Posted on 31-3-2004

British Afraid To Publish
by David Leigh, 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 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."