Adnan Khashoggi
High-rolling Saudi-born ‘Mr Fixit’ known for his jet-set lifestyle and his flirtations with political scandals involving arms contracts
ADNAN KHASHOGGI, the arms dealer, who has died aged 81, became fabulously wealthy from comparatively modest beginnings, and was known for his highrolling international lifestyle and numerous brushes with scandal. At the peak of his deal-making activities, in the 1970s and 1980s, the Saudi-born “Mr Fixit” made hundreds of millions brokering vast arms deals for his friends in the Saudi royal family. He was billed as one of the richest men in the world, his wealth once estimated at £2.4 billion. His assets included 12 homes, fully staffed at all times, including a 10,000 acre ranch in Kenya, an estate in Marbella and houses in London, Paris, Cannes, Madrid, Monte Carlo and Manhattan. He had a stable of Arabian horses and 200 exotic animals, 100 limousines, a personal airline of three jets and a fleet of three yachts, including the $75m Nabila (named after his daughter), which was used in the James Bond film Never Say Never Again. Other assets included a South Korean bodyguard called Mr Kill.
The gossip columns chronicled Khashoggi’s jet-set lifestyle, with tales of costume balls in lavish villas in Switzerland and on the Riviera, and impossible sums staked at the gaming tables of Las Vegas, the Cote d’azur and London. For his 50th birthday he threw a five-day bash at his estate in Marbella, at which he was serenaded by Shirley Bassey, danced with Brooke Shields and basked in a public encomium delivered by Sean Connery. A roll call of glamorous companions included in addition to his three spouses a series of “pleasure wives”.
Khashoggi’s name seemed to crop up whenever there was a whiff of political scandal involving arms contracts – including the £20 billion al-yamamah defence contract negotiated in the 1980s between the British government of Margaret Thatcher and Saudi Arabia. In 1994 there were allegations that the orders were won as a result of bribes to members of the Saudi royal family and government officials, and there were claims that Mrs Thatcher’s son Mark had benefited financially from the deals, claims which he has always denied.
Khashoggi was named by the Sunday Times as one of several representatives of Saudi Arabia’s King Fahd with whom Mark Thatcher held talks. Another intermediary was the Syrian businessman and philanthropist Wafic Said, who, Khashoggi claimed, had used Mark Thatcher for “intelligence”. In 2006, however, the Director of the Serious Fraud Office announced his decision to discontinue investigations into the affair on the ground of national interest.
Khashoggi’s services as a facilitator were a recurring feature throughout American administrations from Nixon onwards, and his good relations with key figures in Washington appeared to survive his involvement in both the Lockheed bribery scandal of 1975-76 and the Iran-contra affair of the 1980s, as well as a series of brushes with the law.
In March 2003 the New Yorker reported that he had held a meeting with Richard Perle, the chairman of the US Defense Policy Board, shortly before the invasion of Iraq. But, as with so much else in Khashoggi’s life, the precise details of their tête-à-tête remain unclear.
Adnan Khashoggi was born on July 25 1935 in Mecca, Saudi Arabia, one of 14 sons of Muhammad Khashoggi, a doctor of Spanish, Basque and Turkish ancestry who was King Abdel Aziz Al Saud’s personal physician. A sister, Samira, would marry the Harrods owner Mohammed Fayed and was the mother of Dodi Fayed. Another sister is the novelist Soheir Khashoggi.
Adnan’s father had spent time in the West, and he sent his son to be educated at Victoria College in Alexandria, Egypt, and then to the United States, where he studied at Ohio State University and Stanford University in California. He left Stanford early to go into business in Saudi Arabia and launched his career as a truck salesman, putting together deals between companies in America and members of the Saudi royal family.
As the family began to spend their oil riches on defence equipment in the 1960s and 1970s, it was to Khashoggi that they turned. To begin with the commissions and contracts were small, but before long Khashoggi had hiked his rates from 2.5 per cent to 15 per cent on contracts of up to half a billion dollars. By the mid-1970s he was pulling in hundreds of millions a year and acting as a middleman for American companies such as Lockheed and Boeing, as well as for British firms such as Marconi and Westland Helicopters.
Money was funnelled to Saudi princes and officials, though Khashoggi always kept a generous share for himself. He allegedly covered his tracks by establishing front companies in Switzerland and Liechtenstein to handle his commissions.
Khashoggi’s role as a fixer apparently went well beyond pure business. In 1989 Pamella Bordes, the high-class call girl who had a House of Commons pass, claimed she had been hired by Khashoggi to provide sexual favours for business and political clients.
In the late 1960s Khashoggi became close to Richard Nixon, attending his inaugurals and contributing money to both his campaigns. In 1973 he served as an intermediary between the White House and King Faisal during the 1973 Yom Kippur War. In 1994 he would be a guest at Nixon’s funeral.
