Jobs Report Sign of Deeper Economic Trouble

.....

Ruth Conniff
July 4, 2009 - The Progressive

.....

The Federal government's jobs report for June shows the country sliding further into an already historic recession. With 467,000 jobs disappearing, bringing the official unemployment rate to 9.5 percent, wages down, and more workers than ever stuck in part-time jobs that don't adequately cover the bills, Americans are hurting. Credit is tight and spending down, leaving little hope that we can borrow and buy our way out of the current economic slump.

The situation calls for a big new round of government stimulus spending. Economists Dean Baker, Paul Krugman, and others are calling on President Obama to try to force a more ambitious stimulus plan through Congress. "Just to be clear, I'm well aware of how difficult it will be to get such a plan enacted," Krugman writes in the The New York Times, anticipating criticism from the Administration insiders like Rahm Emanuel. (In a New Yorker profile earlier this year, Emanuel was quoted as saying that Krugman and other liberal economists are basically right in their criticisms of the too-timid Obama approach to issues like stimulus and tax cuts, but that it's easy to criticize the President when you don't have to get anything past the Republicans in Congress--"How many bills has he passed?" Emanuel asked of Krugman.)

I interviewed another critic of the Obama Administration's centrist economic team for the forthcoming issue of Progressive, William Greider, author of the definitive book on the Federal Reserve Bank, Secrets of the Temple, and, most recently, Come Home America. Greider also has critical things to say about Krugman: "He can't let go of all the bromides he has absorbed over many years as a professional economist," he says, tarring him with the same brush as Robert Rubin and Alan Blinder.

"I think the Establishment, including people like Robert Rubin and Alan Blinder and others, have come part of the way to reality in which they recognize that globalization as they've sold it is not paying off for people, and that portends a growing popular resistance. Combine that with the present financial crisis and that's going to drive that home even more in popular understanding. But they can't go that next step," says Greider.

The bigger problem with the U.S. economy, Greider points out--beyond the need for stimulus and worker retraining-is the toll taken by globalization and the hollowing out of our manufacturing base.

"I think we will keep going down in those terms until this country gets a political leadership that says, 'You know what, it is nuts to run huge trade deficits year after year and pretend that that's OK. It is nuts to imagine that a large, advanced, industrial economy, can prosper without manufacturing.'" he says. "Nobody else in the world does that. Why do we imagine that the U.S. can? It is nuts to become indebted to our trading partners so we can buy more of their stuff. You lay all those things on the table and it is not unreasonable to say this is going to end. . . . When that happens, if enough people understand that there are ways to come back-not to be number one again, but to just become a viable, prospering economy that more or less includes everybody. That's what the goal ought to be."

Interestingly, Greider has spoken with Rubin and others, and recorded their admission that the religion of global trade has its flaws: that workers here and abroad are not reaping the great benefits the prophets of globalization claimed that they would. But their prescription for reform are far too modest, he says. They can't go the extra step and talk about completely renegotiating trade deals and remaking U.S. manufacturing. Instead we continue to pour bailout money into the Wall Street casino economy, and hope for a turnaround. It's time for the Establishment to acknowledge that their whole approach to economics has to change, he says.

"What you can't get from a lot of those people is a candid acknowledgement of that," he told me. They will say, "'Well, yes, the steelworkers have lost jobs and people have sufferend and that's too bad.' But-this applies to a lot of Democrats in the Congress-they find it very hard to step back and say, 'But this is not about the steelworkers or the autoworkers or others who have been disparaged and wiped out by globalization. It's about the U.S. economy. The fact that this economy is gradually losing strength-partly because of globalization.' That's pretty heavy."

If there is one thing that will start turning things around, it's pressure from Americans who are seeing their jobs dry up.

.....

Ruth Conniff covers national politics for The Progressive and is a voice of The Progressive on many TV and radio programs. Conniff was a regular on CNN's Sunday Capital Gang and is now a regular on PBS's To the Contrary. She also has appeared frequently on C-SPAN's Washington Journal and on NPR and Pacifica.

Obama's Nuclear-Weapons Adviser Delivers Doomsday Scenario

.....

Mike Blanchfield
July 4, 2009 - The Vancouver Sun
.....

It's springtime in Ottawa, and Barack Obama's nuclear weapons adviser invites a luncheon gathering to join him on an imaginary journey that is more Dr. Strangelove than A Moveable Feast.

Picture in your mind's eyes your favourite bistro, or some other cherished spot in the city of Paris,'' Dr. Bruce Blair tells the 75 guests picking at a rubber-chicken lunch recently at a downtown Ottawa hotel.

Now, Blair tells them, picture an atomic bomb exploding in that cafe, just like the one that was dropped on Hiroshima in 1945. In that instant, downtown Paris is gone, along with 150,000 souls. The carnage soon multiplies exponentially.

``History would perish. Culture would perish with those many lives. Your bistro, the family at the table next to you, all of these evaporate,'' says Blair, who, by his own admission, misspent part of his youth with his finger on the trigger of mass destruction as a nuclear-ballistic-missile launch officer in the U.S. Midwest.

Obama arrives in Moscow on Monday to meet his Russian counterpart, Dmitry Medvedev, to hammer out the details of new Strategic Arms Reduction Treaty before the old 1991 deal expires in five months. While many see a new START treaty as the road to smoother relations between the White House and the Kremlin, people such as Blair see it as a watershed moment to take bold steps to ultimately rid the world of nuclear weapons.

