DEPT. OF CONNECTIONS

[pynchonoid]

May 1, 2003 | home 
The New Yorker
Talk of the Town
DEPT. OF CONNECTIONS
THE CONTRACTORS
by Jane Mayer
Issue of 2003-05-05
Posted 2003-04-28

Back when Americans were still debating whether there
was just cause for a preëmptive strike against Iraq,
few arguments were scrutinized more closely than the
Bush Administration’s contention that there were
covert links between Al Qaeda and Iraq. At the C.I.A.,
analysts pored over aerial satellite photographs. At
the Treasury Department, experts sifted through
financial records. At the National Security Agency,
Arab-speaking linguists eavesdropped on phone
conversations. But, even after Secretary of State
Colin Powell put his credibility on the line, in a
damning, dot-connecting speech before the United
Nations last February, questions persisted about the
solidity of the alleged links between Saddam and
Osama.

Now there is a new and demonstrable connection, but it
is not the kind that the Bush Administration had in
mind. In fact, it is more likely to fuel the
speculations of conspiracy theorists than it is to put
their fears to rest. It turns out that a money trail
runs—albeit rather circuitously—from the lucrative
business of rebuilding Iraq to the fortune behind
Osama bin Laden. Bin Laden’s estranged family, a
sprawling, extraordinarily wealthy Saudi Arabian
dynasty, is a substantial investor in a private equity
firm founded by the Bechtel Group of San Francisco.
Bechtel is also the global construction and
engineering company to which the U.S. government
recently awarded the first major multimillion-dollar
contract to reconstruct war-ravaged Iraq. In a closed
competitive bidding process, the United States Agency
for International Development chose Bechtel to rebuild
the major elements of Iraq’s infrastructure, including
its roads, railroads, airports, hospitals, and
schools, and its water and electrical systems. In the
first phase of the contract, the U.S. government will
pay Bechtel nearly thirty-five million dollars, but
experts say that the cost is likely to reach six
hundred and eighty million during the next year and a
half. 

When the contract was awarded, two weeks ago, the
Administration did not mention that the bin Laden
family has an ongoing relationship with Bechtel. The
bin Ladens have a ten-million-dollar stake in the
Fremont Group, a San Francisco-based company formerly
called Bechtel Investments, which was until 1986 a
subsidiary of Bechtel. The Fremont Group’s Web site,
which makes no mention of the bin Ladens, notes that
“though now independent, Fremont enjoys a close
relationship with Bechtel.” A spokeswoman for the
company confirmed that Fremont’s “majority ownership
is the Bechtel family.” And a list of the corporate
board of directors shows substantial overlap. Five of
Fremont’s eight directors are also directors of
Bechtel. One Fremont director, Riley Bechtel, is the
chairman and chief executive officer of the Bechtel
Group, and is a member of the Bush Administration: he
was appointed this year to serve on the President’s
Export Council. In addition, George Shultz, the
Secretary of State in the Reagan Administration,
serves as a director both of Fremont and of the
Bechtel Group, where he once was president and still
is listed as senior counsellor.

Rick Kopf, the general counsel of the Fremont Group,
which manages some eleven billion dollars in assets,
confirms that the bin Laden family invested about ten
million dollars in one of Fremont’s private funds
before September 11, 2001. He noted that the bin Laden
family has not enlarged its stake since then, but he
declined to provide additional details about its
association with the firm. He also chose not to
discuss the origin or the nature of the relationship
between the bin Laden and Bechtel families, both of
which made fortunes in huge construction projects in
the Arab world. The Fremont Group evidently does not
go in for connecting the dots. As Kopf said,
“Ownership is private and is not disclosed.”

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