The Sarajevo of the 21st Century
Is Iraq a Diversion
from the Real Invasion
or Will Bush Try to Occupy Both Countries at Once?
by Michael C. Ruppert
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Aug. 21, 2002, 14:00 PDT (FTW) - The global horrors
of the First World War - the war to end all wars - began
with the assassination of Archduke Francis Ferdinand in
Sarajevo in 1914. The apocalyptic war of the 21st
century may have begun with a $1 trillion lawsuit filed
in the United States by 9-11 victim families against Saudi
Arabian banks and members of the Saudi royal family. In
what may be the opening salvos of a financial and energy
apocalypse, the Financial Times reported yesterday that
wealthy Saudi investors had begun a run on their U.S.
banking deposits that may have taken as much as $200 billion
out of U.S. banks. These massive withdrawals - out of
an estimated $750 billion in Saudi U.S. investments -
occurred within days of the August 15 filing of the suit.
Ironically, the principal attorneys in the suit are all
political insiders and, in one case, a member of the Council
on Foreign Relations. You might think they would have
thought of this beforehand.
There are two basic questions to ask about Saudi Arabia.
Why was Saudi Arabia not a focus of U.S. action and serious
media attention in the immediate aftermath of Sept. 11
even though there were so many obvious connections? And
why now is Saudi Arabia so prominently a focus of what
is apparently government-approved U.S. animosity? One
thing is obvious. On the eve of a U.S. invasion of Iraq
the deployment of U.S. military personnel in the region
is also a convenient placement of resources for what may
be a one-two punch to take over a tottering kingdom that
owns 25 percent of all the oil on the planet at the same
time that Saddam Hussein is removed from power in a country
that controls another 11 percent. Together, the two countries
-- which have not yet peaked in production capacity --
and which are the only two nations capable of an immediate
increase in output possess 36 percent of the world's known
The Saudi situation is complicated by the fact that
much of Saudi Arabia's wealth is invested in U.S. financial
markets and its sudden loss could devastate the U.S. economy.
But Bush brinksmanship -- an understatement -- is making
possible a scenario where Saudis long-loyal to the U.S.
markets cut off their own arm in a coyote-like effort
to free themselves from a trap that threatens the stability
both of their kingdom and the global economy.
Osama Bin Laden is a Saudi. Fifteen of the 9-11 hijackers
were Saudi. There has been an obvious and clear financial
trail showing Saudi support for the Al Qaeda. In fact,
as has recently been noted by French author and former
intelligence officer Jean Charles Brisard in his book,
"The Forbidden Truth," the financial support network of
Al Qaeda is a virtual cut-and-paste reincarnation of BCCI,
a Pakistani bank known for terrorist, drug, and CIA connections
in the 1980s. One of BCCI's former executives, Khaled
bin Mafouz, remains the banker for the Saudi royal family
today and both he and Saudi Arabia's former intelligence
chief, Prince Turki (removed just before the 9-11 attacks
after 25 years of liaison with bin Laden), have been discussed
repeatedly, if obliquely, in both mainstream and independent
press stories since the attacks took place.
After months of strenuous and repeated assertions by
the Bush Administration that Saudi Arabia was a key ally
in the war on terror, that they were loyal and trusted
partners in U.S.-led efforts, someone has suddenly turned
on the tap for anti-Saudi propaganda and the mainstream
media are eating it up.
On June 20 the Jang group of newspapers in Dubai reported
that Al Qaeda networks were active in Saudi Arabia. This
followed a June 18 announcement that a group linked to
Al Qaeda had been arrested inside the kingdom and charged
with planning attacks on Saudi government installations.
On July 18 the BBC reported that Saudi Prince Nayef
Bin Sultan Bin Fawwaz Al-Shaalan had been indicted by
a Miami court on charges of having smuggled 1,980 kilos
of cocaine on his private jet in 1999.
