Inside the Kingdom (22 page)

The Al-Yamamah deal has become notorious. Perhaps, with hindsight, it was asking for trouble to name history’s largest ever bilateral weapons deal after the bird of peace (
al-yamamah
in Arabic means “the dove”). It was certainly foolish of British Aerospace (which later became BAe Systems), the manufacturer of the Tornado fighter, to allow the setting up of a fun-and-games fund for prominent Saudis when they came to London, and for their travel agent to list every detail of how they spent it in meticulous ledgers that would later find their way to the newspapers. Thus in July 2004, the readers of the
Sunday Times
were able to read how, over a thirteen-year period, Peter Gardiner, a St. Albans travel consultant, spent £60 million supplying Saudi royals and dignitaries with chartered yachts in Cannes, whole floors of the world’s top hotels, including the Plaza in New York and the George V in Paris, and luxury cars, including the gift of a £170,000 Rolls-Royce to one lucky princess.

Joining in the fun, the glamorous Miss Anouska Bolton-Lee told the readers of the
Mail on Sunday
how her charming Saudi prince, Turki bin Nasser, deputy commander of the Saudi Air Force and brother-in-law of Prince Bandar, had set her up in a Holland Park apartment for which the not unreasonable rent of £13,000 a year was paid—and had also helped with her education. Life on the Al-Yamamah payroll was not all Cristal champagne and Dolce & Gabbana sheepskin coats at £12,000 a pop, she explained: the arms company had generously put her through drama school, financing a two-year course at the prestigious Lee Strasberg Institute, whose speciality was Method acting.

It was Bandar bin Sultan’s freewheeling lifestyle that carried the highest price tag: £75 million for a top-of-the-range wide-bodied Airbus jet, capable of seating some two hundred passengers—or one Saudi prince and his friends. Legally the jet was not Bandar’s property: it was registered to the Saudi Air Force. But Bandar used it for personal and family trips as he wished, and he had the aircraft painted blue and silver, the livery of his favorite football team, the Dallas Cowboys.

“Yes. So what?” was Bandar’s unapologetic reply to an interviewer who asked him if there was corruption in Saudi Arabia—and his lawyers hastily added that the prince did not consider the Al-Yamamah deal to be corrupt. All the gifts and side payments transferred through the contract—said to total £1 billion paid in batches of £30 million per quarter for more than a decade to Riggs Bank, Washington—had been approved by the Saudi Ministry of Defense (headed by his father, Prince Sultan). Bandar had personal charge of the Riggs account, but it was not “a corrupt personal benefit.” It was “Saudi government money from start to finish,” he explained, and he embarked on a robust defense of what he received and spent in an authorized biography by William Simpson, an old friend from his RAF fighter pilot days.

Far from being corrupt, Al-Yamamah was “a utopian arrangement,” according to Simpson, citing “sources close to Bandar” to explain the “ingenious diversity of Al-Yamamah.” The side payments from the contract provided some of the untraceable cash Saudi Arabia needed to fund its secret battles with Communism from Chad to Afghanistan. Using bartered oil and offshore bank accounts, Al-Yamamah was designed to produce large sums of money of which there was no government record. The prince might fly his Airbus to St. Lucia, Honolulu, and his luxurious home in Aspen, but he also used it for the official shuttle diplomacy that took him to London, Paris, and Moscow on the Kingdom’s behalf. One trip of which Bandar was particularly proud was his secret 1983 journey to Rome, on which, he claimed, he had handed over a suitcase containing $10 million to a priest in the Vatican Bank. This was before Al-Yamamah increased the prince’s cash flow, but it demonstrated, in his eyes, the usefulness of money that was off the books. In this case, according to Bandar, the Saudi $10 million went to the Christian Democrats’ election campaign that helped keep the powerful Italian Communist Party at bay—though his claim is impossible to verify, and the Vatican has always denied it.

