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FTR #679 Freeh at Last: Analysis of the Khobar Towers Bombing (Love Means Never Having to Say You’re Saudi, Part 2)

MP3 Side 1 | Side 2

Introduction: Among the Al Qaeda attacks that preceded the 9/11 operation was the Khobar Towers bombing of June, 1996. That attack killed 19 U.S. airmen and wounded 372. Despite firm indications of Al Qaeda authorship of the attacks, the Saudi authorities began a deliberate, years-long coverup of the bombing, deflecting blame in the direction of Iran. Central to the effective coverup of the assault was the active collaboration of then FBI director Louis Freeh, whose complicity with Saudi elements associated with both Al Qaeda and the Bush family milieu continues up to the present. The title of the broadcast refers to Freeh’s actions.

Accessing the magnificent investigative work of Gareth Porter, the broadcast sets forth his brilliant five-part series on the Khobar bombing and the Freeh/Saudi coverup.

The first part of the series describes Saudi obstruction of the investigation, beginning with the immediate aftermath of the event. Right after the blast, the Saudis began to bulldoze the site of the attack, obscuring key evidence needed for a proper investigation of the attack. Tellingly, U.S. intelligence intercepted the Saudis instructing their operatives to appear to go along with the U.S. investigation, while working to coverup Al Qaeda/Saudi involvement in the attack. The Saudis refused a U.S. request to begin interviewing key witnesses in the kingdom (Saudi Arabia).

Of paramount importance to the coverup of the Khobar Towers bombing is the profound collaboration between Freeh and Prince Bandar–the point man for the Saudi co-conspirators among the Saudi elite and national security establishment. Bandar is so close to the Bush family, that he has earned the nickname “Bandar Bush.”

Determined to protect members of their elite who supported Al Qaeda, the Saudis deliberately mislead U.S. investigators in the direction of Iranian culpability. [ Part 2 of the series.] Producing “confessions” of Shi’a Saudis, allegedly members of a “Saudi Hezbollah,” directed by Iran. Almost certainly produced under torture, the confessions were discounted by then Attorney General Janet Reno. The confessions were replete with contradictions.

Previously linking a March 29th arrest to a November (1995) attack on a Saudi National Guard facility, the Saudi authorities now claimed that the March explosives bust was connected to the Khobar attack. In fact, the Saudis had secretly detained and tortured a number of Al Qaeda-related suspects after the April attack. One of those was the actual head of Al Qaeda in Saudi Arabia, Yusuf al-Uyari.

The Shi’a suspect publicly produced by the Saudis as a “confessed” member of the alleged Khobar conspiracy was not convincing. [Part 3 of the series.] Afflicted with asthma so severe that the Iranian Revolutionary Guard had rejected him as a recruit, Hani al-Sayegh denied any involvement with the Khobar attack after his transfer to Canadian custody.

Continuing to frustrate the investigation, Freeh attributed lack of progress on Bill Clinton. When Saudi authorities began to drop their curtain of obfuscation over Khobar, it appears that they were fearful of U.S. hostility over the 1998 Al Qaeda attacks in Africa. Then Vice-President Gore met with the Saudis to pressure them to give the U.S. access to an important Al Qaeda financier.

Freeh attributed belated Saudi cooperation to the intercession of former President George H.W. Bush. Collaboration between Freeh, the Saudis and the Bush family is a pattern we will observe later in the series as well. Throughout the 1990’s, the Saudis actively dissembled with regard to complicity of elements of their elite and Bin Laden’s forces.

Freeh’s collaboration with the Saudi coverup continued despite the fact that Bin Laden took credit for the Khobar bombing, as well as the Riyadh bombing committed the previous November (1995). [Part 4 of the series.] Investigators noted that Bin Laden did not take credit for attacks that he had not planned. Despite the fact that U.S. investigators requested access to the perpetrators of the Riyadh attack, access was not granted.

The fifth and final installment of the series chronicles the coverup going on into the tenure of George W. Bush’s administration. Despite rejection of the Saudi torture-induced confessions by the Shi’a suspects by the Clinton Justice Department, Freeh continued his conspiratorial alliance with the Saudis and, when George W. Bush retained him as FBI director, Freeh continued trumpeting the success of the Saudi investigation, determining Iranian responsibility for the bombing.

Cementing his relationship with the Saudis, Freeh appeared as the defense lawyer for Prince Bandar (“Bandar Bush”) at an April 2009 hearing on the Al Yamamah slush fund investigation.

Program Highlights Include: Saudi intelligence’s hiding of an Al Qaeda attempt at smuggling anti-tank missiles into the kingdom just before a visit by Vice-President Al Gore; Gore’s unsuccessful attempts at pressuring the Saudis to give him access to a key Al Qaeda financier; Saudi intelligence’s disclosure of NSA cell phone intercepts of Al Qaeda conversations to operatives of that organization, resulting in discontinued use of the cell phones; the CIA’s listing of the Saudi intelligence service as a “hostile” organization; review of the George W. Bush administration’s coverup of Al Qaeda and Hamas funding apparatus in the United States–an apparatus to which key elements of that administration and the GOP were connected.  (For more about this, see FTR #’s 454, 462, 464, 513, 515, 538.)

1. The first part of the series describes Saudi obstruction of the investigation, beginning with the immediate aftermath of the event. Right after the blast, the Saudis began to bulldoze the site of the attack, obscuring key evidence needed for a proper investigation of the attack. Tellingly, U.S. intelligence intercepted the Saudis instructing their operatives to appear to go along with the U.S. investigation, while working to coverup Al Qaeda/Saudi involvement in the attack. The Saudis refused a U.S. request to begin interviewing key witnesses in the kingdom (Saudi Arabia).

In this first installment, author Gareth Porter introduces the fundamental dynamic of the coverup–FBI Director Louis Freeh’s collaboration with the Saudis and Prince Bandar bin Sultan in particular. The latter was so close to the Bush family that he earned the nickname “Bandar Bush.” Consumed with hatred for Bill Clinton, Freeh aligned himself with the Saudis from the beginning, frustrating the administration’s attempts at penetrating the bombing conspiracy.

In particular, note that the CIA’s unit charged with following Bin Laden was excluded from the Khobar investigation.

On Jun. 25, 1996, a massive truck bomb exploded at a building in the Khobar Towers complex in Khobar, Saudi Arabia, which housed U.S. Air Force personnel, killing 19 U.S. airmen and wounding 372. Immediately after the blast, more than 125 agents from the U.S. Federal Bureau of Investigation (FBI) were ordered to the site to sift for clues and begin the investigation of who was responsible. But when two U.S. embassy officers arrived at the scene of the devastation early the next morning, they found a bulldozer beginning to dig up the entire crime scene.

The Saudi bulldozing stopped only after Scott Erskine, the supervisory FBI special agent for international terrorism investigations, threatened that Secretary of State Warren Christopher, who happened to be in Saudi Arabia when the bomb exploded, would intervene personally on the matter.

U.S. intelligence then intercepted communications from the highest levels of the Saudi government, including interior minister Prince Nayef, to the governor and other officials of Eastern Province instructing them to go through the motions of cooperating with U.S. officials on their investigation but to obstruct it at every turn.

That was the beginning of what interviews with more than a dozen sources familiar with the investigation and other information now available reveal was a systematic effort by the Saudis to obstruct any U.S. investigation of the bombing and to deceive the United States about who was responsible for the bombing.

The Saudi regime steered the FBI investigation toward Iran and its Saudi Shi’a allies with the apparent intention of keeping U.S. officials away from a trail of evidence that would have led to Osama bin Laden and a complex set of ties between the regime and the Saudi terrorist organiser.

The key to the success of the Saudi deception was FBI director Louis Freeh, who took personal charge of the FBI investigation, letting it be known within the Bureau that he was the “case officer” for the probe, according to former FBI officials.

Freeh allowed Saudi Ambassador Prince Bandar bin Sultan to convince him that Iran was involved in the bombing, and that President Bill Clinton, for whom he had formed a visceral dislike, “had no interest in confronting the fact that Iran had blown up the towers,” as Freeh wrote in his memoirs.

The Khobar Towers investigation soon became Freeh’s vendetta against Clinton. “Freeh was pursuing this for his own personal agenda,” says former FBI agent Jack Cloonan.

A former high-ranking FBI official recalls that Freeh “was always meeting with Bandar”. And many of the meetings were not in Freeh’s office but at Bandar’s 38-room home in McLean, Virginia.

Meanwhile, the Saudis were refusing the most basic FBI requests for cooperation. When Ray Mislock, who headed the National Security Division of the FBI’s Washington Field Office, requested permission to go door to door to interview witnesses in the neighbourhood, the Saudis refused.

“It’s our responsibility,” Mislock recalls being told. “We’ll do the interviews.”

But the Saudis never conducted such interviews. The same thing happened when Mislock requested access to phone records for the immediate area surrounding Khobar Towers.

Soon after the bombing, officials of the Saudi secret police, the Mabahith, began telling their FBI and CIA contacts that they had begun arresting members of a little known Shi’a group called “Saudi Hezbollah”, which Saudi and U.S. intelligence had long believed was close to Iran. They claimed that they had extensive intelligence information linking the group to the Khobar Towers bombing.

But a now declassified July 1996 report by CIA analysts on the bombing reveals that the Mabahith claims were considered suspect. The report said the Mabahith “have not shown U.S. officials their evidence… nor provided many details on their investigation.”
Nevertheless, Freeh quickly made Iranian and Saudi Shi’a responsibility for the bombing the official premise of the investigation, excluding from the inquiry the hypothesis that Osama bin Laden’s al Qaeda organisation had carried out the Khobar Towers bombing.

