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   How a U.S. Company Props Up the House of Saud


How a U.S. Company Props Up the House of Saud

by William D. Hartung

Editor’s Note: This article, an investigation of the Vinnell Corporation, originally ran in the April 1996 issue of The Progressive magazine a few months after bombers attacked the private military contractor’s facilities in Saudi Arabia. At that time, Vinnell was owned by the Carlyle Group. Yet another bombing on Vinnell’s Saudi Arabian property occurred on May 12 of this year.

Now owned by Northrop Grumman, Vinnell also formed a joint venture company with Brown & Root, a subsidiary of Halliburton, to provide services to US military forces in Turkey. According to Vinnell’s website, “Logistics, procurement and transportation support for Vinnell’s overseas operations is provided by Logistics and Transportation Services, Inc., (LTSI), a Vinnell subsidiary in Baltimore.”

The story of how an obscure American company ended up becoming the Saudi monarchy’s personal protection service is a case study in how the US government has come to rely on unaccountable private companies to do its dirty work on the world stage.
The sanitized version of American foreign policy asserts that the United States is hard at work promoting democratic values around the world in the face of attacks from totalitarian ideologies ranging from Communism during the Cold War to Islamic fundamentalism today.

Every once in a while an incident occurs that contradicts this reassuring rhetoric by revealing the secret underside of American policy, which is far more concerned with propping up pliable regimes that serve the interests of US multinational corporations than it is with any meaningful notion of democracy.

The November 13, 1995 bombing of the Saudi Arabian National Guard (SANG) headquarters and an adjacent building housing a US military training mission is one such incident.

President Clinton tried to paint the bombing as just another senseless act of terrorism perpetrated by armed Islamic extremists, but the target was chosen much too carefully to support that simple explanation. The Saudi National Guard is a 55,000 man military force [now in excess of 80,000—Ed.] whose main job is to protect the Saudi monarchy from its own people, using arms from the United States and training supplied by roughly 750 retired US military and intelligence personnel employed by the Vinnell Corporation of Fairfax, Virginia. A January 1996 article in Jane’s Defence Weekly describes the SANG as “a kind of Praetorian Guard for the House of Saud, the royal family’s defence of last resort against internal opposition.” The November bombing—which killed five Americans and wounded thirty more—was certainly brutal, but it was far from senseless. As a retired American military officer familiar with Vinnell’s operations put it, “I don’t think it was an accident that it was that office that got bombed. If you wanted to make a political statement about the Saudi regime you’d single out the National Guard, and if you wanted to make a statement about American involvement you’d pick the only American contractor involved in training the guard: Vinnell.”

A Useful Case Study
The story of how an obscure American company ended up becoming the Saudi monarchy’s personal protection service is a case study in how the United States government has come to rely on unaccountable private companies and unrepresentative foreign governments to do its dirty work on the world stage, short-circuiting democracy at home and abroad in the process. In the wake of the Iran/contra scandal and the end of the Cold War, many observers of US foreign policy have assumed that this penchant for covert policymaking has been put aside, but Vinnell’s role in Saudi Arabia puts the lie to that comforting assumption.

To borrow a phrase from one of Vinnell’s former presidents, the company didn’t start out as a “spook outfit” when it was founded in 1931 as a small Los Angeles area construction company. The firm’s early growth was tied to contracts for the LA freeway system. Indeed, some of Vinnell’s best known projects are decidedly civilian in character, including work on the Grand Coulee Dam and the construction of LA’s Dodger Stadium (Brooklyn Dodger fans take note). But by the end of World War II, the company was already dabbling in military and intelligence work.

Vinnell’s first overseas contract involved shipping supplies to Chinese Nationalist Chiang Kai-shek as part of his futile attempt to beat back the revolutionary forces of Mao Tse-Tung. The company soon embarked on a booming military construction business in Asia, building military airfields in Okinawa, Taiwan, Thailand, South Vietnam, and Pakistan.

Vinnell’s Asian adventures served as a springboard for its emergence as a global company that was more than willing to do a little intelligence work on the side if the opportunity presented itself. In his memoir Ropes of Sand, former CIA operative Wilbur Crane Eveland describes how he used his Vinnell connection as a cover during his tours of duty in Africa and the Middle East in the early 1960s, noting that company founder Albert Vinnell expressed his willingness to help the agency do whatever it needed to do (for a fee, of course).

Eveland returned the favor by negotiating contracts for Vinnell to do construction services on oil fields in Iran and Libya, bribing the appropriate officials along the way.

