Guest Post By Nomadic Joe
Following the World Trade Center attacks, when a Saudi prince offered Mayor Rudy Giuliani a check for $10 million as donation towards disaster relief, the mayor initially accepted and then refused it. According to reports, the reason for the mayor’s declining the donation was that the prince had suggested that the United States "must address some of the issues that led to such a criminal attack," and "re-examine its policies in the Middle East." With some indignation, Giuliani stated that "There is no moral equivalent for this [terrorist] act. There is no justification for it. The people who did it lost any right to ask for justification for it when they slaughtered 4,000 or 5,000 innocent people."
Perhaps it was predictable that Fox News should have supported the mayor's decision. On October 11, 2001 the Fox News' Special Report, Fox News contributer Mara Liasson said that Al-Waleed's statement was "completely false," "outrageous," and that "the mayor did the right thing and refused the money."
On the October 22, 2001, edition of Fox News' Hannity & Colmes Sean Hannity said, "[T]his is a man that blames the United States and their policies for the attack that took place on September 11th. That is such an egregious, outrageous, unfair offense that I would have nothing to do with his money either, and I applaud what Mayor Giuliani did. It showed a lot of guts and character."
Even Beck got into the act. Watch.
The prince involved was, by no means, not just another member of the Saudi royal. As owner of Kingdom Holding, Prince Al-Waleed bin Talal just happens to be one of the world’s richest investors, with Forbes magazine, listing his wealth at $19.4 billion, ranking him as the 19th richest person in the world in March 2010.
Son of Saudi Prince Talal bin Adbel Aziz and Mona El-Solh, daughter of Lebanese Prime minister Riad El-Solh, Al-Waleed was born into two important Middle-Eastern dynasties. As illustrious as that background might have been, the prince was fairly low on the pecking order of royalty.
An article in Khaleej Times by Matein Khalid outlines the rise of the fortunes of Al-Waleed in great detail. Upon graduation from Menlo College in 1979, Al-Waleed began his business career using a loan from Citibank, his graduation gift from the King, to construct an officers’ mess outside of Riyadh. From construction and contracting, the prince soon moved into real estate, amassing a small fortune. He then engineered a hostile takeover of the small under-performing United Commercial Bank. With radical restructuring, Al-Waleed was able to turn the bank around and, within a few years, the shareholders of the bank saw a lucrative windfall with the merger of UCB with the premier bank of the kingdom, SAMBA.
However, it wasn’t until the banking crisis on Wall Street in the early 1990’s that the prince made his mark outside of the kingdom in a big way. Citibank, which had dominated global banking, was on the brink of collapse due to poor real estate investments. Citibank’s CEO John Reed, had nearly completed a bailout with Kuwait Investment Office, but then the Iraq invasion threw the negotiations into disarray, forcing Citibank to accept the Prince’s offer on the very day the White House launched its ground invasion. Thus, using the crisis to his advantage, Al-Waleed was able to turn a $600 million investment into $12 billion with a 15% stake in Citigroup. (The Federal Reserve Board later compelled him to reduce his shareholding to below 10%.)
More importantly, these events established the Prince’s way of doing business, his modus operandi. It is a classic strategy in capitalism, to buy a stake in a company in times of distress at a low price, to work closely with management, restructuring and reducing waste and redundancy in order to engineer a profit. Al Waleed’s Citigroup stake was quite possibly the biggest most successful investment by an Arab investor in Wall Street, according to the cited article.
With that kind of wealth, it's no great surprise that his portfolio is quite diverse, with business investments that include- or have included:
Apple Computers Inc.
Disneyland Resort and Theme Park, Paris
The Fairmont Hotels and Resorts
Four Seasons Hotels & Resorts
Ford Motor Company
Jerusalem Dev. & Investment Co.
Lebanese Broadcasting Center
Palestine Development & Investment Company
Saudi American Bank
Saks Fifth Avenue
The Walt Disney Company
20% ownership of Planet Hollywood.
Among his many assets are: a 95% stake in Kingdom Holding Company; 91% ownership of Rotana Video & Audio Visual Company; 90% ownership of Lebanese Broadcasting Center ( LBCSAT ); about 6% of Citigroup; 17% of Al Nahar and 25% of Al Diyar, two daily newspapers published in Lebanon.
Considering all the chest-beating patriotism displayed by Hannity and all the other Foxes, it was somewhat surprising that one of his other profitable ventures should have remained unmentioned- on every occasion. In 1997, Time Magazine reported that Al-Waleed owned about 5% of News Corporation. By 2010 Al- Waleed's stake in News Corp. was about 7% stake, worth $3 Billion.
In the world of modern finance, that information alone isn't earth-shaking. Investors always tend to go where there is money and Rupert Murdoch's empire has always been able to offer a good return. Of course, given the type of programming that Fox News, a subsidiary of New Corporation, produces, Al-Waleed’s ownership might come as a surprise to many of its conservative ultra-patriot viewers.
Fox News channel was created by Australian-American media mogul Rupert Murdoch in 1996. The channel grew in the late 1990s. Fox News finished the first quarter of 2009 as the second-most-watched cable network on prime time, behind USA Network. In his letter to shareholders in 2010, Murdoch wrote: "(T)he Fox News Channel is simply un stoppable."
