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by Maggie Mulvihill, Jack Meyers and
Jonathan Wells
December 11, 2001, The Boston Herald, ALL EDITIONS
A powerful Washington, D.C., law firm with unusually
close ties to the White House has earned hefty fees representing
controversial Saudi billionaires as well as a Texas-based Islamic
charity fingered last week as a terrorist front.
The influential law firm of Akin, Gump, Strauss, Hauer
& Feld has represented three wealthy Saudi businessmen -- Khalid bin
Mahfouz, Mohammed Hussein Al-Amoudi and Salah Idris -- who have been
scrutinized by U.S. authorities for possible involvement in financing
Osama bin Laden and his terrorist network.
In addition, Akin, Gump currently represents the
largest Islamic charity in the United States, Holy Land Foundation for
Relief and Development in Richmond, Texas.
Holy Land's assets were frozen by the Treasury
Department last week as government investigators probe its ties to Hamas,
the militant Palestinian group blamed for suicide attacks against
Israelis.
Partners at Akin, Gump include one of President Bush's
closest Texas friends, James C. Langdon, and George R. Salem, a Bush
fund-raiser who chaired his 2000 campaign's outreach to Arab-Americans.
Another longtime partner is Barnett A. "Sandy" Kress,
the former Dallas School Board president who Bush appointed in January
to work for the White House as an "unpaid consultant" on education
reform.
In September, a federal grand jury issued subpoenas
for Holy Land records around the same time terrorist investigators froze
the assets of a North Texas Internet firm hired by Holy Land.
Holy Land shared office space with that firm, InfoCom
Corp., which was raided by police on Sept. 5, just days before the World
Trade Center and Pentagon attacks.
Holy Land has denied any link to Hamas.
According to Akin, Gump, the firm represents Holy Land
in a federal lawsuit filed against the charity and another suspected
Hamas entity by the parents of a man allegedly murdered by Hamas
operatives in the Middle East.
In a statement issued Friday, Akin, Gump said it
decided last week to decline a request to represent Holy Land in its
defense of terrorism-related charges made by the U.S. Treasury
Department.
Akin, Gump, which maintains an affiliate office in
the Saudi capital of Riyadh, is also a registered foreign agent for the
kingdom. It was paid $ 77,328 in lobbying fees by the Saudis during the
first six months of 2000, public records show.
In addition to the royal family, the firm's Saudi
clients have included bin Mahfouz, who hired Akin, Gump when he was
indicted in the BCCI banking scandal in the early 1990s. In 1999, the
Saudi's placed bin Mahfouz under house arrest after reportedly
discovering that the bank he controlled, National Commercial Bank in
Saudi Aabia, funneled millions to charities believed to be serving as
bin Laden fronts.
A bin Mahfouz business partner, Al-Amoudi, was also
represented by Akin, Gump. When it was reported in 1999 that U.S.
authorities were also investigating Al-Amoudi's Capitol Trust Bank,
Akin, Gump released a statement on behalf of their client denying any
connections to terrorism. One year earlier, the firm had co-sponsored an
investment conference in Ethiopia with Al-Amoudi.
Akin, Gump partner and Bush fund-raiser Salem led the
legal team that defended Idris, a banking protege of bin Mahfouz and the
owner of El-Shifa, the Sudanese pharmaceutical plant destroyed by U.S.
cruise missiles in August 1998.
The plant was targeted days after terrorists --
allegedly on the orders of bin Laden -- bombed two U.S. embassies in
Africa. The U.S. Treasury Department also froze $ 24 million of Idris'
assets, but Akin, Gump filed a lawsuit and the government later chose to
release the money rather than go to court. Idris, who insists he has no
connection whatsoever to bin Laden or terrorism, is now pursuing a
second lawsuit with different attorneys seeking $50 million in damages
from the United States.
Charles Lewis, executive director of the Center for
Public Integrity, a Washington, D.C.-based non-partisan political
watchdog group, said Akin, Gump's willingness to represent Saudi
power-brokers probed for links to terrorism presents a unique ethical
concern since partners at the firm are so close to the president.
The concern is more acute now, Lewis said, because
Bush has faced stiff resistance from the kingdom in his repeated
requests to freeze suspected terrorist bank accounts.
"The conduct of the Saudis is just unacceptable by
international standards, especially if they are supposed to be one of
our closest allies," Lewis said.
