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Origins of the Bin Laden Family

Excerpted from a report dealing with prominent Saudi families of Yemeni origin. Although FRONTLINE cannot vouch for the accuracy of this report, it does come from French intelligence sources.
Today one of the biggest construction groups in the kingdom [of Saudi Arabia] and the Middle East, the "bin Laden empire" traces its origins to Sheik Mohammed bin Laden, a native of the Chafeite (Sunni) Hadramout who emigrated [from South Yemen] to Saudi Arabia at the beginning of the century.

The beginnings of his activity are shrouded in mystery. It is said that, having satisfied King Abdul Aziz with construction work on the royal palace, Mohammed bin Laden was awarded a much more prestigious contract: the renovation of Mecca. Whatever the actual circumstances, it is a fact that the Saudi royal family gave the bin Laden family--and group--exclusive rights to all construction of a religious nature, whether in Mecca, Medina or--until 1967--the Holy Places in Jerusalem. This enabled the bin Ladens to establish an industrial and financial empire which now extends far beyond religious construction projects.

The relationship between the bin Ladens and the Saudi royal family is quite exceptional in that it not simply one of business ties: it is also a relationship of trust, of friendship and of shared secrets. This is particularly the case with regard to the group's present-day leaders and the Soudairi clan.

Thanks to the renovation of Mecca, Sheik Mohammed bin Laden did not become merely Kin Abdul Aziz' official contractor, but his friend and confidant as well. This friendship has been handed down to their children. The bin Laden sons went to the same schools as the numerous offspring of King Abdul Aziz and they all followed the same path.

Role and influence

One of the connections which still explains many of the personal ties existing throughout the Middle East is the Victoria College in Alexandria, where the bin Laden boys attended classes along with schoolmates such as King Hussein of Jordan, Zaid Al Rifai, the Kashoggi brothers (whose father was one of the king's physicians), Kamal Adham (who ran the Saudi [security] services under King Faisal), present-day contractors Mohammed Al Attas, Fahd Shobokshi and Ghassan Sakr and actor Omar Sharif.

The relationship of trust between the royal family and the bin Laden group has never been repudiated, although it is known to have undergone some serious crises. The most important was doubtless the 1979 Mecca affair. Because the bin Laden company had the exclusive contract for repairs in the Holy Places, its trucks entered and left Mecca at all hours without being inspected. And the rebels used "bin Laden" trucks to get weapons into the city. One of the bin Laden sons, Mahrous, was actually arrested on account of his ties with the Islamists, but was later freed. He is currently manager of the group's Medina branch.

The reason is as follows: after studies in England, where he had kept company with Fadli (son of the ex-sultan of the Abdin region in South Yemen, now leader of a Yemeni fundamentalist group and arrested in Aden last January), Mahrous struck up friendships with a group of Syrian Moslem Brothers in exile in Saudi Arabia. Subsequent Saudi intelligence investigations showed that these Moslem Brothers had taken advantage of Mahrous to use bin Laden trucks without his knowledge.

There was a touch of irony to the episode: when the insurrection broke out, the Saudi security services had to go for help to the bin Ladens, the sole parties in possession of maps of Mecca enabling the Saudi (and Western) police to find their way through the city's underground passageways.

In any case, the episode also demonstrated the strength of the ties between the royal family and the bin Laden Group. Had it been some other group, there is no doubt that Mahrous--whether accomplice or patsy--would have been thrown into prison and the group barred from further economic activity in the kingdom, the sentence serving as a warning to others. This was not the case.

Likewise, the Saudi authorities' decision to issue an arrest warrant for Osama bin Laden on 16 May 1993 does not threaten to affect the relationship between the bin Ladens and the royal family. Osama, one of Mohammed's youngest son, has been known for years for his fundamentalist activities. ...The arrest warrant was issued both because of his support for fundamentalist groups involved in terrorist operations in Algeria and Egypt and his ties with upstart religious circles that tried to establish an independent human rights organization in Saudi Arabia at the beginning of May.

Contrary to appearances, both the Osama and the Mahrous incidents testify to the bin Laden's influence within the kingdom.

The ties of friendship binding bin Laden family members to King Fahd and his brothers make them prime confidantes and advisors. They play an obvious advisory role in Saudi-Yemeni relations. Still, they hold very few economic or financial interests in their ancestral homeland and certainly do not flaunt their family origins.

King Fahd's two closest friends were: Prince Mohammed Ben Abdullah (son of Abdul Aziz' youngest brother), who died in the early '80s and whose brother, Khaled Ben Abdullah (an associate of Suleiman Olayan), still has free access to the king; and Salem bin Laden, who died in 1988.

