Policy Brief #1

The Atlantic Council of the United States, The Middle East Institute,
The Middle East Policy Council, and The Stanley Foundation

US Challenges and Choices in the Gulf:

Saudi Arabia
This policy brief summarizes the discussion at the first in a jointly sponsored series of congressional staff
briefings on "US Challenges and Choices in the Gulf." To receive information on future briefings,
contact Elaine Schilling, program assistant, at e-mail eschillins&Manleyfoundation.ors.

The September 11th terrorist attacks and their aftermath have not altered Saudi Arabia's fundamental
importance in the international arena nor its importance to the United States. Saudi Arabia remains the
source of much of the world's oil reserves, the site of the holiest places in Islam, and the crossroad of
strategic lines of communication between Europe and Asia.

Nonetheless, the September 11th terrorist attacks, unprecedented in myriad ways, have severely
strained US-Saudi relations. The facts that Osama Bin Laden and 15 of the hijackers were of Saudi origin
and that Saudi Arabia supported the Taliban government in Afghanistan have produced a climate of
mistrust and misunderstanding and placed a chill on business activity.

US-Saudi relations have witnessed past periods of friction, as during the 1973 Arab oil embargo, but
communication and cooperation always resumed because of core common interests on both sidea The
United States and Saudi Arabia are strategic partneqp with a record of close cooperation, especially with
respect to ensuring the stable supply and price of oil on the world marketf During the Cold War, Saudi
Arabia played a key role in meeting a number of US foreign policy objectives, including assistance in the
effort to expel the Soviet Union from Afghanistan.

The September 11th atrocities have sparked a debate in the United States about Saudi Arabia and the
future of US-Saudi relations that revolves around the following three questions:

1. Is Saudi Arabia a Source or a Supporter of Terrorist Activity^

It is true that Wahhabisng practiced and promoted by Saudi Arabia, is a particularly intolerant
form of Islam. It is equally true that Saudi Arabia is a very "closed" society. However, to hold the Saudi
general education and cultural systems responsible for generating the terrorism that originates in
predominantly Muslim countries grossly oversimplifies the phenomenon of terrorism, which is the
product of a multitude of root causes.

There is no credible evidence to support the allegations of some commentators that ther
government of Saudi Arabia has directly funded terror organizations^ During the 1970s and 1980s, Saudi
Arabia did provide financial assistance to a number of Arab Islamist groups. However, during the 1990-
1991 Gulf crisis, Saudi authorities discovered that some of these groups had turned out to be a "bad
investment" in that they opposed the coalition effort against Saddam Hussein. Saudi Arabia subsequently

The Atlantic Council of the United States, www.acus.org • The Middle East Institute, www.TheMiddleEastlnstitute.org
The Middle East Policy Council, www.mepc.org • The Stanley Foundation, www.emergingfromconflict.org/iran
 Policy Brief #8
The Atlantic Council of the United States, The Middle East Institute,
The Middle East Policy Council, and The Stanley Foundation

US Challenges and Choices

Saudi Arabia: A View From the Inside
Saudi Arabia has come under increasingly strong criticism in the United States in recent months. This
report summarizes a briefing designed to provide Saudi perspectives on bilateral relations. It is based on
the discussion at the tenth in a jointly sponsored series of congressional staff briefings on "US
Challenges and Choices in the Gulf. " To receive information on future briefings, contact Jennifer Davies
atjdavies@stanleyfoundation.org.

I. Overview

Since September 11, 2001, US-Saudi relations have deteriorated, fulfilling a primary goal of Osama bin
Laden: to drive a wedge between the two longstanding allies. Immediately after the attacks on New York
and Washington, Saudis reacted in disbelief to the news of the hijackers' identities. And while Saudis
struggled to accept the idea that their fellow countrymen would perpetrate such an atrocity, many in the
United States reached the conclusion that some Saudis, including possibly Saudi leaders, had supported,
or at least condoned, the terrorists. A year later, the stress on the relationship caused by this "context-
changing" event has been amplified by tension relating to fighting terrorism, a possible US-led war on
Iraq, the deepening conflict between Israelis and Palestinians, and the treatment of Saudi nationals in the
United States.

II. Terrorism

Most Saudis remain shocked that 15 of the 19 September 11th terrorists were Saudis. The political elite
tend to believe that this was by design, as one of Al-Qaeda's primary stated goals is to undermine the Al-
Saud regime and to damage its ties with the United States. Accordingly, the Saudi political elite are
supportive of the US campaign against terrorism. The Saudi Crown Prince, Foreign Minister, and
Defense Minister have been publicly supportive, and, among other cooperative efforts, have taken steps to
curb Islamic charities on terrorism watch-lists. While these steps have been criticized by many in the
United States as inadequate, the Saudis have had to deal with real institutional challenges in controlling
illegal financial flows. Saudi officials have acknowledged that they need to do more.

The Saudi public, however, remains skeptical towards the US policy of "zero tolerance" for terrorism.
While September 11th was a context-changing event for US citizens, it has not changed the key role of the
Palestinian issue in the thinking of many Saudis. Many of the actions of the Israeli occupation are
considered terrorist in nature, and there is resentment that "zero tolerance" does not apply to Israel. The
perceived contradictions in US policy on terrorism are underscored by a Saudi sense of an Israeli-US,
Judeo-Christian alliance. Increasing numbers of Saudis subscribe to the view that US policy has
underwritten that of Israel's Likud Party and that the war on terrorism is actually a war on Islam.
 Saudi Foreign Policy
Panel Three Abdul Aziz al-Fayez

