Friends in High Places: The Bechtel Story : The Most Secret Corporation and How It Engineered the Wo Laton Mccartney (surface ebook reader .TXT) 📖

the Saudi royal family. That development alone might have provided Prince Mohammad with the opportunity to begin to pressure Bechtel. But there was one thing more: an increasingly nasty dispute between Bechtel and Olayan over profits Olayan claimed were his due.

The argument revolved around Olayan’s partnership arrangement with Bechtel, which guaranteed the Saudi businessman a set percentage of the profits from Bechtel’s Saudi Arabian work, once the company’s costs had been deducted. The arrangement had worked well, as long as Bechtel’s costs were kept in line. According to a senior Bechtel official, the problems began when several longtime Bechtel executives, resentful at what they considered Olayan’s overly close relationship with the company, began systematically increasing Bechtel’s stated costs, reducing Olayan’s profits to close to zero. 5 After unsuccessfully complaining to Bechtel’s London office, Olayan took the matter to Steve junior.

In appealing to Bechtel’s chairman, Olayan had every reason to believe that the dispute would soon be resolved. For one thing, he and Bechtel had enjoyed a long and mutually profitable relationship and had a number of major joint ventures in the works, including the proposed acquisition of a huge tract of land in AI Khubar, just outside Dhahran. Since under Saudi law it was illegal for foreigners to own land, the title to the property was to be in Olayan’s name with a side letter stipulating that Bechtel owned 50 percent of the property. With this acquisition pending (it was apparently completed in 1976), Bechtel could ill afford to alienate Olayan. As one of the company’s executives 210

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in Saudi Arabia put it, “Bechtel needed Olayan much more than Olayan needed Bechtel.”6

Even so, at the urging of John O’Connell, Bechtel held firm, informing Olayan that O’Connell’s men in Saudi Arabia had checked and double-checked their books and had found the accounting to be correct. Astonished and angered, Olayan vowed to keep pressing for a new and complete accounting. Press he did, and Bechtel finally reached a settlement.

In the interval, O’Connell, who privately scorned Olayan as “a rug merchant,” began reasserting his influence on the Saudi scene. His most important-and for Bechtel, expensive-move was courting Prince Mohammad Fahd.

Convinced that the prince possessed influence with the Saudi court, and unaware, apparently, of his history with other companies, O’Connell asked Fahd to intercede with the Saudi government to secure final approval for the Riyadh job, which had been stalled since 1974.

“O’Connell was anxious to push the project through, particularly since Olayan hadn’t had any luck with Riyadh and this was John’s chance to show him up,” noted a Bechtel officer. “Mohammad informed him that the only way for Bechtel to get the contract was for the company to give him the same deal it had cut with Olayan. In other words, no Mohammad, no Riyadh. “7

Having Mohammad, though, was not cheap. He was already Bechtel’s partner in Saudi Arabia. By 1978, however, he wanted nothing less than a lO percent interest in the soon-to-be created Arabian Bechtel Company, Ltd., the Bechtel subsidiary which would manage both Jubail and Riyadh. 8 In addition, published reports indicate that the prince also insisted on having a major say in selecting the subcontractors to be hired by Bechtel. 9 When Bechtel’s financial executives totaled up the tab of the prince’s demands over the expected life of the project, they came to more than $200 million. 10

O’Connell was prepared to agree. The final decision on whether to bring Mohammad in as an actual shareholder, though, rested with the Bechtel executive committee, a group consisting of Steve