Bandar Bush Named in British Scandal

An aerospace company reportedly placed up to $2 billion into accounts held by a key ally of the Bush administration.

The LATimes reports:

Prince Bandar bin Sultan, the powerful former Saudi ambassador to the U.S. who has been one of the Bush administration's strongest allies in the Middle East, was publicly linked to a widening British corruption scandal Thursday with reports that a British aerospace company secretly transferred up to $2 billion into bank accounts at the Saudi Embassy in Washington.

The new allegations point a finger directly at Bandar, the son of the Saudi crown prince and a man who has been a key ally for President Bush and his father, as well as a frequent contact of Vice President Dick Cheney. For years, the prince has been considered the most important go-between in the close and often secretive relationship between the U.S. and the royal family.

According to reports by the BBC and London's Guardian newspaper, documents show that BAE Systems made cash transfers to Bandar every three months for 10 years or more, drawn from a confidential account to which British government departments had access.

The alleged payments grew out of a 20-year, $86-billion oil-for-arms deal under which Britain supplied Saudi Arabia with 120 Tornado warplanes, Hawk training jets and other military equipment. The deal, known as Yamamah ("dove" in Arabic), was Britain's largest export contract.

A former BAE official has said the company made legal payments to "agents" beginning in the 1980s. But the news reports said that money was funneled to Bandar, with some of the cash going to fund the prince's private Airbus. The money reportedly was described as fees for marketing services.

"Hundreds of thousands and millions of dollars were involved," U.S. bank investigator David Caruso told the BBC. He confirmed his account in a brief interview with the Los Angeles Times. "There wasn't a distinction between the accounts of the embassy, or official government accounts as we would call them, and the accounts of the royal family," he said.

The reports suggested for the first time that Britain's Ministry of Defense had authorized the secret payments, and they also left open the possibility that payments occurred after 2001, when Britain made it illegal to bribe foreign officials.

The Yamamah contract already was the center of a government investigation. But in December, that three-year probe was halted in the interests of Britain's "national and international security" with the approval of Prime Minister Tony Blair. The new allegations reignited controversy over that decision.

The Serious Fraud Office's decision to close its probe led to charges that Britain was attempting to shore up its negotiations to sell a $20-billion new fleet of Eurofighter Typhoon jets to the desert kingdom.

But British officials said their real fear was losing Saudi Arabia's cooperation in the war on terrorism. Atty. Gen. Peter Goldsmith told Parliament the heads of Britain's security and intelligence agencies, as well as the nation's ambassador in Riyadh, the Saudi capital, had warned that the investigation could seriously damage relations.

Blair, whose final weeks as prime minister threaten to be shadowed by talk of slush funds and coverups, again defended the decision to call off the probe.

"This investigation, if it had gone ahead, would have involved the most serious allegations and investigations being made into the Saudi royal family," Blair told reporters Thursday in Germany, where he was attending the Group of 8 summit.

"My job is to give advice as to whether that is a sensible thing in circumstances where I don't believe the investigations would have led anywhere except to the complete wreckage of a vital, strategic relationship for our country in terms of fighting terrorism," he said.

But in London there were calls for reopening the inquiry.

"What's new about these revelations are several things. First of all, it's the sheer scale of the payments: It may well be a billion pounds being paid to this one prince," Vincent Cable, a Liberal Democratic member of Parliament who earlier had identified Bandar as a possible target of the probe, said in an interview.

"Secondly, this is the first time [Bandar] has been fingered in quite such a direct and clear way," he said. "The other key point, what's really new about all this and very alarming, is that it does appear that the British government was first of all aware of these payments, and very complicit in them, and moreover, they were made until very recently."

The Ministry of Defense said it could not comment on the reports "as to do so would involve confidential information about al-Yamamah, and that would cause the damage that ending the investigation was designed to prevent."

BAE spokeswoman Lisa Hillary-Tee said in a statement that the company had already handed all information on the contract in its possession to the Serious Fraud Office. "After an exhaustive investigation, it was concluded, over and above the interests of national security, that there was and is no case to answer," she said.