Bandar was saying, though Simpson did not put it this clearly, that the Saudi government knowingly paid BAe vastly more than their actual weaponry was worth, then requested BAe to give the overpayment back to them to use for purposes ranging from the subversion of Communist governments to fun and games in Holland Park. According to Bandar, his government was quite happy with this.

“The Defense Ministry audited and approved every penny,” says one of his aides.

By this account, the Saudis were, in effect, bribing themselves. But they were also cheating themselves, since money that was spent on mistresses or family plane journeys rather than on, say, notional anti-Communist activities, was being embezzled from the Saudi state.

As Bandar saw it, Al-Yamamah had nothing to do with anybody but Saudi Arabia, and he could not see what the British press was complaining about when the story broke in 2004. It had not cost Britain a penny. Presents and favors were part of the traditional method of doing business at all levels in the Middle East. Why should Britain complain if the Kingdom chose to overpay for British armaments and to breathe some life into the moribund UK defense industry? It would have died without Al-Yamamah. For more than twenty years the contract had kept thousands of doughty Lancashire workers in the money producing Tornado fighter planes and Hawk trainers at the BAe factory in Warton, on the edge of Preston—a rust-belt town whose fortunes would be very different without the billions pumped into the local economy by Saudi Arabia.

Arguing his corner, Bandar liked to finish up with the aircraft themselves. If the Kingdom had succeeded in its original bid to push the purchase of F-15s through Congress, he would explain, all the planes would have had to carry armament restrictions to placate the Israelis. For the same reason they could have been configured only as defensive, fighter-interceptors. But under the terms of Al-Yamamah, forty-eight of the seventy-two Tornados purchased by the Saudis were advanced-strike fighters without deployment restrictions, and all the Hawks had attack capacity. In the context of defending his country, the prince considered his duty more than done. He saw no need to apologize for a blue and silver Airbus—nor even for the Method acting lessons of Miss Anouska Bolton-Lee.

. . .

The Iran-Iraq War of 1980-88 was a beastly and bloody business. Hundreds of thousands of ill-trained young men went to their deaths in its World War I-style trenches and “human wave” bayonet charges—a tragedy in which, after 1983, Saudi Arabia and the United States were both complicit. When Iran launched a successful counterassault in that year against Saddam Hussein’s unprovoked invasion of September 1980, the Saudis financed the Iraqi leader as a Sunni Arab “brother.” Saddam was the best available barrier to the scary prospect of the ayatollahs taking power in Baghdad, while the United States backed the Iraqi tyrant as part of Washington’s enduring attempt to gain some redress for the humiliation of the Iranian hostage crisis of 1979-81.

In 1985 the conflict went literally ballistic, when the two protagonists started launching Soviet Scud missiles at each other’s capitals. This so-called War of the Cities gave added urgency to Saudi Arabia’s wish to boost its air defenses, since the Kingdom had no missiles with which to defend itself or to serve as a deterrent. Al-Yamamah had supplied fighter planes and conventional weaponry, but where could the Kingdom locate the equivalent of the Lance missiles whose sale Congress had blocked? The ever-resourceful Prince Bandar found an answer—in Communist China. Saudi Arabia was already financing Chinese weapons sales to Iraq and was allowing the shipments to travel overland through Saudi territory. Why not increase the shipments to include some Chinese CSS-2 Dongfong (“East Wind”) missiles, Bandar suggested to his uncle Fahd. The missiles could be discreetly off-loaded into Saudi care before they reached the Iraqi border. As the prince later explained with glee: “I came and asked my friends, the Americans, for missiles—a ground-to-ground missile with an eighty-mile range called the Lance. But we were told no, because it’s a threat to somebody [Israel]. So we went and got a sixteen-hundred-mile-range missile.”