“There was never, ever a doubt in my mind about who did this,” says a former FBI official involved in the investigation who refused to be identified.

FBI and CIA experts on Osama bin Laden tried unsuccessfully to play a role in the Khobar Towers investigation. Jack Cloonan, a member of the FBI’s I-49 unit, which was building a legal case against bin Laden over previous terrorist actions, recalls asking the Washington Field Office (WFO), which had direct responsibility for the investigation, to allow such I-49 participation, only to be rebuffed.

“The WFO was hypersensitive and told us to f*ck off,” says Cloonan.

The CIA’s bin Laden unit, which had only been established in early 1996, was also excluded by CIA leadership from that Agency’s work on the bombing.

Two or three days after the Khobar bombing, recalls Dan Coleman, an FBI agent assigned to the unit, the agency “locked down” its own investigation, creating an encrypted “passline” that limited access to information related to Khobar investigation to the handful of people at the CIA who were given that code.

The head of the bin Laden unit at the CIA’s Counter-Terrorism Centre, Michael Scheuer, was not included among that small group.

Nevertheless, Scheuer instructed his staff to put together all the information the station had collected from all sources – human assets, electronic intercepts and open sources – indicating that there would be an al Qaeda operation in Saudi Arabia after the bombing in Riyadh the previous November.

The result was a four-page memo which ticked off the evidence that bin Laden’s al Qaeda organisation had been planning a military operation involving explosives in Saudi in 1996.

“One of the places mentioned in the memo was Khobar,” says Scheuer. “They were moving explosives from Port Said through Suez Canal to the Red Sea and to Yemen, then infiltrating them across the border with Saudi Arabia.”

A few days after receiving the bin Laden unit’s four-page memo, the head of the CIA’s Counter-Terrorism Centre, Winston Wiley, one of the few CIA officials who was privy to information on the investigation, came to Scheuer’s office and closed the door. Wiley opened up a folder which had only one document in it – a translated intercept of an internal Iranian communication in which there was a reference to Khobar Towers. “Are you satisfied?” Wiley asked.

Scheuer replied that it was only one piece of information in a much bigger universe of information that pointed in another direction. “If that’s all there is,” he told Wiley, “I would say it was very interesting and ought to be followed up, but it isn’t definitive.”

But the signal from the CIA leadership was clear: Iran had already been identified as responsible for the Khobar bombing plot, and there was no interest in pursuing the bin Laden angle.

In September 1996, bin Laden’s former business agent Jamal Al-Fadl, who had left al Qaeda over personal grievances, walked into the U.S. embassy in Eritrea and immediately began providing the best intelligence the United States had ever gotten on bin Laden and al Qaeda.

But the CIA and FBI made no effort take advantage of his knowledge to get information on possible al Qaeda involvement in the Khobar Towers bombing, according to Dan Coleman, one of al-Fadl’s FBI handlers.

“We were never given any questions to ask him about Khobar Towers,” says Coleman.

“Al Qaeda Excluded from the Suspects List” By Gareth Porter; ipsnews.net; 6/22/2009.

2. Determined to protect members of their elite who supported Al Qaeda, the Saudis deliberately mislead U.S. investigators in the direction of Iranian culpability. Producing “confessions” of Shi’a Saudis, allegedly members of a “Saudi Hezbollah,” directed by Iran. Almost certainly produced under torture, the confessions were discounted by then Attorney General Janet Reno. The confessions were replete with contradictions.

Previously linking a March 29th arrest to a November (1995) attack on a Saudi National Guard facility, the Saudi authorities now claimed that the March explosives bust was connected to the Khobar attack. In fact, the Saudis had secretly detained and tortured a number of Al Qaeda-related suspects after the April attack. One of those was the actual head of Al Qaeda in Saudi Arabia, Yusuf al-Uyari.

In the last week of October 1996, the Saudi secret police, the Mabahith, gave David Williams, the FBI’s assistant special agent in charge of counter-terrorism issues, what they said were summaries of the confessions obtained from some 40 Shi’a detainees.

The alleged confessions portrayed the bombing as the work of a cell of Saudi Hezbollah that had had carried out surveillance of U.S. targets under the direction of an Iranian Islamic Revolutionary Guard Corps officer before hatching a plot to blow up the Khobar Towers facility.

But the documents were curiously short of the kind of details that would have allowed U.S. investigators to verify key elements of the accounts. In fact, Saudi officials refused even to reveal the names of the detainees who were alleged to have made the confessions, identifying the suspects only by numbers one through six or seven, according to a former FBI official involved in the investigation.

Justice Department lawyers argued that the confessions were completely unreliable, and unusable in court, because they had probably been extracted by torture. At Attorney General Janet Reno’s insistence, both Reno and FBI Director Louis Freeh said publicly in early 1997 that the Saudis had provided little more than “hearsay” evidence on the bombing.

There were also major anomalies in the alleged confessions of Shi’a plotters that should have aroused the suspicions of FBI investigators.

The Saudis claimed that on Mar. 28, 1996, Saudi guards at the Al-Haditha border crossing with Jordan had discovered 38 kilogrammes of plastic explosives hidden in a car driven by a Saudi Hezbollah member. That member not only admitted to his Saudi Hezbollah membership, according to the Saudi account, but led the secret police to three more Saudi Hezbollah members, who were allegedly arrested on Apr. 6, 7 and 8. .

What was peculiar about that account is that on Apr. 17, 1996, Saudi officials had announced that they had found explosives in a car at the border with Jordan on Mar. 29, and said that “a number of people” had been arrested. And four days later, Saudi Interior Minister Prince Nayef had announced the arrest of four men in the bombing of the Office of the Programme Manager of the Saudi National Guard in Riyadh on Nov. 13, 1995. Their confessions were broadcast on Saudi television that same day.

In the announcement of the arrests, reported by the New York Times, Nayef referred to the arms smuggling attempt of Mar. 29, saying it was still not clear if the November blast in Riyadh and the smuggling attempt were related.

That statement had clearly implied that Saudi officials had reason to believe that there was a link between the jihadist network believed to have carried out the Riyadh bombing and those who had been caught after the Mar. 29 explosive smuggling attempt.

After the Khobar bombing, however, the Saudis began to link the interception of explosives in late March to the Shi’a they were saying had carried out the Khobar Towers bombing.

One day in July, according to a former Clinton administration official, Freeh came into the White House situation room livid with anger, telling officials there he had just learned that the Saudis had arrested a Saudi Hezbollah activist in March with concealed explosives and had discovered the Shi’a plot to bomb Khobar Towers.

Nayef’s statement suggesting a possible tie to the Riyadh bombing of the previous November was a deliberate deception of the United States, which the Saudis never explained to U.S. officials. “We asked why they didn’t tell us about this earlier and didn’t get an answer,” says Williams.

If the Saudis had actually arrested the four Saudi Hezbollah members who had been ordered to carry out the bombing, as they later claimed, it would have been known immediately to the rest of the Saudi Hezbollah organisation, which would obviously have called off the bomb plot and fled the country.

Further undermining the Shi’a explosives smuggling and bomb plot story is the fact that the Saudis had secretly detained and tortured a number of veteran Sunni jihadists with ties to Osama bin Laden after the bombing.

The Sunni detainees over Khobar included Yusuf al-Uyayri, who was later revealed to have been the actual head of al Qaeda in Saudi Arabia. In 2003, al-Uyayri confirmed in al Qaeda’s regular publication that he had been arrested and tortured after the Khobar bombing.

A report published in mid-August 1996 by the London-based Palestinian newspaper Al Qods al-Arabi, based on sources with ties to the jihadi movement in Saudi Arabia, said that six Sunni veterans of the Afghan war had confessed to the Khobar bombing under torture. That was followed two days later by a report in the New York Times that the Saudi officials now believed that Afghan war veterans had carried out the Khobar bombing.

A few weeks later, however, the Saudi regime apparently made a firm decision to blame the bombing on the Saudi Shi’a.

According to a Norwegian specialist on the Saudi jihadi movement, Thomas Hegghammer, in 2003 – shortly before al-Uyayri was killed in a shoot-out in Riyadh in late May 2003 – an article by the al Qaeda leader in the al Qaeda periodical blamed Shi’a for the Khobar bombing.

In a paper for the Combating Terrorism Center at West Point, Hegghammer cites that statement as evidence that al Qaeda wasn’t involved in Khobar. But one of al-Uyayri’s main objectives at that point would have been to stay out of prison, so his endorsement of the Saudi regime’s position is hardly surprising.

Al-Uyayri had been released from prison in mid-1998, by his own account. But he was arrested again in late 2002 or early 2003, by which time the CIA had come to believe that he was a very important figure in al Qaeda, even though it didn’t know he was the leader of al Qaeda in the peninsula, according to Ron Suskind’s book “The One Percent Doctrine”.

In mid-March 2003, Suskind writes, U.S. officials pressed the Saudis not to let him go. But the Saudis claimed they had nothing on al-Uyayri, and a few weeks later he was released again. The head of al Qaeda in Saudi Arabia and the Saudi secret police were playing a complex game.

The question of how the alleged plotters got their hands on roughly 5,000 pounds of explosives – the estimated amount in the truck bomb – was one of the central questions in the investigation of the bombing. But interviews with six former FBI officials who worked on the Khobar Towers investigation revealed that the investigation had not turned up any evidence of how well over two tonnes of explosives had entered the country.

