Part VII -- Dean Henderson: Big Oil & Their Bankers in the Persian Gulf. Chapter 5: Fortress Persian Gulf

Fortress Persian Gulf

Posted on 11/03/2016 | Leave a comment

(Excerpted from Chapter 5: Persian Gulf Rent-A-Sheik: Big Oil & Their Bankers…)

Following the Iranian Revolution the US more overtly displayed its willingness to lean on the Saudi monarchy.

During the 1979 border war between North and South Yemen US Secretary of Defense and Trilateralist Harold Brown pressured the Saudis to supply $390 million worth of US weapons to North Yemen where US advisers were running the show.  The conflict underscored the vulnerability of the oilfields of the Kingdom to the kind of nationalist rhetoric coming from the neighboring South Yemen government.

Brown also directed the Saudis finance the sale of twelve F-SE fighters by the US to Sudan.  With the Shah deposed, Brown busied himself selling surplus Iranian-bound weapons to the Saudis, as well as to Israel, Jordan, Oman and Egypt.  In the spring of 1980 the US signed a military pact with Turkey and sent the Turks $1 billion in weaponry. [206]

The Saudis immediately announced an oil production increase when the mullahs took Tehran.  Within two weeks of that announcement the US State Department unveiled a $1.2 billion program to shore up the Saudi National Guard.  The program would be supervised by Vinnell Corporation, a subsidiary of TRW, the San Francisco-based consumer credit reporting giant and leading supplier of NSA spy satellites.  By 1979 Saudi purchases of US weaponry surpassed even those of the Israelis.

Bendix, Raytheon, Grumman, Northrup, Lockheed, TWA and the US Army Corps of Engineers all flocked to Riyadh to exhibit their wares.  The US implemented American Peace Shield, through which tens of billions of dollars in defense contracts would be doled out.  Richard Secord swung an $8.5 billion contract for Boeing to provide AWACs to the Saudis.  An integrated Command and Control Center (C3) was established in Saudi Arabia. [207]

The US, Britain and France pushed for defense offset deals with the Kingdom, under which weapons were paid for in oil.  In 1990 the Saudis bought French Crotale missiles, with the French receiving discounted oil and promised to invest in Saudi industry.  A British program known as Al-Yamamah was spearheaded by British Aerospace (BAE) and run by a consortium of pan-European interests, whose governments established the Anglo-Saudi Committee.

Under Al Yamamah the Euro governments, along with BP Amoco and Royal Dutch/Shell, receive free oil.  European arms dealers get contracts with the House of Saud and the Saudis receive help from the British in moving their oil operations downstream by investing in old Eastern European oil refineries. [208]  In 1989 BAE contracted to build Prince Sultan Air Base, while also selling Tornado fighters to the Saudis.  BAE bought Ballast Nedam, a Dutch heavy construction firm with Saudi ties, which built the massive bridge that now links the Saudi mainland to Bahrain. BAE netted $60 billion in the largest contract ever received from the Saudis by a Western company. According to a June 27, 2007 Financial Times article, Al-Yamamah and BAE were being investigated by the US Justice Department.

The militarization of the Gulf Region went beyond the borders of Saudi Arabia.  In 1980 US arms sales and military aid to the GCC emirates were unprecedented.  The AWAC-monitored C3 defense system, now in place in Saudi Arabia, would be integrated with Hawk missile systems installed in all six GCC nations.  In 1983 the GCC began to conduct joint regional military maneuvers under the watchful eye of US advisers.  The Saudis and Kuwaitis conducted the first such exercises, followed by joint training between Oman and the UAE.  Eventually all six nations were running coordinated military exercises on a regular basis.

In 1984 the GCC established a Joint Chiefs of Staff and developed its own Rapid Deployment Forces (RDF), both modeled after and facilitated by the Pentagon.  The Saudis and Kuwaitis agreed to foot the lion’s share of the bill, including an agreement whereby the two richest GCC monarchies paid for air defense systems for Oman and Bahrain.

In late 1984, with the Iran/Iraq War heating up, the Pentagon coordinated the first Peninsula Shield exercises involving troops from the US, Egypt, Pakistan, Turkey and the GCC countries. [209]  The US set up a fallback arc of bases and obtained basing rights for RDF in Oman, Kenya, Somalia and Egypt.  The US B-52 forward base on the Indian Ocean island of Diego Garcia was beefed up.  Egyptian and Pakistani Air Forces, which the GCC nations rely heavily upon, were supplied with new F-16 fighters from Northrup Corporation.  Omani and Egyptian Armies regularly conducted joint military exercises involving US troops.

The French placed Mirage fighters at bases in Djibouti on the Horn of Africa across the Red Sea from Saudi Arabia.  The British added Tornado fighters to its bases in Oman.  And NATO fortified its bases in Turkey, especially at Incirlik Air Base in the south of the country near the Iraqi border.  In 1983, following a trial run invasion of Grenada, President Reagan merged the RDF into the US Central Command.  A US Middle East Forward Command (MIDEASTFOR) component was established at the huge US naval base near Jufair, Bahrain which houses the US 5th Fleet and serves as the biggest ARAMCO customer on the planet.

Since 1973 65% of US arms sales have gone to the Middle East.  Between 1977 and 1987 $34 billion in arms flowed into the Gulf region, more than was supplied to the rest of the entire world combined.  US defense giants sold AWAC’s and F-15’s to Qatar and Kuwait.  After the Gulf War President Bush authorized the sale of Apache attack helicopters to Bahrain and Kuwait.