S
audi Arabia is located in a region that has been
Foreign Policy: characterized by long periods of political instability and
Saudi Arabia, occasional periods of military conflict. It has been
fortunate not to be dragged into war except after the invasion of
the United Kuwait by Iraq. Other than that, Saudi Arabia has been careful
States, and the and has been insistent on solving all problems and disputes
Muslim World through peaceful means.
To understand Saudi foreign policy, we have to identify the
principles on which it is based. Saudi Arabia is first of all an
Arab and Muslim state. It is a member of the Arab League, and
it is the birthplace of Islam. This gives the country great impor-
tance in the Islamic world. It is also a Gulf state and the biggest
member of the Gulf Cooperation Council (GCC), hence its ma-
jor role in maintaining peace and security in the Gulf region.
Saudi Arabia's commitment to having good relations with all
other countries and to the peaceful settlement of disputes is
based on two principles: the respect of sovereignty of each state,
and the non-interference in the internal affairs of any state.
Like any other state in any part of the world, Saudi Ara-
bia's primary foreign policy objective is the preservation of the
Kingdom's independence and its national security. Saudi Ara-
bia is also committed to the preservation of peace and stability
in the Gulf region; to the strengthening of Arab and Islamic sol-
idarity through the Arab League and through the Organization
of the Islamic Conference; and to the promotion of Islamic val-
ues and teaching all over the world. Finally, as a member of the
international community, the Kingdom is committed to preserv-
ing international peace and security.
To achieve the above-mentioned objectives, Saudi Arabia
relies first of all on the diplomacy and political influence de-
rived from its unique position in the Arab and Muslim world. It
also relies on its economic power, derived from the fact that Saudi
Arabia is the largest oil exporter in the world and the owner of
the largest oil reserves in the world. Saudi Arabia also relies on
its membership in a number of regional and international orga-
nizations such as the UN, the Arab League, the Islamic Confer-
ence, and the GCC. As the Kingdom is committed to the peace-
ful settlement of disputes, it has been willing to play a major
role in the region and it has relied on its diplomacy to try to
solve some of the crises that erupted in the region. For instance,
it was instrumental in bringing peace to Lebanon through the
Ta'if Agreement in 1989, which is the basis on which post-war
Lebanon currently functions. The Kingdom was also instrumen-

Saudi Arabia: One Hundred Years Later 19

CRS Report: IB93113 - Saudi Arabia: Post-War Issues and U.S. Relations - NLE Page 1 of 13

CRS Issue Brief for Congress

Redistributed as a Service of the National Library for the Environment*

IB93113: Saudi Arabia: Post-War Issues and U.S.

Relations
Alfred B. Prados
Foreign Affairs, Defense, and Trade Division

April 13, 2001

CONTENTS

• SJJMMARY
• MOST RECENT DEyELQPMENTS
• BACKGROUND AND ANALYSIS
• Current Issues
o Security in the Gulf Region
• Use of Force Against Iraq

o Arab-Israeli Conflict
o .AjTns_TjansIersJ...
• U.S. Arms Sales
• Third Country Sales
o Trade Relationships

• Qil Prgductign
• Foreign Inyestrnent
o Human Rights, Democracy, and Other Issues
• Background to U.S. -Saudi Relations
o Political Development
• Saudi Leadership
• Royji^uccessiojn
o Economy and Aid
• Economic Conditions
• Aid Relationships
o Defense and Security
• Congressional Interest in Saudi Arabia
o Arrns Sales
o Arab Boycott
o Trade...Practices

SUMMARY

Saudi Arabia, a monarchy ruled by the Saudi dynasty, enjoys special importance in the international community
because of its unique association with the Islamic religion and its oil wealth. Since the establishment of the
modern Saudi kingdom in 1932, it has benefitted from a stable political system based on a smooth process of

http://www.ncseonline.org/NLE/CRSreports/international/inter-74.cfm?&CFID=8459083&C... 6/17/03
The New Yorker Page 1 of 9

June 17,2003

THE NEW YORKER

FROM THE ARCHIVE
FOREIGN AFFAIRS
Royal Mess
by Leslie and Andrew Cockburn

As the United States government weighs various responses to the September 11th attacks, the role of Saudi Arabia is crucial—both
because it has history of hosting U.S. bases and because much of Osama bin Laden's animosity is directed against the Saudi royal
family. (Bin Laden was born in Saudi Arabia but has been stripped of his citizenship.) This article, from 1994, looks at dissatisfaction
with the House of Saud from within the kingdom.

/\.t two-thirty in the morning on May 15, 1993, Lujain al-Iman, a twenty-six-year-old native of Missouri, was
awakened in the bedroom of her house in Riyadh by the sound of doors slamming downstairs. She lived, with her
husband, Muhammad al-Masari, in a large villa with stuccoed walls, servants' quarters, and well-tended gardens on
the King Saud University campus. Lujain (she changed her name from Cathy after marrying Masari) had left Denver,
Colorado, to join her husband, a physics professor at the university, just eight months before. She had told her mother
at the airport that she was looking forward to "a nice, quiet, uneventful life," which would be largely taken up with
children—four stepchildren from Masari's first marriage, and her own son from her first marriage, Ali, who was five
and was still adjusting to a mob of new brothers and sisters after his years as an only child in Denver.
Lujain was seven months pregnant, and she had slept badly since just after midnight, when her husband arrived home
and presented her with the phone numbers of two diplomats at the American Embassy. "If anything should ever
happen," he said, "just remind them of their promise."
Masari, forty-six, was one of Saudi Arabia's leading theoretical physicists; he had participated in top-secret
government meetings to discuss whether Saudi Arabia should build a nuclear weapon. (His father had dined regularly
with King Feisal.) He was also a scholar of the shariah, the Islamic code of civil and religious law. But now he was
in very serious trouble.
Crashing through the garage entrance to the house, a dozen or so heavily armed Mabaheth—secret police—had
entered the servants' quarters, on the ground floor. They were Bedouin tribesmen from the Saudi interior; red-and-
white checked ghutrahs masked their faces, so that only their eyes showed. They held a maid at gunpoint until she
waved them toward the study, where Masari's eldest son, eighteen-year-old Anmar, was sleeping. They woke him and
smashed his head against the wall, shouting, "Where is your father?"
Upstairs in the master-bedroom suite, Lujain, her husband fast asleep beside her, was straining to hear. "I saw the
door handle was moving, so I called out, 'Who is it?'" she recalls.
An unfamiliar voice answered, "I'm a friend of Muhammad's. Open the door!"
"I told him, 'No! I'm not gonna open the door!'" Lujain finally shook her husband awake. "He got up and looked out
the window, and there were all these Chevy Blazer trucks parked out there. He checked the phone, and it was dead."
Masari, a devout Muslim, shouted through the door that he needed time to wash "for prayer" and dress. The voice on
the other side threatened to shoot off the lock. Lujain said, "What is this? Did I wake up in Russia this morning?"
Then seven masked Bedouin rushed through the door and dragged Masari away. Lujain had a severe asthma attack.
"I was trying to get my passport out of my purse and hide it under my abaya"—her cloak. "At the same time, I was
trying to use my inhaler," she recalls. "That guy from the Mabaheth just rushed at me, grabbed me around my arms,
and took my medicine from my hand." The leader of the group confiscated her American passport.
Ransacking the house, the intruders carted away seven trunkloads of books and papers. "Anything written in
English—even cookbooks," Lujain says. Books on political theory and on Islam and dense works on physics in
German and English were of particular interest. For good measure, the men ripped down curtains and slashed carpets.
Masari was driven away in the back of a Blazer. There was nothing for Lujain to do but follow her husband's
instructions. The following morning, she went to the American Embassy.

