Khalid bin Mahfouz
|Khalid bin Mahfouz|
December 26, 1949|
Jeddah, Saudi Arabia
|Died||August 16, 2009
Jeddah, Saudi Arabia
|Net worth||$3.2 billion USD|
Khalid bin Mahfouz was the second eldest son of Salim Ahmed bin Mahfouz a Saudi who rose from being an illiterate moneychanger to the founder of the first bank in his country, the National Commercial Bank of Saudi Arabia (NCB). Salim Ahmed then became the personal banker of the Saudi royal family. He handed management of NCB, the largest bank in the country, to Khalid sometime in the 1980s.
In the 1970s Khalid bin Mahfouz bought and lived in a $3.5 million chateaux-style house, later named "Versailles," in the River Oaks area of Houston. He also bought a four thousand acre (16 km²) ranch along the Trinity River in Liberty County, Texas, near the ranch of James Bath. Another of his estates, resting on 121 acres is to be sold at auction on April 11, 2013 with a guide price of 2.4 million euro.
$225 million BCCI scandal fine 
Bin Mahfouz was a non-executive director of Bank of Credit and Commerce International, a financial conglomerate later convicted of money laundering, bribery, support of terrorism, arms trafficking, and many other crimes. Mahfouz personally owned a 20% stake in BCCI. He was indicted by a New York state grand jury for fraud but denied any culpability. The fraud charges were settled for $225 million in lieu of fines. Mr. bin Mahfouz has claimed that he simply settled as a business decision rather than using resources to fight further.
Donations to Osama bin Laden in 1988 
Craig Unger's book House of Bush, House of Saud claims that bin Mahfouz donated over $270,000 to Osama bin Laden's Islamist organization at the request of Osama's brother Salem bin Laden. Bin Mahfouz's lawyer stated: "This donation was to assist the US-sponsored resistance to the Soviet occupation of Afghanistan and was never intended nor, to the best of Sheikh Khalid's knowledge, ever used to fund any 'extension' of that resistance movement in other countries."
Alleged NCB funding of al-Qaeda 
Khalid bin Mahfouz has denied that NCB, his bank, was involved in funding an al-Qaeda group. According to reports, high-placed Saudi businessmen transferred millions of dollars through NCB to charities operating as fronts for al-Qaeda. Mahfouz states that he could not have been aware of every wire transfer moving through the bank, and that he would not have allowed such transactions had he known they were taking place. There is no evidence that Mahfouz was personally involved in any of these transactions.
Additionally, Forbes reports:
[I]n 1999 the [Saudi] government stepped in, buying a controlling 50% stake of NCB from Khalid for at least $1 billion, partly used to wipe Khalid's debt from the books. Khalid and his family retained 34% ownership, but he again surrendered his management positions. . . The extent of Khalid's mismanagement at NCB remains shrouded. NCB has not issued audited numbers since 1998, but it did acknowledge last year that provisions for bad loans in 1999 and 2000 reached $934 million, covering 86% of its doubtful debt.
NCB senior officials vehemently deny the existence of this audit.
He eventually won a string of lawsuits against writers who had accused him of supporting terrorism as no legitimate connection could be found. Rachel Ehrenfield, the author of Funding Evil and a U.S. citizen based in New York, had not written or marketed her book internationally and refused to acknowledge the jurisdiction of the British court over her case. Her refusal resulted in the British Court awarding a default judgment against her in 2005. Dr Ehrenfield was ordered to apologize, destroy all copies of her book and pay him $230,000 in damages. The New York State Legislature, however, passed a law preventing the judgments from being enforced by providing greater protection against libel judgments in countries whose laws are inconsistent with the freedom of speech granted by the United States Constitution .
Sheik Mahfouz did acknowledge making one contribution to Al Qaeda during the epoch of the Soviet occupation of Afghanistan. During this era Osama bin Laden and al Qaeda were also being directly financed by the US government.
Muwafaq Foundation 
Khalid bin Mahfouz helped set up a charity organization called the Muwafaq Foundation, Muwafaq being Arabic for "blessed relief". He funded this charity with $30 million, and put his eldest son, Abdulrahman bin Mahfouz, on the board of directors. In October 2001, the U.S. Treasury Department named Muwafaq Foundation - a charity devoted to famine relief - a front organization. Neither Khalid nor Abdulrahman were accused of funding terrorism by the United States; however Yasin al-Qadi, a Saudi national hired to run the charity, was named a supporter of terrorism by and had his assets frozen by the U.S. Treasury Department.
