Espionage, Profit Meet in the Shadows

Forth of a six-part series diplomats and other kinds of people," here, according to well-informed (i f?' 1 By run Hoagland said Jaber, a diminutive Lehariese con- sources. wilainsioe Post Foreign ServIca sultant and sales representative who The CIA and other intelligence agera. BEIRUT—Farouk .Jaber counts likes to wear American-style short- cies have long used commercial covers among his friends a former American sleeve shirts to combat Beirut's oppres- and relationships with local bust- secretary of the treasury, a shadowy sive summer heat, "This man was a tresses, largely. as a matter of conven- but rich Libyan sales tycoon who was lenee. Small travel agencies, manage- spirited out of Libya on a U. S. Air ment consultant firms and import-ex- Force plane during the 1969 coup, and port businesses are among many shel- the former head of Central Intelli- t:7 41,40/14„0,, r ters that have been developed in Bei- gence Agency operations in Saudi Ara- rut. Now intelligence penetration into bia. good friend': that's all," he said, adding the Middle East business world is be- But Jaber, who acknowledges that emphasis on the last two words. coming a necessity. personal relations are a key to doing Knowingly and not, Arab business- Growing national end private for- business in the Arab world. stresses men are increasingly meeting intelli- tunes in the Middle East are financing that he has done business with none of gence-gatherers. The emerging eco- ventures with long-term political im- the above. He denies that he knew that nomic power of the Arab world and pact that these agencies must assess. the CIA man was anything other than the new importance of oil and other The specter of economic "strangula- the diplomat he posed as. raw materials is causing a basic change tion" by oil embargos and further . "As a businessman, you meet many of emphasis in Intelligence operations See SHADOWS, AS, Col. 1

SHADOWS, From Al price increases as described by U.S. Secretary of State Henry A. Kissinger, ; is a high-priority concern. - In the shadows that envelop both es- : pionage and Middle East deal-making, each of which involves the expenditure - of vast sums of money for purposes that often remain hidden, the point at which simple intelligence-gathering. ends and deep penetration. of policy making begins is deliberately left fuzzy. Where the cash ends up In these unl- : quo "joint ventures" is also carefully cloaked. But it is clear that some Arab officials and businessmen who have dealt with the CIA or have gathered ▪around themselves the reputation for :doing so have. been the recipients of a - number of- financial windfalls In the soaring purchases of arms, sensitive ;communication equipment and even • military personnel by the oil produc- ers. * Suspicions of CIA connections to the "frenetic wheeling and dealing of the ; newly rich Middle East add an explo- *sive element to rising public concern. about business practices and corrup- ^ tion. 'The agency is the favorite target of Arab leftists, who would like to dis- - credit and eventually bring down pro- East and has been identified by many a new company called Ipterser to do Western Arab governments. Exposure Arab newspapers as an agency opera- similar work for Kermit (Kim) Roose- of firth espionage-business connections tive. velt, a former CIA agent whO Mounted would have an even greater impact in The U.S. government departments the coup that brought the shah of Iran this region than did the disclosures of responsible for this work are being back to his throne and who has in re- the political role of ITT in Chile in squeezed by the enormous demand for cent years been deeply involved in the 1970. Despite this risk, the gathering of information and judgments and cannot sale of weapons to Middle East coun- - economic intelligence is a growth in- keep up," Copeland said in a telephone tries, dustry in this region. It is "the big new interview. Copeland reported in detail a con- field." says Wales Copeland, a London Copeland began a management con- versation he said he had with liebert based authoi of books on the CIA. sulting firm in Beirut in 1957. "We just B. Anderson on the setting up of Welt Copeland admits to having been a started early in the field." He said he ser and American businessmen in Bei- 'consultant for the CIA in the Middle left the firm after it was absorbed into rut who dealt with the company say te

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they had the impression Anderson was associated with it. Anderson was secretary of the treas- ury in the first Eisenhower administra- tion. Entrusted with delicate political missions in the Middle East by Eisen- hower and later by Lyndon B. John- son, he has returned to the region fre- quently as a representative of Ameri- can companies seeking business here. He has denied that he owned Interser. By chance, Farouk Jaber says, he and Anderson are friends. Moreover,