Speaking of Akin, Gump partner Kress' office in the
White House, Lewis added: "That's not appropriate and frankly it's
potentially troublesome because there is a real possibility of a
conflict of interest. Basically you have a partner for Akin, Gump . . .
inside the hen house."
But another longtime Washington political observer,
Vincent Cannistraro, the former chief of counter-intelligence at the
Central Intelligence Agency, said the political influence a firm like
Akin, Gump has is precisely why clients like the Saudis hire them.
"These are cozy political relationships . . . If you
have a problem in Washington, there are only a few firms to go to and
Akin, Gump is one of them," Cannistraro said.
Cannistraro pointed out that Idris hired Akin, Gump
during the Clinton presidency, when Clinton confidante Vernon Jordan was
a partner at the firm. "He hired them because Vernon Jordan had
influence . . . that's a normal political exercise where you are buying
influence," he said.
Akin, Gump is not the only politically wired
Washington business cashing in on the Saudi connection.
Burson-Marsteller, a major D.C. public relations firm,
registered with the U.S. government as a foreign agent for the Saudi
embassy within weeks of the Sept. 11 terror attacks.
One of Burson-Marsteller's first public relations
efforts for the Saudis was to run a large advertisement in the New York
Times reading: "We Stand with You, America."
The Washington chairman for Burson-Marsteller, which
also maintains an office in Saudi Arabia, is Craig Veith, who ran
communications for the Republican Party in the 1996 elections.
Other GOP heavyweights who have held top positions at
the PR giant include Sheila Tate, the campaign press secretary for the
elder George Bush; Leslie Goodman, deputy director of communications for
the 1992 Bush-Quayle campaign; Craig L. Fuller, chairman of the 1992
Republican National Convention and elder Bush's vice presidential
chief-of-staff.
(Second of two parts)
Many of the same American corporate executives who
have reaped millions of dollars from arms and oil deals with the Saudi
monarchy have served or currently serve at the highest levels of U.S.
government, public records show.
Those lucrative financial relationships call into
question the ability of America's political elite to make tough foreign
policy decisions about the kingdom that produced Osama bin Laden and is
perhaps the biggest incubator for anti-Western Islamic terrorists.
Nowhere is the revolving U.S.-Saudi money wheel more
evident than within President Bush's own coterie of foreign policy
advisers, starting with the president's father, George H.W. Bush.
At the same time that the elder Bush counsels his son
on the ongoing war on terrorism, the former president remains a senior
adviser to the Washington D.C.-based Carlyle Group. That influential
investment bank has deep connections to the Saudi royal family as well
as financial interests in U.S. defense firms hired by the kingdom to
equip and train the Saudi military.
Last year, former President Bush visited Saudi
Arabia's King Fahd bin Abdul Aziz Al-Saud, but a Carlyle spokesman said
the two did not discuss Carlyle business as previously reported. The
elder Bush is reportedly paid between $ 80,000 and $ 100,000 for each
Carlyle speech he makes. The company declined comment on the former
president's pay.
The Carlyle Group has also served as a paid adviser to
the Saudi monarchy on the so-called "Economic Offset Program," an
arrangement that effectively requires U.S. arms manufacturers selling
weapons to Saudi Arabia to give back a portion of their revenues in the
form of contracts to Saudi businesses, most of whom are connected to the
royal family. A company spokesman said yesterday that arrangement was
ended "a few months ago," but said he did not know whether it was
terminated before or after the Sept. 11 attacks.
A spokesman for former President Bush, reached
yesterday, had no immediate comment on his work for the Carlyle Group.
These intricate personal and financial links have led
to virtual silence in the administration on Saudi Arabia's failings in
dealing with terrorists like bin Laden, said Charles Lewis, executive
director of the Center for Public Integrity, a Washington, D.C.-based
government watchdog group.
"It's good old fashioned 'I'll scratch your back, you
scratch mine.' You have former U.S. officials, former presidents, aides
to the current president, a long line of people who are tight with the
Saudis, people who are the pillars of American society and officialdom,"
said Lewis.
"So for that and other reasons no one wants to
alienate the Saudis, and we are willing to basically ignore inconvenient
truths that might otherwise cause our blood to boil. We basically look
away," he said. "Folks don't like to stop the gravy train."
Some foreign policy observers said as long as American
power brokers in lucrative business deals with the Saudis do not
simultaneously craft U.S. foreign policy, there is no conflict of
interest.
