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leveymg

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Member since: Wed May 5, 2004, 08:44 AM
Number of posts: 36,418

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This is Hersh's real story - regime change over stopping terrorism - and this names the source.

The JCS were right to pushback against the covert policy of arming the Jihadi opposition initiated by CIA Director Petraeus and Secretary of State Clinton being pursued at the time.

Hersh writes that a highly classified 2013 Defense Intelligence Agency/Joint Chiefs of Staff report on Syria forecast that the fall of the Assad regime would lead to "chaos" and possibly to Islamist extremists taking over Syria.

Hersh reports that Lieutenant General Michael Flynn, director of the DIA between 2012 and 2014, told him that his agency sent a "constant stream" of warnings to the "civilian leadership" about the dire consequences of ousting Syrian President Bashar al-Assad.

The DIA's reporting "got enormous pushback" from the Obama administration, Hersh quotes Flynn as saying. "I felt that they did not want to hear the truth."

http://www.upi.com/Top_News/US/2015/12/27/Seymour-Hersh-report-on-Syria-White-House-knew-US-was-arming-Islamic-State/6951451232210/


The report, published in the Jan. 7, 2016 edition of the London Review of Books, relies heavily on an anonymous former senior adviser to the Joint Chiefs of Staff.

Hersh writes that the adviser told him the DIA/Joint Chiefs report took a "dim view" of the Obama administration's insistence on continuing to finance and arm the so-called moderate rebel groups and found that the covert U.S. program to arm and support those "moderate" rebels fighting Assad had been co-opted by Turkey, which then morphed the program into an "across-the-board technical, arms and logistical program for all of the opposition, including Jabhat al-Nusra and Islamic State."

"The assessment was bleak: there was no viable 'moderate' opposition to Assad, and the U.S. was arming extremists," Hersh wrote.

In October, the Pentagon announced that it was discontinuing its program to train and equip moderate rebels in Syria, saying the program cost $500 million and only succeeded in training a "handful" of recruits.

In November, however, the CIA increased its shipments of arms to rebels in Syria, joining with U.S. allies in challenging Russia and Iran's involvement in Syria in support of the Assad regime.

U.S. officials, according to a Nov. 4 article in The Wall Street Journal, said the Obama administration is pursuing a dual-track strategy in Syria, to keep military pressure on Assad while U.S. diplomats "see if they can ease him from power through negotiations."

The White House has not responded directly to the allegations raised in the article in the London Review of Books.

Its author, Seymour Hersh, won a Pulitzer Prize in 1970 for his reporting on the My Lai Massacre during the Vietnam War and has continued to write on national security for many newspapers and magazines, including The New Yorker. He was widely criticized for his The Killing of Osama bin Laden report that accused President Barack Obama and his administration of lying about the circumstances surrounding the killing of Osama bin Laden in 2011. Many media establishments, intelligence analysts and officials, including the White House, rejected the claim.


No disclosed evidence that Assad gave command orders. Quite the opposite: intercepts of phone

calls that night recorded officials at the Syrian Defence Ministry freaking out when it learned that a chemical weapons attack had been launched. This was overheard by western intelligence analysts. After the fact, the most senior part of the Syrian military demanded who had ordered the attack. Here's the source, and it wasn't RT:

http://foreignpolicy.com/2013/08/27/exclusive-intercepted-calls-prove-syrian-army-used-nerve-gas-u-s-spies-say/

But the intercept raises questions about culpability for the chemical massacre, even as it answers others: Was the attack on Aug. 21 the work of a Syrian officer overstepping his bounds? Or was the strike explicitly directed by senior members of the Assad regime? "It’s unclear where control lies," one U.S. intelligence official told The Cable. "Is there just some sort of general blessing to use these things? Or are there explicit orders for each attack?"

Nor are U.S. analysts sure of the Syrian military’s rationale for launching the strike — if it had a rationale at all. Perhaps it was a lone general putting a long-standing battle plan in motion; perhaps it was a miscalculation by the Assad government. Whatever the reason, the attack has triggered worldwide outrage, and put the Obama administration on the brink of launching a strike of its own in Syria. "We don’t know exactly why it happened," the intelligence official added. "We just know it was pretty fucking stupid."


