Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #461 Update on 9/11 and Related Matters

Recorded May 23, 2004

In addition to updating the investigation of terrorist financing, this broadcast highlights behind-the-scenes deals between the Bush family, the oil industry and Saudi Arabia to manipulate the results of American elections. The broadcast also sets forth the impending arrival in the United States of Tariq Ramada, the son of Muslim Brotherhood kingpin Said Ramadan and the heir to his father’s unsavory political tradition.

Program Highlights Include: A meeting of the Carlyle Group allegedly involving discussion of the Saudi Binladen Group’s continued funding of Al Qaeda; continued investigations of the funding of terrorism by Saudi charities and businesses targeted by Operation Green Quest; review of some of the Bush administration’s connections to the above-mentioned businesses and charities; proof of Bank Al Taqwa’s involvement in the funding of Al Qaeda; the alleged involvement of Yassin Al-Qadi in the funding of terrorism; allegations in a recent book that the Saudis were conspiring with the Bush administration to lower gas prices in order to assure Bush’s election; recent announcements by the Saudis that give credence to the allegations in that book; review of the 1970’s conspiracy between George H.W. Bush’s CIA, the Saudis and the petroleum industry to create a phony oil shortage; the role of that phony oil shortage in destabilizing the Carter administration, justifying the defense and budgetary policies of the Reagan/Bush administrations and justifying arms sales to Saudi Arabia.

1. Much of the first part of the program deals with the issue of terrorist funding—Operation Green Quest in particular. Discussion begins with an allegation that the Carlyle Group was considering the issue of continued funding of Al Qaeda by the Saudi Binladen Group—the primary Bin Laden family business enterprise. (For more about the Carlyle Group, see—among other programs—FTR#’s 329, 342, 347.) “Directors of one of the world’s largest armament companies are planning on meeting in Lisbon in three weeks time. . . . The financial assets of the Saudi Binladen Corporation (SBC) are also managed by the Carlyle Group. . . . The Portugal News has been told by a reliable source that the Carlyle Group meeting in Lisbon will discuss the relationship between the Saudi Binladen Corporation [sic] and Osama bin Laden. Many US officials claim that the SBC continues to finance his political activities, and has done so for many years. If true, this would place George Bush senior and his colleagues at the Carlyle Group in an embarrassing position. As managers of SBC’s financial investments they might well be accused of indirectly aiding and abetting the United States’ number one enemy.”
(“US Arms Group Heads for Lisbon”; The Portugal News; 4/4/2003.)

2. Next, the broadcast turns to discussion of Operation Green Quest, the code-name for the operation directed at interdicting the terrorist-funding apparatus behind Al Qaeda. (For more about Operation Green Quest, see—among other programs—FTR#’s 356, 357, 359, 366, 382, 387, 390, 406, 415, 423, 425, 432, 433, 454.) The Herndon Group and the Al-Rajhi interests were targets of the 3/20/2002 Operation Green Quest raids. FTR#462 details the subversion of Operation Green Quest by the Bush administration, some of whose elements and associates belong to the milieu targeted by the operation. “Federal prosecutors plan to seek indictments in the next six to 12 months of a group of prominent Muslim businessmen who are at the center of the U.S. government’s largest domestic investigation into the financing of terrorism. In an unusual hearing sought by lawyers for the businessmen, a federal judge pressed prosecutor Gordon Kromberg to spell out the Justice Department’s plans. The wealthy Islamic activists are involved in a group of commonly controlled businesses and charities in Herndon, Va., that allegedly has financial links to the Al-Rajhi banking empire of Saudi Arabia.”
(“U.S. to Seek Charges in Terror Probe” by Glenn R. Simpson; The Wall Street Journal; 4/26/’04; p. A6.)

3. “Former federal officials allege that the Al Rajhi Banking and Investment Corp. has links to the financing of terrorists. The bank has denied the allegations. Mr. Kromberg told the court that he expects to ask a grand jury to hand up charges, possibly involving a racketeering conspiracy. ‘We think we have a good case and we are going to bring it,’ Mr. Kromberg said. Since the mid-1990’s, the U.S. government has conducted an on-and-off investigation into whether the charities support terrorist group such as Hamas, Palestinian Islamic Jihad, and al Qaeda. Some figures in the Herndon group have been prominent politically in Washington, and several are affiliated with a world-wide society called the Muslim Brotherhood that has ideological links to terrorist groups. [Italics are Mr. Emory’s] . . .” (Idem.)