Vinnell’s big break in the military/intelligence field came during the American intervention in Vietnam, when the company won hundreds of millions of dollars of business doing everything from building military bases to repairing armored personnel carriers to running military warehouses.

At the peak of its involvement Vinnell had 5,000 employees in Vietnam, but not all of them were engaged in straightforward military operations. Several retired Army and Marine officers familiar with Vinnell’s work in Vietnam have indicated that the company ran several “black” (secret) programs. In a March 1975 interview with the Village Voice, a Pentagon official described Vinnell as “our own little mercenary army in Vietnam” and asserted that “we used them to do things we either didn’t have the manpower to do ourselves, or because of legal problems.” The official indicated that one of Vinnell’s jobs was as “rear security forces,” assigned to “clean up” US military bases in Vietnam during the US withdrawal: “how they ‘cleaned up’ was pretty much up to them.... If we figured an area was certain to be overrun by the VC [Viet Cong].... they were to demolish everything and anything.”

The last thing that Vinnell nearly demolished in Vietnam was its own financial viability. The company had apparently poured all of its resources into the war effort, and it had very little to fall back on when the war ended. Vinnell posted losses every year from 1970 through 1974, and in January 1975 the company filed a reorganization plan with the California Department of Corporations in which it proposed to sell voting control in the company to a Lebanese investor for the modest sum of $500,000. With these dismal financial figures looming in the background, the firm’s February 1975 contract for $77 million to train the Saudi National Guard brought Vinnell back from the brink of bankruptcy.

The Vinnell/Saudi training deal drew considerable fire, both in the press and on Capitol Hill. On February 9, 1975 Peter Arnett filed a piece for the Associated Press that raised questions about the propriety of a private US company serving as a hired protection service for an undemocratic regime. When Maas asked one of Vinnell’s men in Riyadh whether he viewed himself as a mercenary, the question drew a classic bureaucratic response: “We are not mercenaries because we are not pulling the triggers. We train people to pull the triggers. Maybe that makes us executive mercenaries.”

This setup was a bit too blatant even for the more hawkish members of Congress. Senators Henry (“the Senator from Boeing”) Jackson and Armed Services Committee Chairman John Stennis of Mississippi demanded hearings on the contract, which Jackson purported to find “completely baffling.” Meanwhile, a reform-minded young Congressman from Wisconsin named Les Aspin aired charges that the $77 million Saudi contract may have been greased with a $4.5 million payment to middleman Ghassn Shaker, the very same Lebanese businessman that Vinnell was trying to give a controlling interest in the company at a cut rate price. The hearings were held and Shaker was dissuaded from buying a controlling interest in Vinnell, but the contract to train the Saudi National Guard was allowed to stand.

By 1979, when a rebellion rocked the Saudi regime and opposition forces occupied the Grand Mosque at Mecca, Vinnell’s “executive mercenaries” were called out from behind the scenes onto the front lines. The Washington Post reported at the time that in the final stages of the storming of the mosque, the Saudi princes who were running the military operation relied on “advice from the large US military training mission” (including Vinnell contract employees) and were “in frequent telephone contact with US officials.” Counterspy magazine further reported that when the initial National Guard assault failed, Vinnell personnel were brought to Mecca to “provide the tactical support needed to capture the Mosque.”

During the 1980s, things returned to “normal” in Saudi Arabia, with strict controls on freedom of expression, harsh repression of the rights of women, public beheadings of common criminals, and the maintenance of a fiercely anti-communist, pro-US foreign policy. (These same practices continue to this day).

Vinnell’s role as the regime’s principal security “prop” was barely discussed in the US media, but the company did figure indirectly in the biggest intelligence scandal of the decade, Iran/contra. Lt. Col. Richard Gadd, who went on to become the chief operations officer for Ollie North and Richard Secord’s private weapons air drop service for the contras, was hired by Vinnell for his first job out of the Air Force. According to Steven Emerson’s 1988 book Secret Warriors, Gadd’s work at Vinnell involved setting up a private, “black” air transport service called Sumairco which was to be dedicated solely to secret US army operations. Gadd left Vinnell after a few months, taking Sumairco with him. He also used his brief stopover at Vinnell to get started on two other “special services” companies, American National Management and Eagle Aviation Services, which were secretly involved in such major operations as the 1983 US invasion of Grenada.