``We have the wind of Obama and Medvedev at our back,'' says Blair, president of the non-profit World Security Institute, on a recent visit to Canada's capital to push his Global Zero grassroots initiative to rid the world of nuclear weapons.

On a trip to Europe in April, Obama called for a nuclear-free world. But with the nuclear ambitions of Iran and North Korea, coupled with the ever- present threat of terrorists in search of a dirty bomb, the road to that nuclear-free utopia is littered with more potholes than during the Cold War.

Still, Blair and many others say the need for the U.S. and Russia to show leadership is even more pressing, to remove not only the ever-present Cold War possibility of a world-ending nuclear accident, but the 21st-century threat of nukes falling into terrorist hands.

Much has been made of the need to press the ``reset'' button on the strained relations of late between the White House and the Kremlin. Medvedev struck a conciliatory note this past week when he called for a new era in relations with Washington, based on a ``purely pragmatic'' agenda.

Thomas Graham, a retired U.S. diplomat and Clinton-era arms-control ambassador, said Russian and American co-operation on arms control, including a new START treaty, would pay dividends in a much broader sense.

``For too long in this post-Cold War world, the two former Cold War adversaries have remained in a semi-hostile relationship,'' Graham said this past week.

``There could be a serious threat of broader nuclear-weapon proliferation. Many people are concerned about the Iranian nuclear program. . . . This administration, I believe, correctly understands that we cannot effectively deal with either of those issues, and many others, as well, without close co- operation with the Russian Federation.''

Officials from both countries are already hammering out the details of an agreement that would replace the START 1 treaty which expires Dec. 5.

Though the Moscow-Washington relationship is tangled in a web of tension over the U.S. missile-defence-shield plans for Europe, and NATO's eastward expansion, positive signals emerged from the Kremlin on Friday on one front: Medvedev's spokesman said he and Obama would sign a side deal that would allow the U.S. military transit of goods through Russian territory to Afghanistan.

The main goal would be a new START framework that would essentially see both sides slashing their nuclear-warhead stockpiles by one-quarter, down to about 1, 500 warheads each.

Despite the spread of nuclear-weapons arsenals to countries such as China, Pakistan, India and elsewhere, nine out of every 10 nuclear bombs on the planet are under the control of the White House and the Kremlin.

Lilia Shevtsova, of the Moscow office of the Carnegie Endowment for International Peace, suggests that a renewed version of START will not necessarily make the world a safer place.

``When you start counting nukes, you start talking disarmament and verification procedure. It's a sign, not of mutual trust; it's rather a sign of lack, an absence of mutual trust,'' says Shevtsova.

Charles Ferguson, a senior fellow with the Council on Foreign Relations, says if Russia and the U.S. were to go so far as to cut their arsenals down to 1,000 each, other nuclear countries could begin to compete with them.

``We're uncertain as to where China is headed, in terms of its gradual nuclear development. There's still uncertainties even about India, where it may be headed, or Pakistan,'' says Ferguson.

For Blair, it's well past the time to abandon long-held suspicions and animosities.

After walking his Ottawa luncheon crowd through his Paris doomsday vision, Blair piles on more scenarios.

If there were an accidental launch of weapons that triggered all-out nuclear war between Russia and the U.S., 119 million people in each country would die in the initial exchange. That would include 15 million around the Kremlin in Moscow. A city like Chicago or Ottawa would be gone within the hour.

``We've pushed our luck as far as we can; now we need a policy. So, to put it bluntly, there are two paths that stretch before us: We either bury our weapons or we're buried by them,'' says Blair.

``In a Global Zero world, there will still be terrorists, and still be criminals, but they'll not get their hands on nuclear materials. We'll always have Paris in our future, Ottawa in our future. Right now, we cannot say that.''

Saudi Bombshells, Part 1 - Al-Qaeda excluded from suspect list

.....

Gareth Porter
July 2, 2009 - Asia Times

.....

On June 25, 1996, a massive truck bomb exploded at a building in the Khobar Towers complex in Khobar, Saudi Arabia, which housed United States Air Force personnel, killing 19 airmen and wounding 372.

Immediately after the blast, more than 125 agents from the US Federal Bureau of Investigation (FBI) were ordered to the site to sift for clues and begin the investigation of who was responsible. But when two US Embassy officers arrived at the scene of the devastation early the next morning, they found a bulldozer beginning to dig up the entire crime scene.

The Saudi bulldozing stopped only after Scott Erskine, the supervisory FBI special agent for international terrorism investigations, threatened that secretary of state Warren Christopher, who happened to be in Saudi Arabia when the bomb exploded, would intervene personally on the matter.

United States intelligence then intercepted communications from the highest levels of the Saudi government, including interior minister Prince Nayef, to the governor and other officials of Eastern Province instructing them to go through the motions of cooperating with US officials on their investigation but to obstruct it at every turn.

That was the beginning of what interviews with more than a dozen sources familiar with the investigation and other information now available reveal was a systematic effort by the Saudis to obstruct any US investigation of the bombing and to deceive the US about who was responsible for it.

The Saudi regime steered the FBI investigation toward Iran and its Saudi Shi'ite allies with the apparent intention of keeping US officials away from a trail of evidence that would have led to Osama bin Laden and a complex set of ties between the regime and the Saudi terrorist organizer.