sonvoseasnovwmgmt'vnEatevaegognsamtangvatoms!gfatmomo9voovtorm.vg5DsomweeatraRe,-6,,Bviz(iMoWAVAMMIVC,,,,,.7 Jaber and his business partner, an in- Ington replied through its ambassador fluential Saudi Arabia-born banker in Jeddah that the United States was and sales representative named Ghas- not geared to provide such support. san Shater,_were clients of Interserc Four private American companies Which was run by John M. McCrane, could probably do the job, the Saudis who now works for AnderSon's New - were told. But the U.S. government York company. would offer a full guarantee for only In what Jaber said was another ex- one company, Raytheon. traordinary bit of coincidence, Shaker Raytheon had already provided and McCrane recently were both listed teams to install and handle Hawk su0 as prospective shareholders In the .yin- face-to-air missiles for the Saudis. The Hawk contract had been landed by nel Corp. of California._ Vinnell broke into the headlines Raytheon's energetic representative, early this year after the company Adnan Khashoggi, whose commissions landed a $77 million contract to send tin arms and civilian aviation sales to 1p00 former U.S. servicemen to train Saudi Arabia total more than $150 mil- Saudi Arabia's national guard in infan- lion over the past 10 years. try tactics, handling armored vehicles Khashoggi's wide-ranging contacts and firing missiles. One congressman, with Western arms companies and the who asked not to be identified, imme- trust he has gained from the Saudi diately labeled .the operation as "a CIA minister of defense, Prince Sultan, front." and controversy swirled briefly have made him a virtually unavoidable around Vinneli's "mercenaries." element in Saudi Arabia's major de- fense deals. The tangled chain of events that led But he floated in and out of Faisal's a private American company into the most sensitive security unit in Saudi favor for much of the late king's 14- Arabia involves some of the key fig- year reign. He does not enjoy Prince ures in the brokering of power in the Abdullah's confidence. Khashoggi did Middle East. not appear as the agent on the na- tional guard contract, which instead How deeply it involves Shaker — a was to be handled by Prince Abdullah Cambridge University graduate in his Faisal, the king's son. early 40s, with a wide range of con- Khashoggi's rivals say he used the tacts at the highest levels in Saudi king's son to mask his own participa- Arabia, Oman and Jordan—is in dis- tion. The Saudi finanoier denies this, pute. contending that Raytheon approached The story begins in February 1972, the prince on its own to diversify its when King Faisal prevailed upon his contacts in Saudi Arabia. brother. Prince Abdullah, to bring But word of a business arrangment American advisers in to reorganize, ex- between Khashoggi and Prince Abdul- pand and train the 35,000-man Bedouin lah Faisal reached the king, according army that guards key government in- to a well-informed source. Reacting in stallations and Sandia Arabia's oil- anger, the king and his brother re- fields, jected Raytheon. Faisal and his national security advi- This led the 'U.S. government to sor, Iamal Adham, asked the Ameri- break the program up Into five con- can goiternmetitto take direct control of the $330 million project. But Wash- See SHADOWS, A9, Col. Z

