In the sweeping grounds of a Virginian mansion, not far from Washington DC, two rich and powerful men took a stroll one Sunday afternoon early in 1985. They walked slowly and spoke quietly; after a while one of them took a piece of paper from his pocket and passed it to his companion. A few more words, and the conversation was over.
Two months later, in a teeming suburb of Beirut, a car bomb exploded, scything through the crowded pavements, bringing masonry crashing down on the heads of passers-by, killing 80 people and injuring some 200 others. As rescuers cleared away the debris, a small group of young Muslims scrambled over the rubble and unfurled a banner for the world’s media. It said: “Made in the USA.”
The two men who met that day in Virginia were William Casey, then Director of the US Central Intelligence Agency, and Prince Bandar bin-Sultan, the Saudi Ambassador to the United States. The thread that links the two of them to the carnage of a car bomb in Beirut emerged only late last year when investigative reporter Bob Woodward published his expose of US covert operations, Veil.
On that account, Casey had decided to hit back against Middle East terrorists and to avenge the kidnapping of his station chief in Beirut, William Buckley, by assassinating Sheikh Mohammed Hussein Fadlallah, the leader of the Iranian-back Hizbollah movement. Casey had contacted Prince Bandar and, that day in the Saudi Ambassador’s palatial garden, he had passed him the number of a Geneva bank account.
Bandar, who has had a close working relationship with the head of Saudi intelligence, Prince Turki, arranged for $3 million to be laundered through the Geneva account to pay for the assassination. The Saudis hired a British former SAS officer to arrange the job. He set up separate cells to gather intelligence on Fadlallah’s movements, to supply equipment and finally to place the car bomb. But despite his careful planning, the operation went disastrously wrong, leaving its intended target unscathed amidst a scene of carnage.
But this long thread which ties a conversation in Virginia to a massacre in Beirut is only one among many which were woven together by William Casey during his seven years at the CIA into a global web of secret operations. The web spreads from Washington out across the Atlantic to Europe, where it runs through interference in a supposedly free election, to Morocco in the north of Africa through Chad and Ethiopia to Angola in the south, across the streets of Beirut and up into the mountains of Afghanistan, deep into South Yemen and then Cambodia, before coming back to the Americas where it is knotted into the battle fields of Nicaragua and El Salvador.
Although it was Casey who sat at the centre of this web, feeling the pulse of events around the world, his power was matched by that of the Saudis, who shadowed his every move. Casey supplied the strategy, but the Saudis supplied the funds, trading their deniable dollars for US defence technology. Their alliance goes back to the first days of the Reagan administration in January 1980.
Casey arrived at the CIA to find an organisation almost paralysed by politics, internally by factional disputes and externally by its tug of war with the White House and Congress. The agency had cut its covert operations back to the bone in order to concentrate on the less controversial business of gathering and analysing intelligence – a move which was welcomed by many in President Carter’s Washington but which found no favour with the new Director.
Casey, who had learned his intelligence at the shoulder of William ‘Wild Bill’ Donovan in the war-time Office of Strategic Services, determined to put the CIA on a more aggressive footing and, in doing so, he had the support of a new President with a mandate to defend American interests not just against the traditional enemy in Moscow but also against the many-headed Hydra of international terrorism.
He inherited only one full-blooded covert operation from the previous CIA Director, Admiral Stansfield Turner: a programme in South Yemen which the CIA were running jointly with the British intelligence service, MI6, to train teams of saboteurs to infiltrate the country and to destabilise the Marxist Government there by destroying oil installations and attacking internal communications.
The operation was being managed by the then deputy head of the CIA, Frank Carlucci, now the US Defence Secretary. Progress was slow and when Colonel Ghadaffi signed a new military pact with South Yemen in October 1981, Casey pushed more money into the project and demanded action. The result was a catastrophe. In March 1982, the CIA sent a sabotage team of 13 Yemenis into South Yemen with a list of economic targets to attack. They were found, arrested and tortured. After admitting their links with Western intelligence they were all either executed or gaoled. The CIA hurriedly withdrew a second team which had been infiltrated at the same time.
Even though the operation was a failure, Casey was attracted to its structure. The CIA was using British agents as a cut-out to disguise American involvement and was receiving Saudi funds to cut the cost. Apart from the operational advantages, these links also cemented political alliances for Washington. The British and the Saudis were happy too: they were securing their own strategic interests and simultaneously storing up favours for the future.
The political benefits of this model for joint operations were underpinned by a network of personal contacts. It was not just that the Saudis and the Americans shared an interest in attacking Marxism in the Third World, there were also numerous individuals in the intelligence communities of the two countries who found that they could advance their careers and/or enlarge their personal fortunes by pooling resources.
Early in the Reagan administration, all these factors were brought together in one deal which was to transform the alliance from its more or less haphazard status into one of the corner stones of US foreign policy. The deal was the sale of the American AWACs early warning system to the Saudis.
On the Saudi side, the chief negotiator was Prince Bandar, who was not only the Ambassador to Washington but also the son of the Defence Minister in Riyadh. On the American side, the sale was managed by two men who were subsequently to become two of the most famous names in the history of secret warfare, General Richard Secord and Lt Colonel Oliver North. Together they succeeded in pushing the multi-million dollar deal around the opposition of the Israeli lobby in Washington and through a reluctant Congress.
The deal, according to sources in Washington, had a hidden clause: the price which the Saudis agreed to pay for AWACs was secretly raised above the figure which was declared publicly, so that the difference between the private and the public price could be skimmed off and diverted into covert operations. The amount involved is said to run into hundreds of millions of dollars. The surplus is believed to have been channeled to Angola to support the rebel UNITA army of Jonas Savimbi – in direct breach of a Congressional ban on all aid to UNITA.