Not one of the six could recall any specific evidence about how the alleged plotters got their hands on that much explosives. And one former FBI official who continues to defend the conclusions of the investigation flatly refused to tell this writer whether the investigation had turned up information bearing on that question.

If the Saudi Hezbollah group had actually been plotting to bring the explosives into the country by hiding them in cars, they would have had to get more than 50 explosives-laden cars past Saudi border guards who were already on alert. There is no indication, however, that any additional cars with explosives came across the border in the weeks prior to the bombing.

“Saudi Account of Khobar Bore Telltale Signs of Fraud” by Gareth Porter; ipsnews.net; 6/23/2009.

3. The Shi’a suspect publicly produced by the Saudis as a “confessed” member of the alleged Khobar conspiracy was not convincing. Afflicted with asthma so severe that the Iranian Revolutionary Guard had rejected him as a recruit, Hani al-Sayegh denied any involvement with the Khobar attack after his transfer to Canadian custody. Hayegh admitted that he had performed surveillance of U.S. facilities and personnel in Saudi Arabia on behalf of the Iranians, an act that American investigators attributed to the fact that Iran was fearful of an attack by the U.S., and conducted surveillance of potential targets for retaliation as a defensive tactic.

Freeh continued to frustrate the investigation, blaming lack of progress on Bill Clinton. When Saudi authorities began to drop their curtain of obfuscation over Khobar, it appears that they were fearful of U.S. hostility over the 1998 Al Qaeda attacks in Africa. Then Vice-President Gore met with the Saudis to pressure them to give the U.S. access to an important Al Qaeda financier. Just before Gore’s visit, Saudi intelligence broke up an Al Qaeda plot to use Sagger anti-tank missiles in an attack. U.S. intelligence was not informed of the incident.

Later, under the younger George Bush, the FBI under Robert Mueller, the Justice Department and the Department of Homeland Security actively frustrated investigation of the Al Qaeda/Muslim Brotherhood financial apparatus in the U.S. Bush administration and GOP luminaries were implicated in the investigation.

Freeh attributed belated Saudi cooperation to the intercession of former President George H.W. Bush. Collaboration between Freeh, the Saudis and the Bush family is a pattern we will observe later in the series as well. Throughout the 1990’s, the Saudis actively dissembled with regard to complicity of elements of their elite and Bin Laden’s forces.

Note that after the NSA shared intercepts from Al Qaeda cell phones with the Saudis, Bin Laden’s personnel stopped using their cell phones. Note, also that the CIA under George Tenet listed the Saudi intelligence service as a “hostile” agency.

In March 1997, FBI Director Louis Freeh got what he calls in his memoirs “the first truly big break in the case”: the arrest in Canada of one of the Saudi Hezbollah members the Saudis accused of being the driver of the getaway car at Khobar Towers.

Hani al-Sayegh, then 28 years old, had arrived in Canada in August 1996 after having left Saudi Arabia, by his own account, in August 1995, for Iran and Syria. The Canadian government charged him with being a terrorist, based on claims by the Saudi regime.

In order to be transferred to the United States without facing deportation to Saudi Arabia, where he was believed to face the death penalty, al-Sayegh had to agreed to a plea bargain under which he would admit to having proposed an attack on U.S. personnel, for which he would have to serve up to 10 years in prison.

In fact, the only thing al-Sayegh had actually admitted to, according to FBI sources, was having proposed an attack on one AWACS plane that had been turned over to the Saudi Air Force – a proposal he said had been rejected. Both before and after being brought to Washington, moreover, Al-Sayegh steadfastly denied any knowledge of the Khobar Towers bombing.

Despite that consistent denial by al-Sayegh, a Washington Post story on Apr. 14, 1997 quoted U.S. and Saudi officials as saying that al-Sayegh had met two years earlier with senior Iranian intelligence officer Brig. Gen. Ahmad Sherifi and that Iran was the “organising force” behind the Khobar bombing. That story, leaked by officials supporting the Saudi version of the Khobar story, cited Canadian intercepts of al-Sayegh’s phone conversations in Ottawa before his arrest as allegedly incriminating evidence.

The story leant further credence to the general belief in Washington that Iran had masterminded the bombing, mainly because U.S. intelligence had observed the surveillance of U.S. military and civilian sites in Saudi Arabia by Iranians and their Saudi allies in 1994 and 1995.

What al-Sayegh actually told FBI agents in a series of interviews in Ottawa and Washington, however, contradicted the leaked story, according to sources familiar with those interviews.

Al-Sayegh admitted having carried out the surveillance of one military site other than Khobar for the Iranians, but insisted that it was not to prepare for a possible terrorist bombing but to identify potential targets for Iranian retaliation in the event of a U.S. attack on Iran.

His testimony was consistent with what Ambassador Ron Neumann, who was director of the Office for Iran and Iraq in the State Department’s Bureau of Near East Affairs from 1991 through 1994, had been saying about the Iranian reconnaissance of U.S. targets.

While most official analysts were ready to believe that Iran was plotting a terrorist attack against the United States, Neumann recalls that he had discerned a pattern in Iranian behaviour: every time U.S.-Iran tensions rose, there was an increase in Iranian reconnaissance of U.S. diplomatic and military faculties.

“The pattern could be taken as hostile but it could equally have been defensive,” says Neumann, meaning that the Iranians viewed such reconnaissance of possible U.S. targets as part of their deterrent to a U.S. attack.

Hani al-Sayegh would have been a strange choice for driver of the getaway car at Khobar Towers. A frail man whose frequent asthma attacks repeatedly interrupted his interviews with the FBI, al-Sayegh recounted to investigators he had entered military training with the Iranian IRGC, but had been told by his IRGC handler after one particularly disastrous exercise that his asthma made him unfit for military operations.

FBI veteran Jack Cloonan, who was talking with the agents interviewing al-Sayegh that spring and summer, told al-Sayegh’s immigration lawyer, Michael Wildes, that he was convinced al-Sayegh had not participated in the operation, according to notes in the diary Wildes kept on the case.

Hani al-Sayegh continued to deny either that he was involved or the Iranians had anything to do with Khobar, and as a result was deported to Saudi Arabia in 1999 – despite the widespread assumption within the FBI that he would be beheaded on his return.

Freeh had no case against the Iranians and their Saudi allies unless he could get access to the Saudi Shi’a detainees. In the memoir “My FBI”, Freeh charged that President Bill Clinton refused to press Saudi Crown Prince Abdullah for access to those prisoners and then asked him for a contribution to the future Clinton presidential library at a meeting at the Hay-Adams Hotel in September 1998.

That account is disputed, however, by numerous Clinton administration officials. Freeh, who was not present, cites only “my sources”, strongly suggesting that he got it from the self-interested Prince Bandar.

Freeh claimed that former President George Bush had then interceded with Abdullah at Freeh’s request, resulting in a meeting between Freeh and Abdullah at Bandar’s Virginia estate Sep. 29, 1998. At that meeting, Abdullah offered to allow the FBI to submit questions to the detainees and observe the questions and answers from behind one-way glass.

But what Freeh left out of the story is that Abdullah’s new offer came at a time when the Saudis felt a greater need to appease Washington on the Khobar Towers investigation than they had previously.

In May 1998, the CIA had learned that Saudi intelligence had broken up an al Qaeda plot to smuggle Sagger anti-tank missiles from Yemen into Saudi Arabia about a week before a scheduled visit to Saudi by Vice-President Al Gore and had not informed U.S. intelligence about the incident.

Then, on Aug. 7, 1998, the U.S. embassies in Nairobi, Kenya and Dar Es Salaam, Tanzania had been bombed 10 minutes apart. The CIA had quickly ascertained that al Qaeda was responsible for the bombings, with the result that U.S. intelligence began to focus more on bin Laden’s operations in Saudi Arabia.

Gore had met with Abdullah on Sep. 24, and had pressed hard for access to an important al Qaeda finance official, Madani al Tayyib, who had been detained by the Saudi government the previous year, but kept away from U.S. intelligence.

The Saudi regime had long acted to keep the United States away from the bin Laden trail in Saudi. During the Afghan War, high-ranking Saudi officials, including interior minister Prince Nayef himself, had worked closely with bin Laden. And those ties had apparently continued even after the Saudi government revoked bin Laden’s citizenship, froze his assets, and began cracking down on some anti-government Islamic extremists in 1994.

Evidence soon appeared that the regime had allowed Saudi supporters of bin Laden to finance his operations through Saudi charities, while encouraging bin Laden to focus on the U.S. military rather than the regime.

9/11 Commission investigators later learned that, after bin Laden’s move from Sudan to Afghanistan in May 1996, a delegation of Saudi officials had asked top Taliban leaders to tell bin Laden that if he didn’t attack the regime, “recognition will follow”.

Meanwhile, Nayef was resisting CIA requests for bin Laden’s birth certificate, passport and bank records.

The CIA had been sharing its own intelligence on bin Laden with the Mabahith, the Saudi secret police, including copies of National Security Agency interceptions of the cell phone conversations of suspected al Qaeda officials. Then the militants suddenly stopped using their cell phones, indicating they had been tipped off by the Mabahith.

In early 1997, the CIA’s bin Laden station even issued a memorandum for CIA Director George Tenet, who was about to travel to Saudi Arabia, identifying Saudi intelligence as a “hostile service”.

By late September 1998, the Saudi regime was feeling the heat from the Clinton administration for its failure to cooperate on bin Laden’s operations in Saudi Arabia. Abdullah’s proposal was a way to demonstrate cooperation on terrorism while helping Freeh promote the Saudi line on Khobar Towers.

