Kuwait Inc.'s Special Influence In The U.S.A. Historically--Part 2

Kuwait Inc. also owned three million shares of IBM stock, as well as stock in DuPont and Ford in the 1980s. At least $457 million worth of the stock of the U.S. oil companies and $191 million worth of the stock of U.S. utility companies were also owned by the Kuwait Inc. government in the 1980s. The Kuwait Inc. government also owned $12 billion in U.S. government treasury bonds in the early 1980s. The U.S. stocks and bonds owned by the government of Kuwait Inc. continued to be managed by Citibank, Chase Manhattan Bank, Morgan Stanley and J.P. Morgan/Morgan Guaranty Trust in the 1990s.

The government of Kuwait Inc. and Kuwaiti private businessmen also used their new post-1973 oil wealth to make more direct investments in the United States. In 1985, for instance, the value of property in the United States in which the Kuwaiti Inc. government or Kuwaiti private businessmen owned more than 10 percent of the stock exceeded $4 billion. The Atlantic Hilton Hotel, for instance, was owned by Kuwait Inc. investors. A large share of the Galleria Dallas and Houston hotels and malls, worth $500 million, was also owned by Kuwait Inc., as was a large share of the Great Western Resources Oil company, worth $100 million. In the early 1980s, Kuwait Inc. businessmen also owned the Columbia Plaza, a $22 million office complex in Washington, D.C.

The government of Kuwait Inc. also owned 15 percent of the Exploration Company of Louisiana in the 1980s. Other partly-owned Kuwait Inc. properties in the U.S.A. included PCA Crossroads Associates, the Kansas Oil Resources Project, L’Ermital Palm Beach Project and the Williston Basin Oil Exploration Project. The Williston Basin investment of Kuwait Inc. stemmed from the Kuwait Petroleum Corporation joining with the Arizona-based AZR Resources Inc. to set up the International Energy Development Corporation that explored for oil. KPC also agreed in 1981 to set up a joint venture to refine and sell oil products with the Honolulu, Hawaii-based Pacific Resources Inc..

In 1981, private Kuwaiti businessmen also spent over $200 million to acquire three small independent Texas oil refineries. In 1982, Kuwaiti private investors also joined other Arab investors in purchasing a 25 percent share of the U.S. private banking house, Smith Barney, for $40 million.

The government of Kuwait Inc. also owned a 25 percent share, worth $2.4 billion, of Germany’s Hoechst AG transnational chemical company during the early 1980s. In 1986, Hoechst AG purchased the U.S.-based Celanese Corporation for $2.8 billion. Hoechst AG also operated two large factories in low-wage South Carolina through its Hoechst Fibers textile subsidiary in the 1980s.

A 14 percent share of Germany’s Daimler-Benz transnational automotive company, worth $3.5 billion, was also owned by the government of Kuwait Inc. in the 1980s. Daimler-Benz’s U.S. subsidiary, Freightliner, had total annual sales of $1.3 billion each year, prior to Daimler-Benz eventually merging with Chrysler. Fifty-one percent of Korf Industries, a U.S. subsidiary of Germany’s Korf Stahl steel company was also owned by the government of Kuwait Inc. in the 1980s.

The government of Kuwait Inc. also owned 9.9 percent of British Petroleum [BP], whose U.S. subsidiary, BP America, was worth $21 billion in the late 1980s. BP America used to operate under the name of Standard Oil of Ohio [SOHIO] before the British government and the Kuwait Inc. government’s BP purchased it.

(Downtown 1/23/91)

Next: Kuwait Inc.’s Past Santa Fe International Investment

Kuwait Inc.'s Special Influence In The U.S.A. Historically--Part 1

In December 2007, Dow Chemical announced that Kuwait Inc.’s Kuwait Petroleum Corporation had agreed to buy a 50% stake in Dow Chemical’s plastics divisions for $9.5 billion, marking the biggest overseas investment by a Kuwaiti firm. Yet there’s nothing new, historically, about the government of Kuwait Inc. using the surplus capital it obtains from its oil revenues to purchase more stock in U.S.-based transnational corporations.

