Terror in the Saudi kingdom

CIA veteran Bob Baer talks about the censored 9/11 report, why al-Qaida is still cozy in the house of Saud -- and why Osama is winning.

Published August 1, 2003 9:39PM (EDT)

With last week's release of the Congressional report on 9/11, veteran CIA officer Bob Baer must be feeling strongly vindicated, or seriously alarmed -- or both.

In his new book, "Sleeping With the Devil: How Washington Sold Our Soul for Saudi Crude," Baer bores deep into the half-century oil-and-military alliance between Washington and Riyadh. He goes to the heart of why the White House, which controversially censored the report, is bending over backward to keep locked away sensitive information that might shake up its relationship with Riyadh -- just as Baer warns that we can no longer afford to coddle the Saudi government.

"The Saudi regime is hanging on by a thread, presiding over a kingdom deeply torn between past and present, and dangerously at war with itself," he writes. It wouldn't take much, he argues, for Saudi militants to get hold of potent weapons, cull a small force from the largely disaffected population, and carry out an attack on the country's vital oil infrastructure. Halting the flow of Saudi crude would send world oil prices sky high and, in a worst-case scenario, could lead to regional war and global economic collapse.

Since May 12, when al-Qaida-linked suicide bombers struck a residential compound in Riyadh and killed 23 people, including nine Americans, the Saudis have announced a string of raids and arrests aimed at the terror network. While the Saudi regime and some in Washington are claiming tangible progress, Baer remains skeptical. "As far as I know, there hasn't been a single arrest inside the kingdom of anybody implicated in Sept. 11," he told Salon in an interview. Baer believes the 28 blacked-out pages of the 9/11 report, which he thinks will inevitably come to light, will offer sober evidence of the deep-rooted problem with Washington's longtime ally. "They'll point to a network of Saudis inside the kingdom that supported the hijackers at every stage," he says flatly.

So why does Washington still call Riyadh a partner?

According to Baer, the Saudis essentially act as the globe's Federal Reserve of oil. They are the only player in the market with significant surplus capacity. When a major crisis threatens to spike oil prices dramatically, as when Saddam invaded Kuwait in 1990 or when terrorists slammed planes into the twin towers in 2001, the Saudis literally pump massive liquidity into the global oil market to stabilize it.

Indeed, the catastrophe of Sept. 11 is the heavy price we pay for our dependency on the kingdom's oil, asserts Baer, because that dependency keeps Washington entrenched in a tainted, decades-long deal: We arm the Saudi rulers in exchange for guaranteed cheap and free-flowing crude, and we let them turn a blind eye to malignant Islamic militancy within their borders.

A CIA operative for 21 years until retiring in 1997, Baer worked the volatile turf of the Mideast and Central Asia long before terror struck on U.S. soil; field missions took him from Beirut to northern Iraq to Tajikistan, a hotbed of Islamist extremism. Ex-CIA officers turned whistle-blowers -- who are generally underpaid and have spent their careers toiling in obscurity -- may sometimes warrant skepticism, but Baer is not alone in his view of the Saudis. This week a chorus of U.S. lawmakers has joined him.

"There are substantial elements of the royal family that do not view the United States as an ally against terrorism," U.S. Rep. Robert Wexler, D-Fla., said when discussing the 9/11 report, according to Knight Ridder Newspapers. "Right now, Saudi Arabia is a far greater threat to Americans than Iraq ever was." Wexler's comments followed his recent return from a third trip to the kingdom.

All but naming the Saudis, Sen. Bob Graham, D-Fla., told the New York Times: "In my judgment there is compelling evidence that a foreign government provided direct support through officials and agents of that government to some of the Sept. 11 hijackers."

And House minority leader Nancy Pelosi, D-Calif., concurs with Baer's view that a section of the report was redacted for political cover and not national security. "[Classification] is not intended to protect reputations of people or countries. This administration has an obsession with secrecy, and this report is overclassified," she told the Associated Press.

