Last week's row over whether Princess Haifa--the wife of Prince Bandar bin Sultan, the Saudi Ambassador to Washington--helped pay for the September 11 attacks has exposed a fault line that runs through President's Bush's war on terror.

The suggestion is that regular payments made by Princess Haifa from her Washington bank account made their way to associates of the September 11 hijackers.

Mary Steyn describes the plot in this week's Spectator :

"In this latest curious episode, the official explanation, if I can type it without giggling, goes something like this: Princess Haifa. . . gets a letter from a woman in Virginia she's never heard of complaining about steep medical bills. Being a friendly sort of princess, she immediately authorises the Riggs Bank in Washington to make payment by cashier's cheque of several thousand dollars per month to this woman, no questions asked. How come I can never get hold of a princess like that when I need one?"

"Of the $130,000 she receives from the benevolent ambassadress, Majeda Ibrahin signs at least some of the cheques over to a friend of hers, who's married to a guy in San Diego who's helping two of the 11 September plotters. Pure coincidence, say the smooth-talking Saud princelings put up on the talk-show circuit since Newsweek broke the story at the weekend. Could happen to any good-hearted princess."

American Senator Charles Schumer has accused the Saudis of playing "a duplicitous game" by buying off the terrorists - terrorists who claim to want to overthrow the Saudi government, yet who seem strangely attracted to attacking every country in the world apart from Saudi Arabia.

President Bush is playing along with the double-dealing, perhaps in recognition of the Saudi royal family's awkward position within the Arab world, as an over-privileged and hated monarchy created by the British, friend of America, yet supporter of the Palestinians and defender of Islam's two holiest places, Mecca and Medina. Saddam Hussein showed the Arab royal families what can happen to them when he invaded Kuwait in August 1990.

Osama bin Laden is a Saudi, as were 15 of the 19 September 11 hijackers, and al-Qaeda's operations in Afghanistan, Pakistan and elsewhere appear to have been financed with funds from the desert kingdom.

Since the attacks on New York and Washington, American rhetoric against Saudi Arabia has become ever more provocative. Maureen Dowd in the New York Times recently urged President Bush to forget about invading Iraq and to invade Saudi Arabia instead: "A Saudi invasion would be like the Panama invasion during Bush I. We already have bases to use there. And this time Mr. Cheney won't have to beg the royals to use their air space, or send American forces. Once we make Saudi Arabia into our own self-serve gas pump, its neighbours will get the democracy bug."

And then there's the issue of women in Saudi Arabia, where we are treated better than in Afghanistan under the Taliban, but only just. Dowd writes: "If we're willing to knock over Saddam for gassing the Kurds, we should be willing to knock over the Saudis for letting the state-supported religious police burn 15 girls to death last March in a Mecca school, forcing them back inside a fiery building because they tried to flee without their scarves. And shouldn't we pre-empt them before they teach more boys to hate American infidels and before they can stunt the lives of more women?"

The attacks on the Saudis are often based on US intelligence leaked by American officials who seem concerned that not enough is being done by their own government. Last summer, a classified intelligence briefing to the Pentagon's defense advisory board was made public.

"The Saudis are active at every level of the terror chain, from planners to financiers, from cadre to foot soldier, from ideologist to cheerleader," the report stated. It described the kingdom as "the kernel of evil, the prime mover, the most dangerous opponent" that America faced anywhere in the Middle East.

Donald Rumsfeld quickly pointed out that the report did not reflect official US policy, thereby following a pattern in which each flurry of supposedly unofficial anti-Saudi sentiment is immediately diluted by official placatory statements from the Bush administration. It has the definite feel to it of good cop/bad cop.

The US overlooks Saudi Arabia's human rights abuses, its lack of democratic freedoms, lack of a free press, lack of due process and of women's rights - all of which were justifications offered for the overthrow of the Taliban in Afghanistan.

There are four main reasons for the American appeasement of Saudi Arabia.

One obvious reason is oil. Saudi Arabia provides 17% of daily American oil needs and controls 25% of global reserves. And American dependence on Persian Gulf oil is projected to increase, not decrease, in the next 20 years. (America has not signed the Kyoto Protocol, so is not committed to finding alternative sources of energy.) Saudi Arabia is the only producer with the capacity to keep the global market stable by producing more oil in times of crisis to prevent price spikes.

The second reason is Islam. The great fear in the region - a fear of the monarchs, as well as the West and Israel - is that the Islamists will get a foothold and the monarchy overthrown, as happened when the Shah of Iran was deposed in I979 and replaced by the Ayatollah Khomeini. With the Saudi royal family, it's a case of better the devil you know.

The third big issue for America is Israel. Israel could not exist without American protection, military aid and money. The rejectionist Arab lobby (mainly Syria, Iraq, Libya and the Palestine National Authority) as well as the hardliners in Iran can be held in check to some extent by America's good relations with Egypt, Jordan and Saudi Arabia.

And then, of course, last but never least, there's Saddam Hussein. American has military bases in Saudi Arabia which it will have to use in the war against Saddam, as it did in 1991. If the Saudi royal family were to oppose the war, then not only would America be at a huge military disadvantage, but the whole of the Gulf Region and possibly even Jordan and Egypt would support Saddam Hussein too, making action against Iraq politically unfeasible.

For all these reasons, the Bush administration is, as the Guardian reports, "fighting its war on terror with its right hand tied behind his back, its left eye closed, and shackles around its ankles."

In his Spectator article, Mark Steyn compares the Bush and Bandar relationship to James Bond and the latest evil mastermind:

"I always like the bit in the Bond movie where 007 and the supervillain meet face to face - usually at the supervillain's marine research facility or golf course or, in this latest picture, his Icelandic diamond mine. Bond knows the alleged marine biologist is, in fact, an evil mastermind bent on world domination. The evil mastermind knows Bond is a British agent. But both men go along with the pretence that the other fellow is what he's claiming to be, and the exquisitely polite encounter invariably ends with the mastermind purring his regrets about being unable to be more helpful. 'But perhaps we shall meet again, Mr. Bond,' he says, as the Oriental manservant shows 007 to the door."

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