” U.S. Officials Leaked a False Story Blaming Iran” by Gareth Porter; ipsnews.net; 6/24/2009.

4. Part 4 of the series notes that the FBI followed director Freeh’s lead and directed their investigation in the direction of Iran. This, despite the fact that Bin Laden took credit for the Khobar bombing, as well as the Riyadh bombing committed the previous November (1995). Investigators noted that Bin Laden did not take credit for attacks that he had not planned. Despite the fact that U.S. investigators requested access to the perpetrators of the Riyadh attack, access was not granted.

Meanwhile, the CIA had developed information linking Bin Laden to the Khobar Towers bombing. As we will see, this was to no avail.

Osama Bin Laden had made no secret of his intention to attack the U.S. military presence in Saudi Arabia. He had been calling for such attacks to drive it from the country since his first fatwa calling for jihad against Western “occupation” of Islamic lands in early 1992.
On Jul. 11, 1995, he had written an “Open Letter” to King Fahd advocating a campaign of guerilla attacks to drive U.S. military forces out of the Kingdom.

Bin Laden’s al Qaeda organisation began carrying out that campaign later that same year. On Nov. 13, 1995 a car bomb destroyed the Office of the Programme Manager of the Saudi National Guard (OPM SANG) in Riyadh, killing five U.S. airmen and wounding 34.

The confessions of the four jihadists from the Afghan War to the bombing, which were broadcast on Saudi television, said they had been inspired by Osama bin Laden, and one of them referred to a camp in Afghanistan which was associated with bin Laden.

“It was a backhanded reference to bin Laden,” says veteran FBI agent Dan Coleman.

The U.S. Embassy in Riyadh immediately requested that the FBI be allowed to interrogate the suspects as soon as their arrests were announced in April. But the Saudis never responded to the request, and on May 31, the embassy was informed only an hour and half before that the four suspects would be beheaded.

When the bomb exploded at Khobar Towers on Jun. 25, 1996, Scott Erskine, the agent in charge of the Riyadh bombing investigation, was about to return to the United States after another frustrating meeting in which Saudi officials were not forthcoming about whom they were going to prosecute. When FBI Director Louis Freeh visited Khobar a few days after the bombing, he was told not to expect any more information on the Riyadh bombing.

Instead of insisting that the Clinton administration put more pressure on the Saudis to cooperate on the possibility of links between the two bombings, Freeh quietly decided to drop the investigation of the Riyadh bombing entirely. The case was put on “inactive” status, according to two former FBI officials, meaning that no more actions were to be taken, even though it had not been formally closed.

Bin Laden made it more difficult to ignore his role, however, by publicly claiming responsibility for both the Riyadh and Khobar bombings. In October 1996, after having issued yet another fatwa calling on Muslims to drive U.S. soldiers out of the Kingdom, bin Laden was quoted in al Quds al Arabi, the Palestinian daily published in London, as saying, “The crusader army was shattered when we bombed Khobar.”

And in an interview published in the same newspaper Nov. 29, 1996, he was asked why there had been no further operations along the lines of the Khobar operation. “The military are aware that preparations for major operations require time, in contrast with small operations,” said bin Laden.

He then linked the two bombings in Saudi Arabia explicitly as signals to the United States from his organisation: “We had thought that the Riyadh and Khobar blasts were a sufficient signal to sensible U.S. decision-makers to avert a real battle between the Islamic nation and U.S. forces,” said bin Laden, “but it seems that they did not understand the signal.”

According to Coleman, one of the FBI’s top investigators on al Qaeda, bin Laden always took credit for terrorist actions he had planned but not for those he had not planned. For example, bin Laden issued no claim about the World Trade Centre bombing and told his former business agent turned FBI informer, Jamal al-Fadl, that he had nothing to do with it, Coleman says.

The Riyadh and Khobar bombings even had a common operational feature. As noted by the head of the bin Laden unit at the CIA, Michael Scheuer, in both cases, the vehicle was not parked so as to bring the entire building down. If the team executing the Khobar bombing had parked parallel to the security fence rather than backing up to it, says Scheuer, it would have destroyed the entire building. The same thing had happened in the OPM SANG bombing.

The bin Laden unit of the CIA had collected concrete intelligence on bin Laden’s role in planning the Khobar Towers bombing. In mid-January, 1996, according to the intelligence compiled by the unit, bin Laden traveled to Doha, Qatar, where plans were discussed for attacks in eastern Saudi Arabia. Bin Laden arranged for 20 tonnes of high explosive C-4 to be shipped from Poland to Qatar, two tonnes of which were to be sent to Saudi Arabia, the report said.

Bin Laden specifically referred to operations targeting U.S. interests in the triangle of cities of Dammam, Dhahran and Khobar in Eastern Province, using clandestine al Qaeda cells in Saudi Arabia, according to the intelligence reporting.

FBI agents working on the Khobar case simply rejected any evidence of bin Laden’s involvement in Khobar, however, because the decision had already been made that the Shi’as were responsible.
David Williams, then the FBI agent in charge of counter-terrorism for the Bureau, recalls that he had read intelligence reports suggesting bin Laden’s involvement in the bombing, but says he had done so “with a suspicious eye”.

The FBI investigators dismissed the relevance of the evidence linking bin Laden to the Riyadh bombing. As one former FBI official explained the logic of that position to IPS, the Khobar Towers bombing was completely different from the Riyadh bombing seven months earlier: it was in an area of Eastern Province where Shi’a oppositionists were predominant and where al Qaeda had no known cell.

The facts, however, told a different story. The city of Khobar itself was predominantly Sunni, not Shi’a, and the triangular area of the three cities had a large population of veterans of the Afghan War who were followers of bin Laden. As the London-based Palestinian publication reported in August 1996, the six jihadis who confessed to the bombing were all from an area called Al Thoqba near Khobar.

One of the veteran jihadis detained after the bombing, Yusuf al-Ayayri, who was then the actual head of al Qaeda in the Arabian peninsula, was from Dammam and knew the jihadi community in that region very well, according to Norwegian specialist on al Qaeda Thomas Hegghammer.

The FBI and CIA knew nothing about bin Laden’s movement in that part of Saudi Arabia, however, because they were completely dependent on Saudi intelligence for such information. A CIA memorandum dated Jul. 1, 1996 said the Agency had “little information” about the “location, size, composition or activities” of opposition cells in Saudi Arabia.

Interviews with FBI officials involved in the investigation make it clear that they were not interested in evidence linking bin Laden to the bombing, because they understood their task to be limited to getting whatever information they could from Saudi officials.

Williams says he didn’t question the Saudi account of the Khobar plot, because, “You start to believe the people who are your interlocutors.”

Asked about the evidence that bin Laden was behind the plot, another FBI official with substantive responsibility for the investigation told IPS, “I didn’t get involved in that aspect. That wasn’t my job.”

“FBI Ignored Compelling Evidence of bin Laden Role” by Gareth Porter; ipsnews.net; 6/25/2009.

5. Part 5 of the series chronicles the coverup going on into the tenure of George W. Bush’s administration. Despite rejection of the Saudi torture-induced confessions by the Shi’a suspects by the Clinton Justice Department, Freeh continued his conspiratorial alliance with the Saudis and, when George W. Bush retained him as FBI director, Freeh continued trumpeting the success of the Saudi investigation, determining Iranian responsibility for the bombing.

Freeh parroted the Saudi line on Khobar in a 2002 hearing before a joint hearing of the Senate and House Select Intelligence committees. He also continued to whitewash Saudi complicity with Al Qaeda operations.

Cementing his relationship with the Saudis, Freeh appeared as the defense lawyer for Prince Bandar (“Bandar Bush”) at an April 2009 hearing on the Al Yamamah slush fund investigation. The series closes with the observation that, had Freeh not executed his years’ long coverup of Al Qaeda involvement in, and Saudi complicity with, the Khobar bombing, it is at least theoretically possible that the disinterest on the part of the Bush administration with regard to Al Qaeda might have been interdicted.

In early November 1998, Louis Freeh sent an FBI team off to observe Saudi secret police officials interviewing eight Shi’a detainees from behind a one-way mirror at the Riyadh detention centre. He planned to use the Shi’a testimony to show that Iran was behind the bombing.
As expected, the stories told by the detainees recapitulated the outlines of the Shi’a plot that had already been described by the Saudis two years earlier. Now there were even more tantalising details of direct Iranian involvement.

One of the detainees said Iranian Revolutionary Guard Corps General Ahmad Sherifi had personally selected the Khobar barracks as a target. Another said the Saudi Hezbollah members had been not only trained but paid by the Iranians.

“We came away with solid evidence that Iran was behind it,” says a former FBI agent.

There was one problem with the evidence the FBI team collected: the Saudi secret police had already had two and half years to coach the Saudi Hezbollah detainees on what to say about the case, with the ever-present threat of more torture to provide the incentive.

But Freeh was not about to let the torture issue interfere with his mission. “For Louis, if they would let us in the room, that was the important thing,” one former high-ranking FBI official told IPS. “We would have gone over there and gotten the answers even if they had been propped up.”

When Freeh took the accounts from the Shi’a detainees in interrogations witnessed by the FBI team, however, the Justice Department didn’t buy them as valid testimony. The department refused to go ahead with an indictment as Freeh had desired, evidently based on the same objection that had been raised two years earlier: the Shi’a had been subject to torture.

But in January 2001, President George W. Bush kept Freeh on as FBI director. Freeh told the new president that Iran had masterminded the Khobar bombing, according to his testimony before the 9/11 Commission, and the Justice Department then began collaborating with Freeh on an indictment of the Saudi Hezbollah which implicated Iran in the Khobar bombing.