To be sure, Saudi Arabia has been an important ally in the Arab world for the United States; it has welcomed U.S. air bases, allowed key military stagings for both Gulf wars, and shepherded the global oil market through some serious rough spots. The complex web of political, economic and military factors defining the Washington-Riyadh alliance has been around far longer than the current President Bush. And Saudi leaders have been quick to point out that al-Qaida is as hostile to them as to the U.S. -- or at least as hostile to some of them. In the hopes of deflecting some of the harsh criticism, the Saudis, too, have called for the 9/11 report to be fully declassified; foreign minister Saud al-Faisal maintained this week that the kingdom has "nothing to hide."

But Riyadh's hasty P.R. campaign aside -- al-Faisal quickly flew to Washington on Tuesday ostensibly to lobby the White House for full disclosure -- Baer believes the Saudi leadership is still burying its head in the sand at home. And, he says, the real war we should be fighting is not in Baghdad.

Baer spoke to Salon by phone from Washington on Wednesday about why al-Qaida remains cozy in the house of Saud, and why Washington must have full cooperation from Riyadh to win the war on terror -- a prospect he doesn't have a lot of faith in.

It's striking how, since 9/11, the Saudi image has lurched between valued partner and veiled enemy -- especially when you consider Bush's strict moral declaration that nations are "either with us or against us." How do you think the Saudis ultimately fit into the picture in terms of the war on al-Qaida?

Saudi Arabia is a sacred cow. It's sort of like Israel in this sense; it's been defined as an ally. But since Saudi Arabia is the source of most of the money and most of the hijackers, they have a long way to go before they're a true partner in this war on terrorism. Believe me, we would see it leaked in the press if they were providing the same help that the British, the French, the Pakistanis, the Egyptians, and all these other countries are -- even Syria has provided more help than Saudi Arabia, and they're not exactly friends of this town.

Why, at a time when the credibility of the Bush administration is under serious fire precisely over intelligence issues, would the administration stonewall on something so conspicuous as this 9/11 report? Even Saudi officials are saying they want the classified material made public.

Well, first of all, the Saudis have to say that: They have to proclaim their innocence. I don't think they know what's in those 28 pages. I doubt they got a copy of it.

The problem is the greater web of all this: The Saudis are not telling us the whole truth about bin Laden supporters inside Saudi Arabia. I think those 28 pages will add fuel to the fire. There'll be more questions the administration doesn't want to deal with. The administration doesn't want to present a case against certain Saudis, which would naturally lead to indictments, because the Saudis aren't going to honor those -- there'll be no extraditions to the U.S., they've said that.

What do you think those 28 blacked-out pages in the report really contain?

I think they'll point to a network of Saudis inside the kingdom that supported the hijackers at every stage, whether in Germany, Spain or San Diego. I think there'll be a lot of isolated information that Saudis Arabia's detractors would use to say, "Look, there's the plot."

I've talked to people in the Justice Department and the FBI who say there's no smoking gun against the Saudi royal family. But there are a lot of unanswered questions, and that's the contention in my book. Why is it that there's a Saudi involved at every turn in this? Are they all connected? Or is it just coincidental? That's just too hard to believe any longer.

Your new book is highly critical of the entrenched oil-military alliance between Washington and Riyadh. And now we have a number of congressional leaders like Sen. Bob Graham who are charging that the still-classified section of the 9/11 report is an issue of political cover, not national security. Who is the White House ultimately trying to protect here, itself or the Saudis?

It's certainly a question of both. Our traditional policy vis-à-vis Saudi Arabia, which let them take care of their internal problems themselves, seemed to work fine for a long time. After 9/11 Saudi Arabia suddenly presented a very serious problem for the administration, but the people [in Washington] who know the Middle East are smart enough to know it's a delicate issue that can't be solved easily. I think they'd rather postpone the day of reckoning until after the next election, or even the next president's term. But I think things are so bad inside Saudi Arabia ... it's a real can of worms. Nobody seems to know what's going on, or who these enemies are that are embedded in the Saudi regime.

How does that connect to the view of some U.S. policymakers that the Saudi regime is vulnerable to a largely disaffected population?

The regime is plenty vulnerable. I think the fact that we've been seeing running gun battles all around Saudi Arabia since May 12 [when suicide bombers struck a residential compound in Riyadh] is indication enough there are deep problems in the kingdom.

