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 $26 billion USD in the early 1980s, he was considered one of the richest men in the world.
Early life and education
Khashoggi was born in Mecca, the son of Muhammad Khashoggi, who was King Abdul Aziz Al Saud's personal doctor. His family is of Turkish and Syrian ancestry. 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. Another sister, Soheir Khashoggi, is a well-known Arab writer (Mirage, Nadia’s Song, Mosaic).
Khashoggi was educated at Victoria College in Alexandria, Egypt, and the American universities California State University, Chico, Ohio State, and Stanford. Khashoggi left his studies in order to seek his fortune in business.
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. 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.
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. 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.
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. 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. Native Nations Securities and MJK Clearing both eventually filed for bankruptcy.
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.'"
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.
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. One of Khan's accounts eventually was blocked when it was determined that the source of the funds came from Khashoggi's arms sales.
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. They raised one daughter (Nabila, who attended Millfield School in England) and four sons together (Mohammed, Khalid, Hussein, and Omar). Soraya gave birth to another daughter, Petrina Khashoggi, shortly after Adnan divorced her, but this child has now been shown by DNA testing to not be Adnan's, but Jonathan Aitken's.
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. 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", and in his heyday, Khashoggi spent $250,000 a day to maintain his lifestyle.
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.
Influence and legacy
- 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
- "Khashoggi's Ship", a song by Queen from the album The Miracle (1989)
- "I am", a song by Army of Lovers (1993)
- 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.
- David Leigh and Rob Evans (7 June 2007). "Biography: Adnan Khashoggi". The Guardian (London: Guardian News and Media Limited). Retrieved 29 January 2012.
- Michelle Green. "Unveiling Adnan Khashoggi: a Provocative Biography Tells of His Deals, His Wealth and His Women". People.Com. Time Inc. Retrieved 29 January 2012.
- "About the Bin Laden family". PBS. Retrieved 26 February 2013.
- The First Post. "Michelle avoids Khashoggi and Thatcher in Marbella". Retrieved 22 February 2011. "Khashoggi was the notorious Turkish-Saudi Arabian arms dealer implicated as a middleman in the Iran-Contra scandal of the 1980s, when Ronald Reagan was in the White House."
- Mackey, p. 400, "Of mixed Turkish and Syrian descent, [Khashoggi] [...]"
- Rebecca Ponton. Soheir Khashoggi: Success Is No Mirage, Woman Abroad Magazine, Nº7, Sep/Oct 2001; retrieved 11 February 2012
- Stengel, Richard (19 January 1987). "Cover Stories: Khashoggi's High-Flying Realm". Time (magazine). p. 5. Archived from the original on 19 September 2008. Retrieved 25 August 2008.
- "Imelda Marcos Acquitted : Cleared of Looting Philippines to Buy N.Y. Skyscrapers : Khashoggi Also Freed in Blow to Justice Dept.". Los Angeles Times. Associated Press. July 2, 1990.
- In the Matter of Dean C. Reder, Securities and Exchange Commission, 26 March 2007.
- Mudry, Brent. "SEC files first suit in GenesisIntermedia debacle", Canada StockWatch, 4 June 2003.
- Form 12B-25, Notification of Late Filing, Securities and Exchange Commission, 14 November 2001.
- SIPC. "SIPC: BANKRUPTCY COURT CLEARS SALE OF TROUBLED MINNESOTA BROKERAGE FIRM, 175,000-Customer Firm Failure is Largest Ever Handled by SIPC", SIPC, 2 October 2001.
- SIPC vs. MJK Clearing, Inc., United States Bankruptcy Court, District of Minnesota', 30 September 2006.'
- The New Yorker: LUNCH WITH THE CHAIRMAN. March 17, 2003.
- "Hasan Ali 'front man' of arms dealer Khashoggi: ED chargesheet". Indian Express. Retrieved 25 August 2013.
- "Black money case: Hasan Ali bail cancelled, under probe for Khashoggi linksf". Indian Express. Retrieved 25 August 2013.
- Kumar, Devesh (12 April 2011). "Black money: Hasan Ali, Tapuria admit to links with Khashoggi". Economic Times. Retrieved 25 August 2013.
- "Former billionaire's wife Soraya Khasgoggi's modest life as a flower-seller". Daily Mail (London). 19 January 2007.
- Dominick Dunne. Khashoggi’s Fall, Vanity Fair, September 1989; Retrieved 11 February 2012
- Tom Kelly. It's hard living with the stigma of being Jonathan Aitken's love child, says Petrina Khashoggi, Mail Online, 2 June 2011; Retrieved 11 February 2012
- Family rallies round Aitken's secret Khashoggi love child The Guardian, Yvonne Ridley and Jonathan Calvert. 10 January 1999
- Pierre Trudeau, en casa de Khashoggui, La Vanguardia, 6 August 1986; Retrieved 11 February 2012
- Michelle Green. Unveiling Adnan Khashoggi: a Provocative Biography Tells of His Deals, His Wealth and His Women, People, vol.25, Nº8, 24 February 1986; retrieved 11 February 2012
- Salmans, Sandra (22 February 1985). "Lavish Lifestyle Of a Wheeler-Dealer". New York Times. Retrieved 24 December 2011.
Khashoggi's retreat at Marbella in southern Spain, an entire mountain with seven villas, a 1,300-acre hunting preserve and what we are told is the world's largest outdoor marble disco floor. We are led through his New York duplex, a $25 million apartment in the Olympic Tower on Fifth Ave.
- "Chasing debtors: Cash-strapped Khashoggi?". The Economist. May 25, 2013.
- Seymour M. Hersh Lubch with the Chairman. Why was Richard Perle meeting with Adnan Khashoggi?, The New Yorker, 17 March 2003; Retrieved 11 February 2012