4. FTR#462 will develop apparent links between the targets of the Operation Green Quest raids and the FBI. “ . . . Mr. Parker [lawyer for the Al Rajhi interests Wilmer ‘Buddy’ Parker] asserted that FBI agents have recently told Ms. Luque that the Herndon inquiry is no longer a terrorism case, prompting a sharp rebuttal from Mr. Kromberg, an assistant U.S. attorney. ‘For Mr. Parker to get up here and with a straight face tell this court that the FBI is not investigating this case and . . . that the justice Department doesn’t believe that there is a real terrorist-financing case here, boggles the mind,’ he said.” (Idem.)

5. Yet another evidentiary tributary connecting the Bush milieu to terrorist-funding activities concerns the Riggs Bank, one of whose directors is Jonathan Bush, the president’s uncle. (For more about Riggs Bank, see—among other programs—FTR#431.) “The Senate Finance Committee chairman has asked the 9/11 commission to look into transactions totaling tens of millions of dollars at two U.S. banks by Saudi Arabian diplomats. Sen. Charles Grassley (R., Iowa) sent letters to members of the commission investigating the terrorist attacks of Sept. 11, 2001, detailing ‘suspicious’ activity by Saudi officials and citizens at Fleet-Boston financial Corp. and Riggs National Bank. People familiar with the letter said Mr. Grassley cited Saudi Embassy payments for Saudi citizens’ flight-training and payments to Islamic groups suspected of supporting terrorism. . . .”
(“Senator Requests 9/11 Panel Probe of Saudis, Banks” by Glenn R. Simpson; The Wall Street Journal; 4/29/2004; p. A5.)

6. Abdurrahman Alamoudi is a principal figure in the Operation Green Quest investigation, connected both to the GOP-affiliated Islamic Institute milieu and to the Al Taqwa network discussed below. (For more about Alamoudi, see—among other programs—FTR#’s 433, 435.) “ . . . The Saudi donations of concern to Sen. Grassley include payments through Riggs to the American Muslim Council of Alexandria, Va., two people involved in the matter said. The council’s former president, Abdurrahman Alamoudi, is currently jailed on charges of vi

olating terrorism sanctions.” (Idem.)

7. Next, the program turns to the Bank Al Taqwa. A recent book about former Treasury Secretary O’Neill highlights Al Taqwa’s role in the funding of Al Qaeda. “ . . . Al Taqwa was an association of offshore banks and financial management firms that had helped al-Qaeda shift money around the world. It was based in the Bahamas, and virtually all the known money of al-Qaeda at that point–$20 million—was housed there. It was identified thanks to a break that was anything but exotic: a Bahamian banking official simply blew the whistle on the group. Internal Treasury documents estimated that another $80 to $100 million of al-Qaeda funds was tucked into other, undetected accounts around the globe. . . .”
(The Price of Loyalty; by Ron Suskind; Simon & Schuster [HC]; Copyright 2004; 0-7432-5545-3; p. 198.)

8. Continuing the discussion of Operation Green Quest, the broadcast develops the subject of the Al Taqwa network. Information about Al Taqwa’s role in financing Al Qaeda was contained in a letter from a U.S. Treasury Department official to a Swiss governmental officer. (For more about Al Taqwa, see—among other programs—FTR#’s 343, 354, 356, 357, 359, 371, 377, 378, 382, 387, 415, 416, 423, 425, 432, 433, 435, 454, 455, 456.) “A Bahamian bank controlled by a controversial Islamic financier in Switzerland set up a highly secretive line of credit for a top associate of Osama bin Lden as part of an elaborate scheme to finance attacks by Al Qaeda and other terrorist organizations, according to a newly disclosed U.S. Treasury document. In a January 2002 letter to Swiss authorities, a senior Treasury official privately spelled out the U.S. government’s case that the Bahamian bank, one arm of an international financial network known as Al-Taqwa (Arabic for ‘Fear of God’), had a lengthy history of financing and facilitating the activities of terrorists, including providing millions of dollars in funding for Al Qaeda and Hamas.”
(“Paying for Terror: Treasury Department Documents Detail the Murky World of Al Qaeda” by Michael Isikoff and Mark Hosenball; MSNBC/Newsweek; 5/12/2004.)

