Bush's Courting of Saddam

An '80s business overture that fits a lifetime 'W' pattern of CIA dealings

Sarkis Soghanalian, the international arms dealer who bought billions in weapons for Saddam Hussein, says he was approached at a Newark airport luncheon meeting in the early '80s by a representative of then Texas oil entrepreneur George W. Bush, who was seeking to do business in Iraq.

Featured in lengthy interviews on 60 Minutes, 20/20, and PBS's Frontlineover the years, the twice-convicted Soghanalian was dubbed the "Merchant of Death." He was released from prison at the request of federal prosecutors who, as recently as 2001, cited his "substantial assistance to law enforcement." Justice Department officials questioned him in Washington this year about an ongoing case in Peru involving the sale of 10,000 assault rifles to Colombian guerrillas, but they did not extradite him though he is facing a possible 15-year jail sentence there for brokering the deal.

Soghanalian recalled in half a dozen phone interviews with the Voice that he met with a business associate of W's whose full name he cannot recall but who, like Soghanalian, was Armenian. The meeting was arranged, he says, by a friend who was a leader in Armenian charity circles. Soghanalian recalls that the business associate told him: "George W. Bush wants to do business in Iraq."

"Unfortunately, I was pretty high-profile at the time," says Soghanalian, "and everyone was trying to get close to me. Why would I want their business? I knew his father. What did I need him for?" Soghanalian, who had a stopover in Newark on his way to Baghdad, says he can't remember any specifics about the suggested business. The businessman, he said, "was sent on behalf of Bush" and "said to me, 'This is an important man.' " Soghanalian claims that the man told him that W had "a lot of contacts overseas" and that Soghanalian replied: "I have contacts too. I don't need more contacts." Soghanalian says he has known the senior Bush since at least 1976, when Bush was CIA director. Soghanalian has had such a long-standing CIA relationship that David Armstrong of the National Security News Service calls him the agency's "arms dealer of choice."

Soghanalian says Bush's representative continued to "chase me around" after the airport meeting. Living in an overseas location he did not want disclosed, the 300-pound, 75-year-old legendary dealer said: "I am not where I am and have never been where I was." Though he volunteered the story of the Newark solicitation, he expressed concerns about "angering" the Bushes and repeatedly cut off later interviews, citing health concerns.

It's widely known that prior to the 1990 invasion of Kuwait, the Reagan and George H.W. Bush administrations maintained friendly ties with Hussein, but there has never before been any indication that the current president was seeking business deals with him. In the '80s, the younger Bush managed a series of struggling Texas-based oil companies, one of which, Harken Energy, did secure a major oil deal in Bahrain that caused a public furor, since it appeared to have been awarded to earn favor with the Bush administration. Bush's storefront start-up Arbusto (later renamed Bush Exploration) was in deep trouble in the '83-'84 period when Soghanalian says the approach occurred.

The Soghanalian overture is only one of several Bush business intertwinings with the dark side, starting way back in 1974, when he was 28 years old. Like the Soghanalian adventure, each of these tales has CIA ties, which touch virtually every Bush business venture until 1990.


A mysterious Alaska summer

Neil Bergt, The New York Times' "richest man in Alaska" in the '80s, gave W a summer job in 1974, when he was in between years at Harvard Business School. Bergt says he doesn't know why the young Bush—still living, by his own account, the "wild and woolly days"—wanted to come to Fairbanks, where the company was based. But a Houston construction executive contacted him and asked him to hire Bush, who has been described by professors and friends as an out-to-lunch business student. Bush's father was then the chairman of the Republican National Committee, installed by President Nixon, and Bush Sr. would wind up that summer appearing on the White House lawn when Nixon resigned, waved farewell, and climbed aboard the presidential helicopter for the last time. Bergt concedes that the Bush job was "a political hire."

In several wide-ranging interviews, Bergt oscillated between demands that the Voice pay him $250,000 for "the real story" that "only I can tell" about Bush and insisting that there was "no story here" and that Bush spent a quiet summer preparing a business plan for him. Asked why Bush preferred a summer in Alaska to Wall Street or Houston, Bergt suggested that the motive was nefarious, and that a full account could affect the election, adding: "I'm not talking without money."