IViasari had been participating in clandestine meetings to build an opposition movement to the Royal House of
Saud, the dynasty that has held absolute power in Saudi Arabia since 1932, when King Abdul Aziz Ibn Saud united

http://www.newyorker.com/PRINT ABLE/?FROM_THE_ARCHIVE/011015fr_archiveO 1 6/17/03

Saudi Friends, Saudi Foes Page 1 of 3

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Saudi Friends, Saudi Foes

Is our Arab ally part of the problem?
by Stephen Schwartz
10/08/2001, Volume 007, Issue 04

THE EXTRAORDINARY ACT of destruction seen on September 11 had a noteworthy harbinger in Islamic history. In
1925, Ibn Saud, founder of the present Saudi Arabian dynasty, ordered the wholesale destruction of the sacred
tombs, graveyards, and mosques in Mecca and Medina. These are, of course, the two holy cities of Islam, whose
sanctity the Saudi exile Osama bin Laden and other Islamist extremists ostensibly seek to protect from the defiling
presence of U.S. troops on Saudi soil.

Saud's armed supporters, in a frenzy of iconoclasm, first leveled Jannat al-Baqi, the "heavenly orchard" in Medina,
St
Sut
where one of the original associates of Muhammad was buried under the prophet's supervision. Other relatives and
thousands of early companions of the prophet were also interred at the site, as were the imams Hassan and
Hussein, venerated by Sunni and Shia Muslims. All these graves were wrecked by Saud's minions, who then looted
the treasure at the prophet's shrine.

The Saud party went on to demolish the cemetery in Mecca where the prophet's mother, grandfather, and first wife,
Khadijah, were buried; then to smash many more honored sites, devastating the architectural achievements of
Arabia, including mosques and even Muhammad's house. Only the tomb of the prophet was spared, after an outcry
from traditional Muslims.

This spree of vandalism was accompanied by wholesale massacres of Muslims suspected of rejecting Wahhabism,
a fanatical strain of Islam that emerged in Arabia in the eighteenth century and has periodically disturbed the Muslim
world. In the nineteenth century, it fueled the Arab nationalist challenge to the tolerant and easygoing Ottoman
Empire; and it became, and remains today, the state-sanctioned doctrine of the Kingdom of Saudi Arabia, founded in
1932.

These events of 75 years ago aid in understanding the violence of bin Laden and other Islamic terrorists, who (since
the waning of atheist leftism as a motivating ideology) are all Wahhabis. A direct line extends from the demolition of
the holy places in Medina and Mecca through the slaughter of 58 tourists in Egypt in 1997, the orgy of killing in
Algeria in this decade, and the bombardment of the Buddhist statues at Bamyan by the Taliban only months ago to
the assault on the World Trade Center, symbol of Western wealth and power. In all these cases, unrestrained
destruction and bloodshed were justified by Wahhabi doctrine.

Wahhabis, who regard the veneration of the prophet and of saints as a polytheistic corruption of Islam, are offended
by the honoring of tombs and shrines, along with many other traditional Muslim practices. Observance of the
prophet's birthday, for example, is illegal in Saudi Arabia, although lately Prince Abdullah has introduced a novel
concession: Observances in private homes will no longer be subject to suppression by the religious police.

Wahhabism's bloodstained record explains why so many Muslims around the world fear and hate Islamic
fundamentalism—and why certain marginal types are drawn to it. As an acquaintance of mine put it, in Muslim
Morocco, the footloose young sons of the lower middle class and proletariat can take one of three paths. They may
adopt Western ways, drink and acquire girlfriends, and be envied. They may take up the life of an ordinary observant
Muslim and be respected. Or they may join the Wahhabis—funded by the Saudis and organized by such as bin
Laden—and be feared.