"The al-Yamamah program is a government-to-government agreement, and all such payments made under those agreements were made with the express approval of both the Saudi and the UK governments," she said. "We deny all allegations of wrongdoing," she added.

Payments to foreign officials to win contracts are also illegal under U.S. law. But such payments have long been a feature of contracts in the Middle East, and have been considered an important source of revenue for the Saudi royal family.

"It's widely assumed that members of the royal family get a share in business deals whether they do anything for that share or not," said Jon Alterman, Middle East program director at the Center for Strategic and International Studies in Washington.

"It's part of the way the system works, and in return the princes are often extraordinarily generous with charities and other institutions," he added.

He said Britain's concern over jeopardizing cooperation on security issues reflects the "deep and intimate contact between the Saudi government and Western governments on counter-terrorism" that is considered vital.

"It's not only counter-terrorism inside the kingdom of Saudi Arabia. Muslims pass through Saudi Arabia to go on pilgrimage, so the Saudis have some of the best information about Muslims throughout the world. Their involvement in religious networks means they have both information and influence that reaches throughout the world."

"But to get things done, you need the cooperation of Saudi princes. And it's hard to get the cooperation of individuals who you are simultaneously investigating and accusing of crimes."

Seymour Hersh: "Bush Administration Arranged Support For Militants Attacking Lebanon

Raw Story reports:

In an interview on CNN International's Your World Today, veteran journalist Seymour Hersh explains that the current violence in Lebanon is the result of an attempt by the Lebanese government to crack down on a militant Sunni group, Fatah al-Islam, that it formerly supported.

Last March, Hersh reported that American policy in the Middle East had shifted to opposing Iran, Syria, and their Shia allies at any cost, even if it meant backing hardline Sunni jihadists.A key element of this policy shift was an agreement among Vice President Dick Cheney, Deputy National Security Advisor Elliot Abrams, and Prince Bandar bin Sultan, the Saudi national security adviser, whereby the Saudis would covertly fund the Sunni Fatah al-Islam in Lebanon as a counterweight to the Shia Hezbollah.

Hersh points out that the current situation is much like that during the conflict in Afghanistan in the 1980's – which gave rise to al Qaeda – with the same people involved in both the US and Saudi Arabia and the "same pattern" of the US using jihadists that the Saudis assure us they can control.

When asked why the administration would be acting in a way that appears to run counter to US interests, Hersh says that, since the Israelis lost to them last summer, "the fear of Hezbollah in Washington, particularly in the White House, is acute."

As a result, Hersh implies, the Bush administration is no longer acting rationally in its policy. "We're in the business of supporting the Sunnis anywhere we can against the Shia. ... "We're in the business of creating ... sectarian violence." And he describes the scheme of funding Fatah al-Islam as "a covert program we joined in with the Saudis as part of a bigger, broader program of doing everything we could to stop the spread of the Shia world, and it just simply -- it bit us in the rear."

Transcript:

HALA GORANI: Well, investigative journalist Seymour Hersh reported back in March that in order to defeate Hezbollah, the Lebanese government supported a Sunni militant group, the same ones they're fighting today. Seymour joins us live from Washington. Thanks for being with us. What is the source of the financing according to your reporting on these groups, such as Fatah al-Islam in these camps of Nahr el Bared, for instance? Where are they getting the money and where are they getting the arms?

SEYMOUR HERSH: The key player is the Saudis. What I was writing about was sort of a private agreement that was made between the White House, we're talking about Richard -- Dick -- Cheney and Elliott Abrams, one of the key aides in the White House, with Bandar. And the idea was to get support, covert support from the Saudis, to support various hard-line jihadists, Sunni groups, particularly in Lebanon, who would be seen in case of an actual confrontation with Hezbollah -- the Shia group in the southern Lebanon -- would be seen as an asset, as simple as that.

