Khashoggi Extradited to U.S. for Trial in Marcos Case

Adnan Khashoggi, once regarded as the world’s richest man, was flown in first-class comfort from Switzerland to a federal detention center in lower Manhattan Wednesday to await trial on charges that he helped Ferdinand and Imelda Marcos plunder Philippine national assets. He was denied bail.

FBI agents took custody of Khashoggi aboard the jetliner where, earlier, first-class passengers had been pampered with caviar and champagne. Moments after his arrival, the 53-year-old Saudi financier and arms merchant emerged in handcuffs, ending a three-month extradition fight.

Khashoggi, who was also a key middleman in secret White House arms sales to Iran during 1985-86, later was arraigned on fraud and obstruction of justice charges. Additional conspiracy and racketeering allegations had been dropped to satisfy Swiss extradition requirements. If convicted on the remaining counts, however, he faces up to 10 years in prison and $500,000 in fines.

Wore Green Suit

The short, balding businessman appeared in court wearing an expensive light green leisure suit. He was greeted by Assistant U.S. Atty. Charles LaBella, who said: “Welcome to New York.”

“Thank you, sir,” Khashoggi replied. And they shook hands.

Khashoggi was indicted last fall, along with the Marcoses and several of their associates, but had remained a fugitive until April, when Swiss authorities, acting on a U.S. request, arrested him during a visit to a health spa.

While fighting extradition, Khashoggi had been held in an austere Bern jail cell but was able to order catered meals from a local five-star restaurant and rent a color television set.

His failure to appear voluntarily to answer the charges clearly undermined the bail arguments of his attorney, Robert Morvillo, who assured U.S. District Judge John F. Keenan that Khashoggi would not flee if released on bail. He argued also that bail should not exceed the $5 million set for Mrs. Marcos when she was arraigned last fall on similar charges.

“How do I know he won’t run to places where we have no extradition treaty?” Keenan asked. “He can go to Saudi Arabia and thumb his nose at the court.”

Morvillo compared that to “a lifetime sentence” and said: “He spends very little time in Saudi Arabia.” The attorney said that Khashoggi’s various business dealings require him to be free to meet with “heads of state” and heads of corporations.

But LaBella scoffed at the claim, comparing Khashoggi to a game show host. “He approaches his predicaments as Monty Hall--let’s make a deal!” the prosecutor said. He called Khashoggi a “substantial risk” to flee U.S. jurisdiction and noted that he has few U.S. ties and that his penthouse apartment in New York is subject to foreclosure actions.

In fact, The Times learned, Khashoggi--whose financial fortunes have been in steep decline in recent years--had arranged to raise his bail money--up to $5 million--from British tycoon Roland W. (Tiny) Rowland. “Adnan doesn’t have $5 million,” one associate said .

Rowland, vacationing in Greece, could not be reached for comment. But sources said that his deal with Khashoggi was reached after the two men met recently in Khashoggi’s Bern jail cell.

Judge Keenan said that he would reconsider the bail request later, possibly this week. But he served notice that Khashoggi may be required to make substantial disclosure of his financial assets as a condition of bail.

In an attempt to reach a compromise that would spare Khashoggi a night in jail, Morvillo suggested that the court could appoint private security guards to keep Khashoggi under 24-hour surveillance. The attorney said that Khashoggi would pay those expenses.

“Mr. Khashoggi intends to contest this case,” Morvillo said, adding that Khashoggi has a “desire to face trial.”

The Marcoses, Khashoggi and six others initially were charged in federal court in October, 1988, with stealing $103 million in Philippine funds and then defrauding U.S. banks of $165 million to buy prime Manhattan properties between 1972 and 1978.

Khashoggi is accused of obstructing justice by helping the Marcoses conceal their interest in four New York office buildings. He allegedly submitted forged and backdated documents purporting to show that he had acquired the properties before a federal court order was issued freezing the Marcos assets around the world.

Charges Involve Art

He is also charged with submitting false documents to a French court asserting ownership of a dozen paintings, including oils by Rubens and El Greco, that the Marcoses allegedly stole from the Philippine National Museum.

LaBella said that a joint trial with Imelda Marcos would not be likely before February. Her husband is near death in a Honolulu hospital and has not been arraigned.

Khashoggi spent 13 weeks in Bern district prison, with a team of lawyers fighting extradition. During that time, he was required to clean out his small cell, like other detainees.

His shoelaces and belt were taken away but otherwise he wore his own clothes and ordered gourmet meals from the Schweizerhof Hotel at his own expense. He also rented a color television set from the prison for 61 cents a day.

Khashoggi had been arrested when eating breakfast in his Schweizerhof suite the morning of April 18 and offered the Swiss police officials orange juice and coffee before they took him before a magistrate.

Prison officials said that he had been “a model detainee” and had never caused any problems.