The key to the success of the Saudi deception was FBI director Louis Freeh, who took personal charge of the FBI investigation, letting it be known within the Bureau that he was the "case officer" for the probe, according to former FBI officials.

Freeh allowed Saudi Ambassador Prince Bandar bin Sultan to convince him that Iran was involved in the bombing, and that former president Bill Clinton, for whom he had formed a visceral dislike, "had no interest in confronting the fact that Iran had blown up the towers," as Freeh wrote in his memoirs.

The Khobar Towers investigation soon became Freeh's vendetta against Clinton. "Freeh was pursuing this for his own personal agenda," says former FBI agent Jack Cloonan.

A former high-ranking FBI official recalls that Freeh "was always meeting with Bandar". And many of the meetings were not in Freeh's office but at Bandar's 38-room home in McLean, Virginia.

Meanwhile, the Saudis were refusing the most basic FBI requests for cooperation. When Ray Mislock, who headed the National Security Division of the FBI's Washington Field Office, requested permission to go door to door to interview witnesses in the neighborhood, the Saudis refused.

"It's our responsibility," Mislock recalls being told. "We'll do the interviews."

But the Saudis never conducted such interviews. The same thing happened when Mislock requested access to phone records for the immediate area surrounding Khobar Towers.

Soon after the bombing, officials of the Saudi secret police, the Mabahith, began telling their FBI and CIA contacts that they had begun arresting members of a little known Shi'ite group called "Saudi Hezbollah", which Saudi and US intelligence had long believed was close to Iran. They claimed that they had extensive intelligence information linking the group to the Khobar Towers bombing.

But a now declassified July 1996 report by CIA analysts on the bombing reveals that the Mabahith claims were considered suspect. The report said the Mabahith "have not shown US officials their evidence ... nor provided many details on their investigation".

Nevertheless, Freeh quickly made Iranian and Saudi Shi'ite responsibility for the bombing the official premise of the investigation, excluding from the inquiry the hypothesis that Osama bin Laden's al-Qaeda organization had carried out the Khobar Towers bombing.

"There was never, ever a doubt in my mind about who did this," says a former FBI official involved in the investigation who refused to be identified.

FBI and CIA experts on Osama bin Laden tried unsuccessfully to play a role in the Khobar Towers investigation. Jack Cloonan, a member of the FBI's I-49 unit, which was building a legal case against bin Laden over previous terrorist actions, recalls asking the Washington Field Office (WFO), which had direct responsibility for the investigation, to allow such I-49 participation, only to be rebuffed.

"The WFO was hypersensitive and told us to f*ck off," says Cloonan.

The CIA's bin Laden unit, which had only been established in early 1996, was also excluded by CIA leadership from that agency's work on the bombing.

Two or three days after the Khobar bombing, recalls Dan Coleman, an FBI agent assigned to the unit, the agency "locked down" its own investigation, creating an encrypted "passline" that limited access to information related to Khobar investigation to the handful of people at the CIA who were given that code.

The head of the bin Laden unit at the CIA's Counter-Terrorism Center, Michael Scheuer, was not included among that small group.

Nevertheless, Scheuer instructed his staff to put together all the information the station had collected from all sources - human assets, electronic intercepts and open sources - indicating that there would be an al-Qaeda operation in Saudi Arabia after the bombing in Riyadh the previous November.

The result was a four-page memo which ticked off the evidence that bin Laden's al-Qaeda organization had been planning a military operation involving explosives in Saudi in 1996.

"One of the places mentioned in the memo was Khobar," says Scheuer. "They were moving explosives from Port Said through Suez Canal to the Red Sea and to Yemen, then infiltrating them across the border with Saudi Arabia."

A few days after receiving the bin Laden unit's four-page memo, the head of the CIA's Counter-Terrorism Center, Winston Wiley, one of the few CIA officials who was privy to information on the investigation, came to Scheuer's office and closed the door. Wiley opened up a folder which had only one document in it - a translated intercept of an internal Iranian communication in which there was a reference to Khobar Towers. "Are you satisfied?" Wiley asked.

Scheuer replied that it was only one piece of information in a much bigger universe of information that pointed in another direction. "If that's all there is," he told Wiley, "I would say it was very interesting and ought to be followed up, but it isn't definitive."

But the signal from the CIA leadership was clear: Iran had already been identified as responsible for the Khobar bombing plot, and there was no interest in pursuing the bin Laden angle.

In September 1996, bin Laden's former business agent Jamal al-Fadl, who had left al-Qaeda over personal grievances, walked into the US Embassy in Eritrea and immediately began providing the best intelligence the United States had ever gotten on bin Laden and al-Qaeda.

But the CIA and FBI made no effort take advantage of his knowledge to get information on possible al-Qaeda involvement in the Khobar Towers bombing, according to Dan Coleman, one of al-Fadl's FBI handlers.

"We were never given any questions to ask him about Khobar Towers," says Coleman.

Telltale signs of fraud

In the last week of October 1996, the Saudi secret police, the Mabahith, gave David Williams, the FBI's assistant special agent in charge of counter-terrorism issues, what they said were summaries of the confessions obtained from some 40 Shi'ite detainees.

