Bin Laden Family Strives to Re-establish Its Reputation
By MICHAEL MOSS
his article was reported by Alison Leigh Cowan, Kurt Eichenwald and Michael Moss, and was written by Mr. Moss.
In the week after the Sept. 11 attacks, Abdullah bin Laden picked up the telephone at his penthouse in Cambridge, Mass., and began dialing for some expert advice.
This time, it seemed, his half brother Osama bin Laden might have finally shattered the family's reputation, especially for those members who lived in the United States.
Despite the family's public disavowal of the terrorist mastermind suspect, federal agents swooped in to question family members' neighbors and friends. Reporters piled up outside their doors. More critically, companies that did business with the $5 billion family construction empire in Saudi Arabia were starting to get jittery about dealing with the family.
So the 35-year-old Abdullah bin Laden, a Harvard Law School alumnus, set out to protect the family name. Largely through intermediaries, he sought out advisers in law and political consulting, among them Stanley Arkin, the influential New York lawyer. Mr. Arkin, who declined to comment, turned down the offer. Another prominent communications expert who was contacted later called the F.B.I. to pass on Mr. bin Laden's telephone number.
His troubles that week reflect the challenge facing this wealthy merchant family as it scrambles to protect its financial holdings and reputation around the world.
It is the family of both a terrorist bent on destroying Western influence in the Middle East, and the owner of the Saudi Binladin Group, a corporate giant with tens of thousands of employees and business dealings with companies like General Electric and Motorola. (The company uses a different transliteration of the Arabic name from the usual Western "bin Laden.")
According to American business executives, family members do business with an array of financial institutions, including Goldman, Sachs, Citigroup and Deutschebank. Until earlier this month, the family also had a stake in the Carlyle Group, a Washington investment firm with ties to the luminaries in politics. The two sides decided that the controversy over the connection between the bin Ladens and Carlyle was not worth the relatively small stake of $2 million that the family had committed to the buyout firm.
Others are sticking with them, citing American officials who say they have no evidence of financial links between the family and Osama bin Laden. "We've talked to the State Department and so far as we can tell, these people are clean," said Stephen Seiler, chief executive of Hybridon, a biotech company in Cambridge in which a bin Laden brother has a small stake.
But one American executive with a longstanding corporate relationship with the family added: "Their situation is catastrophic from a business point of view. They had a pretty good brand name, but the brand name is now destroyed in many ways." Figuring out how to restore that name is proving difficult. "It's understandable the bin Ladens just want to hide," said Prof. Adil Najam of Boston University, who has studied the family. "But this will not go away, and their silence is costing them."
In the days after Sept. 11, the bin Ladens in America left for Saudi Arabia, with the assistance of Prince Bandar bin Sultan, Saudi Arabia's ambassador in Washington. Now, people who have been in contact with the family said, they are working to devise a public-relations strategy with his numerous half brothers.
Abdullah bin Laden, who has been shuttling between Riyadh, the capital, and the company headquarters in Jidda, had hoped to come up with a plan in a couple of days. But two weeks later, the family is still debating what to do.
To the family, the opinion of the West is particularly important. "The United States has been like a second home to many members of the family," one family member said in an interview from Saudi Arabia.
The bin Ladens must reach a consensus before taking any action. One question they may face is the family's position toward Mohammed Jamal Khalifa, a man who has been identified as Osama bin Laden's brother-in-law and who has been accused by law enforcement officials in the Philippines of having funneled money to Islamic militants. Mr. Khalifa has denied the allegation.
The bin Ladens also will not do anything that might bring disapproval from the Saudi royal family, which faces its own challenge in how to relate to its Western allies and its own Islamic supporters.
"The Saudi culture is just so different," said one American executive who knows the family well. "They are just not used to this. They move very, very slowly."
It was never supposed to turn out this way for a storybook clan. From the time the family patriarch, Mohammed bin Laden, moved from Yemen to Saudi Arabia in the first half of the last century, fortune had smiled on the family. He arrived penniless and illiterate, but his construction work won a reputation as top-notch. Business took off when he won the favor of the king, building palaces for the royal family. He and his company, the Saudi Binladin Group, won coveted contracts to restore and expand the sacred mosques at Mecca and Medina.