This is the most important point for Western leaders to understand right now: The West has multitudes of potential
Muslim allies in the anti-terror war. They are the ordinary, sane inhabitants of every Muslim nation, who detest the
fundamentalist violence from which they have suffered and which is symbolized, now and forever, by the mass
murder in New York.

http://www.weeklystandard.com/Content/Public/Articles/000/000/000/277gkmhl.asp 6/17/03
Economist.com Page 1 of 2

Economtst.com GLOBAL AGENDA

Double-edged sword
Sep 27th 2001
From The Economist Global Agenda

The Saudi royal family has long exploited religion to bolster its standing. That has
helped breed the very sort of religious extremism that inspired the terrorist attacks on
America and is now threatening the kingdom's own stability

WHEN Saudi Arabia cut off diplomatic relations with Afghanistan on

September 25th, the decision was hailed as the final step in the
international isolation of the Taliban regime. But the most
remarkable feature of the action is how slow the Saudis were to
take it. The Saudi government sees Osama bin Laden as a threat to
its very existence. Yet Saudi Arabia was one of only three countries
to recognise his hosts, the Taliban, as the legitimate government of
Afghanistan. Even after Mr bin Laden took refuge with them in
1996, Saudi Arabia is said to have helped pay for their drive to
take full control of the country. And, now that America is planning
to hunt Mr bin Laden down, Saudi Arabia seems reluctant to join the chase.

This reluctance stems in large part from Mr bin Laden's popularity among ordinary Saudis. The
royal family's authoritarian rule makes public opinion hard to gauge, but stories abound of his
admirers sending one another congratulatory text messages on their mobile telephones after the
attacks of September llth. A more common reaction, according to one Saudi, was suspicion that
America was trying to frame Mr bin Laden because of his opposition to American involvement in
the Middle East. At any rate, many Saudis sympathise with his denunciation of America's
"indifference" to the plight of Palestinians under Israeli occupation and Iraqis under United Nations
sanctions.

Saudi officials, conscious of the growing criticism of

America, have long tried to play down the two countries'
ties. They have pursued, for example, a rapprochement
with Iran, in defiance of American pressure. In August, a
Saudi diplomat published an article enumerating the many
inadequacies of George Bush, America's president.
Abdullah, the kingdom's crown prince and day-to-day
ruler, has avoided meeting Mr Bush, in a deliberate snub.
Earlier in the year, with the Palestinian uprising in full
swing and popular consternation at its height, the Saudi
regime began to put pressure on America to stop using
aircraft based in its country for attacks on Iraq. The
planes and their pilots had already been moved to a
Just the foreign minister
remote desert air base several years before to keep them
out of sight. No wonder, then, that the Saudi government reacted with horror and confusion when
American officials declared that they were using the same base as headquarters for any retaliation
against Afghanistan. In the end, the Saudi regime probably will give American forces permission to

http://www.economist.com/agenda/PrinterFriendly.cfm?Story_ID=796255 6/17/03
frontline: looking for answers: interviews: saad al-fagih Page 1 of 16

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t
saad al-fagih
about saad al-fagih

t A Saudi Arabian
dissident living in exile in
You say that [U.S.] analysts and institutions aren't London, Dr. Saad al-Fagih
working? What's going on? heads the Movement for
Islamic Reform in Arabia.
In this interview, he
The impression is that the whole thinking machine — explains the factors fueling
strategy centers, think tanks — are paralyzed. The whole anti-Americanism in Saudi
t country, which is supposed to be the best element of the Arabia and other Arab
nations, and explains the
West with the ideology of democracy — where all the brains Saudi government's
dilemma if it allies itself
are melded in a proper decision for the sake of the future of with the U.S. in the war on
the country — all this has vanished. ... terrorism. This interview
was conducted late
September 200.1 by Martin
To follow bin Laden, to put him under very close Smith. In an earlier 1999
surveillance, they are ending up with this: that they don't interview with FRONTLINE,
Dr. al-Fagih described the
know [anything] about him. He's attacking with four planes loose organization of
on their own land, the very symbols of America — a defense individuals that: make up Al
Qaeda.
symbol, an economic symbol, and probably the third
symbol would be the political symbol — and they are asleep.
Why don't they ask themselves why? What went wrong? ...

If they had been modest and humble enough and put

arrogance aside and say, "Well, let's study the phenomenon,
what is the case of bin Laden?" they would have reached a
completely different conclusion and hence a completely
different way of dealing with the problem.

What's the different conclusion?

That depends on understanding the problem. The problem is

a phenomenon consisting of at least four ingredients. The
first ingredient is the huge hatred of the United States
because of its polices in Palestine, its policies in Iraq, its
policies in the Arabian Peninsula.

http://www.pbs.org/wgbh/pages/frontline/shows/terrorism/interviews/fagih.html 6/17/03
frontline: looking for answers: interviews: prince bandar bin sultan Page 1 of 30

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bandar bin sultan

about bandar bin sultan

Dean of the Diplomatic

Saudi dissidents say that there is growing anti- Corps in Washington,
Prince Bandar bin Suitan
Americanism in Saudi Arabia, that bin Laden is in some has served as Saudi
ways becoming a folk hero, in part because the regime Arabia's ambassador to the
United States since 1983.
does not allow dissent, there is unemployment, etc. Is In this interview with
there growing anti-Americanism in Saudi Arabia? FRONTLINE correspondent:
Lowell Bergman, Prince
Bandar argues that while
It's almost as deja vu again. We heard the same stories, the U.S. policy in the Middle
East has its flaws, it cannot
same pontification from people who ... are against the be blamed for the
kingdom, against its policies. In 1990, we were told ... that atrocities of Sept. 11 —
Osama bin Laden and like-
if the Americans come to help Saudi Arabia defend itself minded extremists must
and liberate Kuwait, the Arab world will rise from the bear full responsibility.
Atlantic to the Gulf. Prince Bandar also speaks
candidly about dissidents
within his own country,
about relations between
Saudi Arabia and other
f governments in the Middle
Because? East, and about the role
that Saudi Arabia may take
in the fight against
Because the infidels have come, because Saudi Arabia is a terrorism, This interview
was conducted late
holy land. Well, the truth of the matter, one, the premise September 2001,
was wrong. America has never been a colonizing power as
far as we were concerned. Our relationship with America
did not start in 1990. It started in the 1930s. And when the
Americans came to Saudi Arabia, they didn't come as an
invader. They came actually as a private sector, trying to
help us find oil. They found the oil for us, and they've been
our friends ever since....

