The decades-old US-Saudi alliance appears to be unravelling fast, likely sparking a US Treasury bond withdrawal and court action in its wake
On Wednesday evening, both arms of the United States’ elected government voted convincingly to override President Obama’s veto of a bill that will likely pave the way for lawyers of US citizens to pin the blame for 9/11 on elements of the Saudi state and to exact financial compensation on behalf of their clients.
In this sense, the "Justice Against Sponsors of Terrorism Act" (JASTA), which will almost certainly be promulgated, will represent the latest in a series of milestones for a long-running class action lawsuit filed by the "9/11 Families and Survivors United for Justice Against Terrorism".
The suit had its first big break in 2014 when a New York federal court ruled that the Saudi government was not allowed to claim sovereign immunity, and was thus liable to be sued for damages if the link to 9/11 could be proven.
Since then, its progress has become something of a bellwether for the US’s overall stance on Saudi Arabia, and of a decades-old alliance that would now appear to be unravelling.
A recycling scheme
The alliance has been underpinned for decades by Saudi Arabia’s role as the world’s "swing" oil producer and thus its centrality to the Western powers’ dominance over world energy supplies. It has also rested on the ability of the kingdom to recycle a portion of its "petrodollars" every year into expensive Western arms imports and, more broadly, into a variety of assets in the US and Western Europe.
With more than 2,800 killed on 11 September 2001, including 11 unborn babies, the first serious test of the US-Saudi alliance had begun
Often glossed over, the alliance was also key to the US winning the Cold War, especially in Central Asia and the Middle East. Riyadh’s financial and ideological backing of hardline Islamist movements provided Washington with a useful reactionary and religiously conservative counterweight to more progressive and largely secular nationalist movements, popular liberation fronts, and new regimes such as the People’s Democratic Party in Afghanistan – all of which threatened to nationalise resources and end Western monopolies, and some of which had little choice but to seek the Soviet Union’s protection.
Residents visit a memorial for victims of the World Trade Center attacks (AFP)
With more than 2,800 killed on 11 September 2001, including 11 unborn babies, the first serious test of the US-Saudi alliance had begun, especially after it emerged that 15 of the 19 9/11 hijackers had been Saudi citizens and that a secret Saudi-bound flight had been given special permission to fly out of the US on 13 September.
But with the Saudi petrodollar still vital to the health of the US economy, and rumours of over $100bn of US Department of Treasury bonds by then having been purchased by Riyadh, it was imperative that the strategic relationship remained intact.
Picking the least worst option, by denouncing "al-Qaeda" and thus effectively turning on the same sort of jihadist groups that the CIA had helped bankroll in Afghanistan a decade earlier and had then facilitated in their fight against the Serbian government in the 1990s, the George W Bush administration succeeded in diverting American public attention away from the terrorists’ wealthy, secretive patrons.
Instead, the focus was on the US military’s efforts to remove regimes that could be loosely blamed for providing al-Qaeda sanctuaries and which – in the case of the Taliban and Saddam’s Iraq – were proving obstacles to the exploitation of natural resources by Western companies.
Fast-forward to today, however, and it is no coincidence that this 15-year-old narrative on 9/11 has now finally begun to come unstuck.
Most obviously, in the wake of the 2014 US shale oil revolution, which saw US companies briefly overtake Saudi Arabia and Russia to become the world’s largest oil producers, Riyadh has clearly lost its coveted "swing producer" role.
Hundreds of small-scale US oil rigs can start up with barely a week’s notice should oil prices ever creep up more than a few extra dollars per barrel
Put simply, new technologies and efficiencies – mostly pioneered in the US – have meant that hundreds of small-scale US oil rigs can start up with barely a week’s notice should oil prices ever creep up more than a few extra dollars per barrel. Unable to implement production cuts for fear of losing market share and plunging into deeper deficit, Riyadh simply has to keep pumping.
In this sense, despite expensive and extensive lobbying efforts by Saudi-sponsored PR firms and some considerable intellectual prostitution amongst Western academics, the once again energy-rich US and its political elites have largely been liberated from the need to keep providing unswerving diplomatic cover for the Saudi kingdom.
While some constituencies will undoubtedly still seek to eke out lucrative deals with the Saudi princes, most have probably already realised that a more nervous and less stable Saudi kingdom is perhaps now no bad thing for US interests, especially as Riyadh still really has no alternative but to keep paying for US protection.
Moreover, with a gravy train of US businesspeople already on their way to Iran in the wake of last year’s "nuclear deal", and with Tehran poised to sign some of the biggest Western oil concessions since the days of the Shah, a situation in which Iran and Saudi Arabia can continue to be pitted against each other in a sort of new "Gulf Cold War" seems preferable to one or the other regime emerging as a dominant regional hegemon.