Like his father in 1968, Salem died in a 1988 air Texas. He was flying a BAC 1-11 which had been bought in July 1977 by Prince Mohammed Ben Fahd. The plane's flight plans had long been at the center of a number of investigations. According to one of the plane's American pilots, it had been used in October 1980 during secret Paris meetings between US and Iranian emissaries. Nothing was ever proven, but Salem bin Laden's accidental death revived some speculation that he might have been "eliminated" as an embarrassing witness. In fact, an inquiry was held to determine the exact circumstances of the accident. The conclusions were never divulged.

FRONTLINE Editors' Note:

The above paragraph is inaccurate. Salem bin Laden was piloting a light aircraft, not a BAC 1-11, when he crashed. As for "secret Paris meetings between US and Iranian emissaries" in October 1980, such meetings have never been confirmed.

In spite of Salem's death, the bin Ladens are still part of the small group of friends surrounding the king which includes, in particular, Prince Khaled Turki Al Soudairi (married to one of Fahd's sisters), Prince Faisal Ben Turki Al Abdullah (married to another sister and father of Prince Abdullah Ben Faisal, head of the Royal Jubail Commission) and the family of Moona (Fahd's wife), the Ibrahims.

As trusted servants of the royal family, the bin Ladens have also often acted as chaperones to the king's sons, helping them get their start in business. This was the case with both Prince Mohammed Ben Fahd and Prince Daud Ben Nayef, two of the most active second-generation princes and both at the head of financial empires during the '80s. Both princes were often encountered along with one or another of the bin Laden sons at the head of international companies.

Appointed governor of the Eastern Province in the mid-'80s, Prince Mohammed Ben Fahd resigned from the chairmanships of his companies, putting Prince Saud in his place. The latter, named vice-governor of the Eastern Province last June, has also since withdrawn from a number of business activities.

There was also a political aspect to Salem bin Laden's financial activities. Like Ali Ben Moussalem, Salem bin Laden played a role in the US operations in the Middle East and Central America during the '80s.

Family structure

On his death in 1968, Sheik Mohammed left behind not only an industrial and financial estate but also a progeny made up of no less than 54 sons and daughters, the fruit of a number of marriages. The lastborn came into the world in 1967 and is presently a student in Boston.

In an initial phase, the group was headed by Mohammed Bahareth, brother of Mohammed's first wife and uncle of his oldest children. As of 1972, Sheik Salem bin Laden, the eldest son, took over as his father's successor, with the assistance of several brothers.

Upon Sheik Salem's death, the leadership of the group passed to his eldest son, Bakr, along with thirteen other brothers who make up the board of the bin Laden group. The most important of these are Hassan,Yeslam and Yehia.

Most of these brothers have different mothers and different nationalities as well. Each has his own set of affinities, thus contributing to the group's international scope. Bakr and Yehia are seen as representatives of the "Syrian group"; Yeslam, of the "Lebanese group". There is also a "Jordanian group." Abdul Aziz, one of the youngest brothers, represents the "Egyptian group" and is also manager of the bin Laden group's Egyptian branch, which employs over 40,000 people. Osama bin Laden is, incidentally, the only brother with a Saudi mother.

Given the size of the family and the financial empire, the bin Ladens have obviously not managed to escape internal conflict.

One of the most significant clashes involved Ali bin Laden, Salem's youngest son and Bakkr's older brother. Ali currently lives between Beirut, Damascus and Paris. Some have said that the break took place over religious reasons. In fact, our information tells us that Ali bin Laden felt smothered under the weight of the bin Laden empire and chose freedom. This distancing has been accompanied by financial disputes, as the other brothers are in no mood to share the group's dividends with Ali and turn a deaf ear to his repeated demands for remittances.

This said, relations between Ali and his brothers had thawed during recent years. His son Mohammed, now completing his studies in Paris, is set to take on important duties within the group at the appropriate moment. It should be noted that he is currently in discussions with French weapons manufacturers and is strengthening his ties with the Saudi Defense Ministry.

In turn, Mahrous bin Laden is still a member of the group's board of directors. His mistakes during the '70s are still a sticking point, however, and he is primarily involved in the organization's Medina branch without engaging in activity at the central level...a way of getting himself forgotten.

Yeslam bin Laden chose the same path as his brother Ali, but without a family break. Very early on, and in consultation with Bakr and Hassan, he decided to move to Europe, where he heads up a portion of the group's international activities. He divides his time between Geneva and Paris. This choice also stems from his marriage with a woman of princely (but Iranian) family, Mirdoht-Sheybani. He is one of the most "Westernized" of the bin Laden brothers, and we are told that his household language is French.

Commercial and industrial activities

In Saudi Arabia

It was only in 1972, four years after the death of Sheik Mohammed, that the [bin Laden] organization was given a group structure in order meet the needs of its expanding activities. Named Binladen Brothers for Contracting and Industry, the group is headquartered in Jiddahh.