But bin Laden himself [went] to the royal family when

the invasion of Kuwait took place, and said, "We will
defend Saudi Arabia," as I understand it, meaning he

http://www.pbs.org/wgbh/pages/frontline/shows/terrorism/interviews/bandar.html 6/17/03
OrTO , » ot»* x _o«<5-,sv > o ' F o o .

53. Tlie U.S. Alliance with Saudi Arabia

The U.S. Government should \ forcefully pr4ss Riyadh to a

terrorist activities and cut off private funding for terrorist groups,
even at the cost of jtoday'js cozy relationship;
• use visa and ^ transportation rules! to encourage release of cap-
tive American citizens by] for instance, denying U.S. visas to
men who have abused their power under Saudi law to prevent
wives and children from leaving the country;
• put greater official distance between itself and the Saudi Ara-
bian regime, thereby reducing Washington's identification
with a corrupt kleptocracy;
• lend training of the Saudi national guard, a force directed
at suppressing domestic unrest rather than guarding against
external enemies;
• withdraw U.S. military forces from Saudi Arabia; and
• recognize that the feared Saudi "oil weapon" is a myth.

In early 2002 rumors circulated that Saudi Arabia was considering

asking the United States to withdraw its troops from the gulf kingdom.
Outraged denials arose in both Washington and Riyadh. But even before
the September 11, 2001, terrorist assaults, Saudi Arabia was among Wash-
ington's more dubious allies. Washington should take the initiative in
refashioning a relationship that has far more negatives than positives for
the United States. The House of Saud has long leaned toward the West.
King Abdul Al Aziz Al Saud, who fathered 44 sons, is the font of today's
royal family, including King Fahd. The latter suffered a series of strokes
beginning in 1995, however, and his half-brother Crown Prince Abdullah
largely runs the government.
Saudi Arabia would be unimportant but for the massive oil deposits
sitting beneath its seemingly endless deserts. There have been tensions

543
 6 of 32 DOCUMENTS

Copyright 1998 U.S. News & World Report

U.S. News & World Report

October 19, 1998

SECTION: WORLD REPORT; Pg. 37

LENGTH: 448 words

HEADLINE: Saudi royalty gives money to bin Laden

BYLINE: By Bruce B. Auster; David E. Kaplan

HIGHLIGHT:
Royal paradox

BODY:
Osama bin Laden, whose father built palaces and mosques for Saudi Arabia's royal family, has dedicated his life to
overthrowing King Fahd's pro-Western government. Yet he receives millions of dollars to finance his terror campaign
from Saudi royalty, according to U.S. intelligence specialists.
"We've got information about who's backing bin Laden, and in a lot of cases it goes back to the royal family," says
Dick Gannon, who retired July 31 as deputy director for operations of the State Department's Office of
Counterterrorism.
Suicidal. That makes no sense, say some. "There is no member of the royal family who would have anything to
gain from supporting bin Laden unless they went absolutely berserk," says Mamoun Fandy, a scholar at Georgetown
University.
Still, Saudi Arabia has an enormous royal family with thousands of princes and princesses. "There are certain
factions of the Saudi royal family who just don't like us," says Gannon. "They may have the same father or grandfather,
but they can have very different agendas." A top U.S. intelligence official confirms that there are "certainly good odds
that someone [in the extended royal family] is giving money." There is precedent for factions in the family turning
against each other: In 1975, King Faisal was assassinated by a Saudi prince. And Egypt's Gamal Abdel Nasser, an
enemy of the Saudi monarchy, kept renegade Saudi princes on his payroll in the 1950s.
Bin Laden's campaign to destabilize the kingdom highlights the tension between modernization and tradition. King
Fahd and six of his brothers-known as the Sudayri Seven after their mother, the favorite wife of the kingdom's founder-
-have built up the state's economic and military infrastructure. But modernization offends some traditionalists who do
not believe women should attend school and who resent Western influences. Religious leaders condemn the libertine
lifestyle led by some princes, while fundamentalists such as bin Laden believe the presence of American troops defiles
Muslim holy sites.
U.S. officials stress that both King Fahd and Crown Prince Abdullah, who represents the traditionalists, support the
fight against bin Laden's terror network. Last month, Saudi Arabia recalled its top envoy to Afghanistan, where bin
Laden has been granted safe haven.
 3 of 3 DOCUMENTS

Copyright 2001 The Conde Nast Publications, Inc.

The New Yorker

October 22, 2001

SECTION: ANNALS OF NATIONAL SECURITY; Pg. 35

LENGTH: 3552 words

HEADLINE: KING'S RANSOM;

How vulnerable are the Saudi royals?

