possibly as much as a trillion dollars on deposit in
U.S. banks-an agreement worked out in the early eighties by the
Reagan Administration, in an effort to get the Saudis to offset
U.S. government budget deficits. The Saudis hold another trillion
dollars or so in the U.S. stock market. This gives them a remarkable
degree of leverage in Washington. If they were suddenly to withdraw
all their holdings in this country, the effect, though perhaps not as
catastrophic as having a major source of oil shut down, would still
be devastating.
The U.S.-Saudi relationship would not be as cozy as it is without
there being someone well connected on both sides who can move
comfortably between them. That someone is the fifty-four-year-old
Prince Bandar. Although he ranks low on the royal bloodline (his
father is King Fahd's brother Sultan, the Saudi Defense Minister,
but his mother was a house servant), Prince Bandar has been the Saudi
ambassador to the United States since 1983. He is the only foreign
ambassador to have a security detail assigned to him by the State
Department. A daredevil fighter pilot in his younger years, a Muslim
with a taste for single-malt Scotch, and an envoy with a perpetually
open wallet, Bandar has proved adept at working both the public and
the private sides of diplomacy. As the Saudi military attaché to
the United States, he scored a stunning coup in 1981 by persuading
Congress to approve the sale of awacs air-defense technology to his
country, over the objections of aipac, the pro-Israeli
Washington lobby. Later, as ambassador, Bandar conveyed the kingdom's
thanks by secretly placing $10 million in a Vatican City bank, as
reported last year in The Washington Post; the money, deposited at
the request of William Casey, then the director of the CIA, was to
be used by Italy's Christian Democratic Party in a campaign against
Italian Communists. Later still, in June of 1984, Bandar started
paying out $30 million from the royal family so that Lieutenant
Colonel Oliver North could buy arms for the Nicaraguan contras.
It is on the personal front, however, where Bandar shines. A visit
in the early nineties to the summer home of George H.W. Bush,
in Kennebunkport, Maine, earned the prince the affectionate family
sobriquet "Bandar Bush." Bandar reciprocated by inviting Bush to hunt
pheasant on his estate in England. For good measure he also contributed
a million dollars to the construction of the Bush Presidential Library,
in College Station, Texas. King Fahd sent another million to Barbara
Bush's campaign against illiteracy. (He had donated a million dollars
to Nancy Reagan's "Just Say No" campaign against drugs four years
earlier.) Bandar was once Colin Powell's racquetball partner.
Press accounts portrayed Bandar as largely on the outside during
the Clinton years, passing melancholy weeks at his mountain compound
in Aspen, Colorado (more than 50,000 square feet, thirty-two rooms,
sixteen bathrooms). If Bandar was less physically present, however,
he was his usual useful self. In 1992 he persuaded King Fahd to donate
$20 million to the University of Arkansas's new Center for Middle
Eastern Studies, a gesture of respect for the Arkansas governor who
had just been elected President. He is said to have played a role
in persuading the Libyans, in 1999, to turn over two intelligence
operatives suspected in the 1988 bombing of Pan Am Flight 103,
over Lockerbie, Scotland. As he reportedly does at the end of every
administration, whether he is perceived as friend or foe, Bandar
also invited each of the Clinton Cabinet members out to dinner,
at a restaurant of their choice, in a private room or a public one,
depending on their willingness to be seen with him.
Prince Bandar once told associates that he is very careful to look
after U.S. government officials when they return to private life. "If
the reputation then builds that the Saudis take care of friends when
they leave office," Bandar has observed, according to a source cited
in The Washington Post, "you'd be surprised how much better friends
you have who are just coming into office." Practically every deal
with the Saudis eventually becomes hard to trace, lost in some desert
sandstorm back near the wellheads where the money sprang from in the
first place. Many of Washington's lobbyists, PR firms, and lawyers
live off Saudi money. Just about every Washington think tank has taken
it. So have the John F. Kennedy Center for the Performing Arts, the
Children's National Medical Center, and every presidential library
built in the past thirty years.
Bandar hurtled back to prominence after the election of George W. Bush,
occupying a spot somewhere between ambassador and permanently enthroned
visiting head of state. But after 9/11 he began to experience some
difficulty in maintaining a positive Saudi image. In March of last
year agents of the Treasury Department raided the northern-Virginia
offices of four Saudi-based charities: the SAAR Foundation, the Safa
Trust, the International Institute for Islamic Thought (IIIT), and
the International Islamic Relief Organization (IIRO). Also raided was
the local headquarters for the Muslim World League, an umbrella group
funded by the Saudi government. All five organizations are located only
a few miles from Bandar's mansion overlooking the Potomac River. The
organizations can point to a long list of genuinely humanitarian
causes they have aided and supported; but they also have a long list
of alarming associations. Testifying before Congress in August of 2002,
Matthew Levitt, a senior
fellow with the Washington Institute for Near East Policy, noted
that Tarik Hamdi, an IIIT employee, had personally provided Osama bin
Laden with batteries for his satellite phone-a critical link in the
stateless world that bin Laden inhabits. IIIT and the SAAR Foundation
are suspected of helping to finance Hamas and the Palestinian Islamic
Jihad, the sponsors of some of the most lethal suicide bombers
in the Middle East. From 1986 to 1994 Muhammad Jamal Khalifa, a
brother-in-law to Osama bin Laden, ran the IIRO's Philippine office,
from which he channeled funds to al Qaeda. Only excellent work by
the Indian police prevented another IIRO employee, Sayed Abu Nasir,
from bombing the U.S. consulates in Calcutta and Madras.
