Adnan Khashoggi and Richard Nixon
PART 11: Envelopes full of cash
BY HENRY ABBOTT
PART 1: Apollo Global, deep pockets with ties to the NBA, Jeffrey Epstein, and Buzzy
PART 2: The earliest days of Sears Roebuck, the CIA, and United Fruit
PART 3: 1950s and 60s: Buzzy at Princeton, the CIA messes with mind control, Leon Black’s dad
PART 4: Beverly Hills in the 1960s, 70s, and 80s
PART 5: Buzzy the banker.
PART 6: In business with criminals
PART 7: Everyone in this story owns planes
PART 8: “The biggest crime in American history”
PART 9: “A stealth invasion of the U.S. banking industry”
PART 10: Jeffrey Epstein’s tutor
PART 11: Richard Nixon and Adnan Khashoggi
PART 12: The Dechert Report
Many things made Adnan Khashoggi popular among the rich and powerful. A theory: one of the thrills of hanging out with arms dealer Adnan Khashoggi was that he made it OK to be elite.
In one story, Khashoggi meets a Northrop executive’s wife at one of his parties in Paris. Khashoggi remarks on her beauty and learns it’s her birthday. This kind of scene repeats constantly in Khashoggi’s life. What will happen next is that he will impress and delight his guests. Northrop was always one of his most important and lucrative clients, from whom Saudi Arabia bought billions in military equipment.
Khashoggi whispers to his staff to bring this esteemed guest a birthday cake. They don’t have a cake, he learns. Khashoggi reflects on the fortune he spends on chefs and kitchen staffs, the point of which is to make him look magical in moments like this. Khashoggi says he will restaff the entire kitchen if he doesn’t get a cake in ten minutes.
It takes more than ten minutes to bake a cake.
The chef arrives a few minutes later with many-colored melons arranged in geometric shapes to resemble a cake, with whipped cream and candles. The guests are delighted; Khashoggi has done it again.
Khashoggi is known to walk every party guest to their car. He lavishes his friends, associates, and guests with so many gifts his staff eventually starts a foundation to track it all. He passed some royal test. In one sense of the word, he was proper.
Beneath the surface, of course, Khashoggi (like some royals, we are learning) was profoundly indecent. Baked into the arms trade is the knowledge all kinds of people might die. He was the agent of a wealthy kingdom from a time before women’s rights, freedom of the press, or the rule of law. One of his girlfriends talked about multi-day cocaine-and-sex binges. His boat had hydraulics to raise the cushioned seats high enough that passersby couldn’t see the pool—all the better for group nudity.
An underlying message of his life: to certain rich men, whatever you want whenever you want it is not just acceptable, but appropriate and, in the right hands: charming.
Have you tried the champagne?
Does America have royalty? Khashoggi died a few years ago; a website in his honor shows too many power brokers and celebrities to list. Nicholas Cage, Farrah Fawcett, Frank Sinatra, Roger Moore, Claudia Schiffer, Jack Nicholson, Francis Ford Coppola, Sidney Poitier, Joan Collins, Cary Grant, Larry King, Robert DeNiro.
And actual royalty: kings of Jordan and Spain. Heads of state from France, Canada, the Philippines. Princess Diana died in a car with Khashoggi’s nephew, Dodi Fayed.
They may teach children in American schools that this nation is defined as an exit from monarchy. Abraham Lincoln wrote a book called “of the people, by the people, for the people.” Khashoggi symbolizes a re-entry. By the time of Khashoggi, the head of the party of Lincoln was a man named Richard Nixon who embraced Khashoggi in more ways than can be enumerated here. Nixon’s daughter reportedly accepted a $60,000 bracelet from Khashoggi. After leaving office in a corruption disgrace, Nixon’s vice president, Spiro Agnew, joined Khashoggi’s traveling entourage for a time.
In “The Richest Man in the World,” award-winning journalist Ronald Kessler reports that Nixon and Khashoggi had dinner together in Paris in 1967, before Nixon was ever president. They met again that year in Nixon’s New York apartment. Soon, Khashoggi met Nixon’s friend Charles “Bebe” Rebozo; Khashoggi had his staffer Eugene Warner open an account at Rebozo’s Florida-based Key Biscayne Bank. After Nixon’s election, he met again with Khashoggi, at Rebozo’s Florida home.