The FP report that appears at the site has been since edited. The original wording added this important piece of information as reported elsewhere, such as this AFP wire report:


'Panicked phone calls' between Syrian defence official and chemical weapons head after attack

Agence France-Presse

August 29, 2013
http://www.thenational.ae/news/world/middle-east/panicked-phone-calls-between-syrian-defence-official-and-chemical-weapons-head-after-attack

WASHINGTON // US intelligence services overheard a Syrian defence ministry official in "panicked phone calls with the leader of a chemical weapons unit" after last week's deadly chemical attack, Foreign Policy magazine has reported.

"Last Wednesday, in the hours after a horrific chemical attack east of Damascus, an official at Syria's ministry of defence exchanged panicked phone calls with leader of a chemical weapons unit, demanding answers for a nerve agent strike that killed more than 1,000 people," the report on Tuesday said.

"Those conversations were overheard by US intelligence services," the magazine said in a statement. "That is the major reason why American officials now say they're certain that the attacks were the work of the Bashar Al Assad regime – and why the US military is likely to attack that regime in a matter of days."

Also, there were contemporaneous reports of rebel groups obtaining chemical precursors in Turkey. Again, not RT:

There also was never a followup report from rebels caught in Turkey with chems...


http://www.bbc.co.uk/news/world-europe-22720647

"Mr Cos did however say that unknown chemicals had been found and were being investigated."


AND

Turkey arrests Syrian Nusra Front militants -media
May 30, 2013|Reuters

ANKARA, May 30 (Reuters) - Turkish authorities have arrested
a group of Syria's al Qaeda-linked al-Nusra Front militants who
allegedly had been planning an attack inside Turkey and were in
possession of the nerve agent sarin, local media reported on
Thursday.

...

The 12 Nusra members were arrested in the southern city of
Adana, some 100 km (60 miles) from Syria, during raids at their
addresses where police uncovered 2 kg (4.5 pounds) of sarin as
well as heavy weapons, Taraf, Cumhuriyet and Aksam, as well as
several other dailies reported.

The men, who were allegedly planning a large attack in the
city, were formally detained by Adana's top court, the papers
reported, although it was not clear on what charges. The papers
did not reveal their sources.

...

Nusra is one of the most effective forces fighting President
Bashar al-Assad and last month pledged allegiance to al Qaeda
leader Ayman al-Zawahri. The U.S. State Department designated
Nusra as a terrorist organisation in December.

Experts have long said Nusra is receiving support from al
Qaeda-linked militants in neighbouring Iraq. The group claimed
responsibility for deadly bombings in Damascus and Aleppo, and
its fighters have joined other Syrian rebel brigades.

http://articles.chicagotribune.com/2013-05-30/news/sns-rt-syria-crisisturkeyl3n0eb2uy-20130530_1_nusra-front-chemical-weapons-jonathon-burch

$300 mil. doesn't cover the budget of a single U.S. State Dept "public diplomacy" program

Not like the Russians are the only ones or the biggest spenders on propaganda in the world. In fact, if that figure quoted is remotely accurate, it wouldn't cover one US Government agency program that sponsors Syrian opposition propaganda and "nonlethal aid."

The term is "public diplomacy" or "perception management" not "trolling." It isn't just a game played by the Russians.

Most US global perception management comes from the State Department, its contractors and foreign program beneficiaries, since USIA was folded into State Public Diplomacy and Public Affiars in 1999. http://www.publicdiplomacycouncil.org/commentaries/11-11-15/murphy-and-kuehl-national-information-strategy-i-%E2%80%93-introduction

During the Cold War, the two note, “USIA was to act as the agency responsible for achieving strategic cognitive information effects globally in support of U.S. strategy and policy.” Currently, however, “no single executive government agency is in charge of the information instrument of national power overall.” Looking beyond connectivity, they see inadequate attention to “content” and its linkages with “cognitive effects” (might we say “influence”?).

USIA was folded into the Department of State in 1999, so the Public Diplomacy cone has succeeded to this national imperative. I’m not aware that any other branch of government has claimed it.


