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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.

Discussion

16 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:
    http://www.reuters.com/article/2011/11/21/us-crime-coach-freeh-idUSTRE7AK1KH20111121

    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):

    http://blogs.ajc.com/news-to-me/2011/11/10/can-penn-state-scandal-get-even-worse/

    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.

    http://www.psu.edu/ur/2000/sanduskydinner.html

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

    http://en.wikipedia.org/wiki/Louis_Freeh#Post-FBI

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

    http://en.wikipedia.org/wiki/MBNA#Controversies

    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:

    http://en.wikipedia.org/wiki/Ray_Gricar

    Quote:

    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:

    http://www.examiner.com/penn-state-nittany-lions-football-in-philadelphia/penn-state-makes-first-good-pr-move-by-going-strong-on-hired-investigation

    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. ”
    . . . . .

    http://www.google.com/hostednews/ap/article/ALeqM5iDr8X9HSMdr-ApFeMUCQ99VqXRkQD9BH31C00

    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.

    . . . . .

    http://www.freehgroup.com/leaders?leader=5#leader

    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:

    http://community.aetv.com/service/displayDiscussionThreads.kickAction?as=119137&w=267379&d=578800

    . . . . .

    http://www.delawareonline.com/article/20111122/NEWS01/111220338/Penn-State-investigator-has-ties-Second-Mile-charity-s-board?odyssey=tab|topnews|text|Home

    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.

    http://web.archive.org/web/20060818042638/http://www.bureauandthemole.com/from_book.php

    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:

    Bloomberg
    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:

    Bloomberg
    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:

    TPM
    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:

    Reuters
    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
  16. Here’s an inter­est­ing fun fact that’s worth not­ing on the day of for­mer FBI direc­tor Robert Mueller’s tes­ti­mo­ny before Con­gress regard­ing the Mueller inves­ti­ga­tion into the #TrumpRus­sia inves­ti­ga­tion:

    There’s anoth­er for­mer FBI direc­tor who has an inter­est­ing tan­gen­tial tie to all this: Louis Freeh.

    First, recall how one of the most intrigu­ing aspects of the #TrumpRus­sia case is how Russ­ian lawyer Natalia Vesel­nit­skaya was work­ing for defense of Pre­ve­zon, one of the com­pa­nies charged in the Mag­nit­sky affair and mon­ey-laun­der­ing involv­ing Man­hat­tan real estate. Also work­ing on Pre­ven­zon’s defense was FusionG­PS. And in 2015, Jared Kush­n­er made pur­chase of Man­hat­tan real estate from Lev Leviev, the own­er of one, AFI, which is of the com­pa­nies also charged with help­ing Pre­zon with mon­ey-laun­der­ing using Man­hat­tan real estate. Kush­n­er’s pur­chase was for $295 mil­lion. A month before the 2016 elec­tion, Deutsche Bank loaned Kush­n­er $285 mil­lion. In 2016 and 2017, Deutsche Bank employ­ees flagged a num­ber of sus­pi­cious trans­ac­tions from both Kush­n­er’s and Trump’s accounts that looked like pos­si­ble mon­ey laun­der­ing. So Pre­ve­zon and AFI have both been sort of lurk­ing in the back­ground of the whole #TrumpRus­sia affair, espe­cial­ly giv­en the bizarre twist that FusionG­PS worked for Pre­ve­zon’s defense. The fact that Pre­ve­zon end­ed up set­tling with the US gov­ern­ment for a mere $6 mil­lion in 2017 with­out admit­ting any wrong­do­ing, which was wide­ly seen as a mere slap on the wrist, only adds to the intrigue sur­round­ing the case. Amus­ing­ly, Pre­ve­zon ini­tial­ly balked at pay­ing the $6 mil­lion fine, argu­ing that Leviev’s AFI had frozen a $3 mil­lion pay­ment to Pre­ve­zon as part of the US probe.

