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1 July 2001  |     mail this article   |     print   |   
Dealer in Death
Portrait of weaponsdealer Adnan Khashoggi, as published in the Dutch Esquire, July 2001.
Portrait of weaponsdealer Adnan Khashoggi, as published in the Dutch Esquire, July 2001.

He was known as the richest man in the world. Adnan Khashoggi (66) A.K. for intimates, knows what it is to make money, but also how to spend it. Just for his daily expenses, the most infamous arms dealer in the world spent 300,000 dollars a day, especially on the most beautiful women. Khashoggi was treated like a member of the family by anyone who was well-known in the world. Ronald Reagan had the arms dealer, among others, to thank for the fact that he was able to defeat President Carter in 1981 (even though Reagan could not remember it).

By Daan de Wit


The Dutch in the original article has been translated into English by Marienella Meulensteen.
Adnan Khashoggi celebrated his fiftieth birthday with a party that lasted five days. It was held at his house in Marbella, Spain, one of his twelve houses. Each one of his houses is fully manned at all times, in case the big boss decides to drop in at the last moment. If because of all his travels he would not know exactly where he was for a moment, he would be able to recognize the house in Marbella by the five thousand hectares of land on which it stands, his own discothèque, or the two hundred African animals that are sheltered on the property.

On his birthday, Shirley Bassey sang Happy Birthday to him, Brooke Shields showed her pearly whites and danced with the host, and Sean Connery reminded the guests that Khashoggi's enormous ship, the Nabila, further away in the harbor, played an important role in the Bond movie Never Say Never Again.

Khashoggi knows everyone in the world who is of any importance and vice versa. He discussed with Prime Minister  Shimon Peres in 1985 how Israel could get involved in arms transports to Iran; the same year he sent voluminous reports about the political situation in Iran to Robert McFarlane, America's national security advisor; with the then Minister of Defense Ariel Sharon in 1982 in his spectacular Mount Kenia Safari Club, Khashoggi discussed the plan for an enormous arms depot in Sudan for the benefit of 'special projects'; Khashoggi personally called George Bush Sr., but years prior was already in contact with another resident of the White House, Richard Nixon. Khashoggi had made a large donation to his election fund and talked with Nixon several times about the situation in the Middle East. This resulted in all kinds of meetings with the Saudi Royal House, and visits of Nixon to Saudi Arabia; in a letter to King Faisal, Nixon referred to Khashoggi as their 'mutual friend'. Khashoggi also had meetings on one of his airplanes with Jimmy Carter and talked to Ronald Reagan in the White House.


And when there was an investigation into why Mark Thatcher, son of the British ex-Prime Minister, who at the age of 31 was suddenly so well off, it became apparent that he had just cashed in on 35 million guilders. His commission for an arms deal, transferred with kind regards to his account by Adnan Khashoggi.

Playmate without staples
Khashoggi, axis in the Iran-Contra scandal, friend an financial advisor of Imelda Marcos and dealer in death and destruction, can still live the good life. The money that Khashoggi gathered during the course of his career, a small six billion guilders, he invested in many companies, from meat processing to a tourist center. He did not throw his dollars about, but always tried to get as much as possible subsidized, and to find as many co-investors as possible to spread his risks. The only places where he threw his money about were the escort services and especially the casinos. He and his entourage would arrive there sometimes literally with suitcases full of money.
In the turbulent life of Khashoggi, women play a major role. He may be married, but his wife of the moment mostly lives in one place, while Khashoggi constantly flies all over the world and stays elsewhere. Most of the time when you see Khashoggi, he is surrounded by the most beautiful women. It can happen that he is attracted to a Playmate and that he would like to see her without the staples, but generally women are ordered from the most exclusive escort services where they are often fired when they reach the age of 24. James Flannery, Khashoggi's butler in his New York apartment, has lived through it so many times. How Khashoggi locked himself with ten women in his bedroom. After he had to throw out one of the girls because Khashoggi had tired of her, Flannery quit after years of faithful service.

Money with a bang
Adnan Khashoggi was born in 1935, when Saudi Arabia only existed for three years. In the beginning, Saudi Arabia was little more than a large sandbox, led by the founder Abdul-Aziz and his three hundred wives. In 1938 everything changed when the first oil began to spout from the earth. It was the beginning of enormous prosperity, and at that time the young Khashoggi had no idea that he would so richly benefit from it later on. Khashoggi's father, Dr. Mohamed Khaled Khashoggi, took the first steps in that direction. Besides the women, he filled the most intimate place in the life of King Abdul-Aziz - he was his personal physician. And confidant, member of the Cabinet, friend and financial advisor.