GORANI: The Senora government, in order to counter the influence of Hezbollah in Lebanon would be covertly according to your reporting funding groups like Fatah al-Islam that they're having issues with right now?

HERSH: Unintended consequences once again, yes.

GORANI: And so if Saudi Arabia and the Senora government are doing this, whether it's unintended or not, therefore it has the United States must have something to say about it or not?

HERSH: Well, the United States was deeply involved. This was a covert operation that Bandar ran with us. Don't forget, if you remember, you know, we got into the war in Afghanistan with supporting Osama bin Laden, the mujahadin back in the late 1980s with Bandar and with people like Elliott Abrams around, the idea being that the Saudis promised us they could control -- they could control the jihadists so we spent a lot of money and time, the United States in the late 1980s using and supporting the jihadists to help us beat the Russians in Afghanistan and they turned on us. And we have the same pattern, not as if there's any lessons learned. It's the same pattern, using the Saudis again to support jihadists, Saudis assuring us they can control these various group, the groups like the one that is in contact right now in Tripoli with the government.

GORANI: Sure, but the mujahadin in the '80s was one era. Why would it be in the best interest of the United States of America right now to indirectly even if it is indirect empower these jihadi movements that are extremists that fight to the death in these Palestinian camps? Doesn't it go against the interests not only of the Senora government but also of America and Lebanon now?

HERSH: The enemy of our enemy is our friend, much as the jihadist groups in Lebanon were also there to go after Nasrullah. Hezbollah, if you remember, last year defeated Israel, whether the Israelis want to acknowledge it, so you have in Hezbollah, a major threat to the American -- look, the American role is very simple. Condoleezza Rice, the secretary of state, has been very articulate about it. We're in the business now of supporting the Sunnis anywhere we can against the Shia, against the Shia in Iran, against the Shia in Lebanon, that is Nasrullah. Civil war. We're in a business of creating in some places, Lebanon in particular, a sectarian violence.

GORANI: The Bush administration, of course, officials would disagree with that, so would the Senora government, openly pointing the finger at Syria, saying this is an offshoot of a Syrian group, Fatah al-Islam is, where else would it get its arms from if not Syria.

HERSH: You have to answer this question. If that's true, Syria which is close -- and criticized greatly by the Bush administration for being very close -- to Hezbollah would also be supporting groups, Salafist groups -- the logic breaks down. What it is simply is a covert program we joined in with the Saudis as part of a bigger broader program of doing everything we could to stop the spread of the Shia, the Shia world, and it bit us in the rear, as it's happened before.

GORANI: Sure, but if it doesn't make any sense for the Syrians to support them, why would it make any sense for the U.S. to indirectly, of course, to support, according to your reporting, by giving a billion dollars in aid, part of it military, to the Senora government -- and if that is dispensed in a way that that government and the U.S. is not controlling extremist groups, then indirectly the United States, according to the article you wrote, would be supporting them. So why would it be in their best interest and what should it do according to the people you've spoken to?

HERSH: You're assuming logic by the United States government. That's okay. We'll forget that one right now. Basically it's very simple. These groups are seeing -- when I was in Beirut doing interviews, I talked to officials who acknowledged the reason they were tolerating the radical jihadist groups was because they were seen as a protection against Hezbollah. The fear of Hezbollah in Washington, particularly in the White House, is acute. They just simply believe that Hassan Nasrallah is intent on waging war in America. Whether it's true or not is another question. There is a supreme overwhelming fear of Hezbollah and we do not want Hezbollah to play an active role in the government in Lebanon and that's been our policy, basically, which is support the Senora government, despite its weakness against the coalition. Not only Senora but Mr. Ahun, former military leader of Lebanon. There in a coalition that we absolutely abhor.

GORANI: All right, Seymour Hersh of "The New Yorker" magazine, thanks for joining us there and hopefully we'll be able to speak a little bit in a few months' time when those developments take shape in Lebanon and we know more. Thanks very much.

HERSH: glad to talk to you.