This is especially so if such a proxy conflict helps ensure a few more big arms deals, despite low oil prices, and allows the West to trade freely with either side.
The Golden Chain
How JASTA will feed into this new dynamic remains to be seen, as the class action lawsuit may still take years to come to fruition.
Nonetheless, in the meantime, it seems that every extra piece of evidence that is assembled by the 9/11 lawyers and is reported on in the media will serve to lower Saudi Arabia’s reputation even further amongst the American public, and perhaps eventually bring it down to the sort of level last experienced by Gaddafi’s Libya or Ahmadinejad’s Iran.
Furthermore, it is also entirely possible that long before the lawsuit is concluded, a consensus will have emerged in the US that important elements of the Saudi state were indeed involved in 9/11.
Recent revelations, including the release of about 85 percent of the content of 29 pages (known erroneously as the "28 pages") that were originally redacted from the joint congressional inquiry into 9/11, have provided additional, but unconfirmed circumstantial evidence about a Saudi role.
But there also now exists a considerable body of recently declassified documents, leaked materials, interrogation transcripts, and court subpoenaed files that point to a much more substantial connection and the clear existence of Saudi 9/11 financiers and the operation of a Saudi cell in the US that provided logistical assistance for the hijackers.
Put together in the same place for the first time in my new book Shadow Wars: The Secret Struggle for the Middle East, the new evidence paints a clear picture of a network of key Saudi businessmen and ruling family members known as the "Golden Chain", which had played a role in financing the 1980s Afghan jihad but had then been reinvigorated in the mid-1990s following Osama bin Laden’s blackmail-like fatwa criticising the Islamic credentials of the Saudi king.
Known to Western intelligence agencies, the network’s members included three princes, one of whom was on the secret flight out of the US on the 13 September 2001, and all three of whom were soon after named by a heavily waterboarded al-Qaeda prisoner. Dying within a week of each other in June 2002, the men’s deaths were ascribed to a "heart attack" (at age 43), a car accident of which no convincing records exist, and a "thirst incident" that took place during a desert hiking trip with no witnesses.
From Riyadh’s perspective, as well as simply refusing to pay any awarded compensation to the 9/11 victims’ families, a claim can of course be made that such individuals do not represent the state and thus the state cannot be sued.
Problematically, however, with the majority of Saudi princes having always received a generous state stipend and with the 9/11 cell, as with many other al-Qaeda operations, likely having been aided by state-backed charity funds, this line of defence may well come unstuck in US courts.
Drawdown - and fast
More immediately, and of much greater concern to Saudi Arabia, is that the very existence of the lawsuit may well begin to have serious consequences for the kingdom’s domestic stability and the legitimacy of its regime.
On the battlefield in Yemen, for example, Riyadh is still mired in conflict with the nominally Iran-backed Houthi-Saleh alliance and unable to make any meaningful headway towards the capital. The prospect of increased US logistical and intelligence assistance therefore seems increasingly distant, while the kingdom’s ability to replenish easily any depleted stocks of ammunition and armour from its Western suppliers will be significantly reduced.
Yemeni pro-government forces, loyal to President Abd Rabbuh Mansour Hadi, march in a parade in Taez in September 2016 (AFP)
On the economic front, as oil prices remain low and Riyadh’s upkeep of public sector salaries and subsidies continues to underpin its social contract with citizens, JASTA could not have come at a worse time. With the kingdom attempting to turn to international bond markets to help plug its yawning public deficit as its reputation concurrently sinks, investor appetite is unsurprisingly waning.
After speaking recently with several dozen industry specialists on this subject, my impression is that few will want to risk their money being tied up in a bond or public offering linked to a regime that US courts could potentially identify as a terror sponsor.
In such a scenario, it is understood that Riyadh will have to prepare, at least as a contingency plan, for the freezing of its assets in the US and thus will have to accelerate its drawdown of US Department of Treasury bonds.
With the veil of secrecy over these bonds already removed earlier in 2016, and with Saudi’s holdings having fallen from highs of $123 to just $96bn in the space of six months, any additional withdrawals will, as part of a vicious circle, only serve to accelerate the unravelling of US-Saudi relations even further.
- Christopher M Davidson teaches politics at Durham University in England. His new book Shadow Wars: The Secret Struggle for the Middle East is published on 6 October.
The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Eye.
Photo: US President Barack Obama walks past Saudi delegates as he arrives for the G20 Summit in Hangzhou in September 2016 (AFP)
This article is available in French on Middle East Eye French edition.