The State Department runs what it classifies as $330 million in "non-lethal assistance" to the Syrian opposition. The Department describes the media component of that as follows:

http://www.state.gov/r/pa/prs/ps/2014/09/232266.htm
Home » Under Secretary for Public Diplomacy and Public Affairs » Bureau of Public Affairs » Bureau of Public Affairs: Office of Press Relations » Press Releases » Press Releases: 2014 » Press Releases: September 2014 » Syrian Crisis: U.S. Assistance and Support for the Transition
Syrian Crisis: U.S. Assistance and Support for the Transition

Fact Sheet
Office of the Spokesperson
Washington, DC
September 29, 2014

U.S. non-lethal assistance includes training and equipment to build the capacity of a network of more than 3,000 grassroots activists, including women and youth, from more than 400 opposition councils and organizations from around the country to link Syrian citizens with the national- and local-level Syrian opposition. This support enhances the linkages between Syrian activists, human rights organizations, and independent media outlets and empowers women leaders to play a more active role in transition planning.

Support to independent media includes assistance to both television and radio stations; mentoring from Arab media experts to broadcast professionals inside Syria; training for networks of citizen journalists, bloggers, and cyber-activists to support their documentation and dissemination of information on developments in Syria; and technical assistance and equipment to enhance the information and communications security of Syrian activists within Syria. U.S. technical and financial assistance is also supporting the Coalition’s outreach to Syrians through the internet, local, independent radio stations, and satellite television.

An example of a program funded through State to achieve "strategic cognitive information effects" is as follows: https://consortiumnews.com/2014/12/25/selling-peace-groups-on-us-led-wars/

Syrian dissidents received funding from the Los Angeles-based Democracy Council, which ran a Syria-related program called the “Civil Society Strengthening Initiative” funded with $6.3 million from the State Department. The program is described as “a discrete collaborative effort between the Democracy Council and local partners” to produce, among other things, “various broadcast concepts.”

James Prince, the founder and President of the Democracy Council, is also an adviser to CyberDissidents.org , a project created in 2008 by the Jerusalem-based Adelson Institute for Strategic Studies, founded and funded by Sheldon Adelson, a patron and confidant of Benjamin Netanyahu.

Other resources include postings on social media and alternative websites with sensational stories such as the anti-Assad activist “Gay Girl in Damascus” who turned out to be a middle-aged American man in Scotland or Syrian Danny Abdul Dayem, who was frequently interviewed using fake gun fire and flames in his interviews.

Al-Qaeda "acceptable partners in a revived diplomatic effort to resolve the Syrian conflict"

What kind of a solution might that be? WTF are they thinking, and who the hell in the Administration is pushing this agenda? http://www.mcclatchydc.com/news/nation-world/world/article48058665.html

Joint Chiefs of Staff stated IS funding is mostly "donors, lots of donors." Gen Dempsey said "Arabs"

As UN Security Council Mulls ISIS Oil Sanctions, Most Funds Still Flow from Saudi and Gulf Donors

Last edited Sat Feb 7, 2015, 02:32 PM - Edit history (10)
Proposed UN Sanctions Do Not Go To Most ISIS Funding from Wealthy Donors

There is broad agreement that "substantial" funds are still reaching ISIS from wealthy elites in Saudi Arabia, Qatar and other Gulf states. As the Pentagon announced yesterday, oil exports now do not account for most of ISIS finances. ISIS is instead depending on donations, “a lot of donations,” according to Rear Admiral John Kirby, spokesman for the Joint Chiefs of Staff.

Further sanctions do not threaten the primary source of finance for the so-called Islamic State (IS), reported to be in excess of $2 billion last year. On Thursday, a UN measure was proposed by Russia that would sanction the trade in oil and stolen antiquities that partially funds ISIS funders. However, according to the NYT, it does not add to the existing list of individuals named for sanctions. http://www.nytimes.com/2015/02/07/world/middleeast/un-prepares-resolution-to-confront-islamic-state-on-oil-and-antiquities.html?_r=0

This spares the US and NATO the difficult task of having to immediately punish most of the same Sunni states with which it has been previously cooperating in prosecuting the war in Syria. The measure discussed on Friday would, however, specifically sanction parties engaged in smuggling oil from ISIS controlled areas, paying ransom, and the sale of stolen antiquities, the latter valued at $35 million last year.