The alleged confessions portrayed the bombing as the work of a cell of Saudi Hezbollah that had had carried out surveillance of US targets under the direction of an Iranian Islamic Revolutionary Guard Corps officer before hatching a plot to blow up the Khobar Towers facility.

But the documents were curiously short of the kind of details that would have allowed US investigators to verify key elements of the accounts. In fact, Saudi officials refused even to reveal the names of the detainees who were alleged to have made the confessions, identifying the suspects only by numbers one through six or seven, according to a former FBI official involved in the investigation.

Justice Department lawyers argued that the confessions were completely unreliable, and unusable in court, because they had probably been extracted by torture. At Attorney General Janet Reno's insistence, both Reno and FBI Director Louis Freeh said publicly in early 1997 that the Saudis had provided little more than "hearsay" evidence on the bombing.

There were also major anomalies in the alleged confessions of Shi'ite plotters that should have aroused the suspicions of FBI investigators.

The Saudis claimed that on March 28, 1996, Saudi guards at the al-Haditha border crossing with Jordan had discovered 38 kilograms of plastic explosives hidden in a car driven by a Saudi Hezbollah member. That member not only admitted to his Saudi Hezbollah membership, according to the Saudi account, but led the secret police to three more Saudi Hezbollah members, who were allegedly arrested on April 6, 7 and 8.

What was peculiar about that account is that on April 17, 1996, Saudi officials had announced that they had found explosives in a car at the border with Jordan on March 29, and said that "a number of people" had been arrested. And four days later, Saudi Interior Minister Prince Nayef had announced the arrest of four men in the bombing of the Office of the Program Manager of the Saudi National Guard in Riyadh on November 13, 1995. Their confessions were broadcast on Saudi television that same day.

In the announcement of the arrests, reported by the New York Times, Nayef referred to the arms smuggling attempt of March 29, saying it was still not clear if the November blast in Riyadh and the smuggling attempt were related.

That statement had clearly implied that Saudi officials had reason to believe that there was a link between the jihadist network believed to have carried out the Riyadh bombing and those who had been caught after the March 29 explosive smuggling attempt.

After the Khobar bombing, however, the Saudis began to link the interception of explosives in late March to the Shi'ite they were saying had carried out the Khobar Towers bombing.

One day in July, according to a former Clinton administration official, Freeh came into the White House situation room livid with anger, telling officials there he had just learned that the Saudis had arrested a Saudi Hezbollah activist in March with concealed explosives and had discovered the Shi'ite plot to bomb Khobar Towers.

Nayef's statement suggesting a possible tie to the Riyadh bombing of the previous November was a deliberate deception of the United States, which the Saudis never explained to US officials. "We asked why they didn't tell us about this earlier and didn't get an answer," says Williams.

If the Saudis had actually arrested the four Saudi Hezbollah members who had been ordered to carry out the bombing, as they later claimed, it would have been known immediately to the rest of the Saudi Hezbollah organization, which would obviously have called off the bomb plot and fled the country.

Further undermining the Shi'ite explosives smuggling and bomb plot story is the fact that the Saudis had secretly detained and tortured a number of veteran Sunni jihadists with ties to bin Laden after the bombing.

The Sunni detainees over Khobar included Yusuf al-Uyayri, who was later revealed to have been the actual head of al-Qaeda in Saudi Arabia. In 2003, al-Uyayri confirmed in al-Qaeda's regular publication that he had been arrested and tortured after the Khobar bombing.

A report published in mid-August 1996 by the London-based Palestinian newspaper Al Qods al-Arabi, based on sources with ties to the jihadi movement in Saudi Arabia, said that six Sunni veterans of the Afghan war had confessed to the Khobar bombing under torture. That was followed two days later by a report in the New York Times that the Saudi officials now believed that Afghan war veterans had carried out the Khobar bombing.

A few weeks later, however, the Saudi regime apparently made a firm decision to blame the bombing on the Saudi Shi'ite.

According to a Norwegian specialist on the Saudi jihadi movement, Thomas Hegghammer, in 2003 - shortly before al-Uyayri was killed in a shoot-out in Riyadh in late May 2003 - an article by the al-Qaeda leader in the al-Qaeda periodical blamed Shi'ites for the Khobar bombing.

In a paper for the Combating Terrorism Center at West Point, Hegghammer cites that statement as evidence that al Qaeda wasn't involved in Khobar. But one of al-Uyayri's main objectives at that point would have been to stay out of prison, so his endorsement of the Saudi regime's position is hardly surprising.

Al-Uyayri had been released from prison in mid-1998, by his own account. But he was arrested again in late 2002 or early 2003, by which time the CIA had come to believe that he was a very important figure in al-Qaeda, even though it didn't know he was the leader of al-Qaeda in the peninsula, according to Ron Suskind's book The One Percent Doctrine.

In mid-March 2003, Suskind writes, US officials pressed the Saudis not to let him go. But the Saudis claimed they had nothing on al-Uyayri, and a few weeks later he was released again. The head of al Qaeda in Saudi Arabia and the Saudi secret police were playing a complex game.

The question of how the alleged plotters got their hands on roughly 5,000 pounds of explosives - the estimated amount in the truck bomb - was one of the central questions in the investigation of the bombing. But interviews with six former FBI officials who worked on the Khobar Towers investigation revealed that the investigation had not turned up any evidence of how well over two tons of explosives had entered the country.