That someone like Gadd would use Vinnell as his transition from serving in the armed forces to joining the netherworld of private companies involved in covert operations on behalf of the US government is not surprising. Although Vinnell is one of literally hundreds of companies that do work for the CIA and military intelligence agencies, its strong ties to Saudi Arabia and its experience in military training and logistics make it a central players in this still burgeoning field.

Today, the biggest question regarding Vinnell’s ongoing operations is the same one that was posed twenty years ago: why is a US company using retired US military and intelligence personnel to defend a corrupt monarchy in Saudi Arabia? It’s obvious what’s in it for the monarchy: protection from rebels and democrats who might want to change the kingdom’s form of government.

On this front, Vinnell must be busier than ever: Human Rights Watch reported that in 1994, “Saudi Arabia witnessed the largest roundup in recent history of opposition activists and a new low in the dismal human rights record of the Kingdom.” The organization’s report for 1995 cited “further deterioration in human rights observance,” including a harsh crackdown on peaceful Islamist organizations. Political parties and demonstrations are outlawed, there is no independent free press, and there has been a systematic crackdown on peaceful Islamic dissenters.

The lengths to which the Saudi regime will go to prevent critical information from reaching its subjects were underscored in January of 1996 when Saudi officials tried to get Britain to deport Mohammed al-Mas’ari, whose Committee for the Defense of Legitimate Rights has been faxing critical reports about the Riyadh government to contacts within Saudi Arabia from its offices in London. The none to subtle message conveyed to Conservative Prime Minister John Major’s government was that if Mas’ari was allowed to continue operating from Britain, Britain’s future arms sales and other commercial contracts with Saudi Arabia might suffer. While Mas’ari’s democratic credentials have been questioned in some US media assessments of the case, his message is clear enough—he told the New York Times in late January [1996] that “The Saudi regime is a mafia that has enormous wealth under its control and doesn’t want to give it up. We want to have an elected, accountable government with a real rule of law and an independent judiciary.”

The Saudi government obviously feels threatened enough by statements of this sort to make Mr. Mas’ari’s presence in London into an international incident. Supporters of Mr. Mas’ari’s organization operating within Saudi Arabia are treated even more harshly.

On August 11, 1995, the Saudi government beheaded Abdalla al-Hudhaif, a supporter of CDLR who was convicted by a secret tribunal of offenses ranging from firearms possession to distributing critical leaflets to allegedly throwing acid at a security officer. Human Rights Watch notes that this last allegation against Mr. al-Haif is the only violent incident alleged against the peaceful Islamist opposition in Saudi Arabia during the government’s ongoing crackdown on their activities.

Violence Likely to Continue
With peaceful means of expressing disagreement with the current Saudi ruling circle so systematically blocked, violent outbursts like the bombing of the Saudi National Guard headquarters are more likely to occur, and to be met in turn by violent repression by Saudi Arabia’s Vinnell-trained internal security forces.

As for Vinnell and its employees, their main interest in Saudi Arabia is undoubtedly the money. A retired Marine officer who did five years with Vinnell in Saudi Arabia reports that he was able to save up several hundred thousand dollars to buy a retirement home in cash. An official familiar with the work of another US firm that recently got a contract to train the Saudi Navy says that employees at the firm “feel like they’ve died and gone to heaven, because the Saudis will never run out of money.” The myth of Saudi Arabia as a bottomless source of cash has worn thin lately as tens of billions of weapons purchases from the United States plus the cost of the 1991 Gulf War have driven the Saudi budget into deficit for the first time ever, but Vinnell’s contract is safe as long as the current Saudi ruling clique stays in power (it was recently renewed through 1998). [The contract was renewed again in 1998—Ed.]

If anything, Vinnell’s fortunes may improve in the short-term, now that King Fahd has stepped aside for health reasons, leaving the reins of government in the hands of his brother, Crown Prince Abdullah ibn Abdulaziz, who also happens to run the National Guard. Jane’s Defense Weekly has speculated that the guard may be built up even faster now as a way of enhancing Crown Prince Abdullah’s personal power base, which will no doubt mean bigger contracts for Vinnell as well.

But is what’s good for the Saudi monarchy and its chosen protection service good for the people of the United States or Saudi Arabia? The short answer is no, but the US government has exerted considerable energy trying to convince us that we’re all in this mess together and that Americans have no choice but to support the Saudi monarchy.

