Adnan Khashoggi

Adnan Khashoggi
Born	(1935-07-25) 25 July 1935 Mecca, Saudi Arabia

Adnan Khashoggi (Arabic: عدنان خاشقجي‎; born 25 July 1935) is a Saudi Arabian businessman. At a peak net worth of up to $4 billion USD in the early 1980s, he was considered one of the richest men in the world.^[1][2]

Early life and education

Khashoggi was born in Mecca, the son of Muhammad Khashoggi, who was King Abdul Aziz Al Saud's personal doctor.^[3] His family is of Turkish^[4] and Syrian ancestry.^[5] His father was a medical doctor of Turkish descent. Adnan Khashoggi's sister Samira Khashoggi Fayed married Mohammed Al-Fayed and was the mother of Dodi Fayed.^[4] Another sister, Soheir Khashoggi, is a well-known Arab writer (Mirage, Nadia’s Song, Mosaic).^[6]

Khashoggi was educated at Victoria College in Alexandria, Egypt,^[3] and the American universities California State University, Chico, Ohio State, and Stanford. Khashoggi left his studies in order to seek his fortune in business.

Business career

Khashoggi headed a company called Triad Holding Company, which among other things built the Triad Center in Salt Lake City, Utah, which later went bankrupt. He was famed as an arms dealer, brokering deals between US firms and the Saudi government, most actively in the 1960s and 1970s. In the documentary series The Mayfair Set, Saudi author Said Aburish states that one of Adnan's first weapons deals was providing David Stirling with weapons for a covert mission in Yemen during the Aden Emergency in 1963. Among his overseas clients were defense contractors Lockheed Corporation (now Lockheed Martin Corporation), Raytheon, Grumman Aircraft Engineering Corporation and Northrop Corporation (which have now merged into Northrop Grumman).

Between 1970 and 1975, Lockheed paid Khashoggi $106 million in commissions. His commissions started at 2.5% + and eventually rose to as much as 15%. Khashoggi "became for all practical purposes a marketing arm of Lockheed. Adnan would provide not only an entree but strategy, constant advice, and analysis," according to Max Helzel, then vice president of Lockheed's international marketing.^[7] Khashoggi along with Kamal Adham was one of the founders of the gold company Barrick Gold Corporation, established in 1983. For 25 years, Bob Shaheen served as Khashoggi's chief of staff and executive assistant.

A shrewd businessman, he covered his financial tracks by establishing front companies in Switzerland and Liechtenstein to handle his commissions as well as developing contacts with notables such as CIA officers James H. Critchfield and Kim Roosevelt and US businessman Bebe Rebozo, a close associate of former US President Richard Nixon. His yacht, the Nabila, was the largest in the world at the time and was used in the James Bond film Never Say Never Again.

Iran–Contra affair

He was implicated in the Iran–Contra affair as a key middleman in the arms-for-hostages exchange along with Iranian arms dealer Manucher Ghorbanifar and, in a complex series of events, was found to have borrowed money for these arms purchases from the now-bankrupt financial institution the Bank of Credit and Commerce International (BCCI) with Saudi and US backing. In 1988, Khashoggi was arrested in Switzerland, accused of concealing funds, held for three months and then extradited to the United States where he was released on bail and subsequently acquitted. In 1990, a United States federal jury in Manhattan acquitted Khashoggi and Imelda Marcos, widow of the exiled Philippine President Ferdinand Marcos, of racketeering and fraud.^[8]

Genesis Intermedia insolvency

Khashoggi, along with Ramy El-Batrawi, was the principal financier behind Genesis Intermedia, Inc. (formerly NASDAQ: GENI), a publicly traded Internet company based in Southern California. After the September 11 attacks, Khashoggi's U.S.-based checking accounts were frozen and Khashoggi was unable to make a margin call with Native Nations Securities, whose CEO and largest shareholder, at the time, was Valerie Red-Horse, former office manager of junk bond king Michael Milken. In turn, Native Nations and Red Horse were unable to meet their obligations on the margin loan to MJK Clearing, Inc.^[9][10] Trading in the stock of Genesis Intermedia was halted in September 2001. Khashoggi's unwillingness to pay his margin loan to Native Nations Securities, and Native Nations (and Red Horse's) inability to pay its debts to MJK Clearing, began a series of bankruptcies that ended in the largest payout in Securities Investor Protection Corporation history.^[11][12] Native Nations Securities and MJK Clearing both eventually filed for bankruptcy.^[13]

Seymour Hersh report

In January 2003, Seymour Hersh reported in the New Yorker that former Assistant Secretary of Defense Richard Perle took a meeting with Khashoggi in Marseille, France in order to use him as a conduit between Trireme Partners, a private venture capital company of which he was one of three principals, and the Saudi government. At the time, Perle was chair of the Defense Policy Board, a Defense Department advisory group, which provided him with access to classified information and a position to influence defense policy. An advocate of the overthrow of Iraqi dictator Saddam Hussein, Perle had served as an adviser to 2000 Republican Presidential nominee George W. Bush.