Not one of the six could recall any specific evidence about how the alleged plotters got their hands on that much explosives. And one former FBI official who continues to defend the conclusions of the investigation flatly refused to tell this writer whether the investigation had turned up information bearing on that question.

If the Saudi Hezbollah group had actually been plotting to bring the explosives into the country by hiding them in cars, they would have had to get more than 50 explosives-laden cars past Saudi border guards who were already on alert. There is no indication, however, that any additional cars with explosives came across the border in the weeks prior to the bombing.

.....

Gareth Porter is an investigative historian and journalist specializing in US national security policy. The paperback edition of his latest book, Perils of Dominance: Imbalance of Power and the Road to War in Vietnam.

Saudi Bombshells, Part 2 - Why US officials blamed Iran

.....

Gareth Porter
July 3, 2009 - Asia Times

.....

In March 1997, United States Federal Bureau of Investigation (FBI) director Louis Freeh got what he calls in his memoirs "the first truly big break in the case": the arrest in Canada of one of the Saudi Hezbollah members the Saudis accused of being the driver of the getaway car at Khobar Towers.

Hani al-Sayegh, then 28 years old, had arrived in Canada in August 1996 after having left Saudi Arabia, by his own account, in August 1995, for Iran and Syria. The Canadian government charged him with being a terrorist, based on claims by the Saudi regime.

In order to be transferred to the United States without facing deportation to Saudi Arabia, where he was believed to face the death penalty, al-Sayegh had to agree to a plea bargain under which he would admit to having proposed an attack on US personnel, for which he would have to serve up to 10 years in prison.

In fact, the only thing al-Sayegh had actually admitted to, according to FBI sources, was having proposed an attack on one AWACS plane that had been turned over to the Saudi Air Force - a proposal he said had been rejected. Both before and after being brought to Washington, moreover, al-Sayegh steadfastly denied any knowledge of the Khobar Towers bombing.

Despite that consistent denial by al-Sayegh, a Washington Post story on April 14, 1997, quoted US and Saudi officials as saying that al-Sayegh had met two years earlier with senior Iranian intelligence officer Brigadier General Ahmad Sherifi and that Iran was the "organizing force" behind the Khobar bombing.

That story, leaked by officials supporting the Saudi version of the Khobar story, cited Canadian intercepts of al-Sayegh's phone conversations in Ottawa before his arrest as allegedly incriminating evidence.

The story leant further credence to the general belief in Washington that Iran had masterminded the bombing, mainly because US intelligence had observed the surveillance of US military and civilian sites in Saudi Arabia by Iranians and their Saudi allies in 1994 and 1995.

What al-Sayegh actually told FBI agents in a series of interviews in Ottawa and Washington, however, contradicted the leaked story, according to sources familiar with those interviews.

Al-Sayegh admitted having carried out the surveillance of one military site other than Khobar for the Iranians, but insisted that it was not to prepare for a possible terrorist bombing but to identify potential targets for Iranian retaliation in the event of a US attack on Iran.

His testimony was consistent with what ambassador Ron Neumann, who was director of the Office for Iran and Iraq in the State Department's Bureau of Near East Affairs from 1991 through 1994, had been saying about the Iranian reconnaissance of US targets.

While most official analysts were ready to believe that Iran was plotting a terrorist attack against the United States, Neumann recalls that he had discerned a pattern in Iranian behavior: every time US-Iran tensions rose, there was an increase in Iranian reconnaissance of US diplomatic and military faculties.

"The pattern could be taken as hostile but it could equally have been defensive," says Neumann, meaning that the Iranians viewed such reconnaissance of possible US targets as part of their deterrent to a US attack.

Al-Sayegh would have been a strange choice for driver of the getaway car at Khobar Towers. A frail man whose frequent asthma attacks repeatedly interrupted his interviews with the FBI, al-Sayegh recounted to investigators he had entered military training with the Iranian Revolutionary Guards Corps, but had been told by his IRGC handler after one particularly disastrous exercise that his asthma made him unfit for military operations.

FBI veteran Jack Cloonan, who was talking with the agents interviewing al-Sayegh that spring and summer, told al-Sayegh's immigration lawyer, Michael Wildes, that he was convinced al-Sayegh had not participated in the operation, according to notes in the diary Wildes kept on the case.

Al-Sayegh continued to deny either that he was involved or the Iranians had anything to do with Khobar, and as a result was deported to Saudi Arabia in 1999 - despite the widespread assumption within the FBI that he would be beheaded on his return.

Freeh had no case against the Iranians and their Saudi allies unless he could get access to the Saudi Shi'ite detainees. In the memoir My FBI, Freeh charged that president Bill Clinton refused to press Saudi Crown Prince Abdullah for access to those prisoners and then asked him for a contribution to the future Clinton presidential library at a meeting at the Hay-Adams Hotel in September 1998.

That account is disputed, however, by numerous Clinton administration officials. Freeh, who was not present, cites only "my sources", strongly suggesting that he got it from the self-interested Prince Bandar.

Freeh claimed that former president George HW Bush had then interceded with Abdullah at Freeh's request, resulting in a meeting between Freeh and Abdullah at Bandar's Virginia estate September 29, 1998. At that meeting, Abdullah offered to allow the FBI to submit questions to the detainees and observe the questions and answers from behind one-way glass.