On July 28, Britain's The Observer released a story
that quickly spread around the world. It was headlined,
"Britons left in jail amid fears that Saudi Arabia could
fall to al-Q'aeda." The lead paragraphs read, "Saudi Arabia
is teetering on the brink of collapse, fuelling foreign
office fears of an extremist takeover of one of the West's
key allies in the war on terror.
"Anti-government demonstrations have swept the desert
kingdom in the past months in protest at the pro-American
stance of the de facto ruler, Prince Abdullah.
"At the same time, Whitehall officials are concerned
that Abdullah could face a palace coup from elements within
the royal family sympathetic to al-Q'aeda.
"Saudi sources said the Pentagon had recently sponsored
a secret conference to look at options if the royal family
The story later mentioned, "Anti-Abdullah elements within
the Saudi government are also thought to have colluded
in a wave of bomb attacks on Western targets by Islamic
After finally mentioning the apparently unimportant
subject of the headline -- the fact that several Britons
had been jailed on bootlegging charges -- the story concluded
by stating that feuding between factions in the Saudi
court was going to increase with the death of King Fahd
who was unstable in a Swiss hospital.
The story ended by quoting Saudi dissident Dr. Saad
al-Fagih who declared, "'There is now an undeclared war
between the factions in the Saudi royal family.'"
On the same day a lengthy essay on Saudi Arabia in The
Asia Times by Ehsan Ahrari observed, "It is interesting
to note that [Prince] Sultan is believed to be a preferred
U.S. candidate for the Saudi throne." Abdullah is the
crown prince, not Sultan.
On July 29 Stratfor, a global intelligence reporting
and analysis service, reported that a feud was brewing
between Saudi Arabia and neighboring Qatar over Qatar's
willingness to openly support the U.S. invasion of Iraq.
Qatar is nearly sinking under the weight of pre-deployed
military equipment and has a brand new state-of-the-art
U.S. Air Force Base. [See story this issue.]
On July 30, the suggestions that internecine warfare
had erupted in Saudi Arabia were given credence by an
Agence France Presse report describing the recent deaths
of three Saudi princes in eight days. Prince Fahd bin
Turki died of thirst in the desert on July 30. Prince
Sultan bin Faisal died in a car crash on July 23, and
Prince Ahmed bin Salman died the day before of a heart
On Aug. 1, The World Tribune reported that Saudi Arabia,
which has been acquiring long range ballistic missiles
had also been, according to reports confirmed by U.S.
officials, attempting to acquire nuclear weapons from
Pakistan which has been well-documented to have heavy
concentrations of Al Qaeda supporters within all parts
of its government.
On that same day, Saudi dissident Dr. al-Fagih appeared
on the Australian Broadcasting Corporation program "Lateline"
and offered some startling revelations:
"Prince Abdullah who is supposed to be the next in charge,
the next King would not accept to appoint Prince Sultan
as Crown Prince and Prince Sultan insists that he should
be the next in line for Abdullah to be [king]."
Al-Fagih predicted the imminent death of the ailing
King Fahd and noted, "That's why probably the foreign
office have [sic] expected some major thing happening
in the next few weeks...
"I mean, Prince Abdullah is in charge of the national
guard and Prince Sultan is in charge of the army, and
either one will use his own force to fight the other to
fight for power. Now they will use all elements of the
population, of the society... [including a large portion
of the population that supports al-Q'aeda and radical
Al-Fagih said that there was a psychological barrier
in the country because all information is so thoroughly
controlled and the regime maintains the appearance of
complete control. Almost all Saudis dislike the corrupt
regime for a multitude of differing reasons. But, said
the medical doctor who once served with Osama bin Laden
in the Afghan war against Soviet occupation, "Once this
psychological barrier is broken, either by a dispute of
the royal family, or by a financial collapse, you would
expect a major act by the people against the regime."
Al-Fagih also noted that in general the dislike of the
Saudi people for the U.S. was intense because of its unremitting
support of Israel and also because the U.S. had maintained
a military presence on Saudi soil long after the end of
the Gulf War.
