US Officials Leaked False Story Blaming Iran for Khobar Attack

In March 1997, FBI Director Louis Freeh got what he calls in his memoirs "the first truly big break in the case": the arrest in Canada of one of the Saudi Hezbollah members the Saudis accused of being the driver of the getaway car at Khobar Towers.

Hani al-Sayegh, then 28 years old, had arrived in Canada in August 1996 after having left Saudi Arabia, by his own account, in August 1995, for Iran and Syria. The Canadian government charged him with being a terrorist, based on claims by the Saudi regime.

In order to be transferred to the United States without facing deportation to Saudi Arabia, where he was believed to face the death penalty, al-Sayegh had to agreed to a plea bargain under which he would admit to having proposed an attack on U.S. personnel, for which he would have to serve up to 10 years in prison.

In fact, the only thing al-Sayegh had actually admitted to, according to FBI sources, was having proposed an attack on one AWACS plane that had been turned over to the Saudi Air Force – a proposal he said had been rejected. Both before and after being brought to Washington, moreover, Al-Sayegh steadfastly denied any knowledge of the Khobar Towers bombing.

Despite that consistent denial by al-Sayegh, a Washington Post story on Apr. 14, 1997 quoted U.S. and Saudi officials as saying that al-Sayegh had met two years earlier with senior Iranian intelligence officer Brig. Gen. Ahmad Sherifi and that Iran was the "organizing force" behind the Khobar bombing. That story, leaked by officials supporting the Saudi version of the Khobar story, cited Canadian intercepts of al-Sayegh’s phone conversations in Ottawa before his arrest as allegedly incriminating evidence.

The story lent further credence to the general belief in Washington that Iran had masterminded the bombing, mainly because U.S. intelligence had observed the surveillance of U.S. military and civilian sites in Saudi Arabia by Iranians and their Saudi allies in 1994 and 1995.

What al-Sayegh actually told FBI agents in a series of interviews in Ottawa and Washington, however, contradicted the leaked story, according to sources familiar with those interviews.

Al-Sayegh admitted having carried out the surveillance of one military site other than Khobar for the Iranians, but insisted that it was not to prepare for a possible terrorist bombing but to identify potential targets for Iranian retaliation in the event of a U.S. attack on Iran.

His testimony was consistent with what Ambassador Ron Neumann, who was director of the Office for Iran and Iraq in the State Department’s Bureau of Near East Affairs from 1991 through 1994, had been saying about the Iranian reconnaissance of U.S. targets.

While most official analysts were ready to believe that Iran was plotting a terrorist attack against the United States, Neumann recalls that he had discerned a pattern in Iranian behavior: every time U.S.-Iran tensions rose, there was an increase in Iranian reconnaissance of U.S. diplomatic and military faculties.

"The pattern could be taken as hostile but it could equally have been defensive," says Neumann, meaning that the Iranians viewed such reconnaissance of possible U.S. targets as part of their deterrent to a U.S. attack.

Hani al-Sayegh would have been a strange choice for driver of the getaway car at Khobar Towers. A frail man whose frequent asthma attacks repeatedly interrupted his interviews with the FBI, al-Sayegh recounted to investigators he had entered military training with the Iranian IRGC, but had been told by his IRGC handler after one particularly disastrous exercise that his asthma made him unfit for military operations.

FBI veteran Jack Cloonan, who was talking with the agents interviewing al-Sayegh that spring and summer, told al-Sayegh’s immigration lawyer, Michael Wildes, that he was convinced al-Sayegh had not participated in the operation, according to notes in the diary Wildes kept on the case.

Hani al-Sayegh continued to deny either that he was involved or the Iranians had anything to do with Khobar, and as a result was deported to Saudi Arabia in 1999 – despite the widespread assumption within the FBI that he would be beheaded on his return.

Freeh had no case against the Iranians and their Saudi allies unless he could get access to the Saudi Shi’a detainees. In the memoir "My FBI", Freeh charged that President Bill Clinton refused to press Saudi Crown Prince Abdullah for access to those prisoners and then asked him for a contribution to the future Clinton presidential library at a meeting at the Hay-Adams Hotel in September 1998.

That account is disputed, however, by numerous Clinton administration officials. Freeh, who was not present, cites only "my sources", strongly suggesting that he got it from the self-interested Prince Bandar.

Freeh claimed that former President George Bush had then interceded with Abdullah at Freeh’s request, resulting in a meeting between Freeh and Abdullah at Bandar’s Virginia estate Sep. 29, 1998. At that meeting, Abdullah offered to allow the FBI to submit questions to the detainees and observe the questions and answers from behind one-way glass.

But what Freeh left out of the story is that Abdullah’s new offer came at a time when the Saudis felt a greater need to appease Washington on the Khobar Towers investigation than they had previously.

In May 1998, the CIA had learned that Saudi intelligence had broken up an al Qaeda plot to smuggle Sagger anti-tank missiles from Yemen into Saudi Arabia about a week before a scheduled visit to Saudi by Vice-President Al Gore and had not informed U.S. intelligence about the incident.

Then, on Aug. 7, 1998, the U.S. embassies in Nairobi, Kenya and Dar Es Salaam, Tanzania had been bombed 10 minutes apart. The CIA had quickly ascertained that al Qaeda was responsible for the bombings, with the result that U.S. intelligence began to focus more on bin Laden’s operations in Saudi Arabia.

Gore had met with Abdullah on Sep. 24, and had pressed hard for access to an important al Qaeda finance official, Madani al Tayyib, who had been detained by the Saudi government the previous year, but kept away from U.S. intelligence.

The Saudi regime had long acted to keep the United States away from the bin Laden trail in Saudi. During the Afghan War, high-ranking Saudi officials, including interior minister Prince Nayef himself, had worked closely with bin Laden. And those ties had apparently continued even after the Saudi government revoked bin Laden’s citizenship, froze his assets, and began cracking down on some anti-government Islamic extremists in 1994.

Evidence soon appeared that the regime had allowed Saudi supporters of bin Laden to finance his operations through Saudi charities, while encouraging bin Laden to focus on the U.S. military rather than the regime.

9/11 Commission investigators later learned that, after bin Laden’s move from Sudan to Afghanistan in May 1996, a delegation of Saudi officials had asked top Taliban leaders to tell bin Laden that if he didn’t attack the regime, "recognition will follow".

Meanwhile, Nayef was resisting CIA requests for bin Laden’s birth certificate, passport and bank records.

The CIA had been sharing its own intelligence on bin Laden with the Mabahith, the Saudi secret police, including copies of National Security Agency interceptions of the cell phone conversations of suspected al Qaeda officials. Then the militants suddenly stopped using their cell phones, indicating they had been tipped off by the Mabahith.

In early 1997, the CIA’s bin Laden station even issued a memorandum for CIA Director George Tenet, who was about to travel to Saudi Arabia, identifying Saudi intelligence as a "hostile service".

By late September 1998, the Saudi regime was feeling the heat from the Clinton administration for its failure to cooperate on bin Laden’s operations in Saudi Arabia. Abdullah’s proposal was a way to demonstrate cooperation on terrorism while helping Freeh promote the Saudi line on Khobar Towers.

(Inter Press Service)

Author: Gareth Porter

Gareth Porter is an investigative historian and journalist specializing in U.S. national security policy. The paperback edition of his latest book, Perils of Dominance: Imbalance of Power and the Road to War in Vietnam, was published in 2006.