In all fairness, Bush inherited this problem. You know, his father was close to the Saudis and once worked for the Carlyle Group [a U.S. global investment firm with big financial interests inside the kingdom], so this situation has been around for a long time, and it can't be solved overnight. The president knows it's a very volatile issue, as we've seen over the last few days since the report came out. I think he's trying to keep it tamped down as long as he can.

What about the issue of Saudi terrorist financing? Leaks to the press about the 28 classified pages appear pretty damning in this respect -- that the Saudi government, one way or another, has bankrolled much of al-Qaida's operations, including 9/11.

I think for certain the Saudis bankrolled [al-Qaida] -- they sent money to the Taliban to keep bin Laden quiet, for instance. They sent money indirectly to bin Laden himself in the mid-'90s -- I know there's evidence of that. They used intermediaries to move the money, by sending it through official charities. But I think it's a red herring to look at the charities themselves. It misses the point. There's a theory inside Saudi Arabia that the regime will settle the 9/11 Motley suit. [Attorney Ronald Motley is representing families of 9/11 victims in a lawsuit against the terrorists and their alleged state sponsors, including members of the Saudi Arabian government.] It's not the charities that will tell us who was really behind Sept. 11 and who knew about it.

So what will it take to really get to the bottom of it?

The Saudis have to do what I call full matrices. For example, Hamid al-Rashid sent money to Omar al-Bayoumi in San Diego, who then gave that money to the hijackers. [Al-Rashid is a Saudi official alleged to have sent money to al-Bayoumi via the Saudi civil aviation authority; the 9/11 report further links al-Bayoumi to the 9/11 hijackers Khalid al-Midhar and Nawaf Alhazmi.] Well, the Saudis say this is innocent. But if I could take a look at al-Rashid and figure out if he was also working with the operatives in Germany, for instance -- if I could connect all these dots, then there would be a conspiracy.

It means doing a full financial inside Saudi Arabia. We've done it outside and we have all these tantalizing leads. I think the 28 pages will eventually leak out or be declassified, and then we'll see even more tantalizing leads. But we won't be able to connect all the dots until we get 100 percent cooperation from the Saudi government. And I don't think they're ready to do it. They've said they're not.

How dangerous is Americas dependence on our massive oil economy and the complicity it requires with Mideast regimes like the Saudis?

I think it's very dangerous. You look at the map of the world's oil reserves, and 60 percent of them are possessed by what I call the five dysfunctional families in the Gulf. We call them corrupt or dissolute because they spend a lot of money to maintain their lavish lifestyles, and there's no political freedom for the people. But more importantly, if the Saudi government collapsed [from internal unrest] -- and I admit this is a worst-case scenario -- first of all, if crazies got in they could turn off the oil taps, or even sabotage the oil. Right away the price of oil would go from $30 per barrel to $80 or $90, just based on supply and demand. If the problems spilled over into Kuwait and the United Arab Emirates, etc., oil would go a lot higher, to $150 or beyond. You can imagine the chaos that would follow.

The fact is, Saudi Arabia has been the only country with surplus oil that can produce when global markets are under pressure -- the strike in Venezuela or Nigeria, the [first] war in the Gulf -- the Saudis are the ones who pumped more oil and stabilized the markets. They provide the liquidity, and they've done a fantastic job of this, so let's give them their due.

But the price we've paid for our dependence -- and dependence, or addiction, is the right term -- came from not looking closely at what was going on inside the Kingdom, which obviously turned out to be a mistake. Now, am I suggesting there's a conspiracy in Washington? Not at all. This is a dependence which affects our perceptions of what it is we're seriously dependent on. It's human nature.

What do you think it will take to get the American public to wake up to the dangers of viewing the Middle East as little more than a giant gas station?

I think it would take a real hit in the oil market. Here's a scenario: Let's say we start taking losses of 20 soldiers per day in Iraq, and the American people say, "Enough is enough, we're pulling out." A civil war would almost certainly follow in Iraq. It could spread to Kuwait, or the Iranians may come into southern Iraq. A disruption or a speculative frenzy raising gasoline to unacceptable levels -- $5 or $6 a gallon -- would make Americans wake up real fast. We'd either have to conserve, find alternative fuels, or we'd have to change the basis of our economy so it's no longer running on cheap oil.