Almost immediately, Nixon invited Saudi princes to the White House: Prince Fahd, King Abdulaziz, Prince Sultan, Prince Fahd again. Nixon flew to Saudi Arabia himself. Khashoggi was part of every visit. Prince Sultan’s June 1972 trip involved two key contacts of Khashoggi: first he visited the Nixon White House on June 15, then he flew to meet one of Khashoggi’s most important clients, Northrop’s Thomas V. Jones in Beverly Hills. Kessler writes:
During much of this time, Khashoggi was transferring several million dollars from Swiss Bank Corp in Geneva into his account at Rebozo’s Key Biscayne Bank. Through Warner, he withdrew all but $200,000 of it in the form of checks written to “cash” and signed over to the Sands hotel. Khashoggi said he used the $200,000 for yachting and other personal expenses.
Eventually investigators confronted Khashoggi about the account. Kessler writes:
When asked why he placed his account at Key Biscayne Bank, Khashoggi answered with typical bravado. He said he hoped to “curry favor” with the President’s best friend, so he could convey ideas to the President.
The Saudi regime tolerated Khashoggi’s giant commissions in arms deals, which came with the incredible return of legitimacy, and implied protection, from the U.S. government.
Khashoggi also benefitted personally. By 1976, Khashoggi had attracted the attention of the Securities and Exchange Commission, which sent Hillel J. Cohn and Larry J. Jacobs to serve him a subpoena at Howard Hughes’ Sands Hotel in Las Vegas. At 8 a.m., they arrived and asked the front desk for Khashoggi’s room number, which they only got at 11 a.m., after they had been joined by some local DEA agents with .38 guns tucked in their waistlines. They found Khashoggi had rented 15 rooms in the curved Aqueduct building, where they were met first by Khashoggi’s private security, then his chief of staff who offered tickets to a floor show, lunch, and coffee. The investigators never did see Khashoggi, but at 4 p.m. in walked Nixon’s former deputy attorney general, Ralph E. Erickson, who said he represented Khashoggi.
The subpoena said Khashoggi was due in Washington DC the next morning, but in fact he filed flight papers to London, told his pilots Beirut, and ended up in Barbados.
The SEC referred the whole thing to Robert W. Ogren in the Justice department. In a chapter Epstein would emulate decades later, an embarrassment of the most powerful lawyers in the world followed. Epstein was represented by Kirkland & Ellis, home of many of the Trump administration’s most powerful appointees, including William Barr. His team included Ken Starr, Alan Dershowitz, Roy Black, and Jay Lefkowitz.
Khashoggi had a similar team. “At one point,” writes Kessler, “Ogren thought that Khashoggi must have hired half the Washington bar. He had never seen anything like it. ‘Maybe we should give them a baton that the real lawyer could produce to show he represents Khashoggi’ Ogren joked …”
Khashoggi’s super team of well-connected lawyers did its job—he was entirely exonerated. Similarly, Epstein received one of the most favorable deals in history.
One of America’s most famous crimes kicked off with a group of burglars breaking into the offices of his political rivals at the Watergate. When they were caught, the fabric of American democracy had been badly stained, but to the conspirators, it was important to deliver money to support the burglars and their families.
You may remember earlier in this series, the man who became the accountant to the Medellin Cartel, Ramon Milian Rodriguez. When he testified to John Kerry’s subcommittee, Milian Rodriguez explained that he had been trained in the covert handling of money by a Florida-based mentor, and the “very first project” he ever worked on was “delivering money to the families of some agents that had been captured breaking the law in the United States. It’s commonly referred to as Watergate.”
Milian Rodriguez says his mentor was Manuel Artime, who—according to declassified CIA documents—was very close to Nixon’s close friend Rebozo. Both did extensive work for the Agency. Artime’s name is most commonly associated with the Bay of Pigs.
They say you learn the most about people by how they act under stress. When stressed, Nixon leaned on Khashoggi.