It’s true that the Saudi regime provides a wide array of economic and political services to the US government and US corporations, but most of these services have little to do with promoting either democracy or prosperity for the citizens of the United States or Saudi Arabia. The Saudis provide access to their oil resources to US firms on extremely favorable terms, and adjust their pricing policies within OPEC in ways that support US interests.

For years, a significant portion of Saudi “petrodollar” revenues have been invested in US government bonds, helping ease the burden of the growing US budget deficit (the tradeoff is that taxpayers have been asked to spend hundreds of billions of dollars to build a US military force that can get to the Middle East on short notice to defend regimes such as the Saudi monarchy from threats from without or within).

In the realm of secret wheeling and dealing, the Saudis have not shied from putting up money for joint covert operations with the US, from arming the Afghan rebels to providing funds to Oliver North’s Iran/contra “enterprise.”

According to the Washington Post, the latest [1996] US-Saudi joint venture has been a secret initiative to provide over $300 million for covert weapons supplies to the Bosnian government during the period of the UN embargo on that nation. Although Clinton Administration officials have denied involvement in this scheme, it would be consistent with other US actions of the past several years, such as looking the other way as planeloads of weapons were dropped in the area. What is certain is that Saudi Arabia will be approached about providing funds to train Bosnian Muslim forces in the context of the current NATO intervention to police the Dayton accords.

A source with contacts within the Vinnell Corporation has indicated that the State Department has encouraged Vinnell to bid on the contract to train the Bosnian forces. Vinnell’s parent company, BDM [itself owned by the Carlyle Group when this article was written—Ed.], which bought the firm in 1993 to expand its market niche in military training services, already has a contract to provide 500 translators for NATO peacekeeping forces in Bosnia.

The Cold War is over, and the culture of deception and covert dealing represented by the Vinnell Corporation’s role in Saudi Arabia should be brought to an end with it. Nothing of value can come from sustaining the secretive network of companies and relationships that has fueled scandal after scandal and cost thousands of innocent lives.

Even advocates of a US military role in Bosnia have to take pause at the recent revelations of covert activities on the part of the US and its ally, Saudi Arabia, in arming Bosnian forces. If true, the secret violation of the arms embargo on Bosnia will take its place alongside a long line of examples of US government hypocrisy, from the secret arming of Iran and Iraq in the 1980s to the cover-up of the US role in the slaughter of hundreds of thousands of Guatemalans by Pentagon backed military forces and CIA-backed death squads from the 1960s through the 1990s. The common thread uniting these operations is the use of private companies and shadowy intelligence operatives to subvert the publicly stated objectives of US policy, undermining democratic accountability in the process.

The policy of using Vinnell trainers and US arms supplies to keep the Saudi monarchy in power cannot be sustained indefinitely. For one thing, the money’s running out. The lavish social programs that have been used to buy off dissent are being cut sharply to make room for continuing expenditures on advanced American, French, and British weaponry. A number of security analysts are beginning the speak of Saudi Arabia as the “next Iran”—a top-heavy, corrupt monarchy that is in danger of being overthrown by its own people if it fails to implement major reforms soon. And as one confidential financial advisor to the Saudis told the New York Times, the US policy of pushing weapons and military solutions over democratization and social reform may be the greatest single threat to the survival of the House of Saud:

“People think we have this great gold mine in Saudi Arabia.... I don’t think the US government realizes what it is doing by shoving weapons down the Saudi’s throats. They’re forgetting that what they’re doing is creating instability in Saudi Arabia. That could be the greatest risk to Saudi security.”

The people of Saudi Arabia will eventually demand and receive a measure of input into how their government is run and how their resources are utilized. Whether that change comes about through a revolution led by Islamic fundamentalists or an evolution towards democracy will depend in significant part on whether US policy continues to back the monarchy to the hilt or press for a political opening that allows for peaceful change.

If the Saudi monarchy is overthrown, will Vinnell be put in charge of “cleaning up” all the sensitive US-built military and intelligence facilities in Saudi Arabia as it was during the US withdrawal from Vietnam? Or will the American public head off that day by demanding that our government get out of the dictator protection racket and allow the possibility of genuine democratic development in Saudi Arabia?

William D. Hartung is a Senior Fellow at the World Policy Institute at the New School for Social Research in New York City and the author of And Weapons for All (HarperCollins, 1995). He is also a contributor to the forthcoming Power Trip: Unilateralism and Global Strategy after September 11 (Seven Stories Press). Jennifer Washburn providied research assistance in the preparation of this article, which is republished here with permission.

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This story was published on June 4, 2003.
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