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FTR#368 Harken Unto Me, Part II; The Ties that Bind, Part V

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This program continues analysis of economic and political relationships underlying the 9/11 attacks. Of paramount interest in this broadcast is the Harken Energy company, one of W’s unsuccessful and ethically questionable business ventures. The focal point of recent debate concerning Bush’s sale of stock, Harken embodies the economic relationship between the petroleum industry, Saudi Arabia and the terrorist milieu of Osama Bin Laden and 9/11. While the national interest is in direct conflict with the Saudi/oil/Bush economic relationship, note the similarity between the failure of the United States to support the Treasury department’s attempts at interdicting the economic relationships underlying the Third Reich, and contemporary attempts to undermine rules aimed at interrupting terrorist funding networks. Those networks have direct connections to people involved in the Harken story.

1. The broadcast begins by further developing the relationship between the Saudis, Bin Laden’s terrorist milieu and the petroleum industry. “It has been said too often that Osama bin Laden is a ‘creature’ of the CIA, for the simple reason that the United States had contributed, indirectly and temporarily, without a doubt, to his radical cause by financing and supporting the Mujahedeen rebels against the Soviets in Afghanistan in the 1980’s. But America’s support for Bin Laden, was in large part the involuntary consequence of its own ambitions in the region. Saudi Arabia’s’support, on the other hand, was a calculated policy, clear and unambiguous, concerning its brand of Islam in the world. In light of these revelations, Osama bin Laden appears, above all, to be a product of Wahhabism and an instrument of the Saudi kingdom. And both contained converging elements that linked them permanently.” (Forbidden Truth; Jean-Charles Brisard & Guillaume Dasquie; Copyright 2002 [SC]; Thunder’s Mouth/Nation Books; ISBN 1-56025-414-9; p. 92.)

2. The Saudi attitude toward the American response to the September 11 attacks demonstrates the regime’s trouble with regard to Osama bin Laden. The kingdom’s refusal to allow American forces to use its airbases in order to attack Afghanistan illustrates the mutual tolerance that exists between Saudi Arabia and bin Laden. Saudi Arabia has yet to cooperate with the United States in its current investigations for fear of provoking fundamentalists in the kingdom. And Osama bin Laden was careful to ‘spare’ the kingdom, even though he attacked its attitude in his early writings.” (Idem.)

3. We speak freely of ‘state-sponsored terrorism’ such as that of Libya and Iran, while Saudi Arabia is spared from the blacklists for the simple reason that it is essential in the international oil scene. Without this stroke of luck it would probably appear high on the lists.” (Ibid.; p. 93.)

4. Anticipating the focus of the remainder of this broadcast, the discussion illuminates, among other institutions, the BCCI-an institution deeply involved with the development of the Bush/Harken/Bin Laden milieu. “Osama bin Laden is only an emblematic figure in the major religious and financial issues and interests that underlie the future of even the Saudi regime. The networks that support him are well established-whether the BCCI, the Islamic banks, or the so-called humanitarian organizations-and it is quite unlikely that they will disappear with bin Laden.” (Idem.)

5. “The real issue is elsewhere now, and depends on our capacity to call into question Saudi Arabia’s political and financial support of the world’s fundamentalist movements. It is a heavy burden, but if the West does not step in, such support will continue and take root permanently.” (Idem.)

6. “We have long closed our eyes to this situation in order to protect the security of our Saudi ally, allowing the seeds of fundamentalism to grow and become uncontrollable. We refrained from putting any kind of pressure on a power that still today defends the indefensible, and allowed it to exist politically, materially, and financially.” (Idem.)

7. “Next, the program takes up Bush’s role in Harken’s questionable deals. “In early 1989, George W. Bush and his fellow board members at Harken Energy Corp. were presiding over a company that was headed south in a hurry. The Dallas-based oil firm had lost millions of dollars placing bad bets on commodity futures. Debt was piling up; red ink was beginning to flow.” (“Bush OK’s Deal Like Enron’s” by Warren Vieth; Los Angeles Times; 7/12/2002; p. A13.)

8. “Harken’s executives came up with a novel plan to ease the pain. They would sell a small chain of Hawaiian gas stations called Aloha Petroleum to a group of investors that included Harken’s chairman and one of its directors. The buyers would pay $1 million up front, but the accountants would record an immediate $7.9-million profit, enough to erase most of Harken’s losses for the year.” (Idem.)