Just five days later on Aug. 6 the Washington Post reported
that a month earlier on July 10, a top Pentagon advisory
group had received a briefing from Rand Corp. analyst
Laurent Murawiec describing Saudi Arabia as en enemy of
the U.S. and threatening seizure of its oil fields and
financial assets if it did not stop supporting terrorism.
The Pentagon group which received the briefing, the Defense
Policy Board, is headed by renowned hawk Richard Perle.
Although high-level Bush administration figures like Colin
Powell downplayed the briefing's significance, it received
heavy-handed media play for several days. Subsequent reports
stated that Vice President Dick Cheney's staff had "embraced"
On Aug. 7 Saudi Arabia made clear and unequivocal public
pronouncements that it would not allow its soil to be
used for an invasion of Iraq.
On Aug. 14, Reuters reported that King Fahd, who had
just been moved to Spain was in failing health and possibly
On Aug. 15 amidst massive daylong publicity, a 15-count,
$1 trillion lawsuit was filed against various Saudi interests
for liability in the 9-11 attacks. Included among the
defendants were the Saudi Bin Laden Group of companies
(previously connected through the Carlyle Group to Bush
family finances), three Saudi princes, seven banks, eight
Islamic foundations, a number of charities and the government
The three Saudi princes are Turki Faisal al Saud (see
above), Prince Sultan bin Abdul Aziz (same as above),
and Prince Mohamed al-Faisal.
This new suit eclipsed three earlier suits, largely
ignored by the major media, filed by victim families charging
various degrees of liability and/or complicity by the
U.S. government. The key lawyers in the case have a history
of close affiliation with the Republican Party, the Bush
family and/or the Council on Foreign Relations. Media
coverage of the suits continued through the weekend ending
FOLLOWING THE MONEY
The instability in Saudi Arabia may well be just the
end result of internal decay and rot. But the consequences
and implications of Saudi Arabia's current crisis are
far deeper once one examines the financial threat that
Saudi chaos might unleash.
Like the United States, the Saudi economy is in tatters.
Like the U.S. economy it needs only one thing to keep
it afloat -- cash.
The Saudi government rightly fears a quickly successful
U.S. invasion of Iraq. A first inevitable consequence
would be serious anti-American protests from the Saudi
population. The second inevitable consequence would be
an almost immediate increase in Iraqi oil production,
which would result in a price reduction that might break
the back of OPEC and dramatically reduce oil income. Seeing
that the U.S. economy is on the brink of collapse, the
Bush Administration, facing congressional elections in
November and a potentially disastrous 2004 presidential
election, must do whatever it takes to keep itself in
power. For this administration, so hugely populated by
oil men (and woman), cheap oil is the obvious first choice.
Saudi Arabia seems to have seen this coming for some
time. In April, the Saudi government announced that it
was considering privatizing parts of Aramco, the Saudi
national oil company, and selling off some of Aramco's
operations to Exxon, BP-Amoco, Shell and other major companies.
Though little has been disclosed since the early announcements,
this move would benefit the Saudis in two big ways.
First, it would give Western companies an equity stake
in the stability of the monarchy, making it difficult
for the U.S. to consider bombing or embargoing operations
owned by western companies. Secondly, it would generate
large amounts of cash to offset declining economic growth,
rising unemployment and declining per capita income, according
to Stratfor on April 29.
The oil-based Mexican standoff is mirrored by what is
effectively a much more successful financial deterrent
-- the Saudis ability to wreck the U.S. financial markets
should they see their situation become utterly desperate.
OWNING THE AMERICAN DREAM
It is impossible to quantify the exact amount of Saudi
holdings in the U.S. economy. But anecdotal evidence is
The New York Times reported on Aug. 11, "An adviser
to the Saudi royal family made a telling point about Saudi
elites. He said an estimated $600 billion to $700 billion
in Saudi money was invested outside the kingdom, a vast
majority of it in the United States or in United States-related
investments." The BBC has estimated Saudi U.S. investment
at $750 billion.
