The "Saudi Arabia Money Laundering Affair" was, in short, a deal that Perkins helped work out whereby the U.S. government would keep the Saudi family in power in exchange for a guaranteed oil supply. True/ False

 

True

John Perkins describes the post-World War II period as one that created the first truly multinational empire in history, largely by economics, rather than the military, based on experiences explored in his New York Times bestsellers. He shares his personal role in the "deal of the century" of money laundering in Saudi Arabia, the assassinations of President Jaime Roldos of Ecuador and Omar Torrijos of Panama, the fight against Saddam Hussein, and more. Centered on ravaging wealth, he addresses his role as a leader in fostering what he terms a mortal economy. Then by proposing realistic solutions to transform the death economy into a life economy, he brings the conversation to the next level, one that cleans up waste and generates modern electricity, travel, finance, communications, and industrial technology.

Arab oil ministers pondered more options at a meeting in Kuwait City. The delegate of Iraq was vehemently in favour of attacking the U.S. He called on the other delegates to nationalize the Arab world's American enterprises, to place a complete oil embargo on the United States and all other Israel-friendly nations, and to remove Arab funding from all American banks. He pointed out that Arab bank deposits were significant and that not unlike the one of 1929, this action could lead to a panic.

Other Arab ministers were hesitant to commit to such a bold proposal, but on 17 October they agreed to go forward with a more limited embargo, beginning with a production cut of 5 percent and then imposing an additional decrease of 5 percent per month before their political targets were reached. They decided that with its pro-Israeli position, the United States should be prosecuted and should thus see the most serious embargo imposed on it. Several of the countries attending the meeting announced that cutbacks of 10% instead of 5% will be enforced.

On March 18, 1974, the oil embargo expired. Its length was brief, its influence enormous. Saudi oil's sale price soared from $1.39 a barrel on January 1, 1970, to $8.32 on January 1, 1974.2 The lessons learnt during the early to mid-1970s will never be forgotten by policymakers and subsequent administrations. The trauma of those few months helped to cement the corporatocracy in the long run; its three foundations bonded like never before: massive companies, multinational banks, and government. The bond will survive.

The embargo has resulted in crucial shifts in mindset and strategy. It persuaded Wall Street and Washington that it was never likely to tolerate such an embargo again. Protecting our oil reserves was already a priority; it became an obsession after 1973. The embargo raised the prestige of Saudi Arabia as a participant in world affairs and pressured Washington to understand the geopolitical value of the kingdom to our own economy. In addition, it prompted the leaders of the U.S. corporatocracy to desperately look for methods to return petrodollars to America and to recognize the lack of regulatory and bureaucratic mechanisms for the Saudi government to better handle its mushrooming resources.

The increased oil profits arising from the price hikes was a mixed blessing for Saudi Arabia. It flooded the national treasury with billions of dollars, but it also weakened some of the Wahhabis' strong religious convictions. Wealthy Saudis have travelled the world over. In Europe and the United States, they attended schools and colleges. They purchased fancy cars and decorated Western-style items for their homes. A modern type of materialism replaced Traditional theological values, and it was this materialism that offered a solution to concerns of potential oil crises.

Washington began negotiating with the Saudis almost immediately after the embargo ended, offering them logistical assistance, military arms and training, and an opportunity to put their country into the twentieth century in return for petrodollars and most notably, guarantees that there would never be another oil embargo again. The talks culminated in the formation of the United States-Saudi Arabian Joint Economic Commission, the most remarkable body. It represented a revolutionary philosophy known as JECOR, which was the reverse of conventional international assistance programs: it relied on Saudi resources to employ American companies to develop Saudi Arabia.