health care complexes, and computer technologies.
Saudi Arabia was a planner’s dream come true, and also a fantasy realized for anyone associated with the engineering and construction business. It presented an economic opportunity unrivaled by any other in history: an underdeveloped country with virtually unlimited financial resources and a desire to enter the modern age in a big way, very quickly.
I must admit that I enjoyed this job immensely. There was no solid data available in Saudi Arabia, in the Boston Public Library, or anywhere else that justified the use of econometric models in this context. In fact, the magnitude of the job—the total and immediate transformation of an entire nation on a scale never before witnessed—meant that even had historical data existed, it would have been irrelevant.
Nor was anyone expecting this type of quantitative analysis, at least not at this stage of the game. I simply put my imagination to work and wrote reports that envisioned a glorious future for the kingdom. I had rule-of-thumb numbers I could use to estimate such things as the approximate cost to produce a megawatt of electricity, a mile of road, or adequate water, sewage, housing, food, and public services for one laborer. I was not supposed to refine these estimates or to draw final conclusions. My job was simply to describe a series of plans (more accurately, perhaps, “visions”) of what might be possible, and to arrive at rough estimates of the costs associated with them.
I always kept in mind the true objectives: maximizing payouts to U.S. firms and making Saudi Arabia increasingly dependent on the United States. It did not take long to realize how closely the two went together; almost all the newly developed projects would require continual upgrading and servicing, and they were so highly technical as to assure that the companies that originally developed them would have to maintain and modernize them. In fact, as I moved forward with my work, I began to assemble two lists for each of the projects I envisioned: one for the types of design-and-construction contracts we could expect, and another for long-term service and management agreements. MAIN, Bechtel, Brown & Root, Halliburton, Stone & Webster, and many other U.S. engineers and contractors would profit handsomely for decades to come.
Beyond the purely economic, there was another twist that would render Saudi Arabia dependent on us, though in a very different way. The modernization of this oil-rich kingdom would trigger adverse reactions. For instance, conservative Muslims would be furious; Israel and other neighboring countries would feel threatened. The economic development of this nation was likely to spawn the growth of another industry: protecting the Arabian Peninsula. Private companies specializing in such activities, as well as the U.S. military and defense industry, could expect generous contracts—and, once again, long-term service and management agreements. Their presence would require another phase of engineering and construction projects, including airports, missile sites, personnel bases, and all of the infrastructure associated with such facilities.
I sent my reports in sealed envelopes through interoffice mail, addressed to “Treasury Department Project Manager.” I occasionally met with a couple of other members of our team—vice presidents at MAIN and my superiors. Since we had no official name for this project, which was still in the research and development phase and was not yet part of JECOR, we referred to it only—and with hushed voices—as SAMA. Ostensibly, this stood for Saudi Arabian Money-laundering Affair, but it was also a tongue-in-cheek play on words; the kingdom’s central bank was called the Saudi Arabian Monetary Agency, or SAMA.
Sometimes a Treasury representative would join us. I asked few questions during these meetings. Mainly, I just described my work, responded to their comments, and agreed to try to do whatever was asked of me. The vice presidents and Treasury representatives were especially impressed with my ideas about the long-term service and management agreements. It prodded one of the vice presidents to coin a phrase we often used after that, referring to the kingdom as “the cow we can milk until the sun sets on our retirement.” For me, that phrase always conjured images of goats rather than cows.
It was during those meetings that I came to realize that several of our competitors were involved in similar tasks, and that in the end we all expected to be awarded lucrative contracts as a result of our efforts. I assumed that MAIN and the other firms were footing the bill for this preliminary work, taking a short-term risk in order to throw our hats into the ring. This assumption was reinforced by the fact that the number I charged my time to on our daily personal time sheets appeared to be a general and administrative overhead account. Such an approach was typical of the research and development/proposal preparation phase of most projects. In this case, the initial investment certainly far exceeded the norm, but those vice presidents seemed extremely confident about the payback.