9. “They made a point of seeking the approval of directors who were not participants in the investor group. Bush, a member of the board’s audit committee, signed off on the deal, according to Harken documents. So did the company’s outside auditor, Arthur Andersen & Co.” (Idem.) In this context, one should remember that, just as the Harken deal with Aloha resembled Enron’s operations, Arthur Andersen was Enron’s accountant.

10. “But the government challenged and ultimately overturned the accounting method used by Harken to post a gain on the sale. Aloha was sold a second time, and the new buyer extracted big concessions from the company. The initial profit recorded on the sale morphed into a big loss. In the midst of all the maneuvering, Bush sold most of his Harken stock in June 1990.” (Ibid.; pp. A1-A13.)

11. “Based on a review of publicly released Securities and Exchange Commission filings, meeting minutes, memos and correspondence from that period, there is no evidence that Bush, or any of the other directors, raised objections or expressed concern about the Aloha deal. Experts on corporate governance say that as an independent director and one of only three members of the audit committee, Bush was in a position to exercise an important oversight role but apparently failed to do so.” (Ibid.; p. A13.)

12. “An audit committee’s primary responsibility is to ensure that the company’s outside auditors conduct a thorough examination of the financial records without interference from officers and employees.” (Idem.)

13. “The Aloha sale was so similar to what Enron Corp. did to hide its losses that Harken could have served as a model for the now-disgraced company, one accounting expert said. ‘The people at Enron could have gone to school on this thing,’ said Alfred King, former managing director of the Institute of Management Accountants, vice chairman of Milwaukee-based Valuation Research Corp. and former advisor to the Financial Accounting Standards Board.” (Idem.)

14. “‘They sold to themselves and recorded a profit,’ King said. ‘That’s exactly what Enron did on a number of those off-balance-sheet transactions. On this one transaction at lest, it’s almost identical.'” (Idem.)

15. “Still, accounting experts, security law specialists and political analysts say there is enough similarity between events at Harken and Enron to keep Bush on the defensive about his own actions a decade ago and undermine his credibility as a corporate reformer.” (Idem.)

16. “Indeed, Bush would not have been allowed to serve on Harken’s audit committee if the reform proposals he outlined this week had been in effect then. The president says audit panel membership should be limited to outside directors. Besides sitting on Harken’s board, Bush had a consulting contract with the company. According to accounting experts, that qualifies him as a corporate insider.” (Idem.)

17. “‘Hiding losses in partnerships, playing games with accounting not reporting forthrightly transactions as a potential inside trader-it’s all eerily reminiscent of Enron,’ said Charles Lewis, executive director of the Center of Public Integrity, a Washington research group. ‘This is not a corporate executive who laid awake at night worrying about complying with federal laws, from all appearances,’ said Lewis, who has been critical of the Bush administration.” (Idem.)

18. “Another transaction at Harken would have violated Bush’s reform proposals as well: On Thursday, the White House confirmed that Harken made two loans to Bush while he served on the board of directors, a practice that Bush now wants publicly held companies to prohibit.” (Idem.)

19. “The loans, totaling $180,375, were made in 1986 and 1988 at a below-market interest rate to enable Bush to purchase Harken stock under an incentive plan for board members.” (Idem.)

20. “Suspicions about the Aloha Petroleum deal have been fueled by the fact that most of the principals refuse to talk.” (Idem.)

21. “Of the seven Harken directors who served on the board with Bush, five declined to discuss the deal or did not return calls seeking comment.” (Idem.)

22. “Executives at Aloha, now a privately held company, also declined to comment. So did past and present officials at Harken, Arthur Andersen and the SEC.” (Idem.)

23. One of the central elements of the discussion is Talat M. Othman, a close Bush family associate, director of Harken, member (with Bush) of the audit committee and a key player in the Al Taqwa milieu. “Former director Talat M. Othman, who chaired the three-member audit committee, said he did not recall the details of the Aloha sale or the company’s reasons for arranging it. ‘I’m not sure that our motivation was to create instant profits,’ said Othman, a Palestinian who represented Saudi investors who owned 13% or Harken’s stock. ‘It was a normal part of the business to be buying and selling.” (Idem.)