Bergt's company, Alaska International Air, certainly has a checkered history. In 1979, it sold a coveted military cargo plane, a Hercules C-130, to Libyan dictator Muammar Qaddafi, despite a U.S. ban that specifically barred the delivery of that particular plane. Bergt contends he was tricked by the middleman on the $8.6 million transaction —none other than Sarkis Soghanalian. Soghanalian, who claims to have never done an arms deal that wasn't covertly sanctioned by the CIA, says Bergt, who also has a plethora of CIA ties, was fully aware that Qaddafi was getting the plane and participated "voluntarily."

Ironically, the Bergt plane and two others illicitly sold to Libya were soon used to invade neighboring Chad and to fly enriched uranium from Niger for Qaddafi's fledgling nuclear development program. Bush has claimed credit recently for convincing Qaddafi to abandon his nuclear program, and once claimed that Saddam Hussein had received uranium from Niger as a justification for the war. While another top AIA executive, Gary White, says he met Soghanalian in Geneva on a couple occasions and even stayed in his Florida mansion, Bergt just had lunch with him in San Diego.

"Gosh, to find out later that he was an arms merchant," Bergt now says. "We had several incidents where we dealt with people and later we'd read about the things they did in Time magazine," which was then exposing CIA covert operations. "We were doing a lot of wild stuff all over the place," recalls Bergt, specifically including the period that W worked there.

Indeed, in September 1975, Bergt says, "I sold a Herc to Idi Amin for $10 million," celebrating decades later that he made the African despot "pay through the nose." Bergt acknowledged that there were "some CIA guys surrounding the deal with Idi," just as he acknowledges that AIA, under its prior incarnation as Interior Airways, was doing CIA-tied business back to 1968–69. "I wasn't a CIA proxy company," says Bergt, referring to airlines that were actually no more than fronts for the agency. "I just wished I was." One of his pilots recalled that Bergt actually bought planes from CIA firms like Southern Air Transport.

The very summer that W worked at the company, it was participating in the most secret and expensive CIA venture ever, the Glomar Explorer. The agency spent a half- billion dollars on what congressional critics called a boondoggle for billionaire Howard Hughes: the construction of a ship the length of three football fields with a giant clawed arm designed to dive 17,000 feet to bring a sunk Soviet sub to the surface. In early August, the Glomar dropped the sub and shattered it on the ocean floor off the Alaskan coast. White remembers doing an airdrop to supply the Glomar, and Bergt says that W "may have made some runs with us"—though he adds that he didn't even know Bush was a pilot.

When the senior Bush was vice president in 1986 and his aides were deeply involved in supplying the Contras in Nicaragua, Bergt's airline, renamed MarkAir, did at least a half-dozen runs to a dirt strip in Honduras hauling aid, some of it in sealed containers, for the rebels. "If it's guns and ammunition, I could care less," Bergt told reporters at the time. Again, Soghanalian and the CIA were also deeply involved in the Contra traffic. The Anchorage Daily News reported that at least two of the flights were not registered with customs, avoiding the requirement of "an export declaration of everything" aboard.

Bergt even offered to regale the Voice with stories of "drug running and Iran-Contra." A day later, he called his own offer "absolute bullshit," though he insisted that the Anchorage paper already intimated both in connection with his company. He branded the stories, which a Voice search of years of the Anchorage paper's clips could not locate, as "claptrap" and "yellow journalism." Coincidentally, when Bush answered questions about his own alleged cocaine involvement during the 2000 campaign, he implicitly suggested that 1974 might be the last year he did drugs, claiming that he could've filled out a federal questionnaire about illegal drugs going back 15 years prior to his father's presidency.

Bergt recalls the senior Bush calling him after his son's summer there at least once, and says Neil Bush attended a 1988 fundraiser he hosted in his Anchorage home for the Bush presidential campaign. A check of federal election records indicates that Bergt, who's also contributed lesser amounts to W's campaign, raised at least $6,500 for the 1988 campaign. One of Bergt's brothers works for the Federal Aviation Administration and his son-in-law is the Interior Department official in charge of overseeing the Alaska pipeline. There is no indication that political influence was involved with obtaining either job.