In 2010, Fox News' revenues increased 23 percent from 2009. Now, admittedly, 2009 was a rough year for News Corp. Overall, the company's revenues decreased 8 percent, and, according to Murdoch, it was "among the most challenging in our Company's 56-year history."
Fox News has in its past faced assorted challenges and has come out on top. When Time Warner bought out Ted Turner's Turner Broadcasting, a federal antitrust consent decree required Time Warner to carry a second all-news channel in addition to its own CNN. Time Warner selected MSNBC as the secondary news channel, instead of Fox News. Fox News claimed that this violated an agreement to carry Fox News. Citing its agreement to keep its U.S. headquarters and a large studio in New York City, News Corporation pressured Mayor Rudolph Giuliani's administration to pressure Time Warner, one of the city's two cable providers, to transmit Fox News on a city-owned channel. City officials threatened to take action affecting Time Warner's cable franchises in the city.
About that time, lawsuits began flying between Time Warner and the City of New York and News Corporation. Time Warner claimed undue interference against the city and News Corp countered with an anti-trust suit against Time Warner for its unfair support of its competitor, CNN. This, in turn, led to a rather nasty spat between Murdoch and Ted Turner with the outspoken Turner calling Murdoch "Adolf Hitler" and the New York Post, owned by Murdoch, ran an editorial questioning whether Turner was sane.
When the dust cleared, everybody ended up with a few bruises. Giuliani's motives were also questioned, as his wife was a producer at Murdoch-owned WNYW-TV. In the end, businessmen and lawyers all kissed and made up, agreeing to share the loot in a fair and balanced way.
As fascinating as domestic disputes often are, the background of News Corporation's royal investor is quite a bit more intriguing. Prince Al-Waleed bin Talal openly shares his sage economic strategy regarding investments and has made public statements to other Middle Eastern investors. He advocates business instead of boycotts, as the means 'influencing American public opinion.
"...Prince Alwaleed bin Talal, a Saudi billionaire and respected economic authority, argued that the boycott movement was totally ineffective in that it failed to hurt the US economy. He said that it was the Arabs who benefit more from extended economic relations with the US because "the trade balance between the Arabs and the US is in our favor." He elaborated by explaining that US trade with the Arab World was no more than 3% of the American total trade volume. The Arabs should concentrate on influencing American public opinion, he said.
Naturally, this begs the question of how the acquisition of such a conservative mouthpiece could fit into this man's agenda of influencing American opinion. On the surface, it doesn't seem to be working. While it is possible that 7% ownership could be used to pressure executives, either implied or direct, nobody could accuse Fox News of coddling Islamic fundamentalists. Moreover, doesn't Hannity's criticism of Al-Waleed signify that the news department has not been influenced by Saudi money?
It could, but the argument would be stronger had the public been informed in a straightforward manner. Instead, by laying on the indignation, Fox News underscores the image that it is independent- or rather, fair and balanced. In short, a bit of theater for the folks back home. So where is the evidence of direct influence?
There's a small item which some might reference as the tip of an iceberg. Speaking on a panel at the Arab and World Media Conference in Dubai in 2005, billionaire Prince al-Walid bin Talal criticized the US media for being generally "pro-Israel" and said Arabs are not doing enough to counter that, according to Middle East Online.
The prince then pointed to his own experience as an example of what can be done to shape media coverage. During the violent street protests in France one month ago, the prince said, Fox News ran a banner at the bottom of the screen that said "Muslim riots."
"I picked up the phone and called Murdoch ... [and told him] these are not Muslim riots, these are riots out of poverty," Al-Waleed said. "Within 30 minutes, the title was changed from Muslim riots to civil riots."
Still, this particular prince, while small in stature, is not known for his unassuming ego. Perhaps this was a fantasy he conjured to boast or illustrate his larger point.
Admittedly, the example simply proves that the prince wants people to think he has such influence. Perhaps such an investment in News Corp is only all about business and isn't that pretty predictable for a rich investor? So the questions remain: Is there any evidence of Al-Waleed's political ideology? And is there any evidence that this ideology affects the broadcasting at Fox News or News Corp?
It would, of course, be quite surprising to find conclusive evidence because influence of this sort is subtle and, when more direct, definitely undocumented. Additionally, often the outward signs of such influence would be an absence of what is being discussed or a re-direction of priorities. Here's an example.
For a short time, News Corporation's purchase of the Wall Street Journal caused a bit of consternation about the independence of this respected source. Executives, however, assured staff that the news department would remain free of interference and carry on as it always had. However, according to insiders, two of the newspaper's top investigative reporters covering terrorism left after Murdoch scaled back their beats. Glenn Simpson and Susan Schmidt, both award-winning journalists, had broken major stories on Saudi funding of terrorism. Does this represent interference or just a change of editorial priorities?
In and of itself, there is nothing inherently wrong with a Saudi prince investing in a news organization, even one with such a dominant voice as News Corp. Investors, by their nature, seek out opportunities and News Corporation’s horizons seem limitless. The question is, of course, is there evidence to suggest that Al-Waleed, as a member of the Saudi royal family, has an agenda? And, more precisely, is New Corp a tool for his agenda?
In the next part, I will take a closer look at the circumstantial evidence.
READ PART TWO OF THIS ARTICLE.