"To have Bush Sr. on the board of Carlyle is not
necessarily a significant problem because Carlyle has interests all over
the world," said Vincent Cannistraro, a former counter-intelligence
chief for the Central Intelligence Agency.
Companies regularly entice powerful political figures
to work for them, he said.
"It's kind of business as usual. Where it really
affects things is when someone with a financial interest in a company
also has a policy position in the administration," Cannistraro said.
INSIDERS TRADING
A significant portion of the millions of dollars U.S.
companies and their politically influential executives have earned in
deals with the Saudis has been through military contracts.
The Carlyle Group had a major stake in the large
defense contractor B.D.M., which has multimillion-dollar contracts
through its subsidiaries to train and manage the Saudi National Guard
and the Saudi air force, U.S. Department of Defense records show. In
1998, Carlyle sold its controlling interest in B.D.M. to defense giant
TRW International.
Meanwhile, the boards of directors of the Carlyle
Group, B.D.M. and TRW are all stocked with high-level Republican policy
makers.
Frank C. Carlucci, a former secretary of defense under
President Reagan, was chairman of B.D.M. for most of the 1990s.
Carlucci, who also served as Reagan's national security adviser and a
deputy director of the CIA, now heads the Carlyle Group.
Along with former President Bush, other officials from
past Republican administrations now at the Carlyle Group include: former
Secretary of State James A. Baker III; ex-budget chief Richard Darman;
and former Securities and Exchange Commission chairman Arthur Levitt.
President Bush is himself linked to the Carlyle group:
He was a director of one of its subsidiaries, an airline food services
company called Caterair, until 1994. Six years later, when Bush was
governor of Texas, the board of directors of the Texas teachers' pension
fund - some of whom were his appointees - voted to invest $ 100 million
with the Carlyle Group.
The president of B.D.M. is Philip A. Odeen, a former
high-level Pentagon official in the Nixon administration. During the
Clinton administration, Odeen chaired the Pentagon task force that
planned the restructuring of the U.S. military for the 21st century.
Currently, he is the vice-chair of the Defense Science Board, which
advises the Pentagon on emerging threats.
TRW, the new owner of B.D.M., has its own noteworthy
board members, including former CIA director Robert M. Gates and Michael
H. Armacost, who served as undersecretary of state under President
Reagan and as ambassador to Japan for former President Bush.
Big Saudi money also makes its way back to Texas and
the Bush family. The family of Saudi Arabia's longtime U.S. ambassador,
Prince Bandar bin Sultan bin Abdul Aziz, gave $ 1 million to the Bush
Presidential Library in College Station, Texas.
THE REVOLVING DOOR
Another example of the complex web connecting U.S. and
Saudi powerbrokers is Dick Cheney, who moved from the Pentagon to the
international oil business and back as vice president last year.
After serving as the elder Bush's secretary of
defense, Cheney was hired to run oil-services giant Halliburton Co.,
where he worked until he resigned last year to campaign with the younger
Bush. In 2000, his last year with Halliburton, Cheney received $ 34
million when he cashed out from the company.
Not surprisingly, Halliburton's links to Cheney and
other Washington power brokers appear to have helped the company's
business prospects in the Middle East.
Just last month, Halliburton was awarded a $ 140
million contract to develop an oil field in Saudi Arabia by the
kingdom's state-owned petroleum firm, Saudi Aramco, and a Halliburton
subsidiary, Kellogg Brown & Root, along with two Japanese firms, was
hired by the Saudis to build a $ 40 million ethylene plant.
Cheney isn't the only member of President Bush's inner
circle whose work for firms connected to the Saudis has paid big
dividends.
The current national security adviser, Condoleezza
Rice, is a former longtime member of the board of directors of another
giant oil conglomerate with business in the Saudi desert, Chevron, which
merged with Texaco this year. Rice even has a Chevron oil tanker named
after her.
Substantial profits received by U.S. leaders in
private sector deals with the Saudis have helped to squelch criticism of
the royal family's refusal to address the role its country has played in
fueling Islamic terrorism, Lewis said.
"There's a disconnect there," Lewis said. "I'm
fascinated that we don't lay this at Saudi Arabia's doorstep. But the
chances to cash in and the amount you can cash in for are starting to
become absolutely astronomical. Who wants to look like the Boy Scout
complaining about it and potentially jeopardize their own
post-employment prospects?"
Former advisers to the president's father also hold
key positions with U.S. firms which have teamed up with the Saudis on
major oil deals.
