[A-List] US imperialism, English libel laws: Bush, Saudi Arabia & censorship

[Michael Keaney]

Bush, the Saudi billionaire and the Islamists: the story a British firm is
afraid to publish

Publication of book cancelled as libel laws blamed for stifling free speech

David Leigh
Wednesday March 31, 2004
The Guardian

A book investigating links between rich Saudis and US politicians has been
suppressed by the giant publishing firm Random House because, it says, of
growing "libel tourism" by wealthy foreigners, and exorbitant legal "success
fees".

Libel lawyers are stifling free speech, the deputy chairman of Random House,
Simon Master, said yesterday.

The UK publication of House of Bush, House of Saud, by the American writer
Craig Unger, has been cancelled because Secker and Warburg, a Random House
subsidiary, says it can no longer afford such risks.

The book focuses in part on the activities of a Jeddah-based Saudi
billionaire, Khalid bin Mahfouz, who has been engaged in a war of words in
the US, where there have been public accusations by officials linking him
and others to funding received by Osama bin Laden.

Unger collates links between Mr Bin Mahfouz and Islamist fundamentalists.
But the new dimension of his research is that he also analyses the Texas
business links between the Bush circle and the families of Mr Bin Mahfouz
and other rich Saudis.

Unger's thesis is that the eagerness of US politicians to tap into Saudi
money over the years may have compromised Mr Bush's determination to fight
terrorism: "Never before has an American president been so closely tied to a
foreign power that harbours and supports our country's mortal enemies."

How far Unger's thesis is credible is something that the US reading public
will be able to decide for themselves. The book is becoming a bestseller in
US election year. In Britain, however, the deputy chairman of Random House
denied that the decision to suppress it was "pusillanimity or unnecessary
self-censorship".

Simon Masters said UK libel laws were ludicrous and had been made worse by a
recent judgment won by a wealthy Saudi wrongly accused of terrorist funding
links, in which the defence of public interest had been thrown out.

"Forum shopping" by wealthy foreigners attracted to Britain's draconian
libel laws was made worse, he said, by "the willingness of some law firms to
take cases on a no-win no-fee basis. The firms who take on such clients will
if successful, present hugely inflated bills, the costs of which can be
awarded against the defendant in addition to any damages".

Reputation

He called this system disgraceful. A libel fight was immensely
time-consuming and potentially hugely expensive - "vastly more than the
publisher could hope to earn from the book".

The UK libel system, he said is "stifling legitimate freedom of speech".

Mr Bin Mahfouz's UK lawyers, Kendall Freeman, said yesterday that their
client "has had no choice in the past but to issue libel proceedings to
protect his reputation in this country".

They added: "We do not comment on the particular fee arrangements we have
with our clients."

Mr Bin Mahfouz, who inherited his vast wealth from his banker father, has
issued a sheaf of UK libel writs to successfully obtain retractions and
damages for them. He says that he and his family abhor terrorism, and were
horrified by the September 11 attacks.

The links with Texas politicians began in the 1970s, according to Unger. He
says a businessman, Jim Bath, acted as local partner both for Mr Bin
Mahfouz, and his close friend Salem bin Laden.

Both young men were heirs to family fortunes. Mr Bin Laden was also the
eldest brother of Osama bin Laden, who was many years later to turn into the
world's most reviled terrorist.

In 1977 Mr Bin Mahfouz with Mr Bath and John Connally, [former treasury
secretary] bought the Main Bank of Houston.

In 1982, according to the author, Mr Bin Mahfouz and his brothers, with the
Texas Commerce Bank, developed a Houston skyscraper. The bank was the family
firm of James Baker, the former White House chief of staff.

In 1987, he says a Saudi associate of Mr Bin Mahfouz, Abdullah Taha Bakhsh,
helped the young George Bush and his struggling oil firm, Harken Energy, by
buying 17% of its stock. More help for Mr Bush came in 1990, when the prime
minister of Bahrain, Khalifa bin Salan al-Khalifa, awarded offshore drilling
rights there to Harken. The Bahrain premier was a shareholder in a
controversial bank, BCCI, along with Mr Bin Mahfouz, who owned 30%.

The final link asserted by Unger came in 1995 when, he says, Mr Bin
Mahfouz's two sons invested $30m (£16m) in the Carlyle Group, a firm linked
to the Bush family.

What Unger describes in his book is the kind of exploitation of oil-rich
Saudis which has often been linked to US and British politicians in the last
30 years.

Mr Bin Mahfouz points out that he neither personally funded Harken nor paid
anybody else to do so. On the other alleged business links, his lawyers,
Kendall Freeman, say he "does not propose to comment".

But what gives the book a controversial edge is the linking of this
phenomenon with the financing of terrorism. Unger accuses Mr Bin Mahfouz of
making donations to Osama bin Laden.

Mr Bin Mahfouz has an answer to this: he says Osama's brother, Salem, asked
him in 1988 to hand over $270,000 (£150,000) to Osama's cause. He believed
it was going to Afghanistan. At that time, as he accurately says, this was
entirely in line with US foreign policy.

"This donation was to assist the US-sponsored resistance to the Soviet
occupation of Afghanistan and was never intended nor, to the best of Sheikh
Khalid's knowledge, ever used to fund any 'extension' of that resistance
movement in other countries."

Similarly, Mr Bin Mahfouz has an answer to Unger's repetition of the charge,
based on more recent allegations by US Treasury officials, that officials of
Muwafaq, an international Islamic charity launched in 1991 by Mr Bin
Mahfouz, went on to funnel money to al-Qaida. He was unaware of this, he
says, and has appointed lawyers to investigate Muwafaq.

As far as his own National Commercial Bank (NCB) is concerned, Mr Bin
Mahfouz's lawyer says: "Like upper management at any other major banking
institution, Khalid Bin Mahfouz was not, of course, aware of every wire
transfer moving through the bank. Had he known of any transfers that were
going to fund al-Qaida or terrorism, he would not have permitted them. At no
time did Khalid Bin Mahfouz have any knowledge or reason to believe that
members of the Saudi royal family were transferring funds to Muslim
charities that were sending funds to al-Qaida."

Another of Unger's points is that Saleh Idris, the owner of the alleged
al-Qaida Sudan pharmaceutical factory bombed by the US in 1998, was an
associate of Mr Bin Mahfouz, being deputy manager of the NCB.

Mr Bin Mahfouz's response is: "The Clinton administration initially claimed
that the plant was financed by Bin Laden based upon the mistaken assumption
that it was owned by a Sudanese government corporation. This was withdrawn
after it was discovered that it was privately owned by Mr Idris. The
administration then accused Mr Idris of association with terrorism and froze
his assets. But the US declined to defend this claim in a legal action
brought by Mr Idris and released his assets. The international press has
been virtually uniform in its conclusion that the bombing of the El-Shifa
plant was a mistake."