Swiss Arrest Khashoggi in Marcos Case

Times Staff Writer

International wheeler-dealer Adnan Khashoggi, once considered one of the world’s richest men, was arrested and jailed here Tuesday at the request of the U.S. government.

Khashoggi, 53, a fugitive from a U.S. warrant, was arrested at the Swiss capital’s leading luxury hotel. The immediate charges against him allege that he conspired with former President Ferdinand E. Marcos of the Philippines and his wife, Imelda, to hide money and property that they had stolen from their country.

The portly Saudi Arabian multimillionaire, whom the world’s press has portrayed as an overage playboy, a party-giver to the rich and famous and an insider’s financial and political go-between, was summarily taken to the local prison. Switzerland has no provisions for bail, but Khashoggi has 10 days to appeal his arrest and imprisonment.


U.S. to Seek Extradition

Washington has 60 days to prepare formal extradition papers, which U.S. authorities say will be drawn up as soon as possible.

According to Swiss officials, the U.S. Embassy alerted them that Khashoggi had checked into the Schweizerhof Hotel while in Bern to visit local medical consultants, as he apparently has done before. The Americans asked the Swiss to arrest him, based on an indictment issued in New York federal court on March 9, followed by an arrest warrant issued March 24 by U.S. magistrate Naomi Buchwald.

Local police took him into custody at about 10 a.m. Hotel sources said he was not handcuffed by the arresting officers.

The specific American charges against Khashoggi, Swiss officials said Tuesday, involve only his relationship with the Marcoses, who have lived in exile in Hawaii after their flight from the Philippines in February, 1986.

Khashoggi is charged with racketeering, conspiracy, obstruction of justice and mail fraud. Racketeering alone carries a penalty of up to 20 years in prison.

The Marcoses face various felony charges in the United States, involving grand theft, conspiracy and fraud. But Marcos’ case was severed Monday from his wife’s by a federal judge in New York after the defense contended, and the prosecution agreed, that he is too ill to stand trial.

The two U.S. charges against Khashoggi, according to the Swiss, allege that he:

-- Illegally helped the Marcoses buy four expensive properties in New York City.

-- Illegally aided the Marcoses to dispose of art works, worth millions of dollars, that they had stolen from Philippine institutions, notably the Manila Metropolitan Museum of Art. Some of the paintings were recovered from Khashoggi’s possession in France.

Khashoggi has been the target of other legal actions initiated in several countries. Faced with more than $150 million in litigation, Triad America Corp., Khashoggi’s U.S. subsidiary based in Salt Lake City, has filed for bankruptcy. In New York and London, a Philippine government-owned company is suing him over the disappearance of $3.5 million invested in an ill-fated joint venture.

Once Called Richest

By the end of the last decade, some were referring to Khashoggi as the world’s richest man, with estimates of his wealth ranging up to $4 billion, much of it from commissions paid in the 1970s by Western corporations that he guided in dealing with an Arab world flush with oil money and eager to modernize.

But beginning in the early 1980s, he has suffered business reverses that have left him heavily in debt and have caused him to lose some of his prize possessions, such as his yacht and his luxurious DC-8 jet.

Khashoggi has also been linked to the Iran-Contra scandal--considered the darkest stain on the Reagan Administration--the scheme to sell arms to Iran in exchange for the release of American hostages in Lebanon, with the profits being turned over to the U.S.-supported Nicaraguan Contras. The Saudi financier has been quoted as saying he is still owed between $10 million and $15 million for the “bridging money” he lent the secret Iran-Contra operation.

Khashoggi’s legendary millions and his position as a business and political kingpin originated from his role as a middleman between close friends in the Saudi government and Western suppliers of transportation, building and military equipment to the oil-wealthy kingdom, which was rapidly trying to modernize in the flush of skyrocketing petroleum revenues.

Got Into Military Contracts

From his first deal, involving the sale of trucks to the Saudi royal family, Khashoggi branched out into military contracts, dealing with some of the biggest names in the U.S. defense industry--arranging the sale of billions of dollars worth of weapons and skimming off enormous commissions.

Khashoggi seemed to reach his zenith as an international mover-and-shaker in the late 1970s.

For his friends in the fast lane, he provided parties, privileges and, it is said, female companionship. His residences stretched from New York to Morocco to Paris to Monte Carlo--all more sumptuous than any Hollywood dream.

Still, his reputation was always clouded by charges that he was basically a glorified fixer. The Saudi royal family has recently seemed embarrassed by his lavish style, opulent even by their standards, and sources say he could no longer count on their largess.

And as the price of oil declined, so, it seemed, did the fortunes of Adnan Khashoggi. With many of his assets being seized by various legal claimants and governments, the man who once had the ear of Presidents Richard M. Nixon, Jimmy Carter and Ronald Reagan began lowering his profile.

But on Tuesday, here in Switzerland, Adnan Khashoggi was once more in the eyes of the world.


Background--Born July 25, 1935, son of personal physician to Saudi Arabia’s King Ibn Saud; educated at private school in Egypt, studied economics for one year at Cal State Chico, one quarter at Stanford.

Family--He married 15-year-old English girl, Sandra Jarvis-Daly, in 1962; she took name Soraya and bore him four sons and a daughter. Divorced and remarried in 1979, he has one son by second wife, Italian-born Lamia.

Business--He quickly discovered talent for bringing buyers and sellers together. Beginning in his 20s, he has acted as middleman between governments and businesses, notably in arms sales to countries such as Saudi Arabia and Kuwait. Helping Northrop sell $4.2 billion in F-5 warplanes to Saudis in 1970 netted him $184 million in Northrop commissions. His financial empire consists of multinational companies administered through Triad holding company in Riyadh, the Saudi capital.

Politics--He has acted as courier in Mideast peace missions; in 1987, he told of sending $1 million to Iranian arms dealer--in what was to become Iran-Contra affair--"to get the deal going” and end Iran-Iraq War.

Life Style--At height of wealth, he maintained 12 homes in places such as New York, Paris and Monte Carlo, in addition to DC-8 “flying penthouse.” In 1985, his 1,300-acre retreat in Marbella, Spain, was site of lavish medieval-style 50th birthday party. On $50-million yacht Nabila, named after his daughter, he entertained celebrities and royalty.

Setbacks--In late ‘70s, when he was sometimes called world’s richest man, estimates of his wealth ran up to $4 billion, but since early ‘80s his empire has been crumbling into debt. Various ventures failed, and his Triad America Corp. filed for bankruptcy. In 1982, he settled out of court, for undisclosed amount, a $2.4-billion suit by ex-wife. By late last year, he had been forced to sell, abandon or lose to repossession his Kenya ranch, London offices, DC-8 and 285-foot yacht--which was repossessed by the Sultan of Brunei over loan default and eventually wound up in hands of financier Donald Trump. Last October, U.S. obtained a warrant for his arrest on fraud and racketeering charges over Marcos affair.