In mid-2002 word leaked to the press that the semi-official
Defense Policy Board, chaired by the notorious cold warrior Richard
Perle, had sponsored a report declaring Saudi Arabia to be part
of the problem of international terrorism rather than part of the
solution. Saudi Arabia, the report stated, was "central to the
self-destruction of the Arab world and the chief vector of the Arab
crisis and its outwardly-directed aggression." It went on to say,
"The Saudis are active at every level of the terror chain, from
planners to financiers, from cadre to foot-soldier, from ideologist to
cheerleader." Within hours Colin Powell was on the phone to the Saudi
Foreign Minister, assuring him-and through him, the royal family-that
such apostasy was not and never would be the official stance of the
Bush Administration. To reinforce the message, President Bush invited
Bandar down to the family ranch at Crawford, Texas.
And yet the image problems have continued. In October of 2001, nato
forces raided the offices of the Saudi High Commission for Aid to
Bosnia, founded by Prince Salman, and discovered, among other items,
photos of the U.S. embassies in Kenya and Tanzania, before and after
they were bombed; photos of the World Trade Center and the USS Cole;
information on the use of crop-duster planes; and materials for forging
U.S. State Department badges. His job wasn't made any easier when,
in the fall of last year, Bandar found himself having to explain away
the fact that about $130,000 in charitable contributions from his wife,
Princess Haifa, might have ended up with two of the 9/11 hijackers.
In the wake of these revelations a U.S. delegation headed by Alan
Larson, President Bush's undersecretary of state for economic affairs,
traveled to Riyadh last November, ostensibly to prod the Saudis
toward increasing the surveillance of their charities and financial
networks. But U.S. and Saudi sources say that one of the main reasons
for Larson's trip was to ensure that if the United States invaded
Iraq, the Saudis would guarantee the flow of extra oil into the world
market. The U.S. embrace of the House of Saud was as tight as ever.
Washington's answer for Saudi Arabia-apart from repeating that
nothing is wrong-is to suggest that a little democracy will cure
everything. Talk the royal family into ceding at least part of
its authority; support the reform-minded princes; set up a model
parliament; co-opt the firebrands with a cabinet position or two,
a minor political party, and some outright bribery; send Jimmy
Carter in to monitor the first election; and in a few generations
Riyadh will be Ankara, maybe even London. The governmental mechanism
may be faulty, the Washington view maintains, but the people who
administer the government are for the most part committed to rooting
out corruption, rounding up terrorists, and recognizing the right
of the people to self-government.
It's utter nonsense, of course. If an election were held in Saudi
Arabia today, if anyone who wanted to could run for the office of
president, and if people could vote their hearts without fear of having
their heads cut off afterward in Chop-Chop Square, Osama bin Laden
would be elected in a landslide-not because the Saudi people want to
wash their hands in the blood of the dead of September 11, but simply
because bin Laden has dared to do what even the mighty United States
of America won't do: stand up to the thieves who rule the country.
Saudi Arabia today is a mess, and it is our mess. We made it the
private storage tank for our oil reserves. We reaped the benefits of a
steady petroleum supply at a discounted price, and we grabbed at every
available Saudi petrodollar. We taught the Saudis exactly what was
expected of them. We cannot walk away morally from the consequences of
this behavior-and we really can't walk away economically. So we crow
about democracy and talk about someday weaning ourselves from our
dependence on foreign oil, despite the fact that as long as America
has been dependent on foreign oil there has never been an honest,
sustained effort at the senior governmental level to reduce long-term
U.S. petroleum consumption.
Not all the wishing in the world will change the basic reality of
the situation.
* Saudi Arabia controls the largest share of the world's oil and
serves as the market regulator for the global petroleum industry.
* No country consumes more oil, and is more dependent on Saudi oil,
than the United States.
* The United States and the rest of the industrialized world are
therefore absolutely dependent on Saudi Arabia's oil reserves, and
will be for decades to come.
* If the Saudi oil spigot is shut off, by terrorism or by political
revolution, the effect on the global economy, and particularly on
the economy of the United States, will be devastating.
* Saudi oil is controlled by an increasingly bankrupt, criminal,
dysfunctional, and out-of-touch royal family that is hated by the
people it rules and by the nations that surround its kingdom.
Signs of impending disaster are everywhere, but the House of Saud has
chosen to pray that the moment of reckoning will not come soon-and the
United States has chosen to look away. So nothing changes: the royal
family continues to exhaust the Saudi treasury, buying more and more
arms and funneling more and more "charity" money to the jihadists,
all in a desperate and self-destructive effort to protect itself.
The fact is that the West, especially the United States, has left
the Saudis little choice. Leading U.S. corporations hire and rehire
known Saudi crooks and known financiers of terrorism to represent
their interests, so that they can land the deals that will pay the
commissions back in Saudi Arabia-commissions that will further erode
the budget and thus further divide the ruling class from everyone
else. Former CIA directors serve on boards whose members have to hold
their noses to cut deals with Saudi companies-because that's business,
that's the price of entry, that's the way it's done. Ex-Presidents,
former prime ministers, onetime senators and congressmen, and Cabinet
members walk around with their hands out, acting as if they're doing
something else but rarely slowing down, because most of them know it's
an endgame too. But sometime soon, one way or another, the House of
Saud is coming down.
The URL for this page is http://www.theatlantic.com/doc/200305/baer
--Boundary_(ID_nAH4ubiUn/VO6LQolPcG5g)--