But obviously the country's economic structure can't be changed overnight.

Right, and I dont think it will happen anyway. I just don't see the impetus for change -- you need suffering for that. In this case it would be economic suffering.

Would another major attack on U.S. soil be enough to motivate such a change?

Well, I saw some statistics in the New York Times the other day saying that 71 percent of Americans think Saddam was behind 9/11, or had some connection to it. And of course, we know from the 9/11 report there was no such connection, or not one that we know about. But because Americans look at the Middle East as a very complicated place, they tend to defer to the president on it [thereby avoiding the real issue at hand], and the administration really pushed that connection.

Isn't that an alarming maneuver on the part of the Bush administration? -- If essentially they created an Iraq-9/11 story that distracts us from the graver threat or problem?

I think it's outrageous. They've simply postponed the problem and carried out a different agenda, which was Saddam Hussein. We haven't dealt with bin Laden, who's still somewhere out there -- not that he himself matters all that much -- and we haven't addressed the problems inside Saudi Arabia. We're told they're being solved since May 12, but can we believe that? By all appearances the Saudis are arresting bin Laden types, but I'd like to see some concrete evidence.

Do you agree that the May 12 suicide bombings in Riyadh had a big impact on the Saudi regime? They've announced a number of al-Qaida arrests in the last two months, but is it real progress or just window dressing?

I think it is window dressing -- just compare Saudi Arabia to Pakistan. The Pakistanis finally understood they had to arrest these people who were behind 9/11. They've been there on the street with us, some getting killed while trying to make arrests, and they've turned them over to us. It's very clear-cut that Pakistan, or at least Musharraf, is helping to a large degree.

But you look at Saudi Arabia, and as far as I know, there hasn't been a single arrest inside the Kingdom of anybody implicated in Sept. 11. And the Interior Minister, Prince Nayef, said yesterday they're not going to turn anybody over to the United States. To really do a thorough, complete investigation we need to take these people [like al-Bayoumi] into our custody as material witnesses.

But the Saudis did say on Tuesday that they'd let FBI agents in Riyadh question al-Bayoumi.

Oh, come on. The guy's prepared his whole schtick on this. They're going to pull him in and he's going to say, "I ran into these people by accident, and they were speaking Saudi Arabic, and it's our custom to receive people like this." Well, if you know the Middle East, you know this is not their custom: You take somebody in who you know, somebody who has a family connection -- not two strangers in a restaurant outside Los Angeles airport.

Nor with the Saudi ambassador's wife [Princess Haifa] do you simply write her a letter, and she immediately starts monthly wire transfers. Somehow this other guy Osama Basnan [another Saudi alleged by the 9/11 report to have been a part of the San Diego al-Qaida cell; he pleaded guilty to using false immigration documents in federal court in October 2002] had his name approved for the ambassador's wife's list.

You're suggesting that could only be done at the behest of the Saudi government.

Right, those are the kinds of details ... there are just too many coincidences. Or somebody wrote Princess Haifa and said, "Osama Basnan is a good friend of the family and a loyal citizen, please help him out in California." So the question is, who wrote that letter? Who made that call?

Don't get me wrong: I think Princess Haifa had nothing to do with this. She was as surprised as anybody, was just a tool used in this. But who got Basnan's name on her list?

The White House has just issued a new warning about the threat of more hijackings. In light of the administration's intelligence failures like the Niger-uranium report, what kind of danger do you think the country still faces from al-Qaida? Are we any safer now than in August 2001?

Well, we've got the new federal transportation security, whatever that is. But you know, the problem is that they've cried wolf too many times about Saddam, about hijackings, about the bridges, so I think nobody quite takes it seriously.

I happen to think that al-Qaida is going to try to hit us somewhere, but I don't really take the government's word for it.

What do you think our government should be doing now that they aren't?

Well, I think they should be running down these terrorist cells in the United States, and the war has been a distraction from this. I think the FBI is overextended. And the other thing they really need to do is combine the databases of the CIA and the FBI.

But wasn't that supposed to be a major point of launching the Department of Homeland Security?

