161. Telegram From the Embassy in Saudi Arabia to the Department of State1
6266. Subject: U.S.-Saudi Relations and Lockheed Bribe.
Summary: On September 10, I told Minister of Defense Prince Sultan that Lockheed had admitted paying some $20 million in bribes overseas, and that Senators Church and Proxmire were pressing the company and the USG for the names of the bribe recipients. Lockheed records showed that according to Adnan Kashoggi, [1 line not declassified] had received some of this money. Sultan said the Department or President Ford must do whatever is necessary to make sure the names are never divulged. The claims were obviously false, but if they were made by the U.S. Congress they have to be taken by the SAG as an indication of deliberate U.S. hostility. It would mean the end of the special U.S.-Saudi relationship, and Sultan did not exclude Saudi Arabia’s turning to the Soviets on the rebound. I urged Sultan not to overreact; if he did so the anti-Arab elements in the U.S. would have won their game. Sultan wants copies of all information on Lockheed that has been given to the Department of State. End summary.
1. I saw Minister of Defense Prince Sultan Sept 10 and told him we had very disturbing information about the way Lockheed has been doing business overseas: Lockheed has admitted to paying some $20 million in bribes to promote its exports, and two Committees headed respectively by Senators Church and Proxmire were investigating the company. I also told Sultan that the Committees were demanding to know to which countries these monies had been paid, and specifically who were the recipients in each. I said Lockheed and the Department of State were standing firm against divulging the names of alleged payees, but that congressional pressure would certainly continue and [Page 543] increase. This was of concern to us because Lockheed records claim that some bribes went to [names not declassified].
2. I said my presentation was in line with my earlier assurances to him that we would keep him informed on all developments to do with Congress’ scrutiny of bribes and agents’ fee. If it looked as if the company would be compelled to release the names to the Congress, I would let him know as soon as the news reached me, whatever the hour of day or night. I assured the Prince the only persons aware of this information—apart from the head of Lockheed and some of the company’s lawyers—were a handful of top State Department officials, my secretary, and my Deputy, Hume Horan.
3. The only Saudis I had discussed this with were Foreign Minister Prince Saud, who had asked to be briefed (Saud took notes, remarked only that “this could be very serious” and asked that I give the same information to Crown Prince Fahd and Prince Sultan), and Prince Fahd who listened with great interest. Fahd said the investigations were clearly inspired by the opponents of good Arab-American relations and asked that we discuss the matter more fully later.
4. I informed Sultan that Lockheed records apparently showed the monies had been paid to Adnan Kashoggi, and that they had been placed in numbered Swiss banks. We had only Kashoggi’s word, however, (as stated in Lockheed files and correspondence) that the accounts were those of [names not declassified].
5. Sultan said the names cannot rpt not ever be revealed. The Department of State and—if necessary—President Ford must do whatever is needed to ensure in this respect the continued privacy and inviolability of Lockheed’s files. Sultan said it was inconceivable to him how anyone who was familiar with the personal wealth of the Saud family, [less than 1 line not declassified] should ever think one of them would ever be party to such a heinous and elaborate circumlocution for a paltry few million dollars. But this was not the point. Sultan knew that if such an accusation were made with the stature of the U.S. Congress behind it, its official U.S. nature would be universally believed. The results would be drastic. They would be felt in the Saudi Arabian Government—but the Saudi Arabian Government, Sultan said, was not the government of [names not declassified] alone. It was many more people than they; in fact, it was the entire state. The effect of such an accusation would be the end rpt the end of the special relationship between the United States of America and the Kingdom of Saudi Arabia. In measured, serious tones Sultan adjured the U.S. Government to end discussions and speculation of the Lockheed case by whatever means and whatever efforts that required.
6. I told Sultan I would pass this message on to you just as he had expressed it to me. Sultan added—in the same quiet and direct mode [Page 544] of address he had used earlier—that if the United States was intending systematically to harass Saudi Arabia it should speak plainly and let the SAG know. For his part, the Saudi Arabian Government wanted to remind the United States Government that others, including even the Union of Soviet Socialist Republics would always be glad to help Saudi Arabia if the United States persisted in its unfriendly stance. Syria and Egypt had already shown the Arab world how Soviet arms, and a Soviet presence were compatible with continued self-respect and national sovereignty. Sultan added this was not said as a threat but as a fact. He hoped that circumstances would permit the Saudi Arabian Government to remain a friend of the United States in the Middle East.
7. Sultan closed this portion of the discussion by saying that he wanted to receive as soon as possible copies of all the original material on the Lockheed case that the Department of State possesses. I commented, as I had previously to Prince Saud and Prince Fahd that the Saudis must not rpt not overreact. Sultan might be right in assuming anti-Arab elements would exploit the investigations but if Saudi Arabia turns against the United States its enemies will have won their game.
8. Comment: If the [less than 1 line not declassified] names are leaked to the media by the investigating committees, the SAG will claim loudly it is the victim of a pro-Zionist conspiracy. It will react against the USG as a whole because (a) it can’t direct its reactions to one branch of the USG and not another; and because (b) from its standpoint, Zionists would be in any case the predominant element and the only ones to profit. It is only this last point that might enable us to salvage the situation if the names (God forbid) are released. It is certainly the point I intend to keep hammering on in all future discussions of the subject.
9. Action requested: Receipt of all pertinent Lockheed materials for delivery to Prince Sultan, i.e. all documents already given to the Senate and any other the Department can squeeze out of Lockheed.
Summary: Akins met with Sultan to discuss the developing Lockheed bribery situation.
Source: Ford Library, National Security Adviser, Presidential Country Files for the Middle East and South Asia, Box 30, Saudi Arabia—State Department Telegrams, To SecState-Nodis (8), 9/75–11/75. Secret; Immediate; Cherokee; Nodis. Akins met with Prince Sa’ud on September 12, and, in telegram 6272 from Jidda of that date, asked the Department for instructions on what assurances he could give the Saudis. (Ibid.) The Department replied on September 13 in telegram 218708 to Jidda, informing Akins that no names except for those of Khashoggi and a prince not employed by the Saudi government had been named by the Church Subcommittee. It instructed Akins to explain to Sa’ud and Sultan that the matter was outside executive branch control. (National Archives, RG 84, Jidda Embassy Files: Lot 79F80, POL Northrop and Lockheed) On August 13, Akins, Dickman, and Huffman had previously met in Washington with Lockheed representatives to discuss the issue. (Ibid., POL Lockheed)
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