Nobody seems to want to put a finger on exactly how much cash is still flowing to ISIS from wealthy ISIS funders, and who exactly they are. But, everyone agrees that support from the Saudis and Gulf elites continues to be substantial. See, http://www.nbcnews.com/storyline/isis-terror/whos-funding-isis-wealthy-gulf-angel-investors-officials-say-n208006

In 2014, Saudi Arabia publicly agreed to clamp down on some donations from its citizens and religious foundations. As a result, most private funding now goes through Qatar. The UN Security Council Resolution 2170 passed last August 15 named only six individual ISIS leaders for direct sanctions. The new measure does not expand that list, but calls for a committee to nominate others for violation of existing UN resolutions.

The effects of the additional sanctions on oil exports proposed would have its primary impact on crude oil smuggling in and out of Turkey. The majority of ISIS oil revenues are derived through the black market in that country. Last June, at its height, a Turkish opposition MP and other sources estimated the annual oil revenues at $800 million. http://thehill.com/policy/energy-environment/221272-report-isis-oil-production-worth-800m-per-year

If accurate, oil sales was about 40% of the total ISIS operating budget as stated by the group. However, even at its height, petroleum accounted for only a fraction of ISIS funding. Some western estimates placed the IS annual total budget as high as $3 billion. See, http://thehill.com/policy/defense/228465-isis-puts-payments-to-poor-disabled-in-2-billion-budget; http://www.ibtimes.co.uk/isis-news-caliphate-unveils-first-annual-budget-2bn-250m-surplus-war-chest-1481931

The $800 million figure is actually at the top end of the estimates. US sources quoted by CNN last October stated that ISIS oil income was more likely half that figure: http://www.cnn.com/2014/10/06/world/meast/isis-funding/

The U.S. Treasury Department does not have hard figures that it can make public on the group's wealth but says it believes ISIS takes in millions of dollars a month.

Sources familiar with the subject say that ISIS' "burn' rate" -- how much the group spends -- is huge, including salaries, weapons and other expenses. For ISIS' oil sales, sources told CNN, the group probably makes between $1 million and $2 million per day, but probably on the lower end.


Along with everyone else, the returns on ISIS oil are probably a fraction of what they were at the height of world oil prices a year ago. Plus, the US and allies are bombing the group's oil platforms and vehicles. That has cut production and export to the point where US commanders now acknowledged that oil sales aren't the source of most ISIS funds, and that they are coming from donations, "a lot of donations":

The Islamic State of Iraq and Syria (ISIS) is no longer relying on oil as its main source of revenue to fund its terrorist activity, according to the Pentagon.

“We know that oil revenue is no longer the lead source of their income in dollars,” Pentagon spokesperson Rear Admiral John Kirby told reporters during a press briefing on Tuesday.

ISIS’ loss of income is compounded by its losses on the battlefield as the group has “lost literally hundreds and hundreds of vehicles that they can’t replace,” Kirby said.

“They’ve got to steal whatever they want to get, and there’s a finite number.”

ISIS is instead depending on “a lot of donations” as one of the main sources of income. “They also have a significant black market program going on,” Kirby said.

http://english.alarabiya.net/en/News/middle-east/2015/02/05/Pentagon-oil-is-no-longer-ISIS-main-source-of-income-.html


In previous testimony before the Senate, Gen. Depmsey, Chairman of the Joint Chiefs stated that the source of ISIS funding:

That leaves a big hole in the Caliphate's budget - that gets filled by someone.

Imposition of expanded UN sanctions would entail difficulties and costs for the US, particularly with Saudi Arabia. Therefore, it should not come as a surprise that the Security Counsel measure is limited, and does not yet show if the world is truly serious about eradicating ISIS.
http://www.democraticunderground.com/10026192755

Hillary was a Goldwater Girl, and all that goes with that.


Benghazi!! is a convenient, bipartisan diversion that like Whitewater cut off lines of investigation

The hearings were really a great success as theater of the absurd. The inconvenient facts -- that Libya and Syria serial regime change was a colossal CIA failure --can't be made to altogether "disappear", but the event can be made to seem so absurd that no "serious person" in Washington wants to pick into the topic any further. That's the purpose of these bipartisan spectacles. Clinton, who is the leading neocon in America, is now cleansed, thanks to the "opposition" Republicans.