9. “The Treasury letter, and another one involving Saudi businessman Yassin A. Qadi, provide a revealing new window into the murky world of terror finance, at least as viewed by U.S. counterterrorism officials. Based largely on secret intelligence sources, the Treasury documents attempt to show how Qadi and Al-Taqwa and its founder, Youssef M. Nada, used concealed bank accounts, complex land deals and other hard-to-trace methods to steer large sums of money to terrorists.” (Idem.)

10. “The letters were recently obtained by Ron Motley, the lead lawyer in a massive lawsuit against Saudi business figures and others accused of complicity in the financing of the September 11 attacks. In a little-noticed court filing on Monday, Motley placed the document in the public record, a move that seemed to startle at least one defense lawyer who noted that such private, government-to government communications are almost never made public. The letters were written by Treasury in an effort to persuade the Swiss to take legal action to shut down the operations of suspect organizations. The most significant of the letters involves Al-Taqwa and its founder, Nada, an Egyptian-born businessman based in Switzerland who has long been a prominent figure in the world of Islamic finance and who has consistently denied any involvement in the financing of terrorism. . . .” (Idem.)

11. “In the letter dated Jan. 4, 2002, George B. Wolfe, then Treasury’s deputy general counsel, tells Switzerland’s deputy chief federal prosecutor, Claude Nicati, that money pours in to branch offices of the Al-Taqwa network in Lugano and Malta from Kuwait and the United Arab Emirates for bin Laden. It alleges that, as late as September 2001, Nada and a business associate, Ali bin Mussalim, provided indirect investment services for al Qaeda, investing funds for bin Laden, and making cash deliveries on request to the Al Qaeda organization.” (Idem.)

12. “The most startling allegation is that Nada’s Bank Al Taqwa appeared to be providing a clandestine line of credit for a close associate of bin Laden, according to the Wolfe letter. This bin Laden lieutenant had a line of credit with a Middle East financial institution that drew on an identical account number at Bank Al-Taqwa. Unlike other accounts, even accounts of private banking customers, this account was blocked by the computer system and special privileges were required to access it. Noting that no identifiable names were associated with the account, the letter calls the circumstances surrounding the account highly unusual, and suggest that they were created to conceal the association of the bin Laden organization with Bank Al-Taqwa.” (Idem.)

13. “A legal source familiar with the investigation into Al-Taqwa said that another U.S. intelligence document states that the Al-Taqwa account was originally set up for Mamdouh Mahmoud Salim, a one-time member of Al Qaeda’s governing Shura Council who was captured in Germany after the 1998 U.S. Embassy bombings in Africa and has been awaiting trial while in prison in the United States ever since. Just last week. Salim was sentenced to 32 years in prison in a separate case stemming from charges that he stabbed a prison guard in the eye with a sharpened plastic comb as part of a failed plot with other accused Al Qaeda codefendants to break out of the Metropolitan Correctional Center in lower Manhattan. (The prison guard suffered brain damage, lost an eye and is partially paralyzed as a result of the attack.) After Salim’s arrest, other al Qaeda figures continued to access the account, the legal source said. The Wolfe letter also reveals for the first time that the government of Jordan had accused Bank Al-Taqwa of financing a terrorist network linked to bin Laden that was involved in plotting terror attacks at Western and tourist targets in Jordan during the millennium celebrations. . . .” (Idem.)

14. “ . . . In addition, the letter notes that one of Al-Taqwa’s board members, Ahmed Huber, had confirmed that he had met with members of bin Laden’s organization in Beirut and had defended the attacks on the World Trade Center and the Pentagon. Huber, a notorious Swiss Holocaust denier and far-right activist, is described in the Wolfe letter also states that another Al-Taqwa board member, Ahmed Idris Nasreddin, has supported an Islamic center in Milan that the U.S. government believes may be Al Qaeda’s most important base in Europe, and which was linked to the 1993 World Trade Center bombing, among other terror plots. . . .” (Idem.)

