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The purported Saudi connection to the contras began, say U.S. sources, after CIA Director William Casey asked King Fahd for such help on a visit to Jidda in February 1984. There are conflicting reports on Fahd's initial response. But by mid-1985 the Saudis' secret aims coincided with those of the U.S. "Since the U.S. was helping Saudi Arabia tame Iran," says Ghadry, "Saudi Arabia would help the U.S. with the contras."
How did this work? According to Ghadry, when U.S. arms went to Iran through Israel, the Saudis paid for them. The money went to Adnan Khashoggi, a billionaire Saudi businessman who was acting as a surrogate for the royal family. Khashoggi, in turn, would pay commissions to the Iranian middlemen and give the CIA the book value of the arms for repayment to the Pentagon. Various bank accounts and straw companies were used to conceal the routing of the funds. The same devious channels, according to Ghadry, were used to pour Saudi money into accounts to fund the contras.
All parties to this alleged scheme, including Khashoggi, Saudi officials and the CIA, deny this was done. Any CIA effort to enlist the Saudis in support of the contras would have violated the Boland Amendment, originally passed by Congress in 1982 to stop the use of any U.S. funds to overthrow the government of Nicaragua, and tightened in 1984 to prevent the Administration from using any other country to provide military help to the contras. Many close observers of Saudi affairs doubt the royal family would take the risk of a potential public exposure of dealing with either Iran or the contras.
Still, in the intricate mixture of public and private actors that is emerging in the Iran-contra scam, a Saudi connection is not at all farfetched. In 1981, when Saudi Arabia faced an uphill struggle to win congressional approval to buy five AWACS radar planes (ironically, for protection against any military threat from Iran), four U.S. officials worked hard to turn the tide. They were North, then a little-known aide at the NSC; Charles P. Tyson, another NSC staffer; Richard Secord, Deputy Assistant Secretary of Defense; and Robert Lilac, a Pentagon official who moved to the NSC, where he became North's boss. The four worked closely with Saudi Prince Bandar bin Sultan to close the deal, which was bitterly opposed by Israel.
Lilac quit the NSC at the end of 1983 to work as a consultant for Prince Bandar, who is the Saudi Ambassador to Washington. Tyson left in March 1983 to work for Khashoggi. The tortuous trail left by both North and Secord, now a retired Air Force general, touches virtually every mysterious point of action in the entire Iran-contra affair.
When Secord left Government service in 1983, he became president of Stanford Technology Trading Group International, based in Vienna, Va. He formed that company together with Albert Hakim, an Iranian-born arms dealer who runs a California electronics firm started up in the 1970s to sell sensitive U.S. technology overseas. Stanford Technology has had intriguing connections in Switzerland. There was a Stanford Technology Corp. in Geneva and a Stanford Technology Services in Freiburg. The Geneva firm had the same address as the Compagnie de Services Fiduciaires (C.S.F.), which the Times of London identified as the repository for $18 million in profits from the sale of U.S. arms to Iran.