Bin Mahfouz cleared his name from accusations he was funding terrorism through the Blessed Relief charity of the Muwafaq Foundation, an organization devoted to famine relief.
UN designation 
There have been numerous allegations that Khalid bin Mahfouz has been named a terrorist financier by the United Nations. The controversy springs from a report prepared by French investigator Jean-Charles Brisard and his research agency, the JCB Consulting Group, for the President of the Security Council of the United Nations in December 2002. In this report Khalid was listed as one of seven "main individual Saudi sponsors of al Qaeda." JCB Consulting claimed that the report was issued at the request of the UN, but Alfonso Valdivieso Sarmiento, then president of the UN Security Council, denied commissioning the report in a letter sent to representatives of Mahfouz. Valdivieso went on to state that the report was unsolicited and that "Mr Brisard's conduct and attitude is totally deceitful and marked by the intention to mislead." JCB Consulting is a paid investigator for a group of 9/11 victims who are suing hundreds of defendants, including Khalid bin Mahfouz, for allegedly financing al Qaeda. In 2001 Brisard and another investigator, Guillaume Dasquié (former editor-in-chief of Intelligence Online) published in 2001 a French book entitled "Ben Laden: La vérité interdite" (Forbidden Truth) (ISBN 2-07-042377-8). In November 2006 they retracted their findings and issued an unreserved apology to Khalid bin Mahfouz and his son Abdulrahman, undertaking never to repeat their allegations.
See also 
- Sedky, Cherif (2003-02-05). "Letter from Cherif Sedky, legal counsel for Khalid bin Mahfouz and his immediate family, to Gunter Pleuger, President of the United Nations Security Council". Retrieved 2006-06-26.
- Benjamin, Daniel & Steven Simon. "The Age of Sacred Terror", 2002
- NYTimes obituary New York Times, August 26, 2009
- Vardi, Nathan (2002-03-18). "Sins of the Father?". The World's Billionaires (Forbes). Retrieved 2006-06-26.
- Unger, Craig. House of Bush House of Saud. Scribner. September 28, 2004. 24. ISBN 0-7432-5339-6, ISBN 978-0-7432-5339-0.
- independent.ie. "€2.4m for home once owned by Saudi Sheikh". independent.ie. Retrieved 2013-03-15.
- Bin Mahfouz Information. "B". Bin Mahfouz family. Retrieved 2007-08-11.
- Kroll, Luisa; Fass, Allison (2006-03-09). "Khalid Bin Mahfouz & family". The World's Billionaires (Forbes). Retrieved 2006-06-26.
- Kerry, John; Brown, Hank (December 1992). "BCCI in the United States - Part Two: Acquisition, Consolidation, and Consequences". The BCCI Affair, A Report to the Committee on Foreign Relations. United States Senate Committee on Foreign Relations. Retrieved 2006-06-26.
- David, Leigh (2004-03-31). "Bush, the Saudi billionaire and the Islamists: the story a British firm is afraid to publish". Guardian Unlimited. Retrieved 2006-06-26.
- Jackson, David; Cohen, Laurie; Manor, Robert; Salopek, Paul (2001-10-28). "Money trail leads to Saudi, U.S. says". Chicago Tribune.
- Martin, Douglas (27 August 2009). "Khalid bin Mahfouz, Saudi Banker, Dies at 60". The New York Times. Retrieved 23 May 2011.
- Samuel A. Abady & Harvey Silverglate, "Rachel's Law: NY's 'Libel-Tourism' Fix". New York Post, 25 February 2008
- "Khalid Bin Mahfouz buried". Arab News. 18 August 2009. Retrieved 23 May 2011.
- Mowbray, Joel (2002-12-20). "Saudis Behaving Badly". National Review Online. Retrieved 2006-06-26.
- Valdivieso, Alfonso (2004-03-12). "Letter addressed to Kendall Freeman" (PDF). Bin Mahfouz Information. Retrieved 2006-06-26.
- Sheikhs Khalid and Abdulrahman bin Mahfouz receive apology from authors Jean-Charles Brisard and Guillaume Dasquié Press release from Bin Mahfouz Information.