Brent Scowcroft: Kuwait Inc.'s Friend In The Bush I White House

Before working for Kuwait Inc. as its Santa Fe International Director, President Bush I’s National Security Affairs advisor, Brent Scowcroft (http://www.scowcroft.com/html/staff/scowcroft.html ) , had a long career in the U.S. military. But like former U.S. Vice-President Quayle and former U.S. Secretary of Defense and current U.S. Vice-President Cheney, Bush I’s National Security Affairs advisor in the early 1990s also apparently had no military combat experience on an actual desert battlefield.

Born in Utah, Scowcroft came to New York State in the 1940s and graduated from New York’s U.S. Military Academy at West Point in 1947. New York’s West Point Military Academy is located only 50 miles north of Downtown Manhattan and 4,500 cadets attended it in 1991—only 10 percent of whom were women in the early 1990s. Women were completely excluded from New York’s Military Academy when Scowcroft studied there.

When Scowcroft attended New York’s Military Academy it also “barred black cadets from social hops and dancing classes…and from intercollegiate sports teams” and “prohibited” African-Americans “from entering Officer Clubs with their classmates during summer trips,” according to the book The Long Gray Line by Washington Post reporter Rick Atkinson. The Long Gray Line book also noted that, until the 1950s, African-Americans at New York’s Military Academy were also “forbidden to teach Sunday school classes attended by teenage white girls.”

After graduating from West Point, Scowcroft became a U.S. Air Force lieutenant. But in 1948 his disabled plane crashed and Scowcroft was unable to fly again. For the next five years, Scowcroft held a number of administrative U.S. Air Force staff positions at the same time he returned to New York to attend Columbia University’s graduate school. He was awarded a Master’s Degree in International Relations by Columbia University at the age of 28.

Scowcroft was then called back to New York’s Military Academy to teach Russian history at West Point until he was 32. At 33, Scowcroft was ordered down to Washington, D.C. to study Slavic Languages at Georgetown University’s School of Linguistics, before being ordered to serve as an “assistant air attaché’” at the U.S. embassy in Belgrade, Yugoslavia between 1959 and 1961. In 1962, the 37-year-old Scowcroft returned to the world of military academic life when the Air Force ordered him to teach political science at the U.S. Air Force Academy until 1964. In 1964, Scowcroft was ordered to the Pentagon to work in the planning and operations section of Air Force headquarters and, at the same time, he was able to return to New York City to work on his PhD at Columbia University. In 1967, Columbia University gave Scowcroft a PhD in International Relations and the 42-year-old Dr. Scowcroft was then ordered by the U.S. Air Force to teach at the National War College.

The next year, during the height of the Vietnam War Era, Scowcroft was ordered back to the Pentagon to direct the staff of Joint Chiefs of Staff General John W. Voigt for the next three years. And in November 1971, the 46-year-old Air Force Colonel Scowcroft was named to be [the now-deceased] former President Nixon’s military aide.

Nixon was so pleased with Col. Scowcroft’s work that he was promoted to Brigadier General in 1972 before eventually leaving the Air Force after becoming National Security Affairs advisor Henry Kissinger’s deputy in January 1973. Two years later, Scowcroft, himself, became the National Security Affairs advisor of [the now-deceased] former President Gerald Ford. After Ford was defeated in the 1976 U.S. Presidential election, Scowcroft became a director of the National Bank of Washington until 1983.

In 1982, Scowcroft joined with his old boss, Henry Kissinger, to form the Kissinger Associates consulting firm before being named, along with former U.S. President Ford, by the Kuwait Petroleum Corporation to be a director of its Santa Fe International then-subsidiary. Shortly after George W. Bush II’s father, George Bush I, was elected president in 1988, Scowcroft was chosen to be Bush I’s National Security Affairs advisor on Nov. 23, 1988. By late January 1989, he had moved from his vice-chairman’s offices at Kissinger Associates in Washington, D.C. and in New York City into his White House office.

(Downtown 1/23/91)

Next: Kissinger Associates In The 1990s: The Confidential Consultants

Kuwait Inc.'s Historic Special Influence In Germany, Spain and Italy

In the early 1980s, the value of Kuwait Inc. government investments in Germany had also reached $3 billion, most of which was invested in the stock of 30 large German corporations, such as Volkswagon, Metallgesellschaft, Daimler Benz, Korf Stahl and Hoechst AG.