But what Freeh left out of the story is that Abdullah's new offer came at a time when the Saudis felt a greater need to appease Washington on the Khobar Towers investigation than they had previously.

In May 1998, the Central Intelligence Agency (CIA) had learned that Saudi intelligence had broken up an al-Qaeda plot to smuggle Sagger anti-tank missiles from Yemen into Saudi Arabia about a week before a scheduled visit to Saudi by vice president Al Gore and had not informed US intelligence about the incident.

Then, on August 7, 1998, the US embassies in Nairobi, Kenya and Dar Es Salaam, Tanzania had been bombed 10 minutes apart. The CIA had quickly ascertained that al-Qaeda was responsible for the bombings, with the result that US intelligence began to focus more on bin Laden's operations in Saudi Arabia.

Gore had met with Abdullah on September 24, and had pressed hard for access to an important al-Qaeda finance official, Madani al Tayyib, who had been detained by the Saudi government the previous year, but kept away from US intelligence.

The Saudi regime had long acted to keep the United States away from the bin Laden trail in Saudi Arabia. During the Afghan war, high-ranking Saudi officials, including interior minister Prince Nayef himself, had worked closely with bin Laden. And those ties had apparently continued even after the Saudi government revoked bin Laden's citizenship, froze his assets, and began cracking down on some anti-government Islamic extremists in 1994.

Evidence soon appeared that the regime had allowed Saudi supporters of bin Laden to finance his operations through Saudi charities, while encouraging bin Laden to focus on the US military rather than the regime.

Investigators from the 9/11 Commission later learned that, after bin Laden's move from Sudan to Afghanistan in May 1996, a delegation of Saudi officials had asked top Taliban leaders to tell bin Laden that if he didn't attack the regime, "recognition will follow".

Meanwhile, Nayef was resisting CIA requests for bin Laden's birth certificate, passport and bank records.

The CIA had been sharing its own intelligence on bin Laden with the Mabahith, the Saudi secret police, including copies of National Security Agency interceptions of the cell phone conversations of suspected al-Qaeda officials. Then the militants suddenly stopped using their cell phones, indicating they had been tipped off by the Mabahith.

In early 1997, the CIA's bin Laden station even issued a memorandum for CIA director George Tenet, who was about to travel to Saudi Arabia, identifying Saudi intelligence as a "hostile service".

By late September 1998, the Saudi regime was feeling the heat from the Clinton administration for its failure to cooperate on bin Laden's operations in Saudi Arabia. Abdullah's proposal was a way to demonstrate cooperation on terrorism while helping Freeh promote the Saudi line on the Khobar Towers.

FBI ignored evidence of bin Laden
Bin Laden had made no secret of his intention to attack the US military presence in Saudi Arabia. He had been calling for such attacks to drive it from the country since his first fatwa calling for jihad against Western "occupation" of Islamic lands in early 1992.

On July 11, 1995, he had written an "Open Letter" to King Fahd advocating a campaign of guerilla attacks to drive US military forces out of the kingdom.

Bin Laden's al-Qaeda began carrying out that campaign later that same year. On November 13, 1995, a car bomb destroyed the Office of the Program Manager of the Saudi National Guard (OPM SANG) in Riyadh, killing five US airmen and wounding 34.

The confessions of the four jihadis from the Afghan war to the bombing, which were broadcast on Saudi television, said they had been inspired by bin Laden, and one of them referred to a camp in Afghanistan which was associated with bin Laden.

"It was a backhanded reference to bin Laden," says veteran FBI agent Dan Coleman.

The US Embassy in Riyadh immediately requested that the FBI be allowed to interrogate the suspects as soon as their arrests were announced in April. But the Saudis never responded to the request, and on May 31, the embassy was informed only an hour and half before that the four suspects would be beheaded.

When the bomb exploded at Khobar Towers on June 25, 1996, Scott Erskine, the agent in charge of the Riyadh bombing investigation, was about to return to the United States after another frustrating meeting in which Saudi officials were not forthcoming about whom they were going to prosecute.

When FBI Director Freeh visited Khobar a few days after the bombing, he was told not to expect any more information on the Riyadh bombing.

Instead of insisting that the Clinton administration put more pressure on the Saudis to cooperate on the possibility of links between the two bombings, Freeh quietly decided to drop the investigation of the Riyadh bombing entirely. The case was put on "inactive" status, according to two former FBI officials, meaning that no more actions were to be taken, even though it had not been formally closed.

Bin Laden made it more difficult to ignore his role, however, by publicly claiming responsibility for both the Riyadh and Khobar bombings. In October 1996, after having issued yet another fatwa calling on Muslims to drive US soldiers out of the kingdom, bin Laden was quoted in al-Quds al-Arabi, the Palestinian daily published in London, as saying, "The crusader army was shattered when we bombed Khobar."

And in an interview published in the same newspaper on November 29, 1996, he was asked why there had been no further operations along the lines of the Khobar operation. "The military are aware that preparations for major operations require time, in contrast with small operations," said bin Laden.

He then linked the two bombings in Saudi Arabia explicitly as signals to the United States from his organization: "We had thought that the Riyadh and Khobar blasts were a sufficient signal to sensible US decision-makers to avert a real battle between the Islamic nation and US forces," said bin Laden, "but it seems that they did not understand the signal."

.....

