Investigative reporter Seymour Hersh publishes a scathing portrayal of Defense Policy Board (DPB) chairman Richard Perle, who Hersh alleges is using his position in the Pentagon to profiteer on the upcoming Iraq war. Hersh does not accuse Perle of breaking any laws, but he does show that Perle is guilty of conflicts of interests. The article, which is released days before its official March 17 publication date, prompts outrage from Perle and his neoconservative defenders, with Perle saying any questions of his potential conflicts of interest would be “malicious,” calling Hersh a “terrorist” (see March 9, 2003), and threatening to sue Hersh, a lawsuit that is never filed (see March 12, 2003). Later in the month, Perle will resign from the DPB over his conflicts of interest as detailed by Hersh (see March 27, 2003).

Dealings with Corrupt Saudis in Violation of Federal Conduct Guidelines - Hersh provides readers with details of Perle’s business dealings with the notoriously corrupt Saudi businessman and arms dealer Adnan Khashoggi (perhaps most famous in the US for his involvement in Iran-Contra—see July 3, 1985) and his activities as a managing partner of the venture capital firm Trireme Partners LP. Trireme is involved in investments that will make large profits if the US actually invades Iraq. Perle, as chairman of the DPB, is subject to the Federal Code of Conduct that bars officials such as himself from participating in an official capacity in any matter in which he has a financial interest. A former government attorney who helped write the code says, “One of the general rules is that you don’t take advantage of your federal position to help yourself financially in any way.” The point is to “protect government processes from actual or apparent conflicts.”

'Off the Ethical Charts' - One DPB member says that he and his fellows