    Now, here’s an arti­cle from 2017 that points out a rather notable per­son hired by Pre­ve­zon in 2017 to help it set­tle that case with the US gov­ern­ment: for­mer FBI direc­tor Louis Freeh:

    Busi­ness Insid­er

    For­mer FBI direc­tor rep­re­sent­ed Russ­ian firm at cen­ter of major mon­ey-laun­der­ing probe

    Natasha Bertrand
    Nov. 16, 2017, 11:23 AM

    * The Russ­ian-owned real-estate firm Pre­ve­zon ear­li­er this year hired for­mer FBI Direc­tor Louis Freeh to help set­tle a major mon­ey-laun­der­ing case with the US gov­ern­ment.
    * That detail was in a mem­o­ran­dum released on Thurs­day by Joon Kim, the act­ing US attor­ney for the South­ern Dis­trict of New York, seek­ing to enforce the set­tle­ment agree­ment Pre­ve­zon struck with the gov­ern­ment in May for rough­ly $5.9 mil­lion.
    * Pre­ve­zon is also rep­re­sent­ed by Natalia Vesel­nit­skaya, the Russ­ian lawyer who met with top Trump cam­paign offi­cials in June 2016 at Trump Tow­er.

    The Russ­ian-owned real-estate firm Pre­ve­zon ear­li­er this year hired for­mer FBI Direc­tor Louis Freeh to help the com­pa­ny nego­ti­ate a set­tle­ment agree­ment with the US gov­ern­ment over an alleged mon­ey-laun­der­ing oper­a­tion that involved an elab­o­rate Russ­ian tax-fraud scheme that impli­cat­ed high-lev­el Krem­lin offi­cials.

    That detail was in a mem­o­ran­dum released on Thurs­day by Joon Kim, the act­ing US attor­ney for the South­ern Dis­trict of New York, seek­ing to enforce the set­tle­ment agree­ment Pre­ve­zon struck with the gov­ern­ment in May for rough­ly $5.9 mil­lion.

    Pre­ve­zon is also rep­re­sent­ed by Natalia Vesel­nit­skaya, the Russ­ian lawyer who met with top Trump cam­paign offi­cials in June 2016 at Trump Tow­er to lob­by for repeal­ing the 2012 Mag­nit­sky Act.

    The Pre­ve­zon case gar­nered high-pro­file atten­tion because of its ties to a $230 mil­lion tax-fraud scheme uncov­ered in 2008 by the Russ­ian tax lawyer Sergei Mag­nit­sky, whose sus­pi­cious death aroused inter­na­tion­al media atten­tion and spurred the pas­sage of the US law, which was designed to pun­ish those sus­pect­ed of involve­ment.

    Demo­c­ra­t­ic mem­bers of the House Judi­cia­ry Com­mit­tee sent a let­ter to Attor­ney Gen­er­al Jeff Ses­sions in July ask­ing whether Vesel­nit­skaya was “involved at any point in the set­tle­ment nego­ti­a­tions.” But Pre­ve­zon hired Freeh specif­i­cal­ly to help with the fir­m’s set­tle­ment dis­cus­sions ear­ly this year, the mem­o­ran­dum says.

    Freeh, who was the direc­tor of the FBI from 1993 to 2001, has been known to take on con­tro­ver­sial clients since enter­ing the pri­vate sec­tor in the ear­ly 2000s. In 2015, for instance, he rep­re­sent­ed an Israeli bil­lion­aire accused of brib­ing the gov­ern­ment of Guinea for a stake in an iron mine.

    Pros­e­cu­tors are now try­ing to get Pre­ve­zon to pay the $5.9 mil­lion it was sup­posed to turn over by Octo­ber 31.

    Pre­ve­zon has argued that the funds it would use to pay the set­tle­ment are tied up in the Nether­lands with a com­pa­ny called AFI Europe, which Pre­ve­zon says froze a pay­ment of more than $3 mil­lion as part of the US lit­i­ga­tion against the Russ­ian-owned firm. But the gov­ern­ment has balked at Pre­ve­zon’s excuse.