Despite the knowledge that our competitors were also involved, we all assumed that there was enough work to go around. I also had been in the business long enough to believe that the rewards bestowed would reflect the level of Treasury’s acceptance of the work we had done, and that those consultants who came up with the approaches that were finally implemented would receive the choicest contracts. I took it as a personal challenge to create scenarios that would make it to the design-and-construct stage. My star was already rising rapidly at MAIN. Being a key player in SAMA would guarantee its acceleration, if we were successful.
During our meetings, we also openly discussed the likelihood that SAMA and the entire JECOR operation would set new precedents. It represented an innovative approach to creating lucrative work in countries that did not need to incur debts through the international banks. Iran and Iraq came immediately to mind as two additional examples of such countries. Moreover, given human nature, we felt that the leaders of such countries would likely be motivated to try to emulate Saudi Arabia. There seemed little doubt that the 1973 oil embargo—which had initially appeared to be so negative—would end up offering many unexpected gifts to the engineering and construction business, and would help to further pave the road to global empire.
I worked on that visionary phase for about eight months—although never for more than several intense days at a time—sequestered in my private conference room or in my apartment overlooking Boston Common. My staff all had other assignments and pretty much took care of themselves, although I checked in on them periodically. Over time, the secrecy around our work declined. More people became aware that something big involving Saudi Arabia was going on. Excitement swelled, rumors swirled. The vice presidents and Treasury representatives grew more open—in part, I believe, because they themselves became privy to more information as details about the ingenious scheme emerged.
Under this evolving plan, Washington wanted the Saudis to guarantee to maintain oil supplies and prices at levels that could fluctuate but that would always remain acceptable to the United States and our allies. If other countries such as Iran, Iraq, Indonesia, or Venezuela threatened embargoes, Saudi Arabia, with its vast petroleum supplies, would step in to fill the gap; simply the knowledge that they might do so would, in the long run, discourage other countries from even considering an embargo. In exchange for this guarantee, Washington would offer the House of Saud an amazingly attractive deal: a commitment to provide total and unequivocal U.S. political and—if necessary—military support, thereby ensuring their continued existence as the rulers of their country.
It was a deal the House of Saud could hardly refuse, given its geographic location, lack of military might, and general vulnerability to neighbors like Iran, Syria, Iraq, and Israel. Naturally, therefore, Washington used its advantage to impose one other critical condition, a condition that redefined the role of EHMs in the world and served as a model we would later attempt to apply in other countries, most notably in Iraq. In retrospect, I sometimes find it difficult to understand how Saudi Arabia could have accepted this condition. Certainly, most of the rest of the Arab world, OPEC, and other Islamic countries were appalled when they discovered the terms of the deal and the manner in which the royal house capitulated to Washington’s demands.
The condition was that Saudi Arabia would use its petrodollars to purchase U.S. government securities; in turn, the interest earned by these securities would be spent by the U.S. Department of the Treasury in ways that enabled Saudi Arabia to emerge from a medieval society into the modern, industrialized world. In other words, the interest compounding on billions of dollars of the kingdom’s oil income would be used to pay U.S. companies to fulfill the vision I (and presumably some of my competitors) had come up with, to convert Saudi Arabia into a modern industrial power. Our own U.S. Department of the Treasury would hire us, at Saudi expense, to build infrastructure projects and even entire cities throughout the Arabian Peninsula.
Although the Saudis reserved the right to provide input regarding the general nature of these projects, the reality was that an elite corps of foreigners (mostly infidels, in the eyes of Muslims) would determine the future appearance and economic makeup of the Arabian Peninsula. And this would occur in a kingdom founded on conservative Wahhabi principles and run according to those principles for several centuries. It seemed a huge leap of faith on their part, yet under the circumstances, and due to the political and military pressures undoubtedly brought to bear by Washington, I suspected the Saud family felt they had few alternatives.