In the 1970s, for instance, the government of Kuwait Inc. began to play the New York stock market with the new wealth it gained from the sale of Kuwait’s crude oil to the transnational oil companies during that decade. In an article entitled “Power Broker: Kuwait’s Money Man Favors U.S. and Stocks In Placing Oil Billions,” which appeared in the Wall Street Journal on Oct. 9, 1979, the advisor to the Emir of Kuwait revealed that the government of Kuwait Inc. held “between $1 million and $50 million in the stock of most of the top 500 U.S. corporations.” By 1982, according to the book OPEC’s Investments And The International Financial System by Richard Mattione, the total value of the Kuwait Inc. government’s New York Stock Exchange holdings was $11 billion. By 1990, the total value of the chunks of U.S. corporate stock owned by the Kuwait Inc. government was between $15 billion and $20 billion. In the early 1980s, for instance, the government of Kuwait Inc. owned:

2.1 percent of all General Electric/NBC stock (788,500 shares), worth $52.8 million.

3.7 percent of all AT&T stock (1,744,200 shares), worth $91.4 million.

2.3 percent of all Procter & Gamble stock (788,300 shares), worth $55.6 million.

2.4 percent of all Philips Petroleum stock (1,268,200 shares), worth $59 million;

2.4 percent of all Conoco stock (1,050,400 shares), worth $59.5 million.

3.8 percent of all Atlantic Richfield stock (1,808,000 shares), worth $96.1 million.

2.5 percent of all Eastman Kodak stock (749,400 shares), worth $61.1 million.

2.1 percent of all Schlumberger stock (500,300 shares), worth $50.1 million.

2.1 percent of all Digital Equipment stock (546,300 shares), worth $51.1 million.

2.1 percent of all American Home Products stock (1,535,000 shares), worth $51.8 million.

Besides controlling the RCA/NBC television network and NBC news operation, the General Electric company that Kuwait Inc. partially owned in the early 1980s also was the U.S. company which received the second-largest amount of Pentagon military contracts in 1988--$6.9 billion worth of weapons production work. Another company that Kuwait Inc. partially owned in the early 1980s, AT&T, sponsored the Public Broadcasting Service’s MacNeil/Lehrer News program between 1983 and the early 1990s. A third company that Kuwait Inc. partially owned in the early 1980s, Procter & Gamble, influenced U.S. mass media programming by being the leading U.S. national advertiser in the late 1980s, spending $1.4 billion on advertising in 1987.

(Downtown 1/23/91)

Next: Kuwait Inc.’s Special Influence in the U.S.A. Historically—Part 2

Kuwait Inc.'s Political System of "Sabahcracy" In 2005

Since the Bush I White House (whose national security affairs advisor, Brent Scowcroft, was a former board member of the Kuwait Petroleum Corporation’s Santa Fe International subsidiary) used the U.S. high-technology war machine to bring the Al-Sabah dynasty back into power in Kuwait in 1991, the pace of political democratization within Kuwait has been slow. As late as March 8,, 2006, for instance, even the U.S. State Department’s Bureau of Democracy, Human Rights, and Labor’s Country Report on Human Rights Practices in Kuwait for 2005 described the political situation in Kuwait under the Al-Sabah Dynasty’s rule in the following way:

“Kuwait is a constitutional, hereditary emirate ruled by the al-Sabah family, which governs in consultation with prominent families and the elected National Assembly. The 1962 constitution grants the emir executive and legislative authority and permits dissolution of the elected National Assembly by decree.

“Kuwait has a population of 2.9 million residents, approximately 970 thousand of whom are citizens. During the July 2003 parliamentary elections, the electorate consisted of approximately 143 thousand male citizens, and there were no political parties….The government and the opposition reportedly bought votes…

“Following the 2003 elections, the emir appointed a new prime minister whose authority the crown prince previously held. The prime minister appoints all officials in the executive branch…

“The constitution provides for some judicial independence; however, the emir appoints all judges, and the Ministry of Justice must approve the renewal of most judicial appointments.

“While civilian authorities generally maintained effective control of the security forces, there were some instances in which elements of the security forces acted independently of government authority.

“The government improved its human rights record by granting women the right to vote; however, serious problems remained. The following human rights problems were reported: no right to change the government; abuse of and alleged torture of detainees; official impunity; poor prison conditions in certain facilities; restricted civil liberties--freedoms of speech, press, assembly and association; limited freedom of religion and of movement; corruption; violence and discrimination against women, especially noncitizens; abuse of noncitizen domestic workers; unresolved legal status of bidoon Arabs; and restricted worker rights.