Saudi Arabia now boasts the highest per capita defense spending in the world.  In 1984 alone the Saudis spent $22.7 billion on US weaponry.  The GCC also “rents” military troops from the best US-trained armies in the region, using aid as payment.  The Saudis have elaborate military assistance arrangements with Pakistan, whereby the Saudis send Karachi aid in return for the services of Pakistani military units.  Kuwait has long received military forces from both Pakistan and Egypt in exchange for billions of dollars in aid.  Pakistan’s best pilots are sent to the UAE to fly the emir’s F-16 fighters.  Similar arrangements exist between the GCC and Turkey. [210]

US-trained militaries in Pakistan, Egypt and Turkey are renowned as the best Muslim forces in the world.  When combined with Israel, the three countries account for one-half of US military aid.  The US once eyed Pakistan as a central command headquarters for its RDF, while Turkey keeps its bases open for US military adventures such as the no-fly zone patrols over northern Iraq.  In effect, the US is defending GCC oil with third country armies which it has trained and over which it holds the purse strings, thus curtailing the power of any potential rogue GCC sheik who may decide to go it alone.  The arrangement dilutes the political power of the Gulf States’ people, whose countries are occupied by foreign troops, ready to dispassionately put down any revolt that might threaten either the emirs or the oilfields.

While Third World grunts provide a standing army, the US is careful not to allow GCC personnel to become proficient in the control of advanced weapons systems.  The most sophisticated systems are monitored by US military officers.  At Riyadh, for example, US CENTCOM is in charge of monitoring AWACs and tanker air traffic. [211]  Key equipment on the AWACs requires US personnel to operate beyond a few days.  The planes contain a digital look-down link so the US can monitor the AWACs from American soil.

There are 6,000 Americans working in the Saudi Arabia arms industry. Many hold key positions.  This figure does not include US troops whose numbers have steadily increased since the mid-1980s and took a quantum leap during the US war with Iraq in 1991.  Another neo-colonial policy disallows licensing of high-tech arms production outside NATO and Pacific Alliance countries.  Spare parts for GCC weapons systems are available only on a strict US schedule.  These technological dependencies insure a perpetuation of the oil for arms quid pro quo which the Four Horsemen, the US defense establishment and the international bankers wish to impose upon the GCC.

There have been voices within US foreign policy circles for some time calling for outright occupation of the oil fields of Saudi Arabia.  The US has planned for this contingency since the 1950’s construction of the first air base at Dhahran, less than five miles from ARAMCO headquarters.  The US Army Corps had made a conscious effort to overbuild the Saudi military infrastructure so that it might later be utilized by the US during a Middle East regional war.  One Saudi agreement allows Saudi bases to accept US F-15’s in a short time period and to instantly integrate the fighters into the existing command and control system.  Similar agreements were signed with the other GCC nations in the climate of fear which followed the 1991 Gulf War.

[168] “Saudi Arabian Oil Company”. L.A. Auland. The Oil & Gas Journal. 8-16-93. p.38

[169] Oil, Industrialization and Development in the Arab Gulf States. Atif Kubursi. Croom Helm. Kent, U.K. 1984. p.4

[170] “Comfort Blanket for the Gulf”. Economist. 12-5-92. p.39-40

[171] Beyond the Storm: A Gulf Crisis Reader. Phyllis Bennis and Michel Monshabeck. Olive Branch Press. New York. 1991. p.39

[172] “How the Middle East Map Came to be Drawn”. David Fromkin. Smithsonian. January 1991. p.14

[173] Diplomacy in the Near and Middle East: A Documentary Record: 1914-1956. J.C. Hurewitz. D. Van Nostrand & Company Princeton, NJ. 1956. p.111

[174] The United Arab Emirates: An Economic and Social Survey. K.G.Fenelon. Longman Books. London. 1976. p.33

[175] Mobil Advertisement. Time. 11-20-95

[176] Arabian Oil: America’s Stake in the Middle East. Raymond F. Mikesell and Hollis B. Chenery. University of North Carolina Press. Chapel Hill. 1949. p.57

[177] Arms and Oil. Thomas L. McNaughter. The Brookings Institute. Washington, DC. 1985. p.102

[178] Defending Arabia. J.E. Peterson. St. Martin’s Press. New York. 1986. p.205

[179] “Uneasy Lie the King’s Heads”. Dilip Hero. The Nation. 9-17-90. p.13

[180] “Saving Kuwait”. Christine Bratton and Doug Henwood. Left Business Observer. 2-28-91. p.1

[181] The Merchants: The Big Business Families of Saudi Arabia and the Gulf States. Michael Field. Overlook Press. Woodstock, NY. 1985. p.131

[182] “Revolution from the Top Down”. Mary Anne Weaver. National Geographic. March 2003. p.84

[183] “A Price Worth Paying”. The Banker. June 1988. p.10

[184] “Nightmare Victory”. Eqbal Ahmad. Mother Jones. March/April 1991. p.7

[185] “Saudi Prince Becomes Citicorp’s Top Stockholder”. Michael Quint. New York Times. 2-22-91. p.A-1

[186] “Saudi Prince Joins Reichmann Bid to Reaquire London Complex”. Larry M. Greenberg. Wall Street Journal. 8-4-95. p.A-4

187] “All That Glitters”. Larry Gurwin and Adam Zagorin. Time. 11-6-95. p.52

[188] Ibid. p.52

[189] Oil Politics in the Gulf: Rulers and Merchants in Kuwait and Qatar. Jill

Dean Henderson is the author of five books:Big Oil & Their Bankers in the Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror Network, The Grateful Unrich: Revolution in 50 Countries, Das Kartell der Federal Reserve, Stickin’ it to the Matrix & The Federal Reserve Cartel.  You can subscribe free to his weekly Left Hook column @www.hendersonlefthook.wordpress.com