A couple of weeks before the 2000 election, the Times first reported about W's Alaska summer, calling it a chapter that "has largely escaped attention," omitted, unlike five other summer jobs, from his autobiography. Bergt said then that his CIA reputation was undeserved, but in fact, even though Bush's summer there precedes by 18 months his father's rise to CIA director, the company has a legion of agency ties. That would become a W pattern.


The Texas CIA connections

Michael Moore made James Bath famous. A former National Guardsman in W's champagne unit in the '70s, the Houston-based Bath mysteriously became the U.S. representative for the bin Laden family shortly after the senior Bush became CIA head in 1976. Bath was also one of the initial investors in Arbusto, W's first energy company venture, in 1978, kicking in $50,000. What Moore didn't say, but Houston Post reporters John Mecklin and Pete Brewton "independently confirmed," was that Bath himself "had some connections to the CIA." In his only known interview on the subject, Bath "equivocated" with Craig Unger, author of House of Bush, House of Saud, saying there are "all sorts of degrees of civilian participation in the CIA" and those that do it don't talk about it. A former Bath business partner says Bath told him he was CIA.

Bath also became the U.S. representative of Khalid bin Mahfouz, the largest shareholder in the notorious Bank of Credit and Commerce International, the biggest bank fraud in history and springboard for the Islamic terrorist nightmare of today. Countless news stories and books have documented the myriad of connections between Harken Energy and the Saudi-dominated BCCI, which was also pivotal in financing illegal arms sales to Saddam.

Bush helped arrange a $25 million cash infusion for Harken in 1987 through Arkansas investment banker Jackson Stephens, who'd helped guide BCCI's acquisitions in America, to secure financing for Harken, which had acquired Bush's failed company and made him a six-figure director. Stephens arranged for two BCCI-tied investors to bail the company out: the Union Bank of Switzerland, a BCCI partner in a third bank; and Abdullah Taha Bakhsh, whose Saudi Finance Co. was partly controlled by BCCI shareholders.

When BCCI exploded in scandal in 1991, the senior Bush tried to distance himself from any knowledge of the bank or its principals, even though a top White House aide, Ed Rogers, was put on a $600,000 retainer by one of the bank's founders, Kamel Adham. Bush denied even knowing Adham, who was the head of Saudi intelligence when Bush ran the CIA. But Soghanalian told the Voice that the two "were friends a long time ago," adding that George H.W. Bush "can say whatever he wants." Soghanalian says he "escorted" Adham to a 1976 meeting with Bush at the Waldorf Astoria, where Adham had a whole floor for five days. "This is when they were organizing the BCCI bank stuff," says Soghanalian, refusing to discuss it any further.

When Bush Sr. said, "I don't know anything about this man (Adham) except I've read bad stuff about him," Time reporters Jonathan Beaty and S.C. Gwynne wrote in their book, The Outlaw Bank, that they were sure the president had told "a certifiable lie" and got White House reporters to ask the press office about it. They were "incredulous" when the press office confirmed the disavowal. Adham himself said: "It is not possible for the president to say that," insisting that Bush had indicated a day later that he did know Adham but that the newspapers refused to print it. Adham wound up pleading guilty on BCCI charges, as did Mahfouz, who paid $225 million in restitution and penalties.

Papa Bush's direct links to BCCI—noted CIA historian Joe Trento, also of the National Security News Service, wrote that as CIA director, he "joined a Saudi prince to create" it—apparently explain the bank's willingness to throw money at Harken shortly after it bought out Junior's busted Arbusto. The Harken bailout is the last in a series of business ties between W and his father's onetime agency, though biographers have noted that W's campaigns, like his father's, have attracted ex-CIA types. When Jimmy Carter replaced the senior Bush at the CIA in 1977, the new director, Stansfield Turner, forced hundreds of agents out, and many joined forces with Bush as a kind of out-of-power CIA clique. That group continued to function unofficially for years, even rising to the fore in the Iran-Contra days of the late '80s.

As W has dallied for months with the CIA reformation promised after the 9-11 Commission report, his own historic ties to the agency may assume greater importance, should he get a second term.


Research assistance: Eric Cantor, Deborah S. Esquenazi, Emily Keller, Eric Magnuson, and Ben Reiter

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