BYLINE: SEYMOUR M. HERSH

BODY:,
1994 or earljefr, the National Security Agency has been collecting electronic intercepts of conversations
between members of the Saudi Arabian royal family, which is headed by King Fahd. The intercepts depict a regime
increasingly corrupt, alienated from the country's religious rank and file, and so weakened and frightened that it has
brokered its future by channelling hundreds of millions of dollars in what amounts to protection money to
fundamentalist groups that wish to overthrow it.
The intercepts have demonstrated to analysts that.by 1996^Saudi money was supporting Osama bin Laden's Al
Qaeda and other extremist groups in Afghanistan, Lebanon, Yemen, and Central Asia, and throughout the Persian Gulf
Tegion. "Ninety-six is the key year," one American intelligence official told me. "Bin Laden hooked up to all the bad
guys-it's like the grand alliance- and had a capability for conducting large-scale operations." The Saudi regime, he said,
had "gone to the dark side."
In interviews last week, current and former intelligence and military officials portrayed the growing instability of
Saudi regime-and the vulnerability of its oil reserves to terrorist attack-as the most immediate threat to American
economic and political interests in the Middle East. The officials also said that the Bush Administration, like the Clinton
^ Administration, is refusing to confront this reality, even in the aftermath of the September 11th terrorist attacks.
TheSaudis and the Americans arranged a meeting between Defense Secretary Donald Rumsfeld and King Fahd
duringa visit by Rumsfeld to Saudi Arabia shortly before the beginning of the air war in Afghanistan, and pictures of
the meeting were transmitted around the world. The United States, however, has known that King Fahd has been
incapacitated since suffering a severe stroke, in late 1995. A Saudi adviser told me last week that the King, with round-
the-clock medical treatment, is able to sit in a chair and open his eyes, but is usually unable to recognize even his oldest
friends. Fahd is being kept on the throne, the N.S.A. intercepts indicate, because of a bitter family power struggle.
(^ Fahd's nominal successor is Crown Prince Abdullah, his half brother, who is to some extent the de-facto ruler-he and
Prince Sultan, the defense minister, were the people Rumsfeld really came to see. But there is infighting about money:
Abdullah has been urging his fellow-princes to address the problem of corruption in the kingdom-unsuccessfully,
according to the intercepts. "The only reason Fahd's being kept alive is so Abdullah can't become king," a former White
House adviser told me.
The American intelligence officials have been particularly angered by the refusal of the Saudis to help the F.B.I.
and the C.I.A. run "traces"-that is, name checks and other background information-on the nineteen men, more than half
of them believed to be from Saudi Arabia, who took part in the attacks on the World Trade Center and the Pentagon.
Ill "They knew that once we started asking for a few traces the list would grow," one former official said. "It's better to
j| shut it down right away." He pointed out that thousands of disaffected Saudis have joined fundamentalist groups
throughout the Middle East. Other officials said that there is a growing worry inside the F.B.I, and the C.I.A. that the
 2 of 2 DOCUMENTS

Copyright 2002 Newsweek

Newsweek

December 2, 2002, U.S. Edition

SECTION: NATIONAL AFFAIRS; Pg. 28

LENGTH: 1899 words

HEADLINE: The Saudi Money Trail

BYLINE: By Michael Isikoff And Evan Thomas; With Jamie Reno in San Diego, Dan Klaidman and Mark Hosenball
in Washington and Christopher Dickey in Paris

HIGHLIGHT:
Rent payments for 9-11 hijackers and mysterious checks from a princess's account. Is there a Saudi tie to terror? Inside
the probe the Bush administration doesn't want you to know about.

BODY:
When the two Qaeda operatives arrived at Los Angeles International Airport around New Year's 2000, they were
warmly welcomed. Nawaf Alhazmi and Khalid Almihdhar would help hijack American Airlines Flight 77 and crash it
into the Pentagon a year and a half later, but that January in Los Angeles, they were just a couple of young Saudi men
who barely spoke English and needed a place to stay. At the airport, they were swept up by a gregarious fellow Saudi,
Omar al-Bayoumi, who had been living in the United States for several years. Al-Bayoumi drove the two men to San
Diego, threw a welcoming party and arranged for the visitors to get an apartment next to his. He guaranteed the lease,
and plunked down $1,550 in cash to cover the first two months'rent. His hospitality did not end there.
Al-Bayoumi also aided Alhazmi and Almihdhar as they opened a bank account, and recruited a friend to help them
obtain Social Security cards and call flight schools in Florida to arrange flying lessons, according to law-enforcement
officials. Two months before 9-11, al-Bayoumi moved to England; several months later, he disappeared. He is believed
to be somewhere in Saudi Arabia.
Who is al-Bayoumi? At various times, the affable father of four told people that he was getting his doctorate at San
Diego State, though the school has no record he ever attended. He told others that he was a pilot for the Saudi national
airline. He apparently did work for Dalian Avco, an aviation-services company with extensive contracts with the Saudi
Ministry of Defense and Aviation, headed by Prince Sultan, the father of the Saudi ambassador to the United States,
Prince Bandar. According to informed sources, some federal investigators suspect that al-Bayoumi could have been an
advance man for the 9-11 hijackers, sent by Al Qaeda to assist the plot that ultimately claimed 3,000 lives.
The Feds' interest in al-Bayoumi has been heightened by a money trail that could be perfectly innocent, but is
nonetheless intriguing—and could ultimately expose the Saudi government to some of the blame for 9-11 and seriously
strain U.S.-Saudi ties. It is too soon to say where the trail will wind up, but it begins with a very surprising name on a
Washington bank account.
About two months after al-Bayoumi began aiding Alhazmi and Almihdhar, NEWSWEEK has learned, al-
Bayoumi's wife began receiving regular stipends, often monthly and usually around $2,000, totaling tens of thousands
of dollars. The money came in the form of cashier's checks, purchased from Washington's Riggs Bank by Princess Haifa
bint Faisal, the daughter of the late King Faisal and wife of Prince Bandar, the Saudi envoy who is a prominent
Washington figure and personal friend of the Bush family. The checks were sent to a woman named Majeda Ibrahin
Dweikat, who in turn signed over many of them to al-Bayoumi's wife (and her friend), Manal Ahmed Bagader. The
 2 of 3 DOCUMENTS

Copyright 2002 U.S. News & World Report

U.S. News & World Report

January 14, 2002 January 14, 2002

SECTION: NATION & WORLD; INVESTIGATIVE REPORT; Vol. 132 , No. 1; Pg. 24

LENGTH: 2074 words

HEADLINE: Princely payments

BYLINE: By Linda Robinson; Peter Gary; Edward T. Pound; Megan Barnett; Lisa Griffin; Randy Dotinga