The indictment was announced on Jun. 21, 2001 – Freeh’s last day as FBI director.

Highly credible evidence soon showed, however, that the Mabahith, the Saudi secret police, did indeed use torture and coercion to get detainees to tell the stories demanded by the Saudi regime – even in front of foreign observers – and that they did so to protect al Qaeda from investigation by the United States.

Three car bombings in Riyadh in November 2000 that had resulted in the death of a British citizen were generally believed to have been the work of al Qaeda. But four British citizens, one Canadian and one Belgian had confessed to the bombings, and their confessions had been broadcast on Saudi television.

After being released in 2003, however, the Canadian citizen, William Sampson, made public his dramatic account of beatings administered by the Mabahith while being hung upside down, including blows which made his testicles swell to the size of oranges. Sampson said the Saudis told him from the beginning what they wanted him to confess to, repeating it over and over while the beatings continued, and refined the story over time, constantly adding new details.

Six weeks into the interrogation, after Sampson began to tell them what they wanted, they started videotaping his confession, using a wall chart to help him remember in detail the movements he was supposed to have made.

The Saudis even coached Sampson on what to say when he was visited by Canadian embassy personnel, threatening him with further torture if he told the embassy officials the truth. When the embassy personnel came to talk with him, Sampson’s two torturers were present for the entire interview, just as they were presumably present at the questioning of the Shi’a detainees observed by the FBI team.

The other foreigners told similar stories of coerced confessions under torture. Sampson and the five foreigners were released only after a May 2003 suicide bombing by al Qaeda on a Riyadh compound housing 900 expatriates forced Saudi Interior Minister Prince Nayef to acknowledge al Qaeda as a terrorist threat in Saudi Arabia.

Meanwhile, once out of office, Freeh became virtually a defence lawyer for the Saudi regime on the Khobar Towers bombing.

Testifying before a joint hearing of the House and Senate Select Intelligence Committees on Oct. 9, 2002, he whitewashed the Saudi policy toward the FBI investigation. Omitting any mention of the Saudi deception over the explosives smuggling incident and refusal to allow the FBI to pursue essential investigatory tasks, Freeh suggested that the Saudis had done everything that could be expected of them.

“Fortunately, the FBI was able to forge an effective working relationship with the Saudi police and interior ministry,” he said. Any “roadblock or legal obstacle” that “would occur”, Freeh asserted, was because of the “marked difference between our legal and procedural systems”.

Freeh paid tribute to Prince Bandar bin Sultan, the Saudi ambassador, as “critical in achieving the FBI’s investigative objectives in the Khobar case” and suggested that any such temporary problems “were always solved” by Bandar’s “personal intervention”.

Freeh misrepresented the arrangement under which the FBI team had observed the interrogation as “making these witnesses directly available”.

In an interview for a fawning biography of Prince Bandar, Freeh even went so far as to call the Saudi beheading of four jihadists who confessed to the OPM SANG bombing after refusing to allow the FBI to question them as “swift justice” on a “Saudi domestic matter”.

The final chapter of Freeh’s connection with Bandar and the Saudis, however, was still to come. In April 2009, Freeh appeared as Bandar’s defence lawyer in a British court case in which Bandar is accused of illegally taking two billion dollars in graft on a Saudi-British arms deal.

In the context of Freeh’s straitened financial situation and his very close relationship with Prince Bandar, this sequence of developments in Freeh’s relationship with the Saudis, culminating in being put on Bandar’s payroll, should have raised eyebrows in Washington.

With a wife and six children to support, Freeh had been far more vulnerable to Saudi blandishments than most senior administration officials. And Bandar had made no secret that he was willing to use the promise of financial benefits to influence U.S. officials while they were still in office.

He once told an associate, according to a February 2002 article by Robert G. Kaiser and David Ottaway of the Washington Post, “If the reputation…builds that the Saudis take care of friends when they leave office, you’d be surprised how much better friends you have who are just coming into office.”

Freeh declined to be interview for this series.

In light of the history of Freeh’s relations with Bandar, his conduct of the investigation of Khobar Towers deserves new scrutiny. Freeh effectively shut down a probe of a terror bombing in which bin Laden was clearly implicated when the Saudis had refused to cooperate; he refused to pursue any investigation of a bin Laden role in the bombing; and he pushed a seriously flawed Saudi account of the bombing despite the fact that it was tainted by the likelihood of torture.

The result of Freeh’s blatant pro-Saudi bias was that Osama bin Laden was allowed more years of unhindered freedom in which to plan terrorist actins against the United States. Had Freeh not become an advocate of the interests of the regime whose representative in Washington eventually put him on his payroll, U.S. policy would presumably have been focused like a laser on Osama bin Laden and al Qaeda two years earlier.

And perhaps the disinterest of the George W. Bush administration’s national security team toward al Qaeda before 9/11 would have been impossible.

“Freeh Became ‘Defence Lawyer’ for Saudis on Khobar”; by Gareth Porter; ipsnews.net; 6/26/2009.


15 comments for “FTR #679 Freeh at Last: Analysis of the Khobar Towers Bombing (Love Means Never Having to Say You’re Saudi, Part 2)”

  1. Freeh tapped to lead pedophile investigation of Penn State:

    The first thing I thought when I heard today’s news was:

    (1) Louis Freeh obstructed the pre-9/11 investigations of FBI agent Robert Wright and the Vulgar Betrayal investigation.

    (2) Louis Freeh is very closely linked with G. H. W. Bush

    (3) Louis Freeh is very closely linked with Saudi Prince Bandar, a.k.a. “Bandar Bush” — including Freeh representing Bandar as his lawyer in a terrorism slush fund trial

    (4) Deep in the Franklin Scandal case, you will find many mentions of Saudi princes and child sex trafficking, as well as the Bush milieu

    (5) Deep in the Penn State case, you will find mention of investigation into the possibility that Sandusky was “farming” young boys for anonymous wealthy football-program “boosters” (donors):


    It all adds up to echoes of the Franklin Scandal, hints of a pedophile ring in the highest places.

    With Louis Freeh as the gatekeeper.

    Reminds me of Kissinger as 9/11 Commissioner.

    Like that chapter, where Kissinger stepped aside due to dubious business conflicts-of-interest, Freeh is vice-chairman for MBNA, a bank holding company and credit card issuer … which, incidentally, is tied to Penn State and Sandusky’s “Second Mile” charity.


    Note that Freeh’s “Penn State Scandal Investigation Team” will include former FBI agents and former federal prosecutors … one can only imagine the roster:


    MBNA has a shady history, as well as being the TOP contributor to George W. Bush’s 2000 campaign:


    All of this does not directly link Freeh to the Franklin Scandal domain, but it puts him squarely in the milieu.

    Posted by R. Wilson | November 22, 2011, 12:03 am
  2. More on the Penn State pedophile mystery:



    After the revelations about the Penn State sex abuse scandal in which it was revealed that Gricar had declined to prosecute Jerry Sandusky, well-known forensic pathologist Cyril Wecht said that “I believe that Gricar’s disappearance is almost certainly related to this Penn State debacle.”[23] He continued, “You’ve got his car being found, locked with cellphones inside. The computers found and the hard drive is found there in the river. The body is never found. Looks to me like it was staged.”[23]

    Posted by R. Wilson | November 22, 2011, 12:09 am
  3. More weird background facts about Louis Freeh:


    Freeh was 2010 Board of directors member, National Center for Missing and Exploited Children.

    “Freeh is an active member and Board member of the National Center for Missing and Exploited Children, has been a member of the U.S. Naval Academy Foundation and is responsible for launching the Innocent Images National Initiative to protect young children. ”
    . . . . .


    Ex-FBI director Freeh granted Italian citizenship

    WASHINGTON — Louis Freeh, the former head of the FBI, is now an Italian citizen.

    Officials at the Italian Embassy in Washington say Freeh was made a citizen at a ceremony Friday.

    An announcement on the embassy’s Web site says Freeh was granted citizenship based on his close work with Italian authorities in fighting organized crime.

    . . . . .


    Freeh associates
    John D. Behnke
    Managing Director

    “Additionally, John was the lead agent (under Louis Freeh) in the investigation of the 1989 murder of Judge Robert Vance of the 11 th Circuit Court of Appeals. After this case was successfully prosecuted, John was awarded the Department of Justice’s Dedicated Service Award by President George H.W. Bush for his outstanding leadership, dedication and self-sacrifice.

    Prior to his assignment as Special Assistant to the Director, John was lead agent for the Olympic Park Bombing Investigation. As a result of his successful efforts in this investigation, the U.S. Attorney General honored John with the Attorney General’s Distinguished Service Award.”

    >>Recall the Olympic Park Bombing Investigation led to the misidentification of security guard Richard Jewell, who later died of a heart attack at age 44.

    >>There is compelling evidence that Freeh & Behnke misidentified & convicted the wrong perpetrator in the murder of Judge Vance:


    . . . . .


    Penn State investigator has ties to Second Mile charity’s board
    — by MAUREEN MILFORD and CRIS BARRISH | DelawareOnline, Nov. 21, 2011

    Former FBI director Louis J. Freeh of Greenville, selected Monday by Penn State University to lead an independent investigation into child sexual abuse allegations, once worked with a major university contributor who is a board member of the youth charity linked to the scandal.

    Freeh served as general counsel of the former MBNA credit card company in Wilmington along with top bank executive Ric Struthers. A Penn State graduate and major contributor still affiliated with the university, Struthers is on the board of directors of The Second Mile charity.