With 1991 sales of SR 125 billion, the group is ranked 32 in Saudi Arabia.

After winning its spurs in the rebuilding of Mecca, the group extended its activities to the broad area of construction and infrastructural works, the Mecca-Medina highway, tens of thousands of housing units, etc., It also entered into agriculture, irrigation and representation of foreign groups (Audi, Porsche and the Dutch Heras Hekwerk group, which it represents for fencing and steel distribution). At the beginning of the `80s, it associated with Hunting Surveys Ltd (UK) for prefab construction and with the Dutch Pander Projects group for distribution of luxury products.

The group is extremely discreet with regard to its financial activities, contracts and projects. On the one hand, the group is a family business and does not have to account to anyone; on the other, its ties with the royal family increase its aura of mystery. Its main contracts are not decided at the industrial or economic level, are not run through the Saudi bureaucracy, but instead emanate directly from discussions held with the seraglio of power.

A discrete link thus exists between the bin Laden group, the royal family and the Chamberlain, Ali Ben Mousalem, a link about noone wishes to speak.

There have been many instances of companies which have seen their contracts withdrawn after having made their association with the bin Laden group the object of publicity judged inappropriate by the group.

This concern for avoiding any and all publicity is also emphasized by the fact that, in contrast to the majority of Saudi companies, the bin Laden group rarely if ever buys advertising space in industry publications.

Rarely, then, does one know in advance just what the next bin Laden project will be: generally, the information is there when it is all over. A number of significant projects have been noted in Saudi Arabia itself during recent years:

* A $296 million contract with other companies such as Ditco (Ben Zagr), Saud Ben Birdgis, Al Mouraiban, Kara, etc., for the construction of a ring freeway around Riyadh.

* A SR1.3 billion contract for construction of housing units for the security forces in Jiddahh.

* A SR1.3 billion contract for similar units for the National Guard at Mecca.

* A SR1.1 billion contract for construction of the Kharaj Military City near Riyadh.

* A SR1.1 billion contract for the Mecca Royal Divan.

* A SR4 billion contract for expansion of the Mecca Holy Places.

Several other major projects in Saudi Arabia have been noted recently:

* Construction and improvements at the Riyadh Airport for the Al Salem Aircraft Company, including construction of nine hangars, as part of one of the five offset programs in the US-Saudi Peace Shield agreement. Scheduled for completion in 1995, these operations are to transform Riyadh's King Khaled International Airport into one of the world's largest, ranking with Singapore, Frankfurt, etc.

* A $10 million contract for construction of a molded plastics factory at Jubail, in partnership with the Swiss group Buss AG, in the framework of the Jubail regional expansion plan and in cooperation with Prince Abdullah Ben Faisal and Saudi Formaldehyde Chemical Co. (SFCCL), founded in November 1990 at the initiative of the Jubail-Yanbu Royal Commission and businessman Mazen Al Lahiq.

In the Middle East

The bin Laden group is represented in most Saudi cities (Riyadh, Damman) and in a number of capital cities in the region: Beirut, Cairo, Amman, Dubai.

* With over 40,000 employees, the bin Laden group in Egypt, managed by Abdul Aziz bin Laden, is that country's largest foreign private group. Sheik Salem had good relations with one of the largest local contractors, Osman Ahmed Osman, going back for many years. Together with the Saudi Shobokshi group, the bin Laden group is currently negotiating a $400 million contract for construction of a paper plant.

* The bin Laden group, represented by Yehia bin Laden, is also holding negotiations with the Lebanese authorities for a $50 million share in the project to rebuild central Beirut, within the framework of the Solidere project and in conjunction with the Al Baraka group and the Ben Mahfouz group. In 1981, the bin Laden group also set up a local company, Sarco SAL, directed by the Sarkissian brothers, but which has not shown any activity.

* The bin Laden group's domestic and regional activities are complemented by international operations. The group set up a representative firm in London, Binexport, in November 1990, but its international business is handled by the SICO offices in Geneva.

Financial activities

The bin Laden family has been present in international finance for many years. With regard to France, this was the case with the Banque Al Saoudi, whose vicissitudes in recent years are common knowledge. Shored up by Banque de France in 1989 to avoid bankruptcy, it was partially taken over by Banque Indosuez, becoming Banque Francaise pour l'Orient, which has just merged with Rafik Hariri's Mediterranee group.

It is interesting to note that the bank's honorary chairman was none other than Prince Mohammed Ben Fahd, and its board of directors included Sheik Salem bin Laden, Sheik Bogshan and Khalid Ben Mahfouz. Banque Al Saoudi and Indosuez' special connections in the Middle East were instrumental in financing a portion of the weapons contracts of the `70s and `80s.

