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UNDERSTANDING
THE PRESENT CRISIS |
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The Fall of
the House of Saud Robert Baer, The Atlantic Monthly, 19 May 2003 |
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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 from 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. 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, carded 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 Kuwait 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 Guantanamo 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 trace 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. Mind 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 deriding 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. Halliburton, 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 attache 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 hurried 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. Robert Baer served for twenty-one years with the CIA,
primarily as a field officer in the Middle East. He resigned from the agency
in 1997 and was awarded its Career Intelligence Medal in 1998. This article
is adapted from the forthcoming book Sleeping
With the Devil (Crown Publishers), to be published in June. © Copyright 2003 The Atlantic Monthly
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