    The Second Mile, which helps children from troubled homes, was founded in 1977 by Jerry Sandusky. A former Penn State assistant football coach, Sandusky, 67, has been charged with multiple counts of child sexual abuse, including one alleged rape on campus. According to a grand jury report, Sandusky “found his victims” through Second Mile.

    Freeh, who served as MBNA’s general counsel from 2001-06, gave a speech in 2005 at a dedication of a new Penn State business building that Struthers and his wife supported through a $2 million gift. Struthers attended the event.

    On Monday, Freeh promised a fair, thorough and independent investigation at a news conference in Philadelphia announcing that his law firm Freeh, Sporkin & Sullivan would lead the investigation. Freeh, a former federal judge, could not be reached later in the day to discuss his relationship with Struthers.

    But Omar McNeill, a partner in Freeh’s Wilmington law firm, said Freeh’s relationship with Struthers was strictly as a business colleague. Freeh did not report to Struthers but to bank founder Charles M. Cawley. After Cawley retired, Freeh reported to Cawley’s successor, Bruce Hammonds, McNeill said. MBNA was sold to Bank of America in 2006.

    “They were business associates,” McNeill said of Freeh and Struthers. “That was the extent of relationship.”

    Stephanie Goodsell, a spokeswoman for the Penn State trustees’ special committee that hired Freeh, said in a statement that Freeh “reported at all times to MBNA’s chief executive officer, and not to Mr. Struthers.”

    . . . . .

    Interestingly, Freeh sent his son to a Potomac, Maryland private school, The Heights School, which is described in “The Bureau and the Mole”, a book by David A. Vise about Robert Hanssen, as “an Opus Dei academy” where members of Freeh’s church (which famed FBI espionage convict Hanssen also attended) “relished” their close ties to Opus Dei.

    Freeh has denied subsequent rumors of personal membership in Opus Dei.


    Posted by R. Wilson | November 24, 2011, 10:33 pm
  4. Man, Freeh really is the it girl these days:

    Posted: Fri, Nov. 25, 2011, 8:08 PM
    Ex-FBI chief named trustee in MF Global bankruptcy

    The Associated Press

    NEW YORK – Former FBI Director Louis J. Freeh has been tapped to be the trustee for MF Global’s Chapter 11 bankruptcy case.

    The U.S. Trustee for the New York region requested court approval for the appointment, according to documents filed Friday.

    MF Global and a committee of its creditors asked the court on Monday for permission to name a trustee so that the company can get a binding commitment for financing while it is in bankruptcy and help it recover any funds left over after its customers are paid back.

    U.S. Bankruptcy Court Judge Martin Glenn in New York granted the motion the next day and ordered U.S. Trustee Tracy Hope Davis to appoint a trustee for the case.

    Davis selected Freeh, a former federal judge who served as director of the Federal Bureau of Investigation from 1993 through 2001. Freeh is now chairman of Freeh Group International Solutions LLC, a global risk-management firm.

    Posted by Pterrafractyl | November 26, 2011, 3:36 pm
  5. Refusing to turn over documents can certainly be a ‘complicating” factor in an investigation:

    MF Global trustee tussles with regulators – report

    Fri Jan 6, 2012 5:25am GMT

    (Reuters) – MF Global’s bankruptcy trustee, Louis Freeh, has refused to turn over some documents to the Commodity Futures Trading Commission (CFTC), which is investigating what happened to an estimated $1.2 billion (774.6 million pounds) in missing customer funds, the Wall Street Journal said.

    Freeh, a former director of the Federal Bureau of Investigation and who represents MF Global’s parent company, has asserted attorney-client privilege in deciding not to release certain documents to the CFTC, according to his office and people familiar with the matter, the Journal said.

    The dispute is complicating efforts to learn how the firm lost the customer funds and to return the money to its owners and could slow the investigation, the Journal said, citing people familiar with the investigation.

    A spokesman for Freeh’s office told Reuters that the trustee’s team was cooperating with regulators, law enforcement and Congressional committees and is not aware “that our initial desire to preserve the attorney-client privilege has hampered their respective investigations.

    “To the extent that the authorities express concerns to us that the effort to preserve the attorney-client privilege is hampering their investigations, we of course would be willing to discuss the issue with them and be inclined to waive privilege,” the spokesman said.

    A spokesman for the CFTC declined to comment the Journal on the story.

    Posted by Pterrafractyl | January 6, 2012, 8:55 am
  6. Something tells me there are a big fans of Louis Freeh right now, and their its initials are J.P.M.:

    MF Global sold assets to Goldman before collapse: sources

    By Lauren Tara LaCapra and Matthew Goldstein

    Tue Jan 3, 2012 7:23pm EST

    (Reuters) – MF Global unloaded hundreds of millions of dollars’ worth of securities to Goldman Sachs in the days leading up to its collapse, according to two former MF Global employees with direct knowledge of the transactions. But it did not immediately receive payment from its clearing firm and lender, JPMorgan Chase & Co (JPM.N), one of the sources said.

    The sale of securities to Goldman occurred on October 27, just days before MF Global Holdings Ltd (MFGLQ.PK) filed for bankruptcy on October 31, the ex-employees said. One of the employees said the transaction was cleared with JPMorgan Chase.

    At the same time MF Global, which was run by former Goldman Sachs head Jon Corzine, was selling securities to Goldman to raise badly needed cash, the futures firm was also drawing down a $1.2 billion revolving line of credit it had with JPMorgan, according to one of the former MF Global employees.

    JPMorgan spokeswoman Mary Sedarat said the bank did not withold money because of the line of credit. She declined further comment on details of the transactions.

    JPMorgan has fought aggressively in bankruptcy court to protect its interests, and received a lien on some of MF Global’s assets in exchange for granting the firm $8 million to fund its bankruptcy costs. The lien puts JPMorgan’s interests ahead of MF Global customers who have not yet received an estimated $900 million worth of money from their accounts, which remain frozen as regulators search for missing funds.

    The hastily crafted transactions and the seeming inability of MF Global to recoup some of the money in the sale to Goldman may start to explain why so much money remains unaccounted for at the futures firm.

    It is unclear what type of assets Goldman bought from MF Global, but the securities were worth hundreds of millions of dollars, the former employees said. The sources spoke on the condition of anonymity.

    The Wall Street Journal previously reported that George Soros’ fund was a buyer of securities sold by MF Global, scooping-up some of its European sovereign debt at a deep discount. Panic among investors and clients about MF Global’s $6.3 billion bet on European sovereign bonds led to its demise.

    So did JP Morgan just decide to keep all the proceeds from the sale since they were MF Global’s primary creditor? Or did Corzine’s old firm, Goldman Sachs, have a little “oopsie” that delayed them from handing over the cash before the collapse? Hmmm…

    Posted by Pterrafractyl | January 6, 2012, 1:19 pm
  7. “Oopsie”…forgot the above link (See mistakes happen!)

    Posted by Pterrafractyl | January 6, 2012, 1:20 pm
  8. Yeah, Freeh is a damn crook. Always was.

    Posted by Steven L. | January 6, 2012, 11:55 pm
  9. Well, we can add “misstatements of law” to the list of legal services you can apparently obtain from former FBI directors:

    MF Global Commodity Customers Must Be Paid First, CFTC Says

    By Linda Sandler – Jan 18, 2012 5:21 PM CT

    MF Global Inc. (MFGLQ) commodity customers must be paid before all other claimants, including the bankrupt parent company, according to the Commodity Futures Trading Commission.

    Court papers by the trustee for MF Global Holdings Ltd., Louis Freeh, contain “errors and misstatements of law” in arguing that commodity laws, which require that customers be “made whole” first, don’t apply to brokerage liquidations, the regulator said in a court filing today. Freeh, representing the parent company creditors, has said money due to them shouldn’t be “diverted” to customers.

    If Freeh was right, “the senseless result would be to render inapplicable the key regulations of the Commodity Futures Trading Commission in the largest commodity broker bankruptcy in U.S. history,” the CFTC said. The result would “strip” customers of a remedy, after they entrusted their assets to the brokerage relying on rules for segregating customer money, it said.

    Posted by Pterrafractyl | January 19, 2012, 12:08 pm
  10. I guess we can add “gambling empire dispute resolution” to the list of services offered by Freeh. It looks like Steve Wynn had a falling out with his main business partner Kazuo Okada, a Japanese pachinko mogul(surely there are no Yakuza ties here). The dispute is over Okada’s payments to Philippine officials to obtain a casino license, making Okada a competitor to Wynn’s highly profitable Macao operation. It’s being described as a tit-for-tat move following Okada’s charges that Wynn isn’t turning over documents related to a $135 million donation to Macao University. It’s good to see the former FBI director ensuring that overseas money-laundering havens are being run according to the highest ethical standards:

    Wynn Resorts says Okada improperly paid regulators, buys out his shares

    By Steve Green

    19 February 2012

    Wynn Resorts Ltd. of Las Vegas said Sunday it moved to remove its largest shareholder from the company, saying it bought out the shares of billionaire Kazuo Okada for $1.9 billion after determining he had made improper payments to foreign gaming regulators.

    The casino-resort operator, in a rare Sunday announcement, said its board on Saturday had received an investigatory report on Okada. Based on that report it had “redeemed” the 24 million shares of Wynn stock held by Okada’s company Aruze USA Inc.

    Sunday’s moves by Wynn represent a dramatic escalation in the legal battle between Okada and Wynn, which erupted in January when Okada filed suit demanding Wynn open its books and records to him concerning certain transactions, including a pledge by Wynn’s Macau subsidiary to donate $135 million to the University of Macau.