You know, it's just crazy, and I can't get over it: I talked to somebody [inside the agency] three days ago, and the CIA is not sending its interrogations, like the guys they've arrested in Pakistan, to the FBI, because they don't want that information to come out in discovery [the disclosure of evidence required in a U.S. criminal proceeding]. So you still have the FBI as an organization that collects evidence, and you've got the CIA collecting intelligence, and no marriage between these two worlds. And don't ask me how to do it; you'd have to ask a smart lawyer. How do you protect the FBI in collecting intelligence? Basically everything comes out in discovery. Zacharias Moussaoui could demand all this stuff; once his defense attorneys get it, it's all out there.

So we end up fighting against our own legal system.

Yeah, it puts us up against our legal tradition, and you'd have to ask a constitutional lawyer how you're going to solve that problem.

You've spent time in Iraq since Saddam was toppled. What do you make of the current postwar situation?

It comes down to providing services and security. Once we're able to do that, we're going to convince a lot more Iraqis that we're there to stay, and that the Iraqis are going to be better off.

I talked to some Iraqis this morning. Right now they're not even picking up the trash. It's going to take much longer than we'd expected to start exporting oil, and unemployment is still at least 50 percent. We have to show the Iraqis they're going to get some tangible benefit out of all this. Fine, everybody hated Saddam, even the Sunni Arabs [favored by the regime]. Most everyone's happy about him being gone, but they're ambivalent overall because life isn't getting any better. To them, there doesn't seem to be any order to the new order we're bringing to Iraq.

Given your experience with the region's volatile factions -- I'm thinking of your efforts as a CIA field operative in 1995 to back a Kurdish uprising against Saddam -- what's your view of this administration's designs for Iraq? Is spreading democracy across the region a realistic vision?

Back then we understood that we wanted the Iraqis to change their own government. We would help them, but they were responsible. What they replaced Saddam with would be theirs to take pride in and to support.

I don't see this plan for democracy happening right now. I think Iraq needs a Saddam-lite. It will take a general or somebody like that who's going to hold the country together through a period of transition. We shouldn't really be talking about democracy there for at least a number of years, because the country is so divided between factions. There are a lot of grudges, and a lot of weapons. The only thing that's preventing a civil war from breaking out is our troops on the ground. The Shia will never forget that the Sunni Arabs supported Saddam, and that Saddam massacred the Shia [in answer to the 1991 Shia uprising following the first Gulf War].

But how could we possibly invade Iraq based on so much democratic rhetoric and then turn around and say, "Well, actually, we need to install a dictatorship to make the 10-year transition?"

That's exactly the problem I have with this war. Iraq is an ungovernable country from the outside. The Ottoman Turks failed, then the British failed, and it's going to take an enormous amount of effort for us to do it. I think we truly will have to occupy it like the British occupied India. We're going to have to be the military, the police, the judges, everything. We really bit off a lot with this war.

What do you make of the U.S. military pullout from Saudi Arabia shortly after the toppling of Saddam? Isn't this precisely what Osama was after?

Yes, it was. Osama bin Laden is winning. He wanted the U.S. military out, and he wanted ties cut with Washington. And he's getting it.

Does the U.S. moving its regional military headquarters next door to Qatar really change anything?

The only thing it really tells me is that things are very volatile in Saudi Arabia. Think about it: Our [strong military presence] in Saudi Arabia goes back to FDR. Now all of the sudden it's basically gone. And recently a big gas deal went to the Europeans, not U.S. companies. Conoco and Exxon Mobil both pulled out, and now it's Total and Royal Dutch/Shell who are moving in. So I think this longtime marriage with Saudi Arabia is clearly on the rocks.

Could it get even worse? That goes right back to the 9/11 report, and what's in those 28 pages. If damning information against the royal family gets leaked, I don't see how Bush is going to manage it. It could get a lot worse.

Is the Bush administration failing the war on terror?

I'd maybe give them a C-plus report card. Bush gets an A-minus for taking out the al-Qaida core in Afghanistan and Pakistan -- he's pretty much got everybody but bin Laden. But there are plenty of ground soldiers still out there, and who do we have to rely on now to get those ground soldiers? The Saudi government.

As you know, I don't have a whole lot of faith in them.

By Mark Follman

Mark Follman is Salon's deputy news editor. Read his other articles here.

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