Charles Tickle, who operated out of Birmingham, Alabama, found Yeslam to be “always very professional… well educated, well spoken.” Daniel Corporation “never had a bad business dealing with him of any kind.” In all, they worked together on about a half dozen commercial real estate ventures in the United States; in each case, Yeslam’s firm, Saudi Investment, was the only investor besides Daniel Corporation. They formed offshore corporations to serve as financing vehicles, with Tickle and Yeslam sometimes named as directors. The only real mystery, Tickle recalled, was whose money Yeslam was actually investing—his, or that of other members of the Bin Laden family, or that of other Saudi investors, or money from some other source. “That was always such a secretive thing,” Tickle said. At the time, as a business issue, “We could have cared less.” For Daniel Corporation’s purposes, all investment funds were the same; Yeslam had access to quite a lot of cash, and there was no reason for Tickle to believe that it was coming from improper sources.14
AS HE BUILT this global portfolio, Yeslam found it more and more difficult to work with Salem. Yeslam was “now, in effect, the chief financial officer” of the Bin Laden companies, according to Carmen, but his “rise was not welcomed by Salem and Bakr,” who increasingly served as Salem’s second in command. The pair challenged some of Yeslam’s decisions; his resentment deepened. Also, Yeslam and some other brothers “were frustrated by their lack of contact” with the Saudi royal family because “Salem and Bakr guarded their contacts with the princes,” according to Carmen. Yeslam was reluctant to openly confront his elder brothers, however. Even in later years, he never spoke in detail about these conflicts, referring only obliquely to “disagreements” and his gradual exclusion from the principal family businesses.15
In 1985 Yeslam left Jeddah and moved to his estate in the Geneva suburbs. He distanced himself from his brothers, but he did not break completely with them—Yeslam, Salem, and Bakr remained codirectors of a number of offshore companies for years afterward, and they held business and social meetings from time to time. Yeslam also continued to manage family money, particularly that of his full brothers and sister. He would facilitate Swiss banking and some investments for other half-brothers and half-sisters as well. Mainly, however, Yeslam hoped, by breaking away from the business scene dominated by Salem in Jeddah, to cultivate his own independent relations with Saudi princes and other wealthy investors who were not already clients of Salem or Bakr—Prince Majid and Prince Mishal, half-brothers of Fahd, were two of his most important contacts during this period.16
Yeslam decided to develop the sort of investment firm that would impress Saudis, Europeans, and Americans alike—one that exuded the mahogany elegance of a Swiss bank. For just over 5 million Swiss francs, he purchased and renovated a grand stone building on a corner lot in Old Geneva, on rue Francois Lefort; it would serve as the headquarters for Saudi Investment Company. From there, Yeslam managed brokerage accounts and international stock trading. A three-page letter to his full brother Ibrahim, written on Saudi Investment Company stationery on March 11, 1985, and later filed in an American court case, offers a snapshot of his trading activity. It refers to an audit by Arthur Andersen of Geneva and then lists Ibrahim Bin Laden’s holdings: small positions in gold and silver; several hundred thousand U.S. dollars in cash deposits, apparently to provide collateral for stock trades; and shares or options in eighty-five different corporations, most of them American. Included in Ibrahim’s stock portfolio were Anheuser-Busch, the beer company; Bally Manufacturing, a maker of pinball machines; and American Airlines.17
It was a heady time to be promoting the stock market, whatever one’s strategy. After a severe recession in the United States in 1982, the Dow Jones Industrial Average rose by more than 50 percent over the next three years. Through the summer and autumn of 1985, as Yeslam built up his firm in Geneva, the markets climbed further still; the Dow soon doubled from its 1982 low, and then kept climbing. A mania about stock investing spread across the United States and around the industrialized world; the volume of shares traded daily on the major exchanges skyrocketed, and many middle-class investors who had previously shied away from stocks now dived in.