Gareth Porter is an investigative historian and journalist specializing in US national security policy. The paperback edition of his latest book, Perils of Dominance: Imbalance of Power and the Road to War in Vietnam.

Saudi Bombshells, Part 3 - FBI chief defended Saudis

.....

Gareth Porter
July 4, 2009 - Asia Times

.....

One of the United States government's top investigators on al-Qaeda, veteran agent Dan Coleman, has a theory that Osama bin Laden always took credit for terrorist actions he had planned, but not for those he had not planned.

For example, bin Laden issued no claim about the 1993 World Trade Center bombing and told his former business agent turned Federal Bureau of Investigation (FBI) informer, Jamal al-Fadl, that he had nothing to do with it, Coleman says.

As noted by the head of the bin Laden unit at the Central Intelligence Agency (CIA), Michael Scheuer, in the 1995 Riyadh and 1996 Khobar Towers bombings in Saudi Arabia a common operational feature was identified: the vehicle carrying the explosives was not parked so as to bring the entire building down.

If the team executing the Khobar bombing had parked parallel to the security fence rather than backing up to it, says Scheuer, it would have destroyed the entire building. The same thing had happened in the bombing of the Office of the Program Manager of the Saudi National Guard in Riyadh which killed five US airmen and wounded 34.

The bin Laden unit of the CIA had collected concrete intelligence on bin Laden's role in planning the Khobar Towers bombing. In mid-January, 1996, according to the intelligence compiled by the unit, bin Laden traveled to Doha, Qatar, where plans were discussed for attacks in eastern Saudi Arabia. Bin Laden arranged for 20 tons of high explosive C-4 to be shipped from Poland to Qatar, two tons of which were to be sent to Saudi Arabia, the report said.

Bin Laden specifically referred to operations targeting US interests in the triangle of cities of Dammam, Dhahran and Khobar in Eastern Province, using clandestine al-Qaeda cells in Saudi Arabia, according to the intelligence reporting.

FBI agents working on the Khobar case simply rejected any evidence of bin Laden's involvement in Khobar, however, because the decision had already been made that the Shi'ites were responsible.

David Williams, then the FBI agent in charge of counter-terrorism, recalls that he had read intelligence reports suggesting bin Laden's involvement in the bombing, but says he had done so "with a suspicious eye".

The FBI investigators dismissed the relevance of the evidence linking bin Laden to the Riyadh bombing. As one former FBI official explained the logic of that position, the Khobar Towers bombing was completely different from the Riyadh bombing seven months earlier: it was in an area of Eastern Province where Shi'ite oppositionists were predominant and where al-Qaeda had no known cell.

The facts, however, told a different story. The city of Khobar itself was predominantly Sunni, not Shi'ite, and the triangular area of the three cities had a large population of veterans of the Afghan war who were followers of bin Laden. As a London-based Palestinian publication reported in August 1996, the six jihadis who confessed to the bombing were all from an area called al-Thoqba near Khobar.

One of the veteran jihadis detained after the bombing, Yusuf al-Ayayri, who was then the actual head of al-Qaeda in the Arabian Peninsula, was from Dammam and knew the jihadi community in that region very well, according to Norwegian al-Qaeda specialist Thomas Hegghammer.

The FBI and CIA knew nothing about bin Laden's movement in that part of Saudi Arabia, however, because they were completely dependent on Saudi intelligence for such information. A CIA memorandum dated July 1, 1996, said the agency had "little information" about the "location, size, composition or activities" of opposition cells in Saudi Arabia.

Interviews with FBI officials involved in the investigation make it clear that they were not interested in evidence linking bin Laden to the bombing, because they understood their task to be limited to getting whatever information they could from Saudi officials.

Williams says he didn't question the Saudi account of the Khobar plot, because, "You start to believe the people who are your interlocutors."

Asked about the evidence that bin Laden was behind the plot, another FBI official with substantive responsibility for the investigation said, "I didn't get involved in that aspect. That wasn't my job."

In early November 1998, FBI director Louis Freeh sent a team of agents to observe Saudi secret police officials interviewing eight Shi'ite detainees from behind a one-way mirror at the Riyadh detention center. He planned to use the Shi'ite testimony to show that Iran was behind the bombing.

As expected, the stories told by the detainees recapitulated the outlines of the Shi'ite plot that had already been described by the Saudis two years earlier. Now there were even more tantalizing details of direct Iranian involvement.

One of the detainees said Iranian Revolutionary Guards Corps General Ahmad Sherifi had personally selected the Khobar barracks as a target. Another said the Saudi Hezbollah members had been not only trained but paid by the Iranians.

"We came away with solid evidence that Iran was behind it," says a former FBI agent.

There was one problem with the evidence the FBI team collected: the Saudi secret police had already had two-and-half years to coach the Saudi Hezbollah detainees on what to say about the case, with the ever-present threat of more torture to provide the incentive.

But Freeh was not about to let the torture issue interfere with his mission. "For Louis, if they would let us in the room, that was the important thing," one former high-ranking FBI official said. "We would have gone over there and gotten the answers even if they had been propped up."

When Freeh took the accounts from the Shi'ite detainees in interrogations witnessed by the FBI team, however, the Justice Department didn't buy them as valid testimony. The department refused to go ahead with an indictment as Freeh had desired, evidently based on the same objection that had been raised two years earlier: the Shi'ites had been subject to torture.