Khashoggi told Hersh that Perle talked to him about the economic costs regarding a proposed invasion of Iraq. "'If there is no war,' he told me, 'why is there a need for security? If there is a war, of course, billions of dollars will have to be spent.'"^[14]

2011 money laundering case

Khashoggi was implicated in a money laundering case involving the use of an Indian citizen. In 2011, Hasan Ali Khan, owner of a Pune stud farm, was arrested by India's Enforcement Directorate and charged with serving as a front for Khashoggi. Khan and Kolkata businessman Kashinath Tapuriah were charged under the Prevention of Money Laundering Act. Allegedly, in 2003, Khan helped launder US$300 million of money Khashoggi made through arms sales through the Zurich branch of Swiss bank UBS.^[15][16]

Khan and Tapuriah admitted to knowing Kashoggi, and Khan described him as a friend. Khashoggi had to use Khan as a front as the Swiss financial services firm UBS had allegedly blackballed him due to his notoriety. Introduced to UBS by Khashoggi in 1982, Khan enabled the arms dealer to launder funds held in American accounts through UBS Geneva.^[17] One of Khan's accounts eventually was blocked when it was determined that the source of the funds came from Khashoggi's arms sales.

Personal life

In the 1960s, Khashoggi married 20-year old Englishwoman Sandra Daly (Sandra Patricia Jarvis-Daly) who converted to Islam and took the name Soraya Khashoggi.^[18] They raised one daughter (Nabila, who attended Millfield School in England) and four sons together (Mohammed, Khalid, Hussein, and Omar).^[19] Soraya gave birth to another daughter, Petrina Khashoggi, shortly after Adnan divorced her,^[20] but this child has now been shown by DNA testing to not be Adnan's, but Jonathan Aitken's.^[21]

His second wife, the Italian Laura Biancolini, also converted to Islam and changed her name to Lamia Khashoggi. She was only seventeen when she met Adnan and gave him another son, Ali, in 1980.^[19]

In the 1980s, the Khashoggi family occupied one of the largest villa estates in Marbella, Spain, called Baraka, hosting lavish parties usually arranged by Marbella's "Monroe's" club proprietor and local celebrity Robert Young (born Robert Parkes UK 1953). These parties were legendary, and guests included film stars, politicians, and pop celebrities. Food was supplied by up to 6 resident chefs, and it is said that champagne was kept in specially cooled trailers parked in the vast grounds of the complex.^[22][23] In 1985, celebrity reporter Robin Leach declared a five-day birthday party in Vienna that Khashoggi threw for his eldest son to be "the most extravagant event in European history",^[24] and in his heyday, Khashoggi spent $250,000 a day to maintain his lifestyle.^[25]

Khashoggi also owned Ol Pejeta Conservancy, in Laikipia, Kenya. His house has since been converted into a hotel which is run by Serena Hotels.

Khashoggi continues to live a quiet life in the Principality of Monaco, even after a British court ordered him to pay £7 million to a creditor. His services as a facilitator have been a recurring feature throughout US administrations since Nixon; most recently, he met Richard Perle shortly before the 2003 invasion of Iraq.^[26]

Influence and legacy

Films

• Where I Stand: The Hank Greenspun Story
• The One Percent

Books

• The Richest Man in the World: The Story of Adnan Khashoggi
• The One-Page Proposal: How to Get Your Business Pitch onto One Persuasive Page
• The Shadow World: Inside the Global Arms Trade

Music

• "Khashoggi's Ship", a song by Queen from the album The Miracle (1989)
• "I am", a song by Army of Lovers (1993)

References

• Kessler, Ronald. The Richest Man in the World: The Story of Adnan Khashoggi, Warner Books, New York, 1986
• Mackey, Sandra. The Saudis: Inside the Desert Kingdom. Updated Edition. Norton Paperback. W.W. Norton and Company, New York. 2002 (first edition: 1987). ISBN 0-393-32417-6 pbk.

External links

• Profile at NNDB