Banque Al Saoudi was 75%-owned by the Paris-based Saudi Arab Finance Corporation, which also controlled a number of other companies: 75% of Saudi Finance Corporation (Saudifin), headquartered in Geneva and in turn controlling the Saudi Arab Finance Corporation and the Arab Finance Corporation International, both in Luxembourg..

Generally speaking, the same set of shareholders was involved: Salem bin Laden, Khalid Ben Mahfouz, Salam Ahmed Bogshan, Saad Khalil Al Bahjat, Taha Baksh, etc.

In London, the bin Laden group also controls the Abdoulla brothers' Evered Holdings.

Since 1980, the bulk of the bin Laden group's international activities are routed through the Geneva offices of Saudi Investment Company (SICO), which was established on 19 May 1980 and whose capital was increased to SF100 million on 30 April 1991.

Located at 13 rue Ceard, the company is chaired by Yeslam bin Laden. Board members are Beatrice Dufour, Baudoin Dunant and Tilouine el Hanafi.

Beatrice Lafour is Yeslam bin Laden's sister-in-law. She is of Iranian origin and is married to a Swiss financier.

Baudoin Dunant, one of French-speaking Switzerland's leading lawyers, is on the boards of over twenty companies in Geneva, Fribourg, Morges, Nyons, etc. He received international publicity in 1983, when he represented Swiss banker Francois Genoud. Genoud, an admirer of Hitler and heir to the rights to Geobbels' writings, had helped finance the FLN during the Algerian Ward and was on trial for participation in international terrorism.

This unseemly publicity did nothing to shake the confidence of Yeslam bin Laden, doubtless an indication that the lawyer is top-notch in his profession (he is also counsel to the financial group of William Kazan , who is currently liquidating a major portion of his banking investments).

During the `80s, the board of directors also included members of the Swiss Wyss family, a branch of which controls the Holderbank Company, which has just signed a $100 million contract with Qatar National Cement. Also on the board were members of the Shakarshi family, whose name is linked to a money-laundering scandal and drug trafficking in Zurich. A Shakarshi family member was also a director of the SICO London branch.

As a result of these scandals and bent on avoiding any publicity, the bin Ladens decided that it was necessary to break publicly with the Shakarshis. In actual fact, the Shakarshis were never overly troubled and it appears that the Zurich company was just another CIA front used to finance the Afghan resistance.

The tie between Yeslam bin Laden and the Shakarshi family would thus seem quite consistent with both family and royal policy. Our information tells us that Yeslam bin Laden continues to maintain relations as usual with the Shakarshi group.

One might also note that the chairman of board of the Zurich Shakarshi company was Dr. Hans Kopp. Kopp is an important lawyer (his wife was then Justice Minister, since resigned) known for his international activities, particularly with the American [intelligence?] services (since the `60s), and is close to the Swiss defense industry (Oerlikon-Buhrle/Contraves).

The Geneva-based SICO is the parent house for the Group's international financial activities and investments, with branches in London and Curacao. The Curacao branch, established in 1984, manages the bin Laden group's partnership with the American Daniels Realty Corporation (Duspic), part of the Fluor Corporation conglomerate. It is partly through the bin Ladens' influence that the Fluor group was one of the major recipients of reconstruction contracts in Kuwait.

Despite a few recent attempts (particularly with the Swiss Contraves group), the bin Laden family has never been directly involved in weapons contracts and has never been bent on adding this activity to its portfolio.

At most, it might be said that the activities of Salem bin Laden in the context of Irangate and Contragate, or of Yeslam bin Laden within his association with the Shakarshi family, have placed the family at the center of these negotiations, but solely as a guarantor or as a representative of the interests of the royal family. The real contracts have been signed directly by members of the royal family: Prince Mohammed Ben Fahd or Prince Saud Ben Nayef.

The bin Laden family (and Yeslam bin Laden in particular) have thus had long-standing and close ties to the London/Geneva-based Albilad company, created in the `70s by Mohammed Ben Fahd and taken over by Saud Ben Nayef in 1984. Albilad was the main instrument for negotiation of the Anglo-Saudi Al Yamama agreement. Saudi interests were represented by businessman Wafik Said, while the British side was represented by Jonathan Aitken, currently a minister in the Major government. It might be noted that a major player in these negotiations was none other than Mark Thatcher, son of the former Prime Minister and very close to Wafik Said.

Nonetheless, while the bin Laden group does not deal directly in armaments, it is an obvious presence in the big military-related construction contracts. We have mentioned a few of these above. At present, its most important contract is for the Riyadh Airport, through the intermediary of the Al Salam Aircraft company, in the framework of the compensation contracts stipulated by the Peace Shield agreement.

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