Former Bush Secretary of the Treasury Nicholas Brady
and a former Bush assistant, Edith E. Holiday, are both on the board of
directors of Amerada Hess, an American petroleum firm currently teaming
up with several powerful Saudi families to develop oil fields in
Azerbaijan.
Another company that has done business with wealthy
Saudis is international energy firm Frontera Resources Corp. based in
Houston. Until recently, Frontera was a 30 percent investor in a $ 900
million project to develop oilfields in Azerbajian. Also investing in
the project were Azerbaijan's state-run oil company and Delta-Hess, a
joint-venture created by the Saudis' Delta Oil and Amerada Hess.
Randy Theilig, a Frontera spokesman, said the company
relinquished its interest in the project in July because it was no
longer "economically viable," and has no current business dealings with
the Saudis or in Azerbajian.
Members of Frontera's board of advisers, which
includes former CIA director John Deutch and former Secretary of the
Treasury and U.S. Sen. Lloyd Bentsen, have been active financial
supporters of the Democratic Party.
Shining a bright light on the web of financial
connections between the power elite in the U.S. and Saudi Arabia is
critical, Middle Eastern foreign policy experts said.
"I think the fact that they have these connections
makes it important for this information to be made public," said Henry
Siegman, a senior fellow on the Middle East at the Council on Foreign
Relations.
Larry Noble, executive director of the Center for
Responsive Politics in Washington, D.C., a non-partisan group that
examines money and politics, said the Bush-Carlyle connection is a
concern.
"It is well known that the father is a close adviser
to his son and therefore it does raise concerns," Noble said "It's not
necessarily that the father has been compromised, but the danger is that
it leads people to question George W. Bush. The public has a right to
feel their leaders are making independent judgments without the
influence of private interests."
Saudi connections
Past and present members of recent White House
administrations include an elite of American corporate executives with
connections to firms that have reaped millions of dollars in business
with Saudi Arabia.
Present administration officials:
George W. Bush
Then: Director, Carlyle Group subsidiary
Now: President
Dick Cheney
Then: Secretary of defense; chairman, Halliburton
Now: Vice President
Condoleezza Rice
Then: Director, Chevron
Now: National security advisor
Former administration officials:
George H. W. Bush
Then: former president, CIA director
Now: senior advisor, Carlyle Group
Frank C. Carlucci
Then: former secretary of defense, national security advisor
Now: chairman, Carlyle Group; ex-chairman, BDM
James A. Baker III
Then: secretary of state
Now: senior counselor, Carlyle Group
Richard Darman
Then: budget chief
Now: managing director and senior advisor, Carlyle Group
Arthur Levitt
Then: chairman, Securities and Exchange Commission
Now: senior advisor, Carlyle Group
George W. Bush
Then: director, Carlyle Group subsidiary
Now: President
Philip A. Odeen
Then: senior official, Pentagon and National Security Council
Now: president, BDM
Robert M. Gates
Then: CIA director
Now: director, TRW
Michael H. Armacost
Then: ambassador to Japan; undersecretary of state
Now: director, TRW
Dick Cheney
Then: secretary of defense; chairman, Halliburton
Now: Vice President
Condoleeza Rice
Then: director, Chevron
Now: national security advisor
Nicholas Brady
Then: treasury secretary
Now: director, Amerada Hess
Edith E. Holiday
Then: assistant to the President
Now: director, Amerada Hess
John Deutch
Then: CIA director, undersecretary of defense
Now: advisor, Frontera Resources
Lloyd Bentsen
Then: U.S. Senator
Now: advisor, Amerada Hess
Campaign cash
Oil and defense companies and their employees, as well
as lobbying firms, gave big bucks to Republican Party candidates in the
last election, including GOP President George W. Bush's presidential
campaign. The following is a sample of some of those contributions from
companies and individuals doing business with Saudi Arabia.
OIL:
Chevron: $769,588
Texaco: $353,118
Unocal: $42,600
Halliburton: $383,947
Marathon Oil: $161,500
Amerada Hess: $165,400
DEFENSE:
TRW Inc.: $ 378,450
The Carlyle Group: $ 108,560
SAIC: $ 313,000
LOBBYISTS:
Akin, Gump, Strauss Hauer & Feld: $412,274
Cassidy & Associates: $140,183
Burson-Marsteller: $55,000
Source: The Center for Responsive Politics
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