    “If Pre­ve­zon’s pay­ment is not due until Pre­ve­zon obtains the debt from the Nether­lands, this case could stay open — and Pre­ve­zon’s US assets could stay frozen — for years,” Kim wrote.

    He added that Pre­ve­zon had even pre­pared for the pos­si­bil­i­ty that it would nev­er be paid by AFI Europe.

    “Dur­ing set­tle­ment nego­ti­a­tions in 2015 and again in 2017, Pre­ve­zon repeat­ed­ly request­ed var­i­ous pro­tec­tions for Pre­ve­zon in the event that the Nether­lands announced or man­i­fest­ed its intent to retain the AFI Europe Debt fol­low­ing its release of the US-request­ed restraint,” the mem­o­ran­dum says.

    ...

    ———-

    “For­mer FBI direc­tor rep­re­sent­ed Russ­ian firm at cen­ter of major mon­ey-laun­der­ing probe” by Natasha Bertrand, Busi­ness Insid­er, 11/16/2017

    Freeh, who was the direc­tor of the FBI from 1993 to 2001, has been known to take on con­tro­ver­sial clients since enter­ing the pri­vate sec­tor in the ear­ly 2000s. In 2015, for instance, he rep­re­sent­ed an Israeli bil­lion­aire accused of brib­ing the gov­ern­ment of Guinea for a stake in an iron mine.”

    Lol, yep, Freeh cer­tain­ly has a flair for pick­ing the kinds of clients that seem odd for a for­mer direc­tor of the FBI. Pre­ve­zon was only one exam­ple. But wow, what an exam­ple it was: in 2017, right in the mid­dle of a grow­ing nation­al scan­dal over an alleged Russ­ian inter­fer­ence cam­paign, Freeh takes the job of help­ing Pre­ve­zon set­tle.

    Although it’s worth not­ing that it appears that Freeh was hired by Pre­ve­zon before the rev­e­la­tion that Natalia Vesel­nit­skaya was in charge of the secret Russ­ian del­e­ga­tion at the noto­ri­ous June 9, 2016, Trump Tow­er meet­ing. That became news in July of 2017. And we are told that Freeh was specif­i­cal­ly hired by Pre­ve­zon to help nego­ti­ate the set­tle­ment, which was reached in May of 2017:

    ...
    That detail was in a mem­o­ran­dum released on Thurs­day by Joon Kim, the act­ing US attor­ney for the South­ern Dis­trict of New York, seek­ing to enforce the set­tle­ment agree­ment Pre­ve­zon struck with the gov­ern­ment in May for rough­ly $5.9 mil­lion.

    ...

    Demo­c­ra­t­ic mem­bers of the House Judi­cia­ry Com­mit­tee sent a let­ter to Attor­ney Gen­er­al Jeff Ses­sions in July ask­ing whether Vesel­nit­skaya was “involved at any point in the set­tle­ment nego­ti­a­tions.” But Pre­ve­zon hired Freeh specif­i­cal­ly to help with the fir­m’s set­tle­ment dis­cus­sions ear­ly this year, the mem­o­ran­dum says.
    ...

    So that would sug­gest Freeh was hired some time before May of 2017 and there­fore before Vesel­nit­skya and her role as Pre­ve­zon’s attor­ney became part of the #TrumpRus­sia focus. Still, Pre­ve­zon was the kind of client that would have been high­ly con­tro­ver­sial for an ex FBI direc­tor to take even if the whole #TrumpRus­sia fias­co nev­er hap­pened due to Pre­ve­zon’s role in the alle­ga­tions that led to the cre­ation of the Mag­nit­sky Act in the first place. But that’s what Louis Freeh is known for: tak­ing clients one would­n’t expect a for­mer FBI direc­tor to take. So at least he’s con­sis­tent.

    Posted by Pterrafractyl | July 24, 2019, 1:02 pm

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