Nixon’s personal attorney, Herbert Kalmbach, admitted to raising $219,000 for the burglars. Of that, at least $50,000 in cash—hundred-dollar bills—came from one of Khashoggi’s favorite clients, Northrop chairman Thomas V. Jones. Kessler writes that Khashoggi wanted Nixon’s goodwill, and was owed a fortune by Northrop for the many arms deals. Kessler reports that Northrop’s chairman, Jones, was happy to contribute to Kalmbach’s special project.
In the 1970s, Michael Milken did a fascinating thing: He moved his banking operation to Beverly Hills. Khashoggi was demonstrating what an important place that could be for giant transactions. There were influxes of money from all over, including aerospace companies. Many NBA billionaires have connections to Milken.
Khashoggi sealed those deals with women present in the bungalows of the Beverly Hills Hotel. Milken’s company, Drexel Burnham Lambert, did the exact same thing, in the same bungalows, at what came to be known as the Predator’s Ball.
Khashoggi’s methods may seem out of step with how we view America. But it was incredibly effective in the upper echelons of American power. Dig through the archives and find Khashoggi connections to Lyndon Johnson, Richard Nixon, Jimmy Carter, both Bushes, and Donald Trump.
Epstein spent time with Bill Clinton and—before a falling out—Trump bragged about partying with him.
Eventually the Church Committee investigated Khashoggi. The effect was momentous. Khashoggi referred to his career as BC, or AC, as in Before Church and After Church. The most substantive outcome was the 1977 passage of the Foreign Corrupt Practices Act.
In 2017, as a new president, Trump reportedly tried to kill the act.
With Khashoggi’s help, U.S. companies like Lockheed and Northrop came to dominate the global arms trade. The UK was missing out, and dispatched Prince Andrew to the cause. After many years, the result was what has been reported as perhaps the biggest deal in the history of global business, whereby Saudi Arabia purchased a giant quantity of planes and other military gear from an array of British companies led by British Aerospace. It’s hard to know how big the deal, signed in 1985, truly has been. Some published number suggest $100 billion or so; it’s ongoing. Investigations by the Serious Fraud office and other bodies have been suppressed. There is strong evidence of involvement by Margaret Thatcher’s son and the Prime Minister, herself. There is incredible evidence of bribes, intelligence involvement, favor trading, and sex.
One of Khashoggi’s daughters—Petrina—learned in her teens that she was really the child of Khashoggi’s then-wife and the UK’s defense procurement minister, Jonathan Aitken. (Interestingly: Aitken belonged to a secretive right-wing group called Le Cercle, which one former member says was funded by the CIA. Former CIA-head William Casey was reportedly a member.)
A source tells TrueHoop that in the years of creating that giant arms deal, Jeffrey Epstein was in London, where he was personally tutored by Adnan Khashoggi and Robert Maxwell. Khashoggi was charming, Epstein eager to learn. Khashoggi’s official biography confirms his own role in the deal. Epstein’s role is harder to pin down, but that Khashoggi tutored Epstein is certain, according to sources. Robert Maxwell’s daughter Ghislaine is due to stand trial shortly for her work with Epstein.
Similar questions dogged Thomas V. Jones of Northrop decades prior. And he navigated various probes without having to tell the whole story. Eventually, though, came what sources say Apollo fears most right now: a stockholder’s derivative suit. When Jones admitted to giving $50,000 in cash to Nixon’s personal attorney, Northrop investors suspected he had spent their money. It was in Jones’ deposition for a class action lawsuit that the whole truth came out. Kessler writes:
As the court reporter’s fingers danced over the keys of the transcribing machine, Jones began telling of secret slush funds, cash in attache cases, off-the-books disbursements, and payments to shadowy foreign agents, including Khashoggi.
It was a revelation. The American public seemed shocked to learn how big deals were completed. Khashoggi’s methods had been exposed. In the same case, lawyers learned that many of those secret accounts were destined for politicians, including Nixon’s campaign committee. The CIA and ultra secret operations earn repeated mentions.
The revelations inspired the SEC to take a fresh look at the overseas activities of many of the United States’ best-known brands, including 3M, Gulf Oil, Phillips Petroleum, and United Brands—then owned and operated by Leon Black’s dad Eli Black.
