Senator Phil Gramm has lent his imprimatur to two notable initiatives in connection with the September 11 terrorist attacks. Last year as chairman of the Senate Banking committee, Gramm stopped a Clinton administration proposal that would have made it easier for investigators to follow the flow of terrorist money; and last week he apparently nearly prevented $20 billion in disaster aid to New York City from being included in an emergency appropriation bill. Meanwhile the Wall Street Journal reported that the Osama bin Laden's family was among the investors in one or more funds operated by The Carlyle Group, a Washington, DC merchant bank that has George Bush Sr. on its payroll, and of which W. himself was a director from 1990 to 1994.
New York Senators Chuck Schumer and Hillary Clinton met with George W. Bush on the afternoon of Thursday, September 13. Bush's support for their request for $20 billion in disaster relief for New York City has been widely reported. The understanding was that the $20 billion would be made available through an emergency supplemental-appropriations measure. The measure was drafted by the Office of Management and Budget, and called for a total of $40 billion -- half for military preparedness, and half for "disaster-recovery activities and assistance" for New York, Virginia, and Pennsylvania. At around 8:00 PM, an aide to Senator Clinton checked with her on the Senate floor, and was told "It's falling apart. We've got to go talk to Daschle right now."
Somehow a second version of the bill had emerged from OMB, calling for only $20 billion. After that was spent, an additional $20 billion could be appropriated, "in a subsequent Act of Congress attendant to a specific emergency request proposed by the President." Congressman Jerry Nadler told New York magazine "It's clear to me that [Senators] Gramm and Nickles tried to take out the earmark." Schumer and Clinton were meeting with Senate Majority Leader Tom Daschle and other Democratic congressional leaders when they learned that Senators Gramm and Nickles were in Speaker of the House Dennis Hastert's office. Rather than join them, Schumer elected to phone Bush chief of staff Andrew Card, while Clinton called members of congress enlisting support. In Hastert's office, Gramm and Nickles, who have nothing to do with appropriations, were arguing against the bill. An unidentified source told New York magazine, "Gramm just doesn't want to spend any money. And Nickles ... he's just anti-New York. He was saying that Oklahoma City didn't get anything like this amount after the bombing there." A $40 billion appropriations measure eventually passed both houses unanimously.
But if Gramm doesn't want the government to spend any money, even for disaster aid to NYC, he apparently doesn't want law enforcement or treasury agencies to be able to track how criminals and terrorists spend (or hide) theirs, either. Even in the aftermath of the attacks Gramm was unrepentant about his opposition to cracking down on money laundering and tax evasion. "The way to deal with terrorists is to hunt them down and kill them," he is reported to have said. Observers have pointed out that members of the banking industry are among Gramm's political patrons, perhaps explaining his steadfast opposition to making bank transactions any less opaque. Gramm's position was essentially mirrored by the Bush administration, prior to September 11, when they withdrew from international talks aimed at developing a treaty to help clean up money laundering. 13 days after the terrorist attack, the administration reversed its position, freezing assets of Osama bin Laden and his associates. They also threatened to bar from U.S. financial markets any nation or bank that did not cooperate with investigators -- key elements of the Clinton administration proposal that Gramm torpedoed.
On September 27 the Wall Street Journal reported that the bin Laden family had invested at least $2 million in a fund operated by The Carlyle Group. An unidentified "foreign financier" told the Journal that the total investment was likely to be much larger. The Carlyle Group is a merchant bank specializing in buyouts of aerospace and defense companies. (A merchant bank is a bank that deals mostly in long term corporate loans and underwriting, often with an emphasis on international finance.) The Carlyle Group has high-level connections to the Republican party: George Bush Sr. is a paid spokesman, former Secretary of State (and head of Bush campaign post-election operations) James Baker is senior counselor, and former Secretary of Defense Frank Carlucci is the group's chairman. According to the Journal, all three have traveled to Saudi Arabia in recent years to meet with the bin Laden family.
The corporate name of the bin Laden family business is transliterated from the Arabic as Binladin. The Saudi Binladin group is a $5 billion business, built by family patriarch Mohammed largely from Saudi government construction contracts. The military barracks at Dharan, Saudi Arabia, were rebuilt by the Binladin Group after the 1996 truck bombing. The family has officially disavowed Osama, who worked briefly in the family business, and is believed to have inherited at least $50 million.