d[C...CMCIIWIL-clumrs iitt•nm,wspw,474K71 r.-wwskimazozrocro-9-77.,—, 73W3117ANAMWSTV117.1751r.r ,,VNIT arrolMwo-w-mstrOgAtv.ar, rqymmu,K,cavxmp, vormr.r.m...-rtp,rEttTe pre,r.- As Espionage, Profit SHADOWS, From AS Their success in the sultanate, which is earning about $600 million a year in tracts, and Vinnell, which had done oil revenue and spending more than 40 $200 million worth of military con- per cent of it on arms to put down a tracts in Vietnam, picked up the train- Communist-backed rebellion, has left ing segment. competitors green with envy. Businessmen close to the national These businessmen — and more im- guard contract negotiations say that portantly, Western intelligence sources Ghassan Shaker played a key role in without au commercial axe to grind - landing the contract for Vinnell. credit that success largely to Shaker's Shaker has denied any connection to dose relationship to the young sultan the company, but American business- and its political implications. men who sought other parts of the pro- ject say that Vinnell advised them to Shaker attended Victoria College in use only Shaker as an agent. Arab Alexandria with King Hussein of Jor- dan at the same time Khashoggi was businessmen confirm this. Shaker received a $4.5 million fee there. (Adham is a graduate of Victo- ria's Cairo branch.) Shaker has told from Vinnell for the contract, Rep, friends that Hussein introduced him to Les Aspin (D-Wis.) said Monday. Aspirt KERMIT ROOSEVELT Qaboos. said he obtained this Information from . . . the coup-maker Hussein has traditionally been one the Pentagon after it tried to classify of America's strongest allies, He has it secret. sent Jordanian soldiers to. help the sul- Despite the large fees it received in tan's forces in Dhofar. Hussein's _sur- Vietnam and the lucrative Saudi con- vival is a key objective of the CIA in tract, Vinnell filed earlier this year for the Middle East. a corporate reorganization by selling Shaker has also indicated to friends two-thirds of the company's shares for that be was helpful in arranging a rap- $500.000 to 10 prospective purchasers, prochement between Qaboos and King Shaker and McCrane were listed in Faisal through his excellent contacts court papers in Los Angeles as bidding in Saudi Arabia. separately for 16 per cent of the com- Such dealings have inevetably given pany at $125,000 each. Shaker an aura of political authority Shaker could not be reached for in Oman. "The United States must comnlent. Jaber said that a Vinnell hope that Ghassan Shaker's image prospectus had been mailed to Shaker, here is good, since he is so widely con- but that he had never indicated any in- sidered to be more than helpful to the terest in buying the shares. John Ham- Americans," an intelligence source in mill, Vinnell president, said after the Muscat said spontaneously a few disclosure of Shaker's name in Febru- months ago when asked about reports ary that the Arab businessman had of large commissions being secured in been eliminated from the ownership Oman by foreign Arabs. "to avoid any further publicity and Jaber declined to specify any pro- MILES COPELAND misunderstanding." jects or contracts his company has ob- ... the CIA 'consultant' It is easy to see how misunderstand- tained in Oman and Saudi Arabia. He ings could arise. Adham, Faisal's na- acknowledged that he was the diplo- tional security advisor, is a friend of matic consul for Oan in Beirut until he Shaker and played a key role in the resigned recently "to avoid any con- decisions to reject Raytheon and ac- flict of interest." cept Vinnell, according to a well-in- Jaber and Shaker are frequently formed Arab source. linked in Oman to a mysterious mid- Adham's role In national security dleman from Libya. He is Yahya has brought him into contact the CFA, Omar, who is estimated by one Ameri- many wellinformed Saudis and West- can diplomat who has watched his ca- ern diplomats report. reer, to have earned $400 million in Jaber and Shaker work out of an of- sales commission and service fees out fice in Beirut's central banking dis- of Oman in the past five years. trict. There is no corporate name on Jaber said that he happens to know the office door for the firm, which han- Omar, but denied the reports that they dles sales representation, management did business togethter. consultancy and construction work. Omar is one of the Arab World's few Jaber says that it is yet another mat- Horatio Alger stories, From a humble ter of coincidence that the "Jaber- family, he was a police officer in Libya Shaker group" began to do a large in the days of King Idris. He founded amount of business in Oman about the a local conglomerate that included a same time that Robert B. Anderson ar- catering service and a sales company rived in that strategically located Per- that had a knack for picking up new ROBERT B. ANDERSON sian Gulf country to talk business and surplus equipment from the U.S. Air . . . the Cabinet man politics with Saultan Qaboos Bin said. Force base at Wheelus at 25 per cent

--. .-7.0i,'.7'...,.,.,,v7.t.,.77.,.t.".7.7.:.7titti•gsz?ivetee,t.,,-xft,s7ty.mkoeatnt.tee...tt,–.-i,,t....vaiiitiVt,• • *-et..t.,t,tee'A^,Mt-v=e17.-Zt-'5tt.ttk.-."`?ttl:ZIetWT,tts."?-ilFiCct.. Meet of cost and reselling it locally at a handsome profit. His friendship with the U.S. Air Force paid off big for Omar on Sept. 1, 1969, when a military coup toppled King Idris. Evidently fearing that the revolu- tionary officers led by Muammar Qad- dali were looking for him, Omar ar- ranged to be packed aboard an Air Foisce. plane in a wooden box and smuggled out from Wheelus to Italy. The pilot who flew him. out was sub- sequently drOpped from the Air Force and turned up on Omar's staff in Rome, an involved source said. Any hard feelings between Omar and the militatly rulers seem to have vanished, however. He has been in Tri- poli several • times recently arranging' new deals with his customary flair. Ashland Oil has admitted paying Omar $100,000 in 1970 as a "consultant" on oil. Ashland said Omar reported he passed the money on to two Libyans, but said the company is unable now to say what the payments covered. "I am surprised Yahya Omar is rep- resenting the American government here," a Libyan businessman recently told a startled American diplomat. "He made a great point, of telling us that when talking business." Omar has left the same impression of being a U.S. representative in Oman, where he ha,s represented com- panies selling missiles, fighter-borts- hers, hotel construction material and a wide range of other goods. The sultan is reported by intimates to believe that Omar hhs a direct chan- nel to American policy-makers through intelligence connections. If such links exist, they would be valuable to a country currently negotiating with the United States over landing rights on Mastrah Island and sophisticated mili- tary supplies. In sum, the advantages that intern- fence agencies enjoy from being close to well-connected businessmen and of- vantages the private businessmen re- ceive are less clear, but are a matter of intense speculation. "If I know from Washington before anybody else in the area that the United States will only approve plane X for country. Y, I'm going to make sure that I represent the company that makes plane X," says• one Arab busi- ness insider. "And if I have been friendly with people in Washington, I would hope they would be friendly with me. From their standpoint, hav- ing me handle the deal is a good way to insure that it goes well." Next: "The Investors"