It's a formula, or a ritual, really. The ghosts of the Clintons' (and the Bush family's) role in BCCI/Iran-Contra were also exorcised by the Republicans botched Whitewater investigation. Mismanaged Congressional hearings, sabotaged from above, also managed to whitewash the Bush CIA's role in arming both sides in the Iran-Iraq War and in creating terrorist Rightwing death squads in Central America, with the help of Rightwing Democrats, such as the Clintons. The theater of the absurd is how both wings of the spooks stay in power permanently in America.

Full-speed ahead, Hillary, damn the torpedoes and the icebergs, and the rock jetty to starboard.

We have the biggest ship, and you still have the lead, damnit, increase the throttles. Full power! Give the passengers a real thrill . . . what was that noise? Oooops.



U.S. Contemplates Confronting Russians in Syria

I Think I Won!

This is done largely through Saudi corporate acquisitions, banks and companies they control

Money buys power, policy and politicians. Hillary Clinton has come to symbolize to many the increasingly blatant capture of the corporate Democratic center by monied interests. Increasingly, in a globalized economy, the source of money in American politics is foreign. But, because there are still vestiges of laws that prohibit the direct campaign contributions to candidates, that money comes in through corporate middlemen. That, my friends, is what we will call corporate capture by proxy.

The Kingdom of Saudi Arabia (KSA) and neighboring Gulf Cooperation Council (GCC states) have acquired or made major investments in literally hundreds of US corporations in a number of industries, including energy, entertainment, banking and financial services, and control even more by "corporate capture". That is a term that is usually associated with how companies in an industry can come to control the regulatory process of agencies originally set up to create and enforce rules of commerce. We are talking here about how nations have been taken over, economically and politically, including the U.S., and how this corruption spreads.

Corporate capture by proxy works this way. Captive companies and their executives legally make contributions to PACS that benefits both parties and major candidates. These contributions are essentially pass-through of foreign funding of federal elections, a problem recognized by the minority opinion in the notorious Citizens United decision. Justice Stevens wrote for those four justices:

The notion that Congress might lack the authority to distinguish foreigners from citizens in the regulation of electioneering would certainly have surprised the Framers, whose obsession with foreign influence derived from a fear that foreign powers and individuals had no basic investment in the well-being of the country. Citizens United, 130 S. Ct. at 945, 947, 948 n. 51 (Stevens, J., joined by Ginsburg, Breyer, and Sotomayor, JJ., concurring in part and dissenting in part) (internal quotation marks and footnotes omitted).

Saudi Arabia has an enormous diversified portfolio of US and global companies purchased or with a substantial interest over time. It is no secret that the Saudis actively seek to mold American public opinion and policy, and that money is their most effective weapon. Among these large companies in which they have taken a major interest is Newscorp, the parent of the conservative US news outlet Fox News. The total amounts of Saudi investments in the U.S. are estimated to in excess of $750 billion. In the next four years, the State-owned Saudi oil company, Aramco, plans on global acquisitions of $80 billion, compared to the $70 billion they will invest internally. http://www.bloomberg.com/news/articles/2015-05-11/saudi-aramco-said-to-plan-spending-80-billion-overseas

During his recent visit to the US, King Salman laid out the Kingdom's U.S. investment plans. KSA also seeks US corporations as partners in joint ventures in Saudi industries and sectors. While broadly invested in the US and UK economies, the greatest part of the Saudi economy is still largely closed to foreign ownership, including the upstream oil supply that remains nationalized. U.S. companies are attracted to offers of joint-venture investment schemes and contracts in the Arab states include the largest arms manufacturers, banks, and petrochemical firms.

According to the Saudi Embassy, the corporate elite lining up to see the King were the usual suspects which have long thrived in the Middle east arms for oil trade: http://www.ft.com/cms/s/0/ff87679e-554f-11e5-8642-453585f2cfcd.html#ixzz3ljT0pHox

The US side included representatives from GE, Chevron, JPMorgan, Boeing, Dow, Alcoa, Fluor, Halliburton, Raytheon and Lockheed, according to a banker briefed on the meetings and a Saudi official.

The king was accompanied by his son, deputy crown prince Mohammed bin Salman, who is spearheading the investment drive into sectors such as mining, oil and gas, health, education, retail, infrastructure and banking.