“On May 16 [2005], the National Assembly approved legislation to grant women the right to vote and seek elected office; however, women were not eligible to vote in the June 2 [2005] municipal council elections because the annual February voter registration period had passed.”

Next: Kuwait Inc.’s Special Influence in the U.S.A. Historically—Part 1

Kuwait Inc.'s Political System of "Sabahcracy" In 1990

The Al-Sabah family may be shy about revealing to people in the United States exactly how much stock it owns in each U.S. corporation. But the Al-Sabah family was not shy about monopolizing political power in Kuwait Inc. prior to the August 1990 occupation of Kuwait by Saddam Hussein’s Iraqi troops.

Sheikh Jabir Al-Ahmad Al-Jabir Al-Sabah had been the Emir of Kuwait since 1977. Kuwait Emir Al-Sabah also was chairman of Kuwait’s Supreme Defense Council, Kuwait’s Supreme Petroleum Council, the Kuwait Fund for Arab Economic Development, and the Kuwait Foundation for Scientific Advancement in 1990. Kuwait Emir Al-Sabah also was Kuwait’s prime minister between 1965 and 1967, Kuwait’s crown prince between 1966 and 1978 and Kuwait’s minister of Finance and Industry and minister of Commerce between 1965 and 1983. But shortly after his country was invaded on August 2, 1990, Kuwait Emir Al-Sabah—the then-chairman of Kuwait’s Supreme Defense Council—had fled from his presidential palace by helicopter.

Sheikh Saadal Abdallahal Salim Al-Sabah had been both Kuwait’s crown prince and Kuwait’s prime minister since 1978. Kuwait Crown Prince and Kuwait Prim Minister Al-Sabah was the Kuwait metropolitan police deputy head between 1954 and 1959, the Kuwait Police and Public Security Department deputy president between 1959 and 1961, Kuwait’s minister of the Interior between 1961 and 1965 and Kuwait’s minister of the Interior and Defense between 1965 and 1978.

Another Al-Sabah family member, Sabah al-Ahmad al-Jabir Al-Sabah, had been Kuwait’s minister of Foreign Affairs since 1963 and Kuwait’s deputy prime minister since 1978.

Nouwaf al-Almad al-Jabir Al-Sabah was Kuwait’s minister of Defense in 1990. Jabir Mubarak al-Hamal Al-Sabah was Kuwait’s minister of Information in 1990. And Salim al-Sabah al-Salim Al-Sabah was Kuwait’s minister of the Interior in 1990.

Another Al-Sabah family member, Sheikh Ali Al-Khalifa Al-Sabah, had been Kuwait’s minister of Oil since 1978 and Kuwait’s minister of Finance since 1983. Kuwait minister of Oil Al-Sabah had also been the chairman of the Kuwait Petroleum Corporation [KPC], the world’s 12th-largest oil company in 1990, since 1980. In the 1960s, minister of oil Al-Sabah was a student at the University of California at Berkeley before graduating from San Francisco State College in 1968. And his close friends had nicknamed him “Ali Cash.”

Nasir Muhammad al-Ahmad Al-Sabah was Kuwait’s minister of Social Affairs and Labor in 1990. And Sheikh Saud Nasir Al-Sabah had been Kuwait’s ambassador to the United States, Kuwait’s ambassador to Canada and Kuwait’s ambassador to Venezuela, simultaneously, since 1981. Kuwait ambassador to the United States Al-Sabah was previously Kuwait’s ambassador to Great Britain, Kuwait’s ambassador to Norway, Kuwait’s ambassador to Sweden and Kuwait’s ambassador to Denmark, simultaneously, between 1975 and 1980.

The Al-Sabah family government of Kuwait Inc. and its Kuwaiti National Assembly had never been too eager to encourage residents of Kuwait to participate in Kuwaiti political life or to even vote, historically. According to the 1989 Political Handbook of the World:

“Political parties are not permitted in Kuwait…Only literate, adult, native-born males whose families have resided in Kuwait since 1920 are allowed to vote, an increasingly vocal call for some women for suffrage being rebuffed by the Assembly in July 1985.”

As a result, only 85,000 out of 825,000 Kuwaitis were allowed to vote before August 1990.