HIGHLIGHT:
Saudi royalty, it is claimed, make out like bandits on U.S. deals

BODY:
On an unseasonably warm December evening, Richard Newcombe stepped off a jumbo jet in Washington, jet-
lagged from a four-day trip to Saudi Arabia. The head of foreign assets control in the U.S. Treasury Department,
Newcombe and his colleagues at the State Department and the National Security Council had made some progress
getting the Saudis to help shut down global tenor networks.
But it was like pulling teeth.
First, the Saudis had balked at freezing bank accounts Washington said were linked to terrorists. Then they
demanded proof that Saudi-funded charities were funneling money to terrorists. On December 8, the first day of the
Newcombe delegation's visit, Prince Nayef, the interior minister, was telling reporters he still did not even believe that
15 of the 19 September 11 hijackers were Saudis. "The truth is missing so far," he said. Now the Newcombe party was
returning with only a promise that the Saudis would be helpful at the next meeting, in January.
Protection money. Strained relations between Washington and Riyadh are nothing new. But since September 11,
tensions have increased markedly. One reason, high-level intelligence sources tell U.S. News, is that at least two Saudi
princes had been paying, on behalf of the kingdom, what amounts to protection money to Osama bin Laden since 1995.
In November of that year, a bomb at the Saudi National Guard headquarters in Riyadh killed several American military
advisers who worked closely with the force. One source, a former senior Clinton administration official, said that the
two princes, whose names have not been disclosed, began making payments to bin Laden soon after the bombing. The
official added that Washington did not learn of the payments until at least two years later. "There's no question they did
buy protection from bin Laden," he says. "The deal was, they would turn a blind eye to what he was doing elsewhere.
You don't conduct operations here, and we won't disrupt them elsewhere.'"
Adel Al-Jubeir, a top Saudi official, denied the payments took place. "Where's the evidence? Nobody offers proof.
There's no paper trail Why would they [princes] pay? These people threaten us more than they threaten you," he
said. Meanwhile, the former Clinton official says the U.S. stance may be toughening. "I dont know if the Saudis have
figured out that their strategy is a loser," he says. "But what's important going forward is to convince them now that this
arrangement has to stop."
Protection money to a major terrorist would be a big enough irritant. But the Washington-Riyadh relationship is
marred by another problem, and this one is just as well kept a secret. Over the past decade, the United States has sold
Riyadh $ 33.5 billion in military hardware. That's more than Israel and Egypt combined have received. U.S. companies
have also done billions of dollars in commercial business with the kingdom. According to well-placed Saudi sources
and a review of several little-known lawsuits, Saudi agents and royalty often demand enormous commissions to
 2 of 19 DOCUMENTS

Copyright 2002 Time Inc.

Time Magazine

August 5, 2002

SECTION: WORLD; Pg. 30

LENGTH: 3249 words

HEADLINE: Do We Still Need the Saudis?;

Oil has sustained the alliance between the U.S. and Saudi Arabia for deca des. But extremism in the kingdom is putting
those ties to the test

BYLINE: Romesh Ratnesar/Riyadh, With reporting by Massimo Calabresi and Mark Thompson/Washington, Scott
MacLeod/Riyadh and J.F.O. McAllister/London

BODY:
People in Saudi Arabia are sick of talking about Sept. 11. They have little interest in examining why 15 of their
countrymen hijacked U.S. commercial planes and killed 3,000 civilians; many prefer to believe that the attacks were the
work of the CIA or the Mossad, and that the 15 hijackers were unwitting players in someone else's plot. "They were just
bodies," a senior government official says. Spend an evening in Jidda, the hometown of Osama bin Laden, where young
Saudis today flock to American chain restaurants and shopping malls to loiter away the stifling summer nights, and you
rarely hear bin Laden's name. "They find it silly when people talk about al-Qaeda," says journalist Mohammed al-
Kheriji, 28, as he sips a latte at the city's newest Starbucks. "People are worried about their own problems."
But while Saudis remain uninterested-or perhaps they're in a state of denial-in the level of Saudi participation in
Sept. 11, the country seethes with open loathing for the U.S. and sympathy for bin Laden's cause. Signs of anti-Western
militancy are rife throughout this vast kingdom, from the capital, Riyadh-where in June separate car bombs blew up a
British banker outside his home and nearly killed an American expatriate—to Abha, a remote mountain city in the
southern province of Asir, where four of the hijackers were raised and locals still celebrate all "the Fifteen," as the
group is called. "Their friends are really proud of them," says Ghazi al Gamdhi, 22, a university student. "They think the
Fifteen were protecting Islam. Most of the guys here want to become heroes protecting Islam."
In recent weeks Saudi militants have resumed their campaign against one of the original sources of bin Laden's
wrath: the 6,000 American troops stationed on Saudi soil. In June, after U.S. investigators discovered the spent casing of
a Russian-made surface-to-air missile lying in the desert near the Prince Sultan air base, Saudi intelligence arrested 11
Saudi members of an al-Qaeda cell for plotting to shoot down U.S. jets that use the facility and for preparing attacks
' against other American targets in the kingdom. It was the first official acknowledgment since Sept. 11 that the
I. organization is active in Saudi Arabia.
The kingdom's latent anti-Americanism has been stoked in recent months by fierce opposition to the Bush
Administration's pro-Israel Middle East policies and the perceived harassment of Muslims in the U.S. The country's
powerful fundamentalist clerics have used these issues to agitate the masses. Government officials are worried that the
country's imams are slipping beyond their control. "Six months ago, you could call them in and say, XTut it out,"' says a
senior Saudi official. "But now you have hundreds of imams condemning the U.S. at prayers every Friday. How can
you stop that?"
Given the stakes, both countries need to figure out a way. Hundreds of Saudis fought alongside the Taliban against
\/' the U.S. in Afghanistan last year. More than one-third of the 350 hard-core fighters being held by the U.S. in
Guantanamo Bay, Cuba, are Saudi nationals. Billions of dollars from wealthy Saudis have funded anti-American and
 1 of 4 DOCUMENTS

Copyright 2003 The Conde Nast Publications, Inc.

The New Yorker

March 24, 2003

SECTION: FACT; Content; Pg. 48

LENGTH: 12287 words

HEADLINE: THE PRINCE;

How the Saudi Ambassador became Washington's indispensable operator.

