The Bush-bin Laden Connection
An intriguing sideline to the War On Terrorism lies in the murky Texas ties that existed between the Bush and bin Laden clans before September 11th. According to the official story, the rest of the huge bin Laden family has disowned Osama. While this argument creates a moral firewall for anyone dealing with the other bin Ladens, the firewall is undermined by circumstantial evidence to the contrary. The U.S.-led effort to freeze Osama-linked assets reportedly is probing financial transactions of the wider bin Laden clan, which is closely tied to the Saudi royal family. In fact, as Seymour Hersh reports in a recent New Yorker article, it is far from clear that the royal family, which has thousands of princes, has forsaken Muslim extremists. Indeed, some members of the royal family itself are said to bankroll Osama bin Laden. The Saudi monarchy, Hersh reports, has also quietly resisted U.S. efforts to conduct background checks of Saudi suspects in the wake of September 11. While much remains to be learned about these shadowy connections, it is clear that any investigation of the bin Laden’s family’s U.S. investments will lead to some well-placed Texans.
Like George W. Bush, the fortune of Osama bin Laden is rooted in oil and his family’s government connections. Before his death in a 1968 plane crash, Osama’s father, Mohammed bin Laden, made a fortune off construction contracts awarded by the Saudi royal family. The $5 billion per year construction conglomerate, known as the Binladin Group (the company uses another spelling of the name) remains closely tied to the Saudi royal family.
After the death of Mohammed bin Laden, control of the company passed to Salem bin Laden, Osama’s half brother. The roots of the first known Bush-bin Laden convergence date back to the mid-1970s, when the two clans were linked by a Houston businessman named James R. Bath. Bath had befriended George W. Bush in the late 1960s, when they both served in the Texas Air National Guard. By 1976, when Gerald Ford appointed the elder George Bush as CIA director, Bath was acting as a business agent for Salem bin Laden’s interests in Texas. (Texas and Saudi Arabia were well-connected by this point through U.S. oil companies and related industries with operations in both locations.) In 1991 Time magazine and later other publications reported on allegations by Bath’s former business partner that the Bush CIA hired Bath in 1976 to create offshore companies to move CIA funds and aircraft between Texas and Saudi Arabia.
After W. lost a bid for Congress, he decided to launch an oil company in Midland in 1979. For $50,000, Bath bought a 5 percent stake in W.’s Arbusto (Spanish for “Bush”) partnerships. At the time, Bath also served as business agent for several prominent Saudis, including Salem bin Laden. In exchange for a percentage of the deals, Bath made U.S. investments for these clients in his own name, according to Time. Although Bath has said that he invested his own money in Arbusto, not Saudi money, the fact that he was Salem’s agent at the time has fueled speculation that Osama bin Laden’s eldest brother was an early investor in W.’s first oil venture. It was around the time of this investment, incidentally, that Osama bin Laden made his first trip to the Khyber Pass, where he would soon join the Mujaheddin and the CIA in the holy war that expelled the Soviets from Afghanistan. (Salem, for his part, owned a house in Marble Falls, and died in a 1988 plane crash near San Antonio.)
The bin Ladens cemented clearer-cut financial ties with the Bush clan in 1995, when they invested $2 million in the Carlyle Group. Carlyle specializes in the buyout of government defense contractors, and many of its principals were heavyweights in the Reagan and Bush administrations. Carlyle’s chair is former Reagan Administration Defense Secretary Frank Carlucci. Former Bush Secretary of State James A. Baker III is a Carlyle partner and the firm’s senior counsel. Ex-President Bush himself is a Carlyle board member and its senior Asian advisor. In recent years, Carlyle has dispatched Carlucci, Baker and Bush to Saudi Arabia to butter up the bin Ladens. Amid controversy over the relationship last month, Carlyle and the bin Ladens severed their ties. The bin Ladens’ departure coincided with Carlyle’s announcement that it expected to raise approximately $300 million by taking its privately held United Defense Industries public. Among other things, this defense contractor pro- duces missile launch systems that are currently aboard U.S. war ships in the Arabian Sea.
Current President Bush has his own connections to Carlyle and the bin Laden family. Carlyle appointed W. in 1990 to the board of its Caterair subsidiary, an airline catering company. W. stepped down from this board in 1994, the year he was elected governor. With W. as governor, Carlyle landed at least two business deals involving Texas government funds. In the same month that Bush was elected president, the Teacher Retirement System of Texas selected Carlyle to invest $100 million of its pension funds. In 1996, the quasi-public University of Texas Investment Management Company (UTIMCO) began awarding lucrative contracts to private firms to invest portions of UT’s $14 billion endowment. The Houston Chronicle reported that UTIMCO’s board (which is appointed by the governor’s handpicked UT System Regents) awarded many of these contracts to firms close to W.–including Carlyle. As of May 2001, Carlyle controlled more than $15 million of University of Texas public endowment funds. This includes $10.5 million that is commingled in the same Carlyle Partners II Fund where the bin Ladens parked their money.
It is a daunting task to unravel the ties between Texas and Saudi oil money, as well as the ties between the Saudi royal family, the bin Laden clan and Osama bin Laden. In this regard, the people of Saudi Arabia and the United States may share a common fate. We may never know the half of it.
Andrew Wheat is research director of Austin-based Texans for Public Justice, a non-partisan, non-profit organization that follows money in Texas politics (www.tpj.org).