In the aftermath, a Lockheed treasurer committed suicide. A former French air force chief of staff died under mysterious circumstances.
Jones testified in October 1974. Eli Black tumbled to his death in February 1975.
In the incredible podcast and book Bag Man, Rachel Maddow and Mike Yarvitz write that “Vice President Spiro Agnew appeared to be running an active criminal operation, taking thousands of dollars of cash bribes, from inside the White House. Oh my God.”
Nixon’s vice president had a certain playbook. He used aggressive language to rile up the Republican base—thinly veiled racism, no-holds barred insults of lefties, anti-communism that rivaled McCarthy. It made him far more popular than Nixon with Republican voters. It has been copied many times over.
Meanwhile, Agnew had been routinely taking bribes in person, in cash. (This became a theme: if you want to get away with something, be loud about being anti-Communist. This worked in the flow of drugs to the US from Laos and Latin America.)
The bribes, report Maddow and Yarvitz, were present in Agnew’s time as a county executive, continued when he was Maryland governor, and even followed him into the White House. “It was brazen,” says Yarvitz, “and it was delivered in cash.”
When Agnew left Maryland for the White House, he left to join Khashoggi, and worked long hours trying to drum up investment in a Kentucky property, at which he ultimately failed. He also nominated his chief of staff, C. Stanley Blair, to win back his former governor seat. It almost worked, but Blair lost the election after Agnew appearances failed to raise as much money as his campaign needed. The victors spent more than twice as much. The campaign’s young treasurer ended up facing hard questions about how they’d pay off all the money the campaign was in debt.
“No one,” said the 33-year-old treasurer fresh out of the military, “will be left holding the bag.”
Those of you who have read this whole series can join me in being a little blown away to learn that the treasurer of that campaign was none other than A.B. “Buzzy” Krongard. The very same former executive director of the CIA and key member of Apollo Global’s board whose intriguing role started this entire investigation.
The Evening Sun reported in 1970 that “Mr. Krongard, 33, a former marine captain and All-American lacrosse player, has been active in Republican party politics since March 1968, when then Governor Spiro. T. Agnew tapped him to lead Maryland’s Draft Rockefeller Drive. During the 1968 presidential campaign, Mr. Krongard was director of special organizations for the Nixon-Agnew ticket in Maryland.”
Blair would be interesting to talk to, but he died at age 52, while watching 60 Minutes.
Buzzy, meanwhile, was left with a campaign in debt and with ties to the dirty tricks of Richard Nixon and his corrupt vice president. That’s when the campaign got $10,000 in cash.
Who it really came from we’ll never know. In 1973, a flood of reports said that this $10,000 came from the cashier’s cage at Hughes’ Silver Slipper Casino in Las Vegas.
Hughes and Khashoggi had interlocking careers. One of Khashoggi’s closest friends from his college days, Eugene Warner, lived in the penthouse of Hughes’ Sands Hotel—where Khashoggi frequently gambled. Khashoggi’s biggest U.S. investment—in Salt Lake City—came from a tip from Hughes’ deputy that the electric company wanted to sell a big parcel of land there. Hughes and Khashoggi worked together on a massive development in Egypt. When Hughes needed to travel discreetly, he used Khashoggi’s airplanes, because his own were tracked. When Khashoggi needed a lawyer, among those he called was Hughes’ Edward P. Morgan.
And, importantly, when Khashoggi wanted to make anonymous donations to Nixon, we know that in at least one instance he did so with checks made out to “cash” at a Hughes casino.
One of the advantages of owning a casino is that when you send people cash, it’s impossible for anyone to say who it’s really from.
After a career that touches 9/11, Blackwater, the CIA’s secretive venture capital firm, and all kinds of Carl Icahn investments, Buzzy Krongard is on the board of the private equity firm that is the NBA’s most important source of cash, whose founder Leon Black recently resigned after he was found to have paid Jeffrey Epstein $158 million.
So where did the Blair campaign’s mysterious cash come from?
Buzzy said he thought it was from a bull roast.
Read PART 12: The Dechert Report
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