The Kuwait Inc. government’s first large investment in Germany was in 1972, when it purchased 14.6 percent of Daimler-Benz for $440 million. By 1991, Kuwait Inc.’s share of Daimler-Benz was valued at $3.5 billion. According to the OPEC’s Investments And The International Financial System book, Kuwait Inc.’s Daimler-Benz investment “aroused some opposition within Germany and led Kuwait to maintain a very low profile over the next several years,” although “unfavorable publicity did not prevent further large investments.” In 1975, for instance, Kuwait Inc. purchased 30 percent of Korf Stahl in Germany but did not publicly announce this new German investment until 1978.

The government of Kuwait Inc. also had a special influence in Spain during the early 1990s. According to the March 7, 1988 issue of Business Week, by 1988 the Kuwait Inc. government was “already Spain’s largest stock player with more than $2 billion sunk into Madrid since 1986.” While playing the Spanish stock market in the 1980s, the Kuwait Inc. government purchased 72 percent of Spain’s Grupo Torras chemical conglomerate. By 1990, Kuwait Inc.’s share of Grupo Torras was, alone, worth between $2 billion and $3 billion.

The government of Kuwait Inc. also had a special influence in Italy during the early 1990s. It owned a refinery in Naples and 2,000 Italian gas stations at that time. Under its Q8 label, it also operated at least 4,800 other gas stations in Europe.

The government of Kuwait Inc. also had a special influence in Japan during the early 1990s. Kuwait Inc. was the first OPEC nation to use its new oil wealth to start playing the Tokyo Stock Market in the 1970s. By the end of 1982, the government of Kuwait Inc., according to the OPEC’s Investments And The International Financial System book, owned between $2 billion and $3 billion worth of Japanese corporate stocks and bonds in such Japanese companies as Toshiba, Mitsubishi, Arabian Oil Company, Nippon Kogyo and Teikoku Sekiyo (an oil company that operates mainly inside Japan).

After 1986, according to Business Week’s March 7, 1988 issue, “Kuwait…earned more money from foreign investments than from oil exports.” According to Time magazine’s Dec. 24, 1990 issue, for instance, from its foreign investments in the United States, the UK, Germany, Spain, Italy, Japan and the rest of the globe, the Al-Sabah royal family’s Kuwait Inc. government was taking in “about $20 million a day” in late 1990—despite its homeland being temporarily occupied by Saddam Hussein’s Iraqi military machine at that time.

(Downtown 1/23/91)

Next: Brent Scowcroft: Kuwait Inc.’s Friend In The Bush I White House

Kuwait Inc.'s Special Influence In The UK Historically

Because the British Government’s British Petroleum [BP], the third-largest transnational oil company in the world in 1991, had a special interest in Kuwait, it was not surprising that British Conservative Party politicians in 1991 urged the Pentagon to use U.S. troops then to “liberate” the homeland of Kuwait Inc.. Another reason why the same British Conservative Party politicians who stubbornly supported the British military occupation of the North of Ireland were so against the 1990 Iraqi military occupation of Kuwait was, perhaps, because Kuwait Inc. also had a special influence on British politics. The value of Kuwait Inc. government investments in the UK in the early 1980s, for instance, exceeded $3 billion.

In 1952, the government of Kuwait Inc. opened an office in London that was called the Kuwait Investment Office [KIO] and in 1991 was located in a seven-story London building called St. Vedast House, near London’s St. Paul Cathedral. By the early 1970s, the government of Kuwait Inc. began to use its new wealth from the sale of Kuwaiti crude oil to play on the London real estate market. For $250 million, the Kuwait Investment Office purchased 100 percent of the St. Martin’s Property Corporation in 1974 to serve as Kuwait Inc.’s vehicle for its London real estate investments. By 1991, the value of the Kuwait Inc. government’s St. Martin Property Corporation was $1.5 billion. Among the London real estate properties owned by the government of Kuwait during the early 1990s was London Bridge City, a one-million-square-foot complex of offices, shops and restaurants along the Thames River of London.

The Kuwait Investment Office also began to play the London Stock Market with its new oil wealth in the 1970s; and by late 1982, according to the OPEC’s Investments And the International Financial System book by Richard Mattione, the government of Kuwait Inc. owned $2 billion worth of British corporate stock. The same book observed that the shares of British corporate stock owned by the Kuwait Inc. government “are concentrated in the areas of insurance, property and investment trusts” and in the early 1980s there were 53 British corporations in which the Kuwait Inc. government owned over 5 percent of all the stock.

