Dept. of Connections May 5, 2003 Issue
The Contractors
By Jane Mayer
Back when Americans were still debating whether there was just cause for a
preƫmptive strike against Iraq, few arguments were scrutinized more closely
than the Bush Administration’s contention that there were covert links between
Al Qaeda and Iraq. At the C.I.A., analysts pored over aerial satellite
photographs. At the Treasury Department, experts sifted through financial
records. At the National Security Agency, Arab-speaking linguists eavesdropped
on phone conversations. But, even after Secretary of State Colin Powell put
his credibility on the line, in a damning, dot-connecting speech before the
United Nations last February, questions persisted about the solidity of the
alleged links between Saddam and Osama.
Now there is a new and demonstrable connection, but it is not the kind that
the Bush Administration had in mind. In fact, it is more likely to fuel the
speculations of conspiracy theorists than it is to put their fears to rest. It
turns out that a money trail runs—albeit rather circuitously—from the
lucrative business of rebuilding Iraq to the fortune behind Osama bin Laden.
Bin Laden’s estranged family, a sprawling, extraordinarily wealthy Saudi
Arabian dynasty, is a substantial investor in a private equity firm founded by
the Bechtel Group of San Francisco. Bechtel is also the global construction
and engineering company to which the U.S. government recently awarded the
first major multimillion-dollar contract to reconstruct war-ravaged Iraq. In a
closed competitive bidding process, the United States Agency for International
Development chose Bechtel to rebuild the major elements of Iraq’s
infrastructure, including its roads, railroads, airports, hospitals, and
schools, and its water and electrical systems. In the first phase of the
contract, the U.S. government will pay Bechtel nearly thirty-five million
dollars, but experts say that the cost is likely to reach six hundred and
eighty million during the next year and a half.
When the contract was awarded, two weeks ago, the Administration did not
mention that the bin Laden family has an ongoing relationship with Bechtel.
The bin Ladens have a ten-million-dollar stake in the Fremont Group, a San
Francisco-based company formerly called Bechtel Investments, which was until
1986 a subsidiary of Bechtel. The Fremont Group’s Web site, which makes no
mention of the bin Ladens, notes that “though now independent, Fremont enjoys
a close relationship with Bechtel.” A spokeswoman for the company confirmed
that Fremont’s “majority ownership is the Bechtel family.” And a list of the
corporate board of directors shows substantial overlap. Five of Fremont’s
eight directors are also directors of Bechtel. One Fremont director, Riley
Bechtel, is the chairman and chief executive officer of the Bechtel Group, and
is a member of the Bush Administration: he was appointed this year to serve on
the President’s Export Council. In addition, George Shultz, the Secretary of
State in the Reagan Administration, serves as a director both of Fremont and
of the Bechtel Group, where he once was president and still is listed as
senior counsellor.
Rick Kopf, the general counsel of the Fremont Group, which manages some
eleven billion dollars in assets, confirms that the bin Laden family invested
about ten million dollars in one of Fremont’s private funds before September
11, 2001. He noted that the bin Laden family has not enlarged its stake since
then, but he declined to provide additional details about its association with
the firm. He also chose not to discuss the origin or the nature of the
relationship between the bin Laden and Bechtel families, both of which made
fortunes in huge construction projects in the Arab world. The Fremont Group
evidently does not go in for connecting the dots. As Kopf said, “Ownership is
private and is not disclosed.”