Carmen felt that a similar craze was overtaking Yeslam. In 1985 “he went through a period of massive and reckless spending, amassing more than 500 pairs of shoes, hundreds of suits and over a dozen luxury cars,” her attorneys wrote in Swiss court filings. All the while, he “continued to suffer poor health, phobias and panic attacks.” Carmen found him “increasingly intolerant and dogmatic.” She sought treatment for her own anxiety and panic attacks. For his part, Yeslam found Carmen increasingly hysterical, and he became exhausted by her repeated threats to kill herself, according to the Swiss court filings by his attorneys. He believed that his wife was involved with another man, that she was “taking him for a ride and that her suicide threats were a pretense.” Finally, “unable to stand his wife’s scenes any longer,” he moved out of their Genthod estate and into his building in Old Geneva. His wife then announced that she was pregnant. They argued over whether they should expand their family together; afer some back and forth, she ultimately gave birth to their third daughter in April 1987.18
In the middle of this tumult, Yeslam decided to purchase control of a stock brokerage in London. It was not, perhaps, the most sanguine time in his life to undertake such a complicated investment, but he forged ahead nonetheless. Russell Wood & Company had offices at Southwark, on the south side of the Thames River. George Russell Wood, a British stockbroker, founded the firm with several partners in 1972; it specialized in what was known as the private client business, meaning that it handled stock trading for wealthy individuals. The firm had a seat as a broker-dealer on the London Stock Exchange; this meant it could buy and sell stocks on its own account or for clients without going through any intermediaries—it was a member of the exchange. This allowed it to promote speed, efficiency, and expertise while recruiting wealthy investors. By taking control of the company, Yeslam could bring his firm and the Bin Laden family directly into the international stock markets for the first time. “They wanted to establish themselves as brokers in London because they were brokers in their own country,” recalled Auguste Sauter, then one of the firm’s partners. Yeslam wanted “to advise all the people in Saudi Arabia with pockets of cash, to invest globally.”19
Yeslam had brought with him to Switzerland a Tanzanian passport holder named Akbar Moawalla, who had previously worked at an American bank in Saudi Arabia. Moawalla served as Yeslam’s chief accountant and manager, and he became Russell Wood’s principal contact in Geneva as the acquisition talks unfolded during 1986 and early 1987.
All the while, stock prices went up and up. Trading volume on the major exchanges swelled. By the spring of 1987, they had a deal. The purchase price was not disclosed, but it appears to have totaled at least several million pounds sterling. Yeslam used Falken Limited, his Cayman Islands entity, to take control of Russell Wood. Moawalla became a director. Yeslam brought in one of his stock trading computers to keep track of all the trading by the London brokerage’s existing clients and new clients from Saudi Arabia and elsewhere. The computer system was scheduled to take charge of all trading at the firm in late August 1987.20
On August 1, at two in the morning, Carmen went to Yeslam’s building in Old Geneva and found him with another woman. “The discovery of the affair was a devastating blow for Carmen,” her attorneys wrote. She said she wanted a divorce. Yelsam moved to write a separation contract.
On August 17, the Dow Jones Industrial Average reached its all-time high, and then began to fall.
Carmen slipped into a dire emotional state, and a week later, a doctor in Geneva, allegedly anticipating her divorce negotiations with Yeslam, issued a medical certificate indicating that her “anxiety and panic attacks had recently increased” and that “any decision or signature” by her should be “deemed null and void.” She was soon hospitalized, suffering from exhaustion.21
In London, an accidental power surge of about one thousand volts, originating in the city’s electrical grid, “burned all the hard disks” on the Russell Wood computer system, as Sauter recalled it. The surge destroyed all records of stock and option trading by the firm’s clients. There were no backup disks, according to Sauter. What happened next is not entirely clear. Sauter recalled that some stockbrokers at the firm had drawn many of Russell Wood’s clients into a risky options trading scheme involving the shares of a beer pump manufacturer in Croydon, England, and that suddenly, amid the confusion caused by the computer breakdown, some rival brokers made a run on these shares, causing Russell Wood’s positions to collapse. In any event, that autumn, the brokerage’s finances declined very rapidly. In October the stock market suffered its biggest one-day crash since the Great Depression of 1929. By the end of the year, Russell Wood had lost ?3.5 million sterling, or about $6 million. In filings for British regulators, the firm blamed its trouble on the computer failure, which had led to “a breakdown in accounting controls.”22
All in all, it had been a discouraging encounter between the Bin Laden family and the forces of globalization. There would soon be worse.