Ten percent of Britain’s Midland Bank, worth $400 million, was also owned in 1991 by the Kuwait Inc. government. Sixty million dollars worth of another British bank, the Royal Bank of Scotland, also was owned in 1991 by the Kuwait Inc. government, as was $100 million worth of Britain’s Trusthouse Forte travel and catering firm. Until the early 1990s, the Kuwait Inc. government owned over 20 percent of the British Petroleum [BP] Corporation. But British popular opposition to having a foreign government control so much of Britain’s national oil company compelled the Kuwait Investment Office to reduce its ownership of BP to 9.9 percent.

(Downtown 1/23/91)

Next: Kuwait Inc.’s Historic Special Influence In Germany, Spain and Italy

Kuwait Inc.'s Past Santa Fe International Investment

The largest direct investment of Kuwait Inc. in the United States during the early 1990s, however, was still the Kuwait Petroleum Corporation’s Santa Fe International. In the early 1980s the Kuwait Inc. government-owned Kuwait Petroleum Corporation [KPC] purchased 100 percent of Santa Fe International, a U.S. transnational corporation specializing in oil exploration, for $2.5 billion. Kuwait Inc.’s Santa Fe International owned 275 oil and gas leases, worth approximately $14 million, on 252,950 acres of U.S. government-owned land and had pending leases covering an additional 299,000 acres on U.S. government-owned land during the early 1990s.

As a result of these Santa Fe International current and pending oil and gas leases in 1991, the Kuwait Petroleum Corporation was permitted to drill for oil on U.S. soil in order to turn U.S. oil into more Kuwait Inc. government investment funds to play with on foreign stock markets. KPC’s Santa Fe International also acquired Andover Oil Company for $150 million in 1982 in order to further increase the U.S. oil and gas holdings of KPC’s U.S. subsidiary. The annual sales of KPC’s California-based Santa Fe International subsidiary exceeded $1 billion during the early 1990s.

To increase its political influence in Washington, D.C. after it purchased Santa Fe International, the Kuwait Petroleum Corporation hired the now-deceased former U.S. President Gerald Ford to be a Santa Fe International director. The government of Kuwait Inc. also hired Ford’s former National Security Affairs advisor, Brent Scowcroft (http://www.scowcroft.com/html/staff/scowcroft.html ) , to be a Santa Fe International director at the same time. Santa Fe International Director Scowcroft, like George Bush I, was a member of David Rockefeller’s Trilateral Commission at that time. While serving as a director on Kuwait Inc.’s Santa Fe International corporate board in 1984, 1985 and 1986, Scowcroft also worked with former U.S. Secretary of State Henry Kissinger as vice-chairman of the New York and Washington, D.C. consulting firm of Kissinger Associates. As President Bush I’s National Security Affairs advisor, Scowcroft—like his former business partner Henry Kissinger—was an advocate of using Pentagon military forces to “liberate” the homeland of Kuwait Inc. in 1991.

To further increase its special influence in United States politics during the 1980s, the Kuwait Inc. government’s Santa Fe International subsidiary formed a political action committee [PAC] which contributed $70,108 to the election campaign chests of influential U.S. politicians during the 1984 U.S. congressional elections. An additional $71,750 was contributed by KPC’s Santa Fe International PAC to U.S. congressional candidates in 1986.

In May 1987, KPC’s Santa Fe International also created a new company, Chesapeake Shipping Inc.. The purpose of creating Kuwait Inc.’s Chesapeake Shipping Inc. subsidiary was to quickly reflag Kuwaiti oil tankers in the Persian Gulf with U.S. flags, so as to more easily enable the Reagan administration to commit U.S. military forces to the protection of special Kuwait Inc. commercial interests, as well as to the protection of special U.S. transnational oil company interests in the Persian Gulf waters.

In addition to operating out of the Kuwait Petroleum Corporation office at 45 Rockefeller Plaza, Kuwait Inc. operated in the U.S.A. in 1991 under the auspices of the Bank of Kuwait and The Middle East, the Commercial Bank of Kuwait SAK, KPC U.S. Holdings and the Kuwait Foreign Trading Contractor and Investment Company [KTFCIC].

Downtown telephoned the Kuwait Petroleum Corporation office in New York City in early 1991. According to the person who answered the telephone then, this office was “just a small four-person office” which mainly focused on “assisting students from Kuwait who are studying in the United States on Kuwait Petroleum scholarships.” She stated that the business operations of KPC in the U.S.A. were controlled by KPC’s London office and suggested Downtown telephone the Kuwait Petroleum Corporation in London if it wished to speak to a company public relations official.

(Downtown 1/23/91)

Next: Kuwait Inc.’s Special Influence In The UK Historically

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