    That lawsuit led to the U.S. Securities and Exchange Commission opening an “informal inquiry” and asking Wynn Resorts to preserve information about the donation and other matters in Macau.

    A businessman well known in Japan, Hong Kong and elsewhere in Asia, Okada is a billionaire pachinko gambling machine maker who’s also developing a casino resort in the Philippines — a project Wynn claims is a conflict of interest as it would compete with Wynn’s business including its Macau casinos.

    Sunday’s statement by Wynn said its Compliance Committee had concluded a year-long investigation after receiving “an independent report detailing numerous apparent violations of the U.S. Foreign Corrupt Practices Act (FCPA) by Aruze USA Inc., its parent company Universal Entertainment Corp. and its principal shareholder,” Okada.

    The Foreign Corrupt Practices Act is a law aimed at deterring U.S. companies from making bribes in foreign lands in order to win business in those countries.

    Wynn said its Compliance Committee, chaired by Wynn director and former Nevada Gov. Robert Miller, hired several investigators, including Freeh, Sporkin and Sullivan LLP, led by former FBI director Louis Freeh.

    “Freeh’s investigators uncovered and documented more than three dozen instances over a three-year period in which Mr. Okada and his associates engaged in improper activities for their own benefit in apparent violation of U.S. anti-corruption laws and gross disregard for the company’s Code of Conduct. These troubling discoveries include cash payments and gifts totaling approximately $110,000 to foreign gaming regulators,” Wynn’s statement on Sunday said.

    “Mr. Okada and his associates and companies appear to have engaged in a longstanding practice of making payments and gifts to his two chief gaming regulators at the Philippines Amusement and Gaming Corporation (PAGCOR), who directly oversee and regulated Mr. Okada’s Provisional Licensing Agreement to operate in that country,” the company said, citing the Freeh Report.

    The report also alleged that Okada and his associates have “consciously taken active measures to conceal both the nature and amount of these payments.”

    Based on the Freeh Report, the Wynn Board found that Aruze, its parent company Universal Entertainment and Okada are “unsuitable” under the provisions of the company’s Articles of Incorporation.

    If the allegations are true, they would also appear to be violations of gaming regulations where Wynn operates in Nevada and Macau.

    Wynn’s move to buy Okada’s shares of the company would appear to make CEO Steve Wynn and his ex-wife, Elaine Wynn, the largest company shareholders.

    A March 2011 regulatory filing said each of the Wynns held about an 8 percent stake in the company vs. Okada’s nearly 20 percent stake.

    On an interesting side-note, Steve Wynn isn’t the only US gambling mogul facing an investigation over their Macao casino. The Sands, owned by Newt Gingrich’s sugar-daddy Sheldon Adelson, is also under investigation for working with a leader of the Triads to run their ‘VIP room’ and spying on Macao officials for ‘leverage’:

    The criminal probe of Sheldon Adelson’s casino empire

    By Peter Henderson and James Pomfret

    SAN FRANCISCO/MACAU, China | Wed Feb 8, 2012 6:15pm EST

    (Reuters) – It’s never good for the candidate when a big donor runs afoul of the law – as President Barack Obama learned this week: his campaign returned large donations from Chicago’s Cardona brothers after it was reported that a third brother is a fugitive from U.S. drug and fraud charges.

    Some Republican candidates for president could find themselves similarly embarrassed if criminal investigations against casino mogul Sheldon Adelson’s Las Vegas Sands for violating the Foreign Corrupt Practices Act come to fruition before November.

    Probes by the Department of Justice and the Securities and Exchange Commission focus on the casino company’s operations in Macau, the world’s biggest gambling hub, court documents show. A former executive in Adelson’s empire, whose allegations are believed to be central to the probe, cites potential illegal dealings with a public official, as well as a tie to an organized crime figure.(That link was first reported by Reuters in a 2010 special report: High-rollers, triads and a Las Vegas giant – link.reuters.com/dyg56s)

    Adelson and his wife single-handedly propped up Newt Gingrich’s campaign with $10 million Super PAC donations in January, and Adelson recently signaled he would write big checks to Mitt Romney, too, if he wins the nomination.

    The Sands company last year acknowledged in the civil lawsuit that it had done business with a man identified in Hong Kong court as a triad leader, Cheung Chi-tai. Sands said it investigated the alleged crime boss after the Reuters 2010 special report highlighted the tie, and that it then severed the relationship. Jacobs in court papers says Adelson himself was aware of the relationship before Sands’ investigation.

    Cheung’s current whereabouts are unknown.

    Jacobs has also claimed in that suit that Adelson told him to hire a Macau public official, Leonel Alves, who was listed as Sands China’s counsel for more than a year. Paying a public official in any capacity raises questions of bribery under the Foreign Corrupt Practices Act. Sands in court papers denied illegal activity. Michael Leven, now Las Vegas Sands President and Chief Operating Officer, acknowledged to the Macau Daily Times that Alves advised the government. “When we deal with an individual that is a Government official – Alves is also a member of the Executive Council, an advising body to the local government – we have to follow the rules of the U.S.. So we are working our way through that,” Leven said in 2010.

    Jacobs further alleged that Adelson personally demanded secret investigations of Macau officials, “so that any negative information obtained could be used to exert ‘leverage’ in order to thwart government regulations/initiatives viewed as adverse to LVSC’s (Las Vegas Sands Corporation’s) interests.”

    These investigations included current and past leaders of the Macau government – Edmund Ho, his successor Fernando Chui Sai-on, who is still the chief, and others – according to an August 2010 letter from Jacobs’ lawyer demanding that Sands save information on investigations into those people. The company described the investigation as a rogue move by Steve Jacobs, and Adelson has accused Jacobs of lying to extort payment from his former employer.

    Posted by Pterrafractyl | February 19, 2012, 7:24 pm
  11. Yikes! Mr. Freeh is going to have to get pretty creative to spin this one:

    MF’s Corzine Ordered Funds Moved to JP Morgan, Memo Says
    By Phil Mattingly and Silla Brush – Mar 23, 2012 6:07 PM

    Jon S. Corzine, MF Global Holding Ltd.’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in a brokerage account with JPMorgan Chase & Co. (JPM), according to a memo written by congressional investigators.

    Edith O’Brien, a treasurer for the firm, said in an e-mail quoted in the memo that the transfer was “Per JC’s direct instructions,” according to a copy of the memo obtained by Bloomberg News. The e-mail, dated Oct. 28, was sent three days before the company collapsed, the memo says. The memo does not indicate whether that phrase was the full text of the e-mail or an excerpt.

    O’Brien’s internal e-mail was sent as the New York-based broker found intraday credit lines limited by JPMorgan, the firm’s clearing bank as well as one of its custodian banks for segregated customer funds, according to the memo, which was prepared for a March 28 House Financial Services subcommittee hearing on the firm’s collapse. O’Brien is scheduled to testify at the hearing after being subpoenaed this week.

    “Over the course of that week, MF Global’s financial position deteriorated, but the firm represented to its regulators and self-regulatory organizations that its customers’ segregated funds were safe,” said the memo, written by Financial Services Committee staff and sent to lawmakers.

    Steven Goldberg, a spokesman for Corzine, said in a statement that Corzine “never gave any instruction to misuse customer funds and never intended anyone at MF Global to misuse customer funds.”

    JPMorgan Overdraft

    Vinay Mahajan, global treasurer of MF Global Holdings, wrote an e-mail on Oct. 28 that said JPMorgan was “holding up vital business in the U.S. as a result” of the overdrawn account, which had to be “fully funded ASAP,” according to the memo.

    Barry Zubrow, JPMorgan’s chief risk officer, called Corzine to seek assurances that the funds belonged to MF Global and not customers. JPMorgan drafted a letter to be signed by O’Brien to ensure that MF Global was complying with rules requiring customers’ collateral to be segregated. The letter was not returned to JPMorgan, the memo said.

    The money transferred came from a segregated customer account, according to congressional investigators. Segregated accounts can include customer money and excess company funds.
    Corzine Testimony

    Corzine, 65, in testimony in front of the House panel in December, said he did not order any improper transfer of customer funds. Corzine also testified that he never intended a misuse of customer funds at MF Global, and that he doesn’t know where client funds went.

    “I never gave any instruction to misuse customer funds, I never intended anyone at MF Global to misuse customer funds and I don’t believe that anything I said could reasonably have been interpreted as an instruction to misuse customer funds,” Corzine told lawmakers in December.

    I’m sure Freeh will come up with something…creative legal interpretations appear to be his specialty:

    MF Global Holdings Ltd. (MFGLQ)’s hiring of consultant Freeh Group International Solutions LLC doesn’t comply with the bankruptcy code, said the U.S. Trustee, a Justice Department arm that oversees bankruptcies.
    By Tiffany Kary – Mar 19, 2012 2:00 PM CT

    Former Federal Bureau of Investigation director Louis Freeh, MF Global Holdings’ Chapter 11 trustee, sought permission to hire the consulting firm along with his law firm, Freeh Sporkin & Sullivan LLP. The law only allows a trustee to hire a law firm or accounting firm to protect the trustee’s disinterestedness, U.S. Trustee Tracy Hope Davis said in papers filed today in U.S. Bankruptcy Court in Manhattan.

    “Such inconsistency may be curable should FGIS be able to demonstrate that it is an accounting firm authorized under applicable law to practice public accounting,” Davis said.

    U.S. Bankruptcy Judge Martin Glenn had approved six lawyers and consultants to work on the bankruptcy while asking for more information about whether Freeh Group could be hired.