In 1961 Khashoggi had married Soraya, a raven-haired beauty who had grown up in a Leicester council house as Sandra Daly, and whom he met when she accompanied her mother on a trip to Paris. The Khashoggis had a daughter and four sons, but the marriage ended in 1974, and Soraya subsequently sued her husband for half his fortune, estimated then at £2.4bn. The action was settled out of court in 1982, with estimates of her entitlement varying between £5 million and £20 million. Quite what happened to the money is unclear, as in 1995 Soraya was discovered living in a rented three-bedroomed terraced house in Hungerford, Berkshire.
It seems the pair remained on friendly terms and when, after their divorce, Soraya gave birth to a daughter, Petrina, Adnan treated the new arrival as part of the family. It was only in 1999 that Soraya revealed that Petrina was the daughter, not of her ex-husband, but of the disgraced former Tory minister Jonathan Aitken, with whom she had been having an affair at the time.
By the time of his divorce, Khashoggi’s fabulous wealth was beginning to attract the attention of the American authorities. During the Lockheed bribery scandal of 1975-76, it was revealed that board members of the US aerospace firm had paid members of friendly governments to guarantee contracts for military aircraft, and Khashoggi was named as one of the principal beneficiaries.
Between 1970 and 1975 Lockheed paid Khashoggi $106 million in commissions; Max Helzel, then vice-president of Lockheed’s international marketing, described Khashoggi as “for all practical purposes a marketing arm of Lockheed”.
Though this scandal nearly led to the corporation’s downfall and played a part in President Carter’s decision to ban the practice of paying bribes to foreign government officials, Khashoggi’s services proved indispensable when the incoming Reagan administration was looking for a way to negotiate the release of Americans still held hostage in the US embassy in Tehran.
During the subsequent congressional inquiry into what became known as the “Iran-contra affair”, Khashoggi was named as one of the key middlemen between Oliver North, in the White House, and the mullahs in Iran in a deal in which embargoed weapons were bartered (with presidential approval) for the release of the hostages.
Khashoggi subsequently claimed that he lost $10 million that he had put up to obtain the weapons, and a separate congressional report revealed that he had borrowed much of the money for the weapons from the Bank of Credit and Commerce International whose collapse, in 1991, defrauded thousands of depositors.
The report remarked how CIA agents and “influential foreign elements in the US, like Adnan Khashoggi” had popped up at important periods of the history of the bank, and at the same time participated “in the making of key episodes in US foreign policy”.
The Iran-contra affair marked the beginning of a difficult period for Khashoggi. In 1987, Triad America Corporation, his American company which was involved in a $400 million development in Salt Lake City, filed for bankruptcy after it was unable to pay its creditors.
The following year 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 and subsequently acquitted.
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. Khashoggi was alleged to have helped the Marcoses plunder the Philippines of some $160 million by fronting for them in illegal property deals.
As plunging oil prices added to the toll, Khashoggi made things worse for himself by losing heavily on the gaming tables. There were whispered stories of how he was draining money from his own projects to maintain his gambling addiction, of unpaid servants and unpaid bills.
During the mid-1990s there was a longrunning legal dispute with Lonrho, from which Khashoggi had allegedly borrowed $8 million in the 1980s when it was run by his friend Tiny Rowland, money which he allegedly failed to repay. Khashoggi argued that Lonrho’s demands failed to take into account some £7.7million owed to him in commissions for his role in bringing about the £177 million acquisition of a one-third stake in Lonrho’s Metropole Hotel offshoot by a Libyan company in 1992.
In 1998 he settled out of court after allegedly bouncing gambling cheques for £3 million at the Ritz Casino in London. The case itself was notable for Khashoggi’s defence that the debt was legally unenforceable because he had an arrangement with the casino’s management that allowed him to continue gambling on credit, contrary to the 1968 Gaming Act.
In 1997 the Thai authorities issued a warrant for Khashoggi’s arrest after the collapse of the Bangkok Bank of Commerce, alleging that $77.5 million was advanced to him without credible collateral. In 2006, after years of investigation, he was charged by the SEC with securities fraud, accused of manipulating the stock price of a California-based internet company which he controlled, and misappropriating over $130 million in transactions that led to the collapse of several brokerage firms, resulting in the largest bail-out in the history of the US Securities Investor Protection Corporation.
Whether Khashoggi ever came close to personal bankruptcy seems doubtful, as he seemed to have little problem finding cash when he wanted it. In 2002 he was reported to have bought a private island in the East China Sea to turn into a £1 billion holiday resort, and he continued to be an popular guest at glitzy parties. In later life, however, he lived quietly in the Principality of Monaco.
After his divorce from Soraya, Adnan Khashoggi married an Italian beauty called Laura Biancolini, who renamed herself Lamia; they had a son. In 1991 he took an Iranian second wife, Shahpari Zanganeh, with whom he had a son and a daughter; that marriage was dissolved. He is survived by Lamia and eight children.
Adnan Khashoggi, born July 25 1935, died June 6 2017