Adnan Khashoggi, perhaps the best-known Saudi billionaire,
controls his investments through Ultimate Holdings Ltd.
and in Genesis Intermedia, which was reported to have
been connected to suspicious stock trades around the time
of the Sept. 11 attacks. (No linkage has been made between
these trades and the attacks themselves). The rest of
his private U.S. holdings are administered through his
daughter's name from offices in Tampa, Fla., not far from
where many of the hijackers received flight training at
both private and U.S. military installations.
Khashoggi is a longtime financial player, deeply connected
to the Iran-Contra scandal of the 1980s and also to BCCI.
But Khashoggi doesn't even make the Forbes list of the
richest people in the world. One Saudi who does is Prince
Alwaleed Bin Talal, who ranks as the 11th richest man
on the planet with an estimated net worth of $20 billion.
Some of Alwaleed's holdings and recent acquisitions
largest shareholder in Citigroup, the teetering U.S. financial
giant, which is reported to have a derivatives bubble
of more than $12 trillion and has reportedly sought recent
emergency assistance from the Federal Reserve. On July
18 Alwaleed made an additional $500 million purchase of
Citigroup stock, raising his estimated shareholding to
also owns, according to an August 9 story in The Guardian,
three percent of the total shares of Newscorp (Fox), making
him the second-largest shareholder behind Rupert Murdoch.
other significant holdings include Apple Computer, Priceline,
The Four Seasons Hotels, Planet Hollywood, Saks and Euro
also sits on the board of directors of the infamous (post-9-11)
Alwaleed alone is in a position to pull the plug on
the U.S. economy. But, of course, he would cost himself
billions to do it and this is not a likely scenario because
he has long been a pro-democratic U.S. supporter. The
remaining investments of the Saudi family, taken as a
whole, would undoubtedly paint an even grimmer risk assessment.
All of this assumes, of course, the stability of the Saudi
monarchy -- an apparent prerequisite for the preservation
of their continued financial empire, the stability of
the U.S. economy making it the most profitable place for
Saudi investment, and the absence of a major and protracted
regional conflict. But if the U.S. economy fails?...
The Bush Administration's unilateral and illegal commitment
to an Iraqi invasion brings all three essentials into
The August 20 report from the Financial Times suggests
that the Saudis are, at minimum, firing a clear warning
shot across the bow of the U.S.S. Bush.
ALLAH'S LAST LAUGH
In his appearance on Australian television Dr. al-Fagih
discussed the likelihood of a Balkanization of Saudi Arabia
by dividing the kingdom into three separate states and
separating the eastern oil provinces from the holy sites
in the west. Such a short-term solution might delay what
seems to be an inevitable final conflict.
But there is another telling factor that has not been
discussed in the major media.
There are signs that major financial power houses are
looking into gold hedges, especially mining and actual
possession of gold in anticipation of a large gold "bust-out."
The head of the California Personnel Employee Retirement
System (CALPERS), the largest pension fund in the country,
recently announced his resignation to go into the gold
sector of the financial markets.
Recent reports starting in 1998 indicate that Saudi
Arabia contains enormous quantities of gold. A 1997 Saudi
embassy press announcement revealed 800 locations where
gold had been discovered. A Nov. 8 report from Ohio State
University -- based upon new Global Imaging System technologies,
confirmed "2,100 known occurrences of gold, silver, copper,
and other metals in the western third of the Saudi peninsula."
Saudi Arabia appears to be sitting atop one of the largest
gold stores on the planet.
But there is something else in the western third of
the country -- the two holiest cities in all of Islam
-- Mecca and Medina. And a gold bust-out might well signal
the end of the U.S. dollar's reign as the dominant currency
in world commerce -- the means by which the U.S. has policed
its global financial empire. And Iran has just signaled
that it is considering pricing its oil in Euros.
Yet the Bush Administration seems willing to risk everything
for a roll of the dice in Iraq and a lawsuit in New York
-- moves it may have already committed itself to take
and cannot reverse. And still the American people try
to ignore the fact that the administration knew about,
and could have prevented, the attacks of September 11th.
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