But in January 2001, president George W Bush kept Freeh on as FBI director. Freeh told the new president that Iran had masterminded the Khobar bombing, according to his testimony before the 9/11 Commission, and the Justice Department then began collaborating with Freeh on an indictment of the Saudi Hezbollah which implicated Iran in the Khobar bombing.

The indictment was announced on June 21, 2001 - Freeh's last day as FBI director.

Highly credible evidence soon showed, however, that the Mabahith, the Saudi secret police, did indeed use torture and coercion to get detainees to tell the stories demanded by the Saudi regime - even in front of foreign observers - and that they did so to protect al-Qaeda from investigation by the United States.

Three car bombings in Riyadh in November 2000 that had resulted in the death of a British citizen were generally believed to have been the work of al-Qaeda. But four British citizens, one Canadian and one Belgian, had confessed to the bombings, and their confessions had been broadcast on Saudi television.

After being released in 2003, however, the Canadian citizen, William Sampson, made public his dramatic account of beatings administered by the Mabahith while being hung upside down, including blows which made his testicles swell to the size of oranges. Sampson said the Saudis told him from the beginning what they wanted him to confess to, repeating it over and over while the beatings continued, and refined the story over time, constantly adding new details.

Six weeks into the interrogation, after Sampson began to tell them what they wanted, they started videotaping his confession, using a wall chart to help him remember in detail the movements he was supposed to have made.

The Saudis even coached Sampson on what to say when he was visited by Canadian Embassy personnel, threatening him with further torture if he told the embassy officials the truth. When the embassy personnel came to talk with him, Sampson's two torturers were present for the entire interview, just as they were presumably present at the questioning of the Shi'ite detainees observed by the FBI team.

The other foreigners told similar stories of coerced confessions under torture. Sampson and the five foreigners were released only after a May 2003 suicide bombing by al-Qaeda on a Riyadh compound housing 900 expatriates forced Saudi Interior Minister Prince Nayef to acknowledge al-Qaeda as a terrorist threat in Saudi Arabia.

Meanwhile, once out of office, Freeh became virtually a defense lawyer for the Saudi regime on the Khobar Towers bombing.

Testifying before a joint hearing of the House and Senate Select Intelligence Committees on October 9, 2002, he whitewashed the Saudi policy toward the FBI investigation. Omitting any mention of the Saudi deception over the explosives smuggling incident and refusal to allow the FBI to pursue essential investigatory tasks, Freeh suggested that the Saudis had done everything that could be expected of them.

"Fortunately, the FBI was able to forge an effective working relationship with the Saudi police and Interior Ministry," he said. Any "roadblock or legal obstacle" that "would occur", Freeh asserted, was because of the "marked difference between our legal and procedural systems".

Freeh paid tribute to Prince Bandar bin Sultan, the Saudi ambassador, as "critical in achieving the FBI's investigative objectives in the Khobar case" and suggested that any such temporary problems "were always solved" by Bandar's "personal intervention".

Freeh misrepresented the arrangement under which the FBI team had observed the interrogation as "making these witnesses directly available".

In an interview for a fawning biography of Prince Bandar, Freeh even went so far as to call the Saudi beheading of four jihadis who confessed to the Office of the Program Manager of the Saudi National Guard bombing after refusing to allow the FBI to question them as "swift justice" on a "Saudi domestic matter".

The final chapter of Freeh's connection with Bandar and the Saudis, however, was still to come. In April 2009, Freeh appeared as Bandar's defense lawyer in a British court case in which Bandar was accused of illegally taking US$2 billion in graft on a Saudi-British arms deal.

In the context of Freeh's straightened financial situation and his very close relationship with Prince Bandar, this sequence of developments in Freeh's relationship with the Saudis, culminating in being put on Bandar's payroll, should have raised eyebrows in Washington.

With a wife and six children to support, Freeh had been far more vulnerable to Saudi blandishments than most senior administration officials. And Bandar had made no secret that he was willing to use the promise of financial benefits to influence US officials while they were still in office.

He once told an associate, according to a February 2002 article by Robert G Kaiser and David Ottaway of the Washington Post, "If the reputation ... builds that the Saudis take care of friends when they leave office, you'd be surprised how much better friends you have who are just coming into office."

Freeh declined to be interviewed for this series.

In light of the history of Freeh's relations with Bandar, his conduct of the investigation of Khobar Towers deserves new scrutiny. Freeh effectively shut down a probe of a terror bombing in which bin Laden was clearly implicated when the Saudis had refused to cooperate; he refused to pursue any investigation of a bin Laden role in the bombing; and he pushed a seriously flawed Saudi account of the bombing, despite the fact that it was tainted by the likelihood of torture.

The result of Freeh's blatant pro-Saudi bias was that bin Laden was allowed more years of unhindered freedom in which to plan terrorist actions against the US. Had Freeh not become an advocate of the interests of the regime whose representative in Washington eventually put him on his payroll, US policy would presumably have been focused like a laser on bin Laden and al-Qaeda two years earlier.

And perhaps the disinterest of the George W Bush administration's national security team toward al-Qaeda before 9/11 would have been impossible.

.....

Gareth Porter is an investigative historian and journalist specializing in US national security policy. The paperback edition of his latest book, Perils of Dominance: Imbalance of Power and the Road to War in Vietnam.