Although not stated explicitly in the Journal report, it is implied that the Carlyle Group was among the banks whose records were subpoenaed as a part of the investigation of the September 11 terrorist attack on the World Trade Center in New York. Through a spokesperson, former president Bush said that he recalled only one meeting with the bin Laden family, which took place in 1998. She admitted that there were at least two meetings after being confronted with a thank-you note from a meeting in 2000. Mr. Carlucci is the former chairman of Nortel Networks, which has conducted joint telecommunications ventures with Binladin Group. Mr. Baker reportedly met with the bin Laden family in 1998 and 1999. Caspar Weinberger, Secretary of Defense during the Reagan administration, and now chairman of Forbes, Inc., met with the bin Laden family twice in recent years, according to the Journal.
President George W. Bush has been linked indirectly to the bin Laden family, as well. During the time that W. was a pilot in the Texas Air National Guard, his friend and fellow guardsman, James W. Bath, was the business representative in Texas for Salem bin Laden, Osama's older brother. Bath continued to act in that capacity until 1988, when Salem died in a plane crash. The Houston Gulf Airport, in League City, TX, was among the properties Mr. bin Laden invested in on Mr. Bath's recommendation. Hopes that the airfield would find increased use over time, handling overflow from Houston airport, never materialized. The estate has been trying to sell the property since Mr. bin Laden's death. Mr. Bath reportedly received a 5% commission as his fee in transactions in which he represented Mr. bin Laden. Bath also invested $50,000 in two funds controlled by George W. Bush during this time, but maintains that the dealings were unrelated.
In 1984, however, George W. Bush's oil exploration company, Bush Exploration (previously Arbusto Energy) was suffering financially as sources of investment disappeared in the face of uncertainty regarding oil prices. After one attempted bailout by an oil company called Spectrum 7 faltered, Harken Energy bought Spectrum 7 for $2 million. George W. Bush received stock worth approximately $500,000 and a consulting fee of $120,000. Harken Energy was run by Alan Quasha, a New York lawyer who was also a Republican Party fundraiser. Sheikh Abdullah Bahksh of Saudi Arabia, a 16% shareholder in Harken Energy at the time, was represented by a Palestinian-born Chicago investor named Talat Othman, who served with George W. Bush on the board of Harken Energy. Othman made at least three separate visits to the White House to discuss Middle East affairs with then President George Bush. At about the same time, and just prior to the Gulf War, Harken Energy, with no previous international or offshore drilling experience, was awarded a 35-year petroleum exploration contract with the emirate of Bahrain.
Sheikh Bahksh emerged as a co-investor in the Bank of Commerce and Credit International (BCCI), a criminal enterprise since dissolved, that existed primarily as a mechanism for obtaining political influence using Middle Eastern oil money. Bahrain's prime minister, Sheik Khalifah bin-Sulman al-Khalifah, was a major investor in BCCI's parent company, BCCI Holdings, of Luxembourg. Through its commodities affiliate, Capcom, BCCI was used as a money laundering service by drug traffickers, arms dealers, etc. BCCI's front man in the U.S., and the person chiefly responsible for its takeover of First American Bank in the U.S., was Kamal Adham. Adham is referred to in the Kerry Committee report on BCCI as having been "the CIA's principal liaison for the entire Middle East from the mid-1960's through 1979." He was also the head of intelligence for Saudi Arabia during the time George Bush Sr. was Director of the CIA.
In August 1991, Ed Rogers, political director in the administration of George Bush Sr., left his White House position to start a "consulting firm." Rogers partner in the venture was Haley Barbour, political director during the Reagan administration, and later chairman of the Republican National Committee. Within a few weeks Rogers and Barbour received a $600,000 contract with Kamal Adham.
When interviewed by the Kerry Committee investigating the BCCI affair, Rogers indicated he had consulted two people concerning Adham's background and the advisability of representing him. One was a Palestinian-American businessman with connections in the Republican party and the Saudi royal family. The other was a National Security Council staffer named Linda Charles, who, at about the same time Rogers left the White House, left the NSC to join a the International Planing and Analysis Center, a "consulting group" headed by Frank Carlucci. Former Deputy Director of the CIA and Secretary of Defense. Carlucci is now, as noted above, chairman of the Carlyle Group.