Knowledgeable about the West, because he enjoyed his education in Paris among other cities, father Khashoggi sent his son Adnan to the United States to study. There A.K. moved into a hotel and appointed a co-student to type out his homework for payment. He was more than generous to his friends: he was known to discretely pick up the tab after dinner parties.


When his father sent him 25,000 guilders to buy a car, he bought a truck instead, which he leased to companies in Saudi Arabia. Later he bought more trucks that he also rented out. Business went well and Khashoggi left the U.S. and the University of Stanford early to open offices in Jeddah and Riyadh, the capital of Saudi Arabia.

Khashoggi's business spirit did not come as a big surprise. When one of the King's favorite wives broke a finger in 1939, father Khashoggi imported Saudi Arabia's first X-Ray machine. To provide the object with electricity, the physician bought a generator that provided enough energy for the houses in the neighborhood. He charged ten Riyals per connected light bulb and before he knew it, 8000 light bulbs were connected to his network, which provided him with more money than he needed.


One lesson that Khashoggi really remembered was when his father dropped a coin on the thick carpet with a soft plop. Father picked up the coin and now dropped it on a marble floor: "you can spend your money quietly or with a bang". He had not forgotten that lesson when he collected his first large commission as a go-between: 400,000 guilders for his negotiations in a deal with trucks. Just about the whole amount was spent on a party so grand that people still talk about it nowadays. Everything about it was grand - the location, the amounts of champagne, the beauty of the women. It became Khashoggi's trademark, and it worked like a magnet, everyone wanted to be a part of it. Trade and money came easy to him from that time on. Personal contacts and the sharing of his prosperity became some of the most important cornerstones of his success.

The years in which the money came to Khashoggi the fastest were his years as go-between steering the middle course between the Saudi Royal Family, who during the establishment of its country invested its oil dollars in an extensive defensive force, and American arms suppliers like Raytheon and Lockheed. He was 27 years old when he received orders from the new King Faisal to go and negotiate. He was one of the family at the court, and in the past had already imported arms for Faisal when he was still the viceroy. But he also knew the culture of the U.S. like the back of his hand. He was the ideal negotiator.


At that time it was all about small numbers and small commissions, but soon it was about five percent commission on contracts of more than a million to one and a half billion dollars. This was followed by demands of Khashoggi for fifteen percent commission. From Lockheed alone - already familiar with the phenomena of bribes - he received no less than 265 million guilders between 1970 and 1975. Never before had anyone made so much money so quickly. He had to give up parts of it to the Saudi princes with government positions who had given him the orders. But most of it he put into his own pocket. 


It lasted just so long until the enormous amounts began drawing the attention of the American government and investigations were launched. In the end it led to the acceptance of the Foreign Corrupt Practices Act. As a consequence, many companies lost their contracts because their contact persons were not to be 'compensated' for their services any more. Creative bookkeeping was the only solution.

October Surprise
Khashoggi's good international contacts also became apparent by what some people called one of the biggest scandals of the past decennia: operation October Surprise. The ones directly involved, among whom George Bush Sr., deny everything, but there are more indications that the operation really took place than not. The (of course alleged) October Surprise was an undertaking of a number of people under the direction of George Bush Sr., who made sure that President Carter lost the elections in 1981 in favor of Ronald Reagan. The key to victory was the release of the 52 hostages in Iran. Bush promised the Iranians 40 million dollars and promised them - illegally - to sell them billions of dollars worth of arms if they would hold the hostages a little longer, so that Carter would lose the elections. So that is what happened. Carter lost because he did not succeed in freeing the hostages. Minutes after the inauguration of Reagan - with George Bush as vice-president - the hostages were released in January 1981.


The final deal between Bush and the Iranians took place in Paris on 19 October 1980, hence the October Surprise. On the way there, the father of the current president flew with a group among which was the subsequent head of the CIA, William Casey. On the way back, Bush was on a supersonic aircraft, an SR-71 Blackbird, which crosses the Atlantic Ocean in two hours. This way he really had only been away from Washington for a very short time, so that the disinformation crew of the CIA could easily deny the whole operation.  