It was this factor which gave the new US/Saudi alliance its most potent appeal – the ability to by-pass Congress which had been using its control of the CIA budget to cut back on covert operations. Soon the alliance was established as a powerful weapon in the arsenal of US foreign policy, giving William Casey the tool with which to spin his web – the self-sustaining, off-the-shelf network of private entrepreneurs and semi-official soldiers which became known as The Enterprise. Although some US Congressmen have gathered clues about it, none has managed to uncover its detail nor even to prove its existence.
The funding from the Awacs deal was soon followed by new waves of cash spilling down the secret pipeline: $32 million in donations from the Saudi’s intelligence budget for US operations in Central America; an estimated $250 million from the same source for Western intelligence in Afghanistan; profits from the sale of HAWK and TOW missiles to Iran; profits from the secret sale of Saudi oil to the South Africans. The cash poured through the numbered accounts and out into Casey’s secret wars, which were to leave their mark all over the world…..
*In Chad, Casey found an ideal vehicle to harass Colonel Ghadaffi. The Libyan leader had established a puppet government in Chad. Other Western intelligence agencies had joined forces to attack this ‘Transitional Government’ and were beginning to drain resources from Libya. The cutting edge of this operation was a guerrilla war led by the former Defence Minister of Chad, Hissen Habre. The French together with the Egyptians, the Moroccans and the Sudanese were sponsoring his efforts. The French had spent more than $100 million by the time Casey arrived at Langley in 1980.
Casey persuaded President Reagan to add US dollars to the effort, but when news of the operation leaked in the American press, Congress started to complain. There was then a terrible cock-up when White House aides tried to lead reporters onto a false scent by suggesting that this covert operation was being conducted not in Chad, but in Mauritius; the aides, however, were weak on geography and mistakenly identified Mauritania as the target, provoking a cloudburst of apologies and retractions.
Despite this mismanagement, the Chad operation survived long enough for Habre to take power in 1982. Casey wanted to build on this, to use Chad to increase the pressure through Ghadaffi’s back door. Realising that Congress would not oblige, he turned to Prince Bandar and persuaded the Saudis to invest $8 million in anti-Ghadaffi groups based in Chad.
*In Ethiopia, which like South Yemen, had forged a military pact with Colonel Ghadaffi, Casey and the Saudis organised funding for the anti-Marxist rebels. The Saudis who had their own vested interest in subduing Marxism in the Horn of Africa bore the brunt of this operation, while the CIA contributed only $500,000 a year.
*In Cambodia, Casey launched a top secret programme in 1982 to support Cambodian groups who were fighting the Vietnamese-backed regime in Phnom Penh. This involved some delicate manoeuvring to avoid subsidising the Khmer Rouge whose genocidal rule had been ended by the Vietnamese and who were jostling for position among other rebel groups. The reality was that Casey could not possibly guarantee that funds would not spill from ‘acceptable’ Cambodia guerrilla groups into the coffers of the Khmer Rouge. American funds were, therefore, ear-marked only for ‘non-lethal’ aid, a compromise which was largely cosmetic but which survived intact because the American public were not told anything about it.
*In Afghanistan, the Saudis played a dominant behind-the-scenes role. Under Casey’s guidance, they became the majority shareholders in the Mujahadeen operation, their total contribution of $250 million dwarfing that of the United States, Pakistan, Egypt and China who were the other key players.
Casey’s web was glued together with a network of deals and favours. The Pakistanis allowed the CIA to set up training camps on its territory; in exchange, the Americans supplied Pakistani President Zia with personal security and allowed Pakistani troops to take part in the training . The Moroccans allowed the Americans and the South Africans to train UNITA on its turf, in exchange for which the Americans aided the Moroccan Government in its fight against Polisario guerrillas. The Saudis sold the South Africans oil which they desperately needed; in exchange the South Africans supplied intelligence to the Saudis and the Americans.
A similar deal is believed to have been behind one of Casey’s most risky operations – a secret fund of $2 million provided by the Saudis to influence the outcome of a general election in Italy. In exchange for the CIA’s assistance in ensuring that the Communists failed at the ballot box, Italian conservatives agreed to assist the Americans in covert operations against Libya.
The now famous covert operation in Central America has been presented to the American public as an isolated aberration, the brainwave of an overzealous Marine officer who is most frequently described as ‘a loose cannon on the ship of state’. Even when his public testimony made him a national hero, he was still held at a distance by an administration which was politically too weak to admit its support for him.
The truth is that Oliver North’s work in Central America was merely one part of a deliberate and coherent strategy. As soon as the Congressional tide began to turn against support for the Contras – with the disclosure of the mining of Nicaraguan waters in April 1984 – Washington turned to the Saudis and The Enterprise.
In May of that year, the then National Security Adviser, Bud McFarlane, met with Prince Bandar and secured the promise of $1 million a month in aid for the Contras. This was a clear five months before Congress finally cut off its own funding with the passing of the Boland Amendment. By that time, North and General Secord had gone further by setting up the cluster of front companies and bank accounts in Geneva and Panama which were to channel cash and arms to the Contras.
Early in 1985, King Fahd visited Washington and met President Reagan and William Casey. The Saudis then agreed to increase their backing to a a rate of $2 million a month. By the time the lid blew off in the autumn of 1986, the Saudis had invested $32 in the operation. All this happened with practised ease because it was part of the whole Enterprise.