24. “Harken acquired Aloha in 1986 when it bought a multi-state gas retailer called E-Z Serve. When it announced its plan to sell 80% of Aloha in 1989, it said Hawaii was too far away from its other gasoline markets and required too much management attention.” (Idem.)

25. Another of the significant players in Harken was Alan G. Quasha. “But the new owners looked an awful lot like the old owners. The buyers were an investor group controlled by the family of Harken Chairman Alan G. Quasha and included another Harken director, Jeffrey Laikind.” (Idem.)

26. “When Harken sold Aloha to Quasha’s group, it had agreed to retain liability for any environmental problems associated with the chain.” (Idem.)

27. The Aloha/Harken deal appears to anticipate Bush’s deep concern with the environment. “In early 1990, it discovered that the commitment would cost it dearly. Aloha’s new owner had 20 gas outlets tested and found that 11 had leaky underground tanks requiring expensive repairs. There were 21 sites still awaiting tests.” (Idem.)

28. On April 4, Treasury Secretary O’Neill met with powerful Islamist Republicans whose spheres of interest overlap those of the institutions and individuals targeted by the Treasury Department in a series of raids on 3/20/2002. (“O’Neill Met Muslim Activists Tied to Charities” by Glenn R. Simpson [with Roger Thurow]; Wall Street Journal; 4/18/2002; p. A4.)

29. The aforementioned Talat Othman interceded on behalf of some of the Islamofascist elements targeted on 3/20. Othman himself was deeply involved with the Al Taqwa milieu and the Islamist elements targeted on 3/20. “Among the Muslim leaders attending [the meeting with O’Neill] was Talat Othman, a longtime associate and supporter of President Bush’s family, who gave a benediction at the Republican National Convention in Philadelphia in August 2000. . . But he also serves [with Jamal Barzinji] on the board of Amana Mutual funds Trust, an investment firm founded by M. Yacqub Mirza, the Northern Virginia businessman who set up most of the entities targeted by the Treasury and whose tax records were sought in the raid.” (Idem.)

30. As hypothesized, the Grover Norquist/GOP/Islamist links are part of the Republican Party’s ethnic outreach program. “The case also highlights conflicts between the Bush administration’s domestic political goals and its war on terror. GOP officials began courting the U.S. Muslim community intensely in the late 1990’s, seeking to add that ethnic bloc to the party’s political base.” (Idem.)

31. The meeting between O’Neill and the Islamists was described as highly unusual. “Bruce Zagaris, an asset-forfeiture lawyer, who represents clients in similar cases, said a meeting between Treasury officials and anyone who might be associated with an entity under investigation is very unusual. ‘It’s virtually impossible [to arrange such a meeting], especially with the Treasury secretary,’ Mr. Zagaris said. ‘It’s very difficult to even get phone calls returned.'” (Idem.)

32. The Amana network has numerous areas of overlap with organizations described as being implicated in terrorism and the milieu of Al Qaeda. “Two nonprofits affiliated with Mr. Mirza and named in the search warrant, the SAAR Foundation Inc. and the Heritage Education Trust Inc., held large blocks of shares in Amana’s mutual funds in 1997, according to SEC records. The SEC documents and other records detailing connections between Mr. Othman and the Islamic Institute [on the board of which Mr. Othman serves] and the raided groups were compiled by the National Security News Service, a Washington based nonprofit research group.” (Idem.)

33. Further details have emerged about the links between Al Taqwa and the GOP/Bush administration. “Mr. Othman also is on the board of Mr. Saffuri’s [and Norquist’s] Islamic Institute, the GOP-leaning group that received $20,000.00 from the Safa Trust, one of the raid’s targets. The president of the Safa Trust, Jamal Barzinji, is a former business associate of Switzerland based investor Youssef Nada, whose assets were frozen last fall after the Treasury designated him a person suspected of giving aid to terrorists.” (Idem.)