15. Another Treasury Department communication concerned Yassin Al-Qadi, another alleged terrorist financier. Al-Qadi is discussed at greater length in FTR#462.) “ . . . The same goes for Qadi, a prominent Saudi businessman who, in a Nov. 29, 2001, letter to the Swiss written by then Treasury general counsel David Aughauser, is a described as having a long history of financing and facilitating the activities of terrorists and terrorist-related organizations, often acting through seemingly legitimate charitable enterprises and businesses.’ Qadi was the founder of Muwafaq (“Blessed Relief”) Foundation, an Islamic charity that employed or served as cover for a number of Islamic extremists connected with bin Laden and other terror groups, according to the A

ufhauser letter. A lawyer for Qadi, whose assets have been blocked by the Treasury Department in the United States, said that the businessman is in the process of presenting evidence to U.S. officials challenging the allegations against him.” (Idem.)

16. “U.S. counterterrorism officials have privately acknowledged their frustration in pursuing cases against both Al-Taqwa members and Qadi as well as numerous other targets in terror-finance investigations. Intelligence is one thing, but gathering the evidence to support these allegations is another story, said one former top U.S. law-enforcement official who worked on terror-finance cases. Still, the justice Department is not done trying. In a recent court hearing, Gordon Kromberg, the senior federal prosecutor in charge of a long-running probe into Islamic charities based in Northern Virginia, including some whose directors have been associated with Nada and Qadi, said that his case was proceeding. ‘We expect them to be charged’, Kromberg said in a court hearing, referring to the Islamic charities that have been targets of the investigation. There will be indictments coming.’” (Idem.)

17. Among the institutions allegedly used by Al Qadi to finance terrorism is the Al Haramain Foundation, a Saudi-financed Islamic charity. That group is, in turn, tied to the Muslim World League, founded at the instigation of Said Ramadan of the Muslim Brotherhood. “The Treasury Department has designated an Islamic charity that is a subsidiary of the Muslim World League, a Saudi religious organization, as a terrorist entity. The Haramain & al Masjid al Aqsa Foundation of Bosnia was designated last week as a ‘global terrorist’ organization by the U.S. government. The Treasury didn’t disclose the group’s ties to the Muslim World League, which lists Al Haramain as a subsidiary on its Web site. The League, which is controlled by the grand mufti of Saudi Arabia, seeks to spread fundamentalist Islam around the world, according to scholars. Saudi officials insist the group is independent of the government, although most scholars—and even one of the group’s own officials—have described it as government-sponsored.”
(“U.S. Treasury Ties Bosnian Arm of Saudi Charity to Terror Funds” by Glenn R. Simpson; The Wall Street Journal; 5/11/2004; p. A6.)

18. “The Treasury designation is only the second time since the attacks of Sept. 11, 2001, that the U.S. has moved against an entity controlled by the League, which has tremendous clout within Saudi Arabia’s deeply religious society. U.S. officials have been wary of targeting the league for diplomatic reasons. . . .” (Idem.)

19. “ . . . The al Haramain & al Masjid al Aqsa Charity Foundation of Bosnia was set up to aid Bosnia’s embattled Muslim population during that country’s civil war in the mid-1990’s. It is a separate organization from the al Haramain Foundation, another Saudi charity also under investigation for financing terror. Al Haramain al Masjid’s board includes influential Saudi financier Yassin Qadi, another alleged financial supporter of terror. Mr. Qadi’s lawyers had no immediate comment yesterday, but Mr. Qadi has insisted the group, which was run by his longtime associate Wael Julaidan, had nothing to do with terrorism.” (Idem.)

20. Said Ramadan’s son Tariq is going to be occupying a position at the University of Notre Dame. (For more about Tariq Ramadan and allegations by Western intelligence experts that he is anything but a “moderate,” see—among other programs—FTR#455.) “The University of Notre Dame, the elite university founded by the Holy Cross Order, (thanks to numerous readers for the correction of the founding order) in South Bend, Indiana, has offered a three-year professorship to the ‘moderate’ Muslim scholar Tariq Ramadan, a resident and citizen of Switzerland. . . . For starters, he is the grandson of Hassan Al Banna, the founder of the Muslim Brotherhood, an Islamist terrorist organization born in Egypt in 1928. The Palestinian branch of the Muslim Brotherhood is none other than the terrorist movement Hamas, which routinely commits brutal suicide attacks against Israeli civilians. . . .”
(“Danger: Tariq Ramadan is Coming to the US”; p. 1.)

