Dept. Of Connections
by Jane 0aMayer
The New Yorker
5 May 2003
Back when Americans were still debating whether there was just cause 0afor a preemptive strike against Iraq, few arguments were scrutinized more 0aclosely than the Bush Administration's contention that there were covert links 0abetween Al Qaeda and Iraq. At the C.I.A., analysts pored over aerial satellite 0aphotographs. At the Treasury Department, experts sifted through financial 0arecords. At the National Security Agency, Arab-speaking linguists eavesdropped 0aon phone conversations. But, even after Secretary of State Colin Powell put his 0acredibility on the line, in a damning, dot-connecting speech before the United 0aNations last February, questions persisted about the solidity of the alleged 0alinks between Saddam and Osama.
Now there is a new and demonstrable connection, but it is not the kind 0athat the Bush Administration had in mind. In fact, it is more likely to fuel the 0aspeculations of conspiracy theorists than it is to put their fears to rest. It 0aturns out that a money trail runs-albeit rather circuitously-from the lucrative 0abusiness of rebuilding Iraq to the fortune behind Osama bin Laden. Bin Laden's 0aestranged family, a sprawling, extraordinarily wealthy Saudi Arabian dynasty, is 0aa substantial investor in a private equity firm founded by the Bechtel Group of 0aSan Francisco. Bechtel is also the global construction and engineering company 0ato which the U.S. government recently awarded the first major 0amultimillion-dollar contract to reconstruct war-ravaged Iraq. In a closed 0acompetitive bidding process, the United States Agency for International 0aDevelopment chose Bechtel to rebuild the major elements of Iraq's 0ainfrastructure, including its roads, railroads, airports, hospitals, and 0aschools, and its water and electrical systems. In the first phase of the 0acontract, the U.S. government will pay Bechtel nearly thirty-five million 0adollars, but experts say that the cost is likely to reach six hundred and eighty 0amillion during the next year and a half.
When the contract was awarded, two weeks ago, the Administration did 0anot mention that the bin Laden family has an ongoing relationship with Bechtel. 0aThe bin Ladens have a ten-million-dollar stake in the Fremont Group, a San 0aFrancisco-based company formerly called Bechtel Investments, which was until 0a1986 a subsidiary of Bechtel. The Fremont Group's Web site, which makes no 0amention of the bin Ladens, notes that "though now independent, Fremont enjoys a 0aclose relationship with Bechtel." A spokeswoman for the company confirmed that 0aFremont's "majority ownership is the Bechtel family." And a list of the 0acorporate board of directors shows substantial overlap. Five of Fremont's eight 0adirectors are also directors of Bechtel. One Fremont director, Riley Bechtel, is 0athe chairman and chief executive officer of the Bechtel Group, and is a member 0aof the Bush Administration: he was appointed this year to serve on the 0aPresident's Export Council. In addition, George Shultz, the Secretary of State 0ain the Reagan Administration, serves as a director both of Fremont and of the 0aBechtel Group, where he once was president and still is listed as senior 0acounsellor.
Rick Kopf, the general counsel of the Fremont Group, which manages some 0aeleven billion dollars in assets, confirms that the bin Laden family invested 0aabout ten million dollars in one of Fremont's private funds before September 11, 0a2001. He noted that the bin Laden family has not enlarged its stake since then, 0abut he declined to provide additional details about its association with the 0afirm. He also chose not to discuss the origin or the nature of the relationship 0abetween the bin Laden and Bechtel families, both of which made fortunes in huge 0aconstruction projects in the Arab world. The Fremont Group evidently does not go 0ain for connecting the dots. As Kopf said, "Ownership is private and is not 0adisclosed."
(In accordance with Title 17 U.S.C. Section 107, this material is 0adistributed without profit to those who have expressed a prior interest in 0areceiving the included information for research and educational purposes.)