"You can't do much work in Saudi Arabia in our line of work without having something to do with the bin Laden enterprises," said Keith Karpe, a spokesman for Fluor, a company based in the United States that recently joined the bin Ladens in building power and petrochemical plants in the kingdom.
Osama bin Laden was born the 17th son of more than 50 children, and like the others he was given every opportunity for an education. But after his father's death in an airplane accident, Mr. bin Laden did not enter the family business; instead he found his calling in 1979, when the Soviet Union invaded Afghanistan.
Fifteen years later, his radical views led the Saudis to revoke his citizenship and his family cut him off. The government also froze his bank accounts, according to an official with the Saudi Arabian Monetary Agency, the central bank. At the same time, his siblings expanded the business, struggling to keep it separate from their increasingly infamous family member. "Osama was a taboo subject," said Dallas Vincent, an American who worked at the company in Saudi Arabia.
To Americans who worked at every level of the company, there was little doubt about the walls between Mr. bin Laden and his siblings. "He was totally ignored," said Daniel Uman, who worked as a construction manager on a 1995 S.B.G. project in Saudi Arabia. "He was totally ostracized by the family and by the kingdom." The severing of ties with Osama bin Laden has been extensive, the family member said. The terrorist maintains no stake in the family business, and receives no direct or indirect financial benefits from it, he said, maintaining that news accounts of Mr. bin Laden having control of hundreds of millions of dollars in inheritance are untrue.
On three occasions, the family sent delegations to Sudan, where Osama bin Laden lived, to try to persuade him to join the family company. They were rebuffed.
Even as the renegade's rage with the West grew, his family became fascinated by it. Salem bin Laden, who took the company reins after his father, Mohammed, died, set the pace. "He rarely stayed in one place for more than a couple of days," said Wayne Fagan, a lawyer in San Antonio who helped Salem bin Laden analyze potential investments from real estate to Hollywood westerns.
After Salem, like his father, died in a plane crash, the company fell to the next oldest son, Bakr, and a board of other half brothers. Their reach into the Western business world expanded. They established Global Administration, based in London, to manage their cash in the Western world. Largely through that company, they established their financial relationships with entities like Citigroup, Carlyle and the Fremont Group, a San Francisco investment firm that includes former Secretary of State George P. Shultz as a director.
But in business meetings, they felt compelled to apologize for the activities of Osama, even though he was still largely unknown in the West. "When I first met the group, they made it very clear that they had disowned Osama bin Laden and that they had absolutely no connection," said one American executive who began to do business with the company in the early 1990's.
With the company expanding its contacts in the West, more and more of the family members chose to attend school in Europe and America, and even live there. Boston became a hub for the family. Many lived at the exclusive Flagship Wharf condominiums in Charlestown, where one of the youngest brothers, also named Mohammed, acquired 10 apartments.
The bin Ladens of Boston largely kept to themselves in socializing. The women drove cars and flew planes, and one spurned tradition by taking her husband's and not her father's name. But they dressed conservatively and were proud of their Arabic roots.
When Mohammed's sister Sana graduated from Wheelock College after studying early childhood education, she organized a Saudi festival at the Children's Museum in Boston, with costumes, juiced mangos and camel humps that she sewed for the children to race around in.
When Mohammed and his family returned to Jidda three years ago, Abdullah, who is single, took on the role of imam for the nieces and nephews, dispensing advice and organizing their lives. Now, he is getting advice on how the family might regain the life they had here.
But Dr. Terry Bennett, a New Hampshire physician and longtime family friend, said the bin Ladens needed go only so far in making public amends. "I've sent them the advice," he said, that they should "make a one-time statement, `We are deeply apologetic,' and then close out. They should not be mea culpa- ing. It is not their fault."
ASHINGTON, Oct. 25 — The Saudi family of Osama bin Laden is severing its financial ties with the Carlyle Group, a private investment firm known for its connections to influential Washington political figures, executives who have been briefed on the decision said today.