34. A Wall Street Journal article provided further information about some of the organizations targeted in the raids. “These include Al-Taqwa Management, a recently liquidated Swiss company the U.S. government government believes acted as a banker for Osama bin Laden’s al Qaeda terrorist network. . . Two people affiliated with the companies and charities are linked by records to entities already designated as terrorist by the U.S. for alleged involvement in terrorist financing. . . Jamal Barzinji, an officer of Mr. Mirza’s company Mar-Jac and other entities, also was involved with Mr. Nada’s companies in the 1970’s, according to bank documents from Liechtenstein. A message was left yesterday for Mr. Barzinji at his address in Herndon. Mr. Barzinji and Mr. Talib live across the street from each other. A third business associate of Mr. Nada, Ali Ghaleb Himmat (who also has been designated by the Treasury as aiding terrorism), is listed as an official of the Geneva branch of another charity operated by Mr. Mirza, the International Islamic Charitable Organization. Hisham Al-Talib, who served as an officer of SAAR, the International Institute of Islamic Thought and Safa Trust Inc., another Mirza charity, during the 1970’s was an officer of firms run by Youssef M. Nada, records show. Mr. Nada is a Switzerland-based businessman whose assets have been frozen by the government, and is alleged by U.S. officials to be a key figure in the Taqwa network. (“Funds Under Terror Probe Flowed From Offshore” by Glenn R. Simpson [with Michael M. Phillips]; Wall Street Journal; 3/22/2002; p. A4.)

35. Othman’s links to Bush are profound. “Mr. Othman has ties to the Bush family going back to the 1980’s, when he served with George W. Bush on the board of a Texas petroleum firm, Harken Oil & Gas Inc. Mr. Othman has visited the White House during the administrations of both President Bush and his father George H.W. Bush.” (“O’Neill Met Muslim Activists Tied to Charities” by Glenn R. Simpson [with Roger Thurow]; Wall Street Journal; 4/18/2002; p. A4.)

36. Further detailing the background of Othman, the broadcast highlights the connections between people associated with the Nugan Hand Bank and Othman. Among those was Harken operator Alan Quasha, whose father advised Nugan Hand. (Nugan Hand was an Australia-based U.S. intelligence operation deeply involved with drug trafficking and covert operations. “Harken Energy was formed in 1973 by two oilmen who would benefit from a successful covert effort to destabilize Australia’s Labor Party government (which had attempted to shut out foreign oil exploration.) A decade later, Harken was sold to a new investment group headed by New York attorney Alan G. Quasha, a partner in the firm of Quasha, Wessely & Schneider. . . William Quasha [Alan’s father] had also given legal advice to two top officials of the notorious Nugan Hand Bank in Australia, a CIA operation. After the sale of Harken Energy in 1983, Alan Quasha became a director and chairman of the board. Under Quasha, Harken suddenly absorbed Junior’s struggling Spectrum 7 in 1986. (“Bush Family Value$: The Bush Clan’s Family Business” by Stephen Pizzo; Mother Jones; September/October 1992.)

37. Othman also has links to Gaith Pharoan of the BCCI and, through him, to James R. Bath and the Bin Ladens. “Sheikh Abdullah Bakhsh, in turn, was a business associate of BCCI front man Gaith Pharoan; he bought a chunk of Harken’s stock and placed his representative, Talat Othman, on Harken Energy’s board of directors.” (Idem.)

38. With Othman and Quasha embodying the continuity between BCCI and Nugan Hand, it should not come as a great surprise that the demise of Nugan Hand and the genesis of BCCI are inextricably linked. “There had been a previous American attempt to use a financial facility for covert operations, but the Nugan-Hand bank operation was exposed by the Australian media and was on its way to bankruptcy by the late 1970’s. The Nugan-Hand bank unraveled along with [Edwin] Wilson and Task Force 157, but not before it had established close working relations in Saudi Arabia with both Aramco and the Bechtel Corporation.” (The Secret War Against the Jews: How Western Espionage Betrayed the Jewish People; John Loftus and Mark Aarons; Copyright 1994 [SC]; St. Martin’s Press; ISBN 0-312-15648-0; p. 394.)

39. “As the old bank in Australia collapsed, the new one in Abu Dhabi was coming into being with the help of the British secret service, which used the same front men in another British colony, the Cayman Islands. In this ‘tax haven,’ Nugan-Hand’s legal firm of Bruce Campbell & Company set up the International Credit & Investment company (ICIC) as a front for the BCCI.” (Idem.)

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