The 1989 Political Handbook of the World also reported that:

“Constitutional guarantees of freedom of the press were suspended by Emir Sabah on August 29, 1976…In conjunction with the dissolution of the Assembly in July 1986 the government imposed new press restrictions, subjecting periodicals to prior censorship and announcing it would suspend any newspapers or magazines printing material `against the national interest.’ The government also continued its drive to Kuwaitize the news media, with an estimated 40 journalists from other Arab countries being deported to open jobs for nationals. The Kuwait Broadcasting Services and Television of Kuwait, both controlled by the government.”

(Downtown 1/23/91)

Next: Kuwait Inc.’s Political System of “Sabahcracy” In 2005

Kuwait Inc.'s Foreign Investments Historically

In a March 7, 1988 article, titled “Kuwait’s Money Machine Comes Out Buying,” Business Week observed that “since gaining full independence from Britain in 1961, Kuwait has built up a huge blue-chip portfolio” of foreign stocks and bonds and that this foreign investment portfolio “may now be worth upwards of $200 billion.” (Collectively, the richest 400 people in the United States were also worth around $200 billion in 1988, according to Louis Rukeyser’s Business Almanac).

Twenty-five percent of Kuwait Inc.’s $200 billion in foreign investments was privately-owned by Kuwaiti businessmen in 1988. Seventy-five percent of Kuwait Inc.’s foreign investment assets were owned in 1988 by the government of Kuwait Inc., which is controlled by the Al-Sabah royal family. But, according to the Aug. 6, 1990 issue of Business Week, “no outsider can know for sure where the Al-Sabahs’ assets end and the government’s begin.”

(Downtown 1/23/91)

Next: Kuwait Inc.’s Political System Of “Sabahcracy” In 1990

Kuwait Inc.'s Historic Special Influence

“Buying quietly through Citibank, Morgan Guaranty Trust, and Chase Manhattan, the Kuwaitis have taken big positions—sometimes just under the 5 percent level requiring disclosure of ownership—in the top 70 industrials on the New York Stock Exchange. So obsessed with secrecy are the Kuwaitis that in the early 1980s they pulled much of their money out of Citibank when details of their holdings appeared in the press…They have concealed ownership of some New York skyscrapers because of possible backlash from Jewish tenants.” (Business Week magazine 3/7/88)

In the early 1980s, Brent Scowcroft ( http://www.scowcroft.com/html/staff/scowcroft.html ) was hired by the government of Kuwait Incorporated’s Kuwait Petroleum Corporation [KPC] to sit alongside Ali Jabar Al Ali Al-Sabah on the board of directors of KPC’s U.S. subsidiary at that time, Santa Fe International. Scowcroft sat on Kuwait Inc.’s Santa Fe International corporate board in 1984, 1985 and 1986, according to Poor’s & Standard’s Register of Corporations. Yet in 1991, the former director of Kuwait Inc.’s major U.S. subsidiary at that time--Brent Scowcroft--was allowed to sit in a White House office as President Bush I’s National Security Affairs advisor.

Like the historically less camera-shy Israeli government, the government of Kuwait Inc. seems to have had a special influence on U.S. politics historically. In the name of “liberating” the homeland of Kuwait Inc., for instance, the Pentagon’s war machine launched a 1991 military offensive against Saddam Hussein’s Iraqi war machine to start Gulf War I at that time.

(Downtown 1/23/91)

Next: Kuwait Inc.’s Foreign Investments Historically

Columbia University Professor Dinkins' Historic Wall Street Connection

Columbia University Professor David Dinkins failed to fight against the special interests of Wall Street’s investment bankers when he was the Mayor of New York City during the early 1990s. One reason may have been because he accepted campaign contributions in 1989 from the same Wall Street investment banking firms who were selected by his administration in 1990 to make big bucks by selling City government bonds. As Shadow Government by Donald Axelrod observed:

“Excluding the federal government, New York City issues more bonds than any public authority or state and local government in the United States. In July 1990 the city selected five underwriters from a field of 53 companies to sell $6 billion in bonds: Bear, Stearns; Goldman Sachs; First Boston; Shearson Lehman Hutton; and Merrill Lynch. To no one’s surprise, the New York Times revealed that all five had contributed $233,000 to the campaigns of Mayor David N. Dinkins and Comptroller Elizabeth Holtzman."

Under Columbia University Professor Dinkins’ administration, the official unemployment rate in New York City was 9.5 percent in August 1993.

(Downtown 9/29/93)

Next: Kuwait Inc.’s Historic Special Influence