The pilot on that fast flight was Günther Russbacher, an American spy. He talked about his past to Rodney Stich, author of what is now considered a classic: 'Defrauding America, Encyclopedia of Secret Operations by the CIA, DEA and other covert agencies'.
In answer to Stich's question as to who were present at the crucial meeting in Paris in October 1980, Russbacher names, among others, Khashoggi. In an interview with the Belgian HUMO in March 1987 about Iran gate, Khashoggi himself states: "I am still convinced that it was all based on a grand idea. I cannot think of it in any other way: after all, I started the ball rolling." Here he is referring to his first meeting with the Iranian arms dealer Manucher Ghorbanifar in 1985 in Hamburg, who later proved to be of essential importance. But Russbacher shows that Khashoggi is too modest, because five years earlier he was already involved in the October Surprise. Preparatory meetings in Buenos Aires and Geneva, in March 1980, were also enabled by Khashoggi: "Mr. Khashoggi allowed us to use his credit cards to buy fuel for the airplane. He indicated that he had a special interest in obtaining the assignment for a sale of or a deal in arms for the government of Iran", says Russbacher to Stich. 

With the arms that were acquired via Khashoggi, Iran waged war against neighboring Iraq. Martin Broek of the Dutch organization Campaign against Arms Trade investigates the arms trade: "The war between Iran and Iraq has been one of the most horrible ones ever. From dugouts and fortifications, people were involved in hand-to-hand combat. It reminded me more of the First than the Second World War. Iran sent children into the mine fields. In total there were millions of deaths. Khashoggi was crucial in a deal concerning TOW anti-tank missiles and HAWK anti-aircraft missiles. Arms which he knew would be deployed immediately".

'Crooks and Criminals'
Years later, Khashoggi's name appears regularly in the reports of the American congressional commission that investigates the Iran Contra affair. It especially concerns the Iran gate aspect of the case, resulting from the operation October Surprise, which was about American arms in exchange for the release of the American prisoners in Lebanon during the mid-80's.

Khashoggi was motivated by the potential for future trade deals, and in the first place influence on the situation in the Middle East. By getting all the parties to the table with the help of Ghorbanifar, arms flows started to take place that were beneficial for the pro-Western power groups, who were at odds with other groups that would start a power struggle after the death of Ayatollah Khomeini. Because nobody trusted one another during the transactions, Khashoggi lent the money. He says that in the end he lost ten million dollars.

During his transactions for what later would be called Iran gate, Khashoggi extensively exploited the international bank BCCI. A very special bank, as appears from the American congressional investigation 'The BCCI Affair' from the end of 1992, carried out by senators John Kerry and Hank Brown. That this bank was subjected to an investigation is also explainable by the nickname of the bank: 'Bank of Crooks and Criminals'. Rodney Stich writes: "BCCI was tailored for the secret and corrupt acticities of the CIA, the Mossad, drug dealers and terrorists'. And rich arms dealers. In the report it says with a sense of understatement, how CIA agents and "influential foreign elements in the U.S., like Adnan Khashoggi" continually pop up at important periods of the history of the bank, and at the same time are part of the decisive periods of foreign politics of the U.S."

Chechnyan orphans
If you want to be important, you will have to look important, Khashoggi must have thought. One of his twelve houses all over the world is his apartment in New York, which actually is a link-up of sixteen apartments. It has a swimming pool and a spectacular view of Manhattan that comprises a whole floor. The neighbors below had to be nice and cooperate because of the weight of the pool - of course with reasonable compensation - by allowing the placement of supports and the construction of a separate dehumidifying installation. The bottom of the pool was decorated with a leaf motif by the artist Fabrizio Plessi, which goes beautifully with the rich tropical flora that surrounds the water. In its entirety it looks like an oasis.
 
Most of all, Khashoggi lives on his largest ship, the Nabila, named for his daughter. The magazine Time-Life called it "the most luxurious modern yacht". The Nabila measures 85 meters, has five decks, and houses a swimming pool, a disco, a screen room, a helicopter platform with helicopter, and forty crew members. For his 48th birthday he welcomed 200 guests on board in Monte Carlo, and a few hours later the ship picked up another 200 guests in Cannes.

The Dutch film maker Jos de Putter was present in June 1997 on one of the yachts of Khashoggi to film the leading star of his documentary, the Chechnyan maffia boss Khozh-Ahmed Noukhaev. De Putter describes his trip as an alien journey through a time machine: after a short flight to Istanbul he is met by a limousine, to be spirited away to the edge of the Bosporus, while he is told during the ride to watch what he says around Khashoggi. The ship is enormous and on board it is nothing but pomp and circumstance. Under the Nabila there hangs a submarine to quickly bring Khashoggi to safety in case of an emergency.