BYLINE: ELSA WALSH

BODY:
During the first weeks of the second Bush Administration, the Saudi Arabian Ambassador to the United States,
Prince Bandar bin Sultan, met with the new President. Bandar, who is fifty-three and has been the Saudi Ambassador
for twenty years, was accustomed to an unusually personal relationship with the White House; he was so close to the
President's father, George H. W. Bush, that he was considered almost a member of the family. The Saudi Ambassador
had been happy about the younger Bush's victory, but he was worn out by the unpublicized role he had played in the
failed negotiations to resolve the Middle East crisis during the last weeks of the Clinton Presidency.
President CUnton had been working on a compromise for years; after the Monica Lewinsky scandal, he had called
this effort part of his "personal journey of atonement." Bush had been briefed on the collapse of the talks and was
baffled by Yasir Arafat, the leader of the Palestinian Authority. "Explain one thing to me," he said to Bandar. "I cannot
believe somebody will not strike a deal with two desperate people."
When Bandar asked what Bush meant by "desperate," Bush explained: President Clinton had been eager to leave
office with a settlement in the Middle East, and Israel's Prime Minister, Ehud Barak, needed a deal to survive the next
election. Bush said that he didn't think Arafat really wanted to solve the problem.
Bandar believed that Arafat's failure to accept the deal in January of 2001 was a tragic mistake-a crime, really. Yet
to say so publicly would damage the Palestinian cause, which had been championed by the Saudis, who would then lose
any leverage they still had. Bush told Bandar that, unlike Clinton, he did not intend to intervene aggressively.
Bandar left the meeting even more distressed. At the end of the Clinton Presidency, Bandar had received
confidential assurances from Colin Powell, the Secretary of State-designate, that he was to relay to Arafat: the Middle
East deal made by Clinton that the new Administration endorsed would be enforced. Powell warned that the "peace
process" would be different under Bush. Bush would not spend hours on the telephone, and Camp David was not going
to become a motel. The message was clear, and until the end Bandar had continued to hope: it appeared that Arafat
would get almost everything he wanted, and that Bush's Administration, which Bandar saw as more tough-minded than
Clinton's, would stand behind the agreement.
"I still have not recovered, to be honest with you, inside, from the magnitude of the missed opportunity that
January," Bandar told me at his home in McLean, Virginia. "Sixteen hundred Palestinians dead so far. And seven
hundred Israelis dead. In my judgment, not one life of those Israelis and Palestinians dead is justified."
We met in late November, during Ramadan, when Muslims fast from dawn to dusk, and Bandar had invited me to
break the day's fast with him. Steel barriers block the way to the house, which overlooks the Potomac River, and I had
passed through a security checkpoint, where commandos in khaki pants and vests inspected my car for explosives.
 The Approaching Turning Point:
The Future of U.S. Relations with the Gulf States

By F. Gregory Gause, III

Brookings Project on U.S. Policy Towards the Islamic World

Analysis Paper Number Two, May 2003

F. Gregory Cause HI is an associate professor of political science at the University of Vermont, and the author
of Oil Monarchies: Domestic and Security Challenges in the Arab Gulf States (Council on Foreign
Relations Press, 1994).

Be Careful What You Wish For

The Future of U.S.-Saudi Relations
F. Gregory Cause III

No country has more vexed Americans in mid-1990s, largely eliminated it domesti-

the crisis that began on September 1 1 than cally. Identification with the United States
Saudi Arabia. Osama bin Laden was born now, at a time of increasing anti-American-
and raised there and is a product, albeit an ism in the Arab world, could excite more
extreme and unique one, of the educational domestic opposition to the Al Saud. With
and cultural milieu of the country. He was the social and economic changes that the
able to recruit 15 fellow Saudis, equally Saudi kingdom has experienced over the
products of that milieu, to participate in the i past 20 years, there is a larger, more edu-
terrorist attacks. But America's vexation (as cated, and more attentive public with which
opposed to its revulsion, which those who the Al Saudjiaye to deal. Rather than run
perpetrated the attacks of September 1 1 the risk of alienating it through unstinting
richly deserve) is less with our Saudi ene- support for the United States, the Al Saud
mies than with our Saudi friends. have choserrtojiedge.
No government in the Arab world is Which raises another question:^ the
closer to Washington than that of Saudi Saudis have to be this attentivejo theirjrwn
Arabia. Just over ten years ago the Saudis public opinion, arethey so weak and_unsta- <
opened their country to half a million ble thattjiey have no value as a strategic
American troops and cooperated openly partner? No) They are in command domes-
with the American military effort against tically, with the institutions of religion
Iraq. Yet now Saudi cooperation with the firmly under the state's control, the fiscal
United States appears grudging and reluc- situation much improved over the past few
tant, at least in public. Saudi leaders, at years, and the internal cohesion of the rul-
times, go out of their way to distance them- ing family relatively strong. They surf their
selves from the United States, particularly public opinion more from the desire to
when addressing domestic audiences. avoid creating unnecessary problems than
Why the Saudi hesitancy to back Amer- out of fear that an unpopular decision could
ica in its hour of need, particularly when mean their downfall. The Al Saud will be
bin Laden is as much their enemy_as^he around for awhile, sitting on all that oil.
isjours? Which leads to the two-part question:
T h i n s w e r lies in how^rjjie, Aljjjaud. where are Saudi-American relations going, t-
crisis differs and where should they be headed? We in
from that of their rule was the United States need to distinguish be-
directly threatened by an Arab army that tween our understandable exasperation with
had already swallowed up one monarchy. the Saudis' public stance in this crisis, and
The threat presented by bin Laden and his the broader question of whether any alter-
sympathizers is much less immediate.jn native government in Saudi Arabia would
fact, the Saudis believed that theyjigd, JDC better for us. Is it our interests that
through their own security measures in the have been hurt by Saud! policy since

Be Careful What You Wish For 37