Investment opportunities highlighted by the Saudi delegation:

Mining — especially phosphate, bauxite and silica.
Energy — state energy giant Saudi Arabian Oil Company is poised to launch a five-year plan, including opportunities in refining and distribution.
Healthcare — US private sector investment is sought to help double hospital capacity.
Leisure industries — Riyadh is looking to US companies such as Disney, Universal Studios and Six Flags to build theme parks across the kingdom.
Education — the government seeks investment in technical training centres.
Banking — with opportunities for US banks to finance mortgages and small businesses. Financial services reforms are planned to increase the role of overseas banks.


The Saudis and Gulf Arabs have also diversified their investments and acquisitions of U.S. political parties and candidates. The relationship with the Bush family led to the long-time Saudi Ambassador to the US to be dubbed, "Bandar Bush." The Saudis and Gulf states have also contributed at least ten million dollars since the late 1990s to the Clinton Foundation. Millions more were donated during the time she was Secretary of State. http://www.washingtonpost.com/politics/foreign-governments-gave-millions-to-foundation-while-clinton-was-at-state-dept/2015/02/25/31937c1e-bc3f-11e4-8668-4e7ba8439ca6_story.html

Some corporations and institutions qualify as captures of the Saudis on account of their huge revenues or contributions from that country. The Foundation Center reports that Boeing, for instance, anted up nearly a million dollars of its own to the Clinton Foundation at a key time to facilitate a multi-billion dollar sale to the oil Kingdom: http://philanthropynewsdigest.org/news/arms-sales-ok-d-by-hillary-clinton-s-state-department-raise-questions

Arms exports to Saudi Arabia totaling $8 billion were approved in FY 2010-12 — up from $4.1 billion in FY 2006-08 — including $29 billion worth of advanced fighter jets delivered by a consortium of American defense contractors led by Boeing, despite the State Department's documented concerns about the repressive policies of the Saudi royal family. In the years before Clinton became secretary of state, the Kingdom of Saudi Arabia contributed at least $10 million to the Clinton Foundation, while Boeing contributed $900,000 to the foundation just two months before the deal was finalized.


(Caption: King Abdullah, Clinton meet in New York January 8, 2011. . . . Abdullah bin Abdulaziz received at his residence in New York yesterday evening U.S. Secretary of State Hillary Clinton, accompanied by former U.S. President Bill Clinton. During the audience, King Abdullah and Secretary Clinton discussed the latest regional and international developments. The audience was attended by Prince Muqrin bin Abdulaziz, President of General Intelligence Presidency; Prince Bandar bin Sultan, Secretary General of the National Security Council . . .)

***

In addition to overt influence buying, until from 1985 until recently the Saudis operated a multi-billion dollar political slush fund, "al-Yamamah" ("the Dove" in Arabic) as a sort of reverse kick-back scheme through which a portion of BAE arms sales revenues to KSA was converted into an all-purpose global bribery fund. Some $43 billion in proceeds were distributed in a loosely audited arrangement as shares of oil that were extracted by Shell Oil and BP oil concessions in KSA.

At least $1 billion were paid out by Yamamah on a regular basis to an account at the now defunct Washington, DC Riggs Bank held by Saudi Ambassador to the US, Prince Bandar. These funds were channeled into a variety of projects, including support of covert operations -- including approximately $70,000 that were used by a Saudi national, Omar al-Bayoumi, who supported the Flt. 77 hijackers, al-Midhar and al-Hazmi, when they arrived in the US in early 2000. Other Riggs Bank funds held by the Saudi Embassy paid for donations to favored politicians in the UK and US. Not surprisingly, Riggs Bank also had long ties with both the Bush family, Jonathon Bush was a Director, and the Central Intelligence Agency. http://www.wsj.com/articles/SB110444413126413199

Like the BCCI-network of corrupt banks with similar dark money ties, funds held by the Saudi Embassy paid for covert operations abroad, including $55 million that went to the contras during the Reagan Administration. These covert operations funded with Saudi Embassy funds out of Riggs continued until the bank was fined $25 million and shut down in 2004 for its role in these money transfers.