    MF Global Holdings, once run by former New Jersey Governor Jon Corzine, filed the eighth-largest U.S. bankruptcy on Oct. 31 after getting margin calls and bank demands for money at its operating unit, MF Global Inc. The brokerage and the parent are in different bankruptcy proceedings handled by two trustees.

    Posted by Pterrafractyl | March 23, 2012, 6:32 pm
  12. To summarize, the FBI found that it had some problems with the forensic analysis of the biggest criminal cases of the 90’s (WTC bombing, OKC, etc). There was a task force to investigate the problems. The task force has been reviewed. The task force had, um, some problems:

    Washington Post
    DOJ review of flawed FBI forensics processes lacked transparency
    By Spencer S. Hsu, Jennifer Jenkins and Ted Mellnik, Published: April 17

    The bombshell came at the most inopportune time.

    An FBI special agent was testifying in the government’s high-profile terrorism trial against Omar Abdel Rahman, the “blind sheik” suspected of plotting the first attack on the World Trade Center.

    Frederic Whitehurst, a chemist and lawyer who worked in the FBI’s crime lab, testified that he was told by his superiors to ignore findings that did not support the prosecution’s theory of the bombing.

    “There was a great deal of pressure put upon me to bias my interpretation,” Whitehurst said in U.S. District Court in New York in 1995.

    Even before the Internet, Whitehurst’s extraordinary claim went viral. It turned out he had written or passed along scores of memos over the years warning of a lack of impartiality and scientific standards at the famed lab that did the forensic work after the World Trade Center attack and in other cases.

    With the FBI under fire for its handling of the 1993 trade center attack, the Oklahoma City bombing and the O.J. Simpson murder case, officials had to act.

    After the Justice Department’s inspector general began a review of Whitehurst’s claims, Attorney General Janet Reno and FBI Director Louis J. Freeh decided to launch a task force to dig through thousands of cases involving discredited agents, to ensure that “no defendant’s right to a fair trial was jeopardized,” as one FBI official promised at a congressional hearing.

    The task force took nine years to complete its work and never publicly released its findings. Not the results of its case reviews of suspect lab work. Not the names of the defendants who were convicted as a result. And not the nature or scope of the forensic problems it found.

    Those decisions more than a decade ago remain relevant today for hundreds of people still in the U.S. court system, because officials never notified many defendants of the forensic flaws in their cases and never expanded their review to catch similar mistakes.

    A review of more than 10,000 pages of task force documents and dozens of interviews demonstrate that the panel operated in secret and with close oversight by FBI and Justice Department brass – including Reno and Freeh’s top deputy – who took steps to control the information uncovered by the group.

    “It was not open,” said a person who worked closely with the task force and who spoke on the condition of anonymity because the bureau and Justice Department maintain a strong influence in forensic science. “Maybe [a coverup] wasn’t the intent, but it did seem to look that way. .?.?. It was too controlled by the FBI.”

    Scathing report

    If the Justice Department was secretive, the agency’s independent inspector general was not. Michael R. Bromwich’s probe culminated in a devastating 517-page report in April 1997on misconduct at the FBI lab.

    His findings stopped short of accusing agents of perjury or of fabricating results, but he concluded that FBI managers failed – in some cases for years – to respond to warnings about the scientific integrity and competence of agents.

    The chief of the lab’s explosives unit, for example, “repeatedly reached conclusions that incriminated the defendants without a scientific basis” in the 1995 Oklahoma City bombing, Bromwich wrote. The head of toxicology lacked judgment and credibility and overstated results in the 1994 Simpson investigation. After the 1993 World Trade Center attack, the key FBI witness “worked backward,” tailoring his testimony to reach the result he wanted. Other agents “spruced up” notes for trial, altered reports without the author’s permission or failed to document or confirm their findings.

    The investigation led to wide-ranging changes, including higher laboratory standards and requirements for examiners.

    Meanwhile, the Justice Department set out to evaluate discredited agents’ work in thousands of cases that had gone to trial.

    Jim Maddock, the FBI’s assistant general counsel, told reporters that the goal of the new task force was to identify any potentially exculpatory information that had arisen in any criminal case involving agents criticized in the report.

    “We are undertaking that review,” Maddock said at an April 15, 1997, news conference. “And when it is done, we will give a full accounting of our findings.”

    The task force gradually wound down when Thomson and DiGregory departed. A new administration arrived months before the Sept. 11, 2001, terrorist attacks, which transformed priorities. In 2002, Michael Chertoff, then assistant attorney general for the criminal division, narrowed the review to speed its completion, dropping unspecified “small cases.”

    Through a spokesman, Chertoff declined to comment.

    In addition, the criminal division stopped asking prosecutors to notify it if they turned over review results to defense attorneys.

    Posted by Pterrafractyl | April 18, 2012, 6:52 pm
  13. So it turns out the FBI’s team-leader on the US embassy boming in Kenya, the bombing of the USS Cole, the 1993 WTC bombing and the 1995 OKC bombings is also a pedophile. He was allegedly caught after logging into his “pedodat69@yahoo.com” email at home. So the guy that was leading some of the biggest terror investigation in the 90’s – the age of the internet’s infancy – was also an online kiddie porn trader. I can’t see any potential for blackmail related to those investigations at all:

    FBI Agent Who Investigated Unabomber Arrested On Child Pornography Charges

    Ryan J. Reilly May 14, 2012, 5:52 PM

    A former FBI explosives expert who investigated high-profile bombings for the bureau over several decades has been arrested and charged with distributing child pornography over unsecured wireless networks using the screen name “pedodave69.”

    Donald J. Sachtleben, 54, joined the FBI in 1983 and retired in 2008. Until the Indiana resident’s arrest he was working as an FBI contractor and a visiting assistant professor of forensic sciences at Oklahoma State University.

    During his FBI career, Sachtleben served as team leader at the bombings of the U.S. Embassy in Kenya and the USS Cole in Yemen, and investigated the 1993 World Trade Center bombing and the 1995 Oklahoma City federal building bombing. He also coordinated the search of Unabomber Ted Kaczynski’s cabin in Lincoln, Mont., even writing Kaczynski’s arrest affidavit, calling removing a live bomb from Kaczynski’s shack “the toughest experience I had.”

    FBI agents later arrested a man who had allegedly traded child pornography with Sachtleben via email. Sachtleben was caught because he allegedly accessed the email address pedodave69@yahoo.com from his home. Investigators found 30 child pornography pictures and movies on a Sony laptop he kept in his red Chevy Suburban, which also contained various work files, according to the FBI.

    Posted by Pterrafractyl | May 14, 2012, 2:47 pm
  14. Well, there’s always one last chance to soak the proles…and sometimes five or six chances:

    MF Global customer deemed “frivolous” in fee fight
    By Nick Brown

    NEW YORK | Fri May 18, 2012 2:23pm EDT

    (Reuters) – A former MF Global Holdings Ltd customer was rebuked on Friday by a judge for filing “frivolous” court papers attacking the mounting fees of Louis Freeh, the trustee unwinding the company’s bankrupt estate.

    U.S. Bankruptcy Court Judge Martin Glenn rejected arguments from customer leader James Koutoulas that Freeh should not be allowed to extend a Friday deadline to file financial data about the company. Koutoulas had argued the postponement would allow Freeh, a former FBI director, to rack up unreasonable fees.

    Glenn stopped short of granting a request by Freeh’s attorney, Brett Miller, to sanction Koutoulas, but warned he may impose such punishments for future frivolous acts.

    “Be fair warned,” Glenn told Koutoulas, a fund manager and lawyer who has assumed the de facto role of representing MF Global’s former customers.

    Koutoulas’ fight began when Freeh estimated this week that professionals in MF Global’s bankruptcy have accrued nearly $25 million in fees. Freeh’s report did not say how much of that figure was accrued by Freeh and his lawyers.

    Freeh, who has not yet submitted formal compensation requests, would be paid from money he ultimately recovers on behalf of the MF estate through litigation and other means.

    Freeh separately asked the court to extend by one month a Friday deadline to file financial data about the company’s debts, assets, transaction history and personnel.

    Koutoulas objected that Freeh, who has been granted five similar extensions in the past, acted in bad faith by drawing out his work while continuing to rake in fees.

    In bankruptcy, legal fees are paid before other creditor claims, meaning each dollar Freeh accrues is a dollar taken away from creditors, Koutoulas said.

    Glenn, though, said Koutoulas did not back up his “bad faith” claims with evidence that Freeh actually had an impure motive for seeking the extension.

    Posted by Pterrafractyl | May 18, 2012, 11:10 am
  15. Louis Freeh has a new job:

    The Atlantic
    The Third Coming of Louis Freeh Will Take on the BP Oil Spill Shenanigans
    Connor Simpson Jul 2, 2013

    Former FBI director Louis Freeh has enjoyed a few months of low-key lawyering away from the spotlight, and, probably, some vacation time, after he finally concluded his investigation at Penn State. But Freeh is ready for his close-up once again. The Associated Press reports he will head the investigation into whether or not one of the lawyers working under the claims administrator in charge of the BP oil spill settlement improperly received some of the settlement money. BP called for an independent investigation over allegations a lawyer working under administrator Patrick Juneau was paid by the law firm he tipped off before joining the case. The lawyer, Lionel H. Sutton III, allegedly received a portion of the $7.8 billion settlement money from a firm to which he referred claims before joining on behalf of the families and the businesses and communities who suffered damages. Sutton resigned in the middle of June.

    Posted by Pterrafractyl | July 19, 2013, 9:24 am

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