This was not, in fact, as clever as it sounded. Sixteen hundred miles meant that, fired from Riyadh, China’s East Wind missiles could hit not only Baghdad and Tehran, but Egypt, Libya, Turkey, Pakistan, western India, much of east and central Africa, and, most crucially, any city or settlement in Israel—the equivalent, by the mid 1980s, of threatening American soil. Saudi acquisition of these lumbering super-Scuds would represent a colossal change in the Middle East balance of power, particularly since the CSS-2s were configured to carry nuclear warheads—which made Bandar’s next move particularly cheeky. Having heard that Iran was seeking to buy Chinese weapons, he claims that he secured a meeting with U.S. secretary of state George Shultz. Shultz says he has no recollection of this meeting.

“Would it be OK,” Bandar says he asked Shultz, “if we go to China and make them an offer they can’t refuse—that we will buy all the weapons they were going to sell to Iran and then give them to Iraq?”

In discussing the details of how to acquire China’s missiles, Fahd had given his nephew strict instructions: he must not tell any direct lies to the Americans, and Bandar felt that his proposition met that test. Shultz would appear to have felt otherwise, however, when he discovered what Bandar actually did. Having obtained some sort of American blessing, the prince flew to Beijing, where he did the small-arms deal as proposed—but also laid the groundwork for the purchase of some twenty-five nuclear-capable, sixteen-hundred-mile-range East Wind missiles, complete with launchers and trainers, for an estimated $3 billion.

The job of completing the deal and installing the missiles secretly was handed to Bandar’s half brother Khaled, the chief of Saudi air defense who had listened on his helicopter radio to the downing of the Iranian pilot at the opening of the Tanker War. A tough and meaty figure, Khaled had survived the humbling rigors of Sandhurst to come home and specialize in air defense. Having studied in U.S. missile schools, he was the ideal person to execute the East Wind project, and he took particular pleasure in the secrecy involved—on one visit to Hong Kong his Chinese counterparts, fearing hidden cameras, arrived with aluminum-foil-lined umbrellas, which they opened and held over their documents while trying to negotiate in whispers.

In Saudi Arabia, the arrival and the installation of the missiles had to be arranged when there was no U.S. surveillance overhead.

“We knew the timings of the satellite,” remembers the prince. “We knew when it was coming over.”

The Saudi troops who were assigned to the East Wind project vanished so effectively, their families assumed they must have been sent on a secret mission to help the Afghani mujahideen, a rumor that Khaled encouraged. Some enterprising wives got hold of his private number.

“By our religion, you must inform us if our men are dead,” they told him.

“By our religion,” he replied, “I swear that they are alive. I will divorce my wife if they are dead—and I am telling you that with her sitting beside me.”

As air-defense commander, the prince had proposed that the installation of the missiles should be revealed once they were operational with their crews fully trained, sometime around the middle of 1989—the whole point of a deterrent was that enemies should be aware of its existence and power. But the news broke fifteen months earlier. According to one account, American alarm bells started ringing when a satellite analyst studying pictures of a high-security missile base in China spotted a delegation of men in beards.
¹³

“Nuclear weapons, for fuck’s sake!” exploded Richard Murphy, assistant secretary of state for the Middle East, when he confronted Bandar bin Sultan with the satellite pictures. George Shultz cut off all links with the prince—he had never spent much time with Bandar in any case. If the Saudi ambassador had anything to say, he could talk to a desk officer. Given the scale of the deception, the secretary of state saw no reason to believe Saudi assurances that they had paid extra money to have the missiles adapted for non-nuclear warheads. Washington was furious from the White House to Congress.

“Congratulations,” sniffed Richard Armitage, the assistant secretary of defense, to Bandar. “You’ve just put yourselves squarely at the top of the Israelis’ targeting package. If the balloon goes up anywhere in the Middle East, you’re going to get hit first.”

In American eyes, Riyadh’s sneaking of the East Wind missiles into range of Israeli territory was a smaller version of the Cuban missile crisis of 1962—except that the smuggling had been done by a nation that claimed to be a loyal friend. Even the urbane Colin Powell lost his cool.

“You guys have done something really stupid,” he has recalled yelling to Bandar. “You’d better hope the Israelis don’t bomb it—but I don’t think they will, because it’s not a very good system you’ve bought.”