AL-YAMAMAH DEAL: THE SAUDI FOREIGN POLICY CONNECTION
By Stephen Fidler

Financial Times (UK)
July 2, 2007

http://www.ft.com/cms/s/c8286b10-2833-11dc-80da-000b5df10621.html

Investigators from the U.S. Department of Justice examining BAE Systems' compliance with anti-corruption laws in its arms dealings with Saudi Arabia will find themselves scrutinizing a deal that was used, with the help of the British government, as a secret tool of Saudi foreign policy.

BAE said last week that the DoJ had launched a formal inquiry into the 20-year-old Al-Yamamah arms deal with Saudi Arabia.

The Al-Yamamah agreement, originally signed in 1985 by the Saudi and British governments to pay for the Saudi purchase of Tornado jets, was employed to distribute Saudi oil revenues outside the country's official budget. "It was a way of Saudis paying money to Saudis," said one person involved in the deal.

The mechanism has been used to pay for more than combat aircraft. According to one account, it bought arms from Egypt for the Mujahideen fighting Soviet forces in Afghanistan and paid for clandestine purchases of Russian arms to oust Libyan troops from Chad.

BAE serviced this contract and has always denied wrongdoing associated with it, arguing that its work was part of a government-to-government arrangement. If the payments were approved by the British and Saudi governments, how could it be doing anything illegal?

The arrangement, at least initially, involved a special account controlled by the Saudis, at the Bank of England. This would receive funds from the sale of Saudi oil lifted and sold by BP and Royal Dutch Shell, which took a commission. Press reports in 1996 suggested this exact arrangement changed -- but over nearly two decades, tens of billions of dollars were directed through it.

The first oil lifting under the contract was on January 31, 1986, of 1.8m to 1.9m barrels. The Saudis agreed to deliver 300,000 barrels per day [plus or minus 10 per cent] for the first three years of the contract. The amount of oil delivered varied with fluctuating oil prices up to a reported maximum of 600,000 bpd in 1993, when a new and expanded contract called Al-Yamamah 2 came into force, and fell to 400,000 in 1998 after the last Tornado was delivered. At times, the kingdom replenished the account with cash -- and at other times there was a surplus that was available for distribution.

Some or all of the payments from the Bank of England account were routed through the U.K.'s Defense Export Services Organization, part of the Ministry of Defense. For this service, the MoD was paid a small commission.

U.K. media reports have alleged Prince Bandar bin Sultan, the former Saudi ambassador to Washington and now national security adviser to King Abdullah, received more than £1bn from BAE as part of these arrangements.

Prince Bandar has dismissed the allegations as "grotesque in their absurdity." He has said the payments came from a Saudi government account and were paid into another account belonging to the Saudi ministry of defense and aviation, to which he was a signatory.


The Guardian detailed how detailed the international financial network that spread commercial and political corruption around the world: http://www.theguardian.com/baefiles/page/0,,2095831,00.html

Over the past 20 years, the warplane programme has brought £43bn in revenue for BAE [profile].

The deal made the career of BAE executive Dick Evans [biography], who rose to chair the company on the strength of it.

Police later calculated that more than £6bn may have been distributed in corrupt commissions, via an array of agents and middlemen.Newly obtained documents and our own investigations have revealed details of where the money may have gone.

Millions went to Bandar, according to US sources. Up to $30m (£15m) at a time is alleged to have been paid into his dollar account at Riggs Bank [profile] in Washington.

More millions were paid by BAE into Wafic Said-linked accounts in Switzerland.

Bandar's father, Prince Sultan [biography], was described by a British ambassador as having "a corrupt interest in all contracts".

Legal sources say BAE disguised many of the payments by making them through an anonymous offshore company, Poseidon.

Large amounts were also alleged to have been transferred in this way to Mohammed Safadi [biography], a Lebanese politician.

He acted for Sultan's son-in-law, Prince Turki bin Nasser (biography), who controlled the Saudi air force.

At least £1bn is said to have gone down the Poseidon route. More payments were allegedly disguised in inflated bills to BAE from local subcontractors.

. . .

The cash for all these payoffs came, simply enough, from overcharging.

Accidentally released UK documents [article] reveal that the basic price of the planes was inflated by 32%, to allow for an initial £600m in commissions.

That was only the start. Many UK sub-contractors - for jet engines, weapons and electronics - have revealed that they too were required to pay commissions.[article]

Spare parts, maintenance, construction of local bases - every aspect of al-Yamamah is alleged to have involved corruption.

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