A SAUDI SLUSH FUND AND LIBYA

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DEFINTITION

Slush Fund n [...] 2: a fund for bribing public officials or carrying on corruptive propaganda." Webster's New Collegiate Dictionary

A MODEL

An Arab friend, a city planner, commenting about Rafiq Hariri’s humongous construction projects in Lebanon, would say, “The only way politicians in this part of the world become billionaires is by launching huge construction projects.” The late Rafiq Hariri, may God bless his soul, had imported this practice from Saudi Arabia. Poor Lebanon. It never stood a chance.

Another way for politicians to skim billions away is to create intelligence-related slush funds. In the Saudi case, oil made it that much easier, since an oil company, working in cahoot with the royals and British intelligence, could pump hundreds of thousands of barrels per day and not have these numbers reflected in the official government accounting.

SLUSH FUNDS: A MODEL FOR THE NEAR FUTURE

Theoretically, this model can be repeated with other governments and other oil companies. Younger princes should be eager to see the creation of similar slush funds. These would be meant to defeat Iran and defeat or lure Syria. But the same slush fuunds, along the way, should make billions for the younger princes. These funds should make up for the eventual withdrwal of U.S. troops from Iraq now that the American tax base is sending yet clearer signals that it no longer believes the Iraq investment is worthwhile. I'd expect Kuwait and the U.A.E. to create their own version of such funds.

SAUDI ARABIA V. LIBYA

An article by Stephen Fidler ( “Al-Yamamah: the Saudi foreign policy connection” (Financial Times, Monday July 2, 2007, at 3) explains, maybe only in part, the reason behind the enmity between Libya’s leadership and that of Saudi Arabia. Only a couple of years ago Muammar al-Qadhafi was alleged to have engineered an assassination attempt against Saudi King Abdallah.

Here are some excerpts from the Financial Times’ article:

“The Al-Yamamah agreement, originally signed in 1985 by the Saudi and British governments to pay for the Saudi purchase of Tornado jets, was employed to distribute Saudi oil revenues outside the country’s official budget. ‘It was a way of Saudis paying money to Saudis,' said one person involved in the deal.

“The mechanism has been used to pay for more than combat aircraft. According to one account, it bought arms from Egypt to the Mujahideen fighting Soviet forces in Afghanistan and paid for clandestine purchases of Russian arms to oust Libyan troops from Chad.” (Emphasis added.)

[...]

“[A special account at the Bank of England] would receive funds from the sale of Saudi oil lifted and sold by BP and Royal Dutch Shell, which took a commission. [...] [O]ver nearly two decades, tens of billions of dollars were directed through [the special account.]”