Rogers subsequently registered with the Justice Department as a foreign agent, and had three meetings with Adham's financial and legal team. Two meetings occurred after Rogers had received notice from Adham's defense attorney, Plato Cacheris, that Adham was under investigation for involvement in the BCCI scandal. The report of the Kerry committee suggests "With no background in business, in criminal law, or in any facet of the law for that matter, the 33 year old Rogers must have accompanied Cacheris for one reason only: his political skills and access."
The story of Rogers representing Adham was reported in the press on October 3, 1991. At a press conference later that month President Bush (Sr.) made an ambiguous statement that he "didn't know anything about the man." Rogers, of course, had been his political director, and Adham had been head of Saudi intelligence at the time Bush was Director of the CIA. Rogers reportedly resigned from the Adham account shortly thereafter, although he refused to discuss whether or not he returned his fee. Representative (now Senator) Charles Schumer called for an investigation by White House Counsel, C. Boyden Gray. Gray nominally mounted an investigation, but never met with Rogers himself. Instead, two assistants who were friendly with Rogers discussed the matter with him by phone. Gray wrote Schumer on November 1, 1991, that "Mr. Rogers was not responsible for and did not participate in any matters concerning to BCCI at the White House." This leaves open the question of whether Rogers may have negotiated his "consulting" contract with Adham while still at the White House. The Kerry committee report concludes its section on Rogers that while Rogers testimony was suspect" the greater failing and more worrisome aspect in the Rogers affair may be that of the White House inquiry. The columnist William Saffire predicted in November 1991 that Boyden Gray, charged by the President to investigate the Rogers affair, would 'pass along the
denials and the White House whitewash will continue.' There is nothing in the record that suggests Mr. Saffire's assessment was inaccurate."
On October 3, 2001 the Senate confirmed Dallas attorney Robert Jordan as ambassador to Saudi Arabia. With no diplomatic experience, Jordan's qualifications include having defended Dubya in an SEC insider trading probe of the sale of his Harken Energy Corp. stock. Jordan is a member of the lawfirm Baker Botts. Former Secretary of State James A. Baker III is the Baker in Baker Botts, and The Carlyle Group is a client.
Former director of the F.B.I.'s New York counterterrorism office, John P. O'Neill, is quoted in a new book by French security expert Jean-Charles Brisard as saying, "All the answers, everything needed to dismantle Osama bin Laden's organization can be found in Saudi Arabia." As reported in the Times the book, "Ben Laden: La Vérité Interdite," suggests that "Saudi support for Mr. bin Laden has been extensive." O'Neill was apparently frustrated at "the inability of American officials to get anything at all from King Fahd," of Saudi Arabia, and although the Times does not provide details, O'Neill reportedly ascribed this failure to "oil." During his term with the F.B.I, O'Neill worked on the investigations of the 1993 World Trade Center bombing, the 1998 bombings of embassies in Africa, and was leading the investigation of the USS Cole in Yemen. O'Neill had complained to Brisard that the F.B.I. was hampered in its international investigations by State Department interference. O'Neill resigned from the F.B.I. in August of this year to become head of security at the World Trade Towers. He was killed in the the September 11 attack.
Bronner, Ethan "Oil Diplomacy Muddled U.S. Pursuit of bin Laden, New Book Contends" NY Times 12 Nov. 2001.
Ashley, Jonathan "It Helps to Have Connections" Eyes on America 4 Oct. 2001
Tomasky, Michael "The Out-of-Towners" New York 1 Oct. 2001
Floyd, Chris "Global Eye - Follow the Money" The Moscow Times 28 Sep. 2001.
Golden, Daniel et al. "Bin Laden Family Could Profit From a Jump In Defense Spending Due to Ties to U.S. Bank" Wall Street Journal 27 Sep. 2001
Fram, Alan "Congress OKs $40B Aid, Use of Force" Associated Press. 15 Sep. 2001
Kerry, John (Senator) and Senator Hank Brown "The BCCI Affair: A Report to the Committee on Foreign Relations United States Senate" 102d Congress 2d Session Senate Print 102-140. Dec. 1992