On the ship, Shapari Khashoggi, the new wife of Adnan, holds a fundraiser party to benefit the Chechnyan orphans. None of the bleached blondes dripping with jewelry from the Côte D'Azur seems to care, is De Putter's impression, let alone that the smokings of Monaco's or Turkey's jetset worry about the 5000 dollars per plate. The extreme boredom that emanates from them, according to De Putter, is alleviated a little when Julio Eglesias sings a tender song and Elizabeth Taylor holds an even more tender speech.


What strikes De Putter is the enormous difference between the Khashoggisi. "Adnan is a small pudgy little man without much charisma, while his wife has grown up at the court of the Shah; and she shows that too - she has a very large aura. She looks like she just escaped from the twelfth century". It underlines the contrast between both spouses, the incarnate expression of the yin and yang principal: Adnan causes the deaths and the wounded, while Shapari spends the money he earns with it to support the orphans in need.


Dodi and Diana
For his influential network, Adnan Khashoggi has always been able to put his trust in his family. One of his sisters is Samira. She is also the ex-spouse of Mohamed Al Fayed, the owner of the billion dollar empire Harrods in London. Al Fayed entered the world of the Khashoggis in 1952 through a meeting with Adnan. In retrospect, it was also his first step into the world of the big money of which he later was to become an inhabitant; Khashoggi hired him and saw to his satisfaction how Al Fayed married his sister. Together, Samira and Al Fayed has a child that they named Emad Mohammed, by now better known as Dodi. In July 1997 Dodi gets to know Princess Diana, in August both of them are killed in Paris. Al Fayed has put up an altar in his Harrods department store in honor of  his son and Diana. He is still convinced to this day that the British Royal House has ordered their deaths.

Soheir Khashoggi is another sister of Adnan. She is a successful novelist whose novels are often set in affluent environments in the Middle-East. Because of her close ties with Dodi Al Fayed she dedicated her book Nadia's Song to him. The book, just like her other books, is banned in Saudi-Arabia. Soheir herself lives in the U.S. in the meantime, thanks to Adnan's help. He helped her with the divorce from the husband of an arranged marriage, and took care of her flight to the West. Soheir's book Mirage is about a young woman who escapes from a harem and flees to the U.S..


Recession
During the last few years, the news about Adnan Khashoggi has become sparse. He does not like to be in the limelight like before when he used to play the glamor recordings about himself in the limousines that picked up his guests from the airport. That is not very strange either, because most of what becomes known of him lately is negative.

The luxurious swimming pool in his apartment in New York is not appraised at much any more: "Nice idea", says someone who is interested in purchasing the property in 2000 when it is up for sale for 32 million. But he suspects that the dehumidifying system does not work any more as it should: "It stinks terribly". The apartment ultimately sold, but only for 12 million dollars.


Other houses of Khashoggi were also sold when during the nineties a recession seemed to hit. Popstar Madonna pulled off a big coup in the clearance sale, with the magnificent Chateau Louis XIII, which is blessed with fifteen rooms and a view of the bay of Cannes. The heat-seeking security cameras were included in the price of more than 12.5 million guilders.


The whole Khashoggi family seems to be financially strapped at the moment. Also Adnan's brother Essam, businessman in fast food packaging, has to take it easy. His ranch in Southern California was sold last year, and his house at Lake Tahoe, also in California, with thirty hectares of land and a private beach, is still up for sale, for 40 million dollars.


Adnan Khashoggi sold one of his private ships to Donald Trump, who re-christened it the Trump Princess. But also for him the ship was finally too much and in turn he sold it to the Saudi Prince Alwaleed.


In 1998, Khashoggi made the newspaper in connection with the deal he made with the Ritz Casino in Monte Carlo because of a gambling debt in the amount of about 20 million guilders. He made the deal with the casino after it appeared that Khashoggi's checks bounced. Earlier, Khashoggi ruined the famous Sands casino in Las Vegas because his checks bounced. "He is addicted to gambling. He denies it, but he needs help", says his ex-wife Soraya. In earlier days she used to be his 'lucky charm' in the casino. Because she really hates gambling, she made her own deal with Adnan that she was allowed to invest part of his winnings in good causes.


People like Khashoggi don't keep their whole fortune in the bank and so even they can be confronted sometimes with what Khashoggi has called in the past a "small and passing liquidity problem". Soraya predicted that Khashoggi would laugh off this little problem with the casino. Upon a question about his financial situation he answered: "Don't worry, I am not broke. I have enough to live on and I don't have any worries".


Early February 2001: President George Bush Jr. announced an increase in the military budget by 1.4 billion dollars to a total budget of 311 billion dollars. In 1999 Saudi Arabia spent more on arms than any other country, and the year before even more. The world market value for arms has been hovering for years around 809 billion dollars.
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