21. “ . . . According to the French daily newspaper Le Monde, he is suspected of having links with al Qaeda. In fact, Ramadan is said to have organized a meeting back in 1991 between Ayman al Zawahiri, Al Qaeda’s number two, and Omar Abdel Rahman, plotter of the first World Trade Center bombing. Other troubling allegations can be found in a lawsuit filed by the victims of the September 11 attacks: Ramadan greatly influenced Jamel Beghal, a French citizen arrested for plotting to bomb the US Embassy in Paris and Ahmed Brahim, an al Qaeda member arrested in Spain.” (Ibid.; p. 4.)

22. The conclusion of the broadcast deals with the Saudi/Bush/petroleum industry relationship. A recent book by Bob Woodward maintained that Saudi Prince Bandar (a long-time intimate and political co-conspirator of the Bush family) had promised George Bush that Saudi Arabia would attempt to influence the price of oil in such a way as to assure that the cost per barrel would come down—thereby benefiting W’s chances for re-election. “ . . . Accusing President Bush of having a ‘sweetheart relationship’ with Saudi Arabia, Democratic presidential candidate John Kerry on Monday described as ‘disgusting’ a report that the Saudis had promised the president to lower oil prices before the November vote. Kerry was responding to an allegation by reporter Bob Woodward that Saudi Ambassador Prince Bandar bin Sultan had promised Bush that his country will increase oil output in the months before the election—which would have the effect of driving down U.S. gasoline prices and giving the Bush re-election campaign a big boost.”
(“Election Gift? Kerry Blasts Price Deal Book Says Bush Made with Saudi Prince” by Robert Collier; San Francisco Chronicle; 4/20/2004; p. A1.)

23. “ ‘If . . . it is true that gas supplies and prices in America are tied to the American election, tied to a secret White House deal, that is outrageous and unacceptable to the American people,’ Kerry said during a campaign stop in Florida. Woodward’s new book about the Iraq war, Plan of Attack quotes Bush as saying ‘I’m worried about the capacity of the oil market’ after an invasion of Iraq and asking about Saudi Arabia’s ability to increase production. Woodward writes that Bandar said his country ‘hoped to fine-tune oil prices over 10 months to prime the economy for 2004.’” (Idem.)

24. Recent developments indicate that Woodward’s allegation is not without substance. “In a significant shift, Saudi Arabia’s oil minister said Monday that crude prices have risen far enough, and he will urge OPEC to increase production, reversing an output cut that began just last month. The change in Saudi oil policy, Oil Minister Ali Naimi said, is due to concern that high prices could hurt the world economy and reduce demand for oil. Oil prices have risen steadily in recent weeks, with U.S. crude oil prices touching $40 a barrel Friday. . . .” (“Saudi Oil Official: Price High Enough” [AP]; San Jose Mercury News; 5/11/2004; p. 4C.)

25. Further indication that the Bush/Bandar accord is substantive: “In an effort to drive down record crude oil prices, Saudi Arabia, the world’s largest oil producer, offered on Friday to increase its output by at least 500,000 barrels, to 9 million barrels a day, starting Jun

e 1. In contrast to an earlier suggestion by the country that OPEC increase its quotas, the offer is important because it would truly add more oil to the market rather than simply formalizing existing overproduction by the group’s members.”
(“Saudis Offer to Increase Oil Output by About 6%” by Neela Banerjee; The New York Times; 5/22/2004.)

26. “With global demand relentlessly high, oil prices rose above $40 a barrel in New York on May 11 and remained there until Friday. Nearly all oil-producing countries are pumping at maximum capacity, and almost all the world’s spare capacity is in Saudi Arabia. The offer, made by the Saudi oil minister, Ali al-Naimi, at a conference in Amsterdam and confirmed by an official at the Saudi embassy in Washington, shows the mounting concern—even among oil producers reaping a windfall from high prices—that oil has become so expensive and volatile that it could slow economic growth and encourage the development of alternative fuels, Saudi officials and oil experts said.” (Idem.)

27. Excerpting FTR#’s 214, 248, the broadcast reviews information about an arrangement among George H.W. Bush’s CIA, the Saudis, and the petroleum industry to create a deliberate, phony oil shortage. This oil shortage created dissatisfaction with the Carter administration (and inflation), thereby helping to defeat him in 1980. In addition, this phony oil shortage served as a pretext for drastically increasing defense spending and arming the Saudis with the latest American weaponry. The Saudi/Bush/petroleum industry axis manipulated oil prices to defeat Carter in 1980. It appears that they are working to manipulate oil prices in 2004 in an attempt to assure Bush’s re-(?) election. “It is hard to recall why he [Carter] was so despised when he was in office. Much of it has to do with the secret history of oil politics. Even during the 1976 election campaign, the oil companies viewed the Democratic candidate as Public Enemy Number One. Carter certainly had some radical ideas about energy policy, which made the oil companies fearful for the future and their profit levels. Carter’s first move after the election didn’t please them. He nominated former CIA head and defense secretary James Schlesinger as his secretary of energy. . . .Worse still, Schlesinger was now a convert to ‘environmentalism.’ Conversation and efficiency were the new buzz words. In their first few months in office in 1977, Schlesinger and Carter made energy their number-one policy issue. . . .”
(The Secret War Against the Jews: How Western Espionage Betrayed the Jewish People; John Loftus and Mark Aarons; Copyright 1994 [HC]; St. Martin’s Press; ISBN 0-312-11057-X; p. 333.)

28. “Even before Americans voted for Carter, the oil industry had launched a quiet crusade of its own, in anticipation of a Democratic victory. In the last months of the Ford administration, the CIA had developed a series of papers on energy and oil issues. Just after his victory in November 1976, Carter was shown a classified CIA analysis of global oil supplies. The ‘old spies’ we asked about this point insist that the report had a powerful impact on Carter and helped to define his policies on the ‘energy crisis.’” (Idem.)

29. “When Carter launched his national energy plan in April 1977, he confirmed that the CIA had provided him with intelligence assessments which made dire predictions about future energy supplies in the Soviet Union. The CIA warning made front-page news: ‘Russia would be importing oil from the Middle East by 1985.’ The Soviets would need to buy three and a half million barrels per day, to be precise, whereas in 1977 they actually exported one and a half million barrels daily. ‘Previously, the assumption had been that the Soviets would continue to be self-sufficient in meeting their oil and gas needs.’” (Idem.)

30. “ . . . In effect, the CIA was telling President Carter that the Soviet Union would face a domestic oil shortage in 1985, causing the worst energy crisis in American history. When the Soviets ran out of domestic oil supplies, they probably would look to the traditional oil suppliers of the United States, especially Saudi Arabia and Kuwait. Our sources in the intelligence community say that the CIA’s ‘oil shortfall’ probably was the greatest intelligence fraud in American history. . . .” (Ibid.; p. 334.)

31. Bush’s father appears to have been a principal player in the creation of the phony oil shortage. “ . . . According to several of our sources, the scheme to manufacture phony CIA estimates and push them on Carter began in the last days of Gerald Ford’s term. They claim that a cabal within the CIA realized that Carter would be the new president, produced the first phony report, and then promptly gave it to Carter as soon as he won, knowing how it would affect his view of the energy crisis. It should be recalled that George Bush was the director of the CIA at the time the oil scam was put in place in 1976. There is some evidence to suggest that it was Bush himself who passed the fake oil estimates to Carter.” (Ibid.; pp. 334-335.)

32. “ ‘You have to understand who was screwing the Jews,’ one ‘old spy’ told us. ‘The whole phony scheme—the oil shortages, the predictions about Soviet troops in the Middle East, the Saudi arms buildup—all of that crap started coming out of the agency back in ’76. The CIA told their boss what he wanted to hear, and in those days, the head of the CIA was an oil man.’” (Ibid.; p. 334.)

33. “ . . . The oil companies and the Saudi government both had access to similar advice from old CIA hands. It almost seemed that Aramco had more of its ex-employees inside the CIA than the CIA had agents in the Middle East. In public, the Saudis dismissed the report as ‘ridiculous and obviously untrue.’ In private, they went along with the CIA’s ‘declining production’ fraud. After some reflection, the House of Saud realized that here was an opportunity to sell less oil but make more money.” (Ibid.; p. 338.)

34. “In public, the Saudis continued to insist that they had plenty of oil. In practice, they helped create an oil shortage. The CIA had created a self-fulfilling prophecy. The Saudis’ reserves mysteriously fell by millions of barrels a day, and their pumping efficiency was said to be atrocious and sure to get worse. In a very short time, American consumers would find themselves running out of gas.” (Idem.)

35. “ . . . In the short run, of course, the motive was more money for American oil companies. Our sources in the intelligence community say that the oil industry used its CIA contacts to fabricate both the Soviets-will-steal-our oil hysteria as well as the dry-wells-in-Saudi Arabia predictions. The immediate goal of the phony predictions was to scare the White House into doing what the oil companies wanted: (1) lift the laws holding the price on domestic American oil; (2) provide a panic to excuse raising world oil prices; and (3) appease the Arabs, by arming the Saudis instead of the Israelis.” (Ibid.; p. 339.)

36. “The oil men in the intelligence services promoted the fear that the Soviets would have no other option than to move down into the Middle East, invade Saudi Arabia, Kuwait, and Iran, and seize U.S. oil for themselves. If Carter didn’t move soon, there would be no hope of withstanding a Soviet invasion o

f the Middle East. The most powerful army in the area was Israel’s. But the Jews could hardly be expected to go to war to save the Arabs’ oil for the West’s often anti-Semitic oil companies. The time had come for the president to make a clear-cut decision: either bow to the Jews’ resolute opposition to U.S. arms sales to the Arabs and risk losing Middle Eastern oil to the Soviets, or arm the Arabs, thereby ending Israel’s military supremacy—a sacrifice that would have to be made in the American national interest.” (Idem.)

37. “Our sources say that the oil companies, and their friends in the CIA, had a very willing ally in the Saudis, who secretly cooperated with the CIA’s fraud by artificially decreasing production and simultaneously increasing the price per barrel of oil. It was all meant to be a very profitable game, in which both the Saudis and the companies would get huge windfalls, while their Jewish enemies were finally put in their place. The Arabs soon would have the weapons they needed to see to that.” (Idem.)

38. “ . . . The fact is that the CIA reports on the Soviet threat were as false as they were frightening. As one of our sources put it: ‘Look, the Soviets couldn’t even hang on to their puppet colony in Afghanistan. They were bleeding themselves white. At one point during the Afghan war, the military was consuming nearly 28 percent of the gross productivity of the Soviet Union. The last thing the Kremlin wanted was all out war with the Moslem world. They couldn’t finance their own PLO hit squads, let alone start a second front in the Middle East. The whole idea of the Russian army marching into the Saudi oil fields was a fraud.’ But the fraud worked. According to the Red scare scheme, there was only one thing to do: arm the Arabs so they could defend the oil fields themselves.” (Ibid.; pp. 350-351.)

39. “The cardinal sin of statesmanship is naivete. Carter and Turner never suspected that their own people would lie to them. The phony CIA oil reports completely fooled them. ‘Don’t you get it?’ asked one of our sources. ‘The gas shortage during the Carter administration was as phony as the CIA’s prediction about the Soviet oil shortage. The goddamn Middle East was swimming in oil during the Carter administration, but less and less of it was shipped to America. For chrissakes, there was so much oil in South America that they had to shut down refineries in the Caribbean to keep it away from the U.S.’” (Ibid.; p. 353.)

40. “This source has a point. One of the largest refineries in the Western Hemisphere is located on St. Croix, in the U.S. Virgin Islands. Most of its capacity went unused during the Carter administration’s ‘oil shortage,’ yet it was greatly expanded during Reagan’s term, despite the world glut of oil and falling prices. Most of the ‘old spies’ are adamant that the oil companies cut refinery production to cause as much damage to the Carter administration as possible.” (Ibid.; pp. 353-354.)

41. “By mid-1981, it was embarrassingly clear that all of the CIA’s predictions, upon which Carter had relied, were completely false. Not only was there not an oil crisis, the whole industry had suddenly gone the other way. There was a worldwide surplus of oil, not a shortfall. The CIA figures on Saudi oil were just as false as their Soviet production estimates. By June that year, the Saudi Arabian government had created an oil glut and was under intense pressure in the Arab world to cut its production. The Middle East was drowning in oil. . . .” (Ibid.; p. 354.)

42. Like his father and Ronald Reagan, George W. Bush’s combination of tax cuts and massive defense spending are destroying the American fiscal landscape. “ . . . Under the Republicans, lucrative arms factories sprouted in what had previously been rural Democratic states. The votes went where the jobs were. In the course of the Reagan-Bush administrations, the defense budget was increased to a point where more money was spent on arms than in all the wars in U.S. history combined. To accomplish this massive defense buildup, the Reagan-Bush administrations borrowed three times more money than all U.S. presidents combined. The largest debt in America history was based on the faulty premise that the Soviet Union was going to attack the Middle East.” (Ibid.; p. 355.)


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