Khashoggi Freed on $10-Million Bail; Financial Drain Disclosed

Adnan Khashoggi, the grounded jet-setting financier, was freed on $10-million bail Thursday, traveling by rented limousine from his jail cell to his heavily mortgaged Manhattan penthouse where he will be monitored electronically by a special bracelet he must wear at all times.

“I am pleased that the courts have granted me bail,” Khashoggi said as he stood in a wrinkled leisure suit outside the federal courthouse. “I am anxious to begin work on my defense and look forward to clearing my name at trial. I assure you I will be here for the trial.”

The short, balding arms dealer, a smile fixed to his face, then tried to walk down the steps. He was engulfed by shouting, pushing photographers. Several people were knocked to the ground. In the melee, television cameras bumped Khashoggi’s shoulders. Lenses crowded within an inch of his face. Finally, a wedge of U.S. marshals helped him to his car.

Charged in Marcos Case

Khashoggi, 54, who was a key middleman in secret White House arms sales to Iran, is charged with fraud and obstruction of justice in connection to claims he helped Ferdinand E. and Imelda Marcos plunder Philippines national assets.

Federal Judge John F. Keenan granted his application for bail Thursday over the strenuous objections of prosecutors who argued Khashoggi had ample resources to flee the country.

As a condition of bail, the Saudi businessman--once regarded as the world’s richest man--had been required to disclose details of his financial empire. It provided a rare insight into an empire in decline.

Although Khashoggi’s financial statement claimed a net worth of $54 million, $46 million of that amount is listed as equity in real estate subject to foreclosure proceedings in New York and Malaga, Spain.

Khashoggi’s statement revealed that dozens of his companies around the world are in trouble--bankrupt, dormant or abandoned. Many of his bank accounts, scattered around the world, have only pennies. Some are overdrawn.

Account Overdrawn

The disclosures surprised one of his former business executives who said that in recent years Khashoggi “could have written a million dollar check” against any of his bank accounts. Today, however, his balance in Monte Carlo’s Bank of Credit & Commerce, for example, was listed as only 47 cents. And his account at the Champs-Elysees branch of the Credit Commercial de France bank in Paris was listed as overdrawn by $250.68.

Khashoggi also is nearly $2 million in arrears on household expenses--reportedly owing everyone from the maids to the lawn mower repairman--at his homes in Marbella and Cannes.

Khashoggi’s statement for the court, listing assets of $141.8 million and liabilities of $88 million, also showed personal credit card debts of $81,000. It also listed “cash in hand” of $5 million and cash in banks of $643,746.

On Thursday, Khashoggi’s brothers Essam and Amr posted two $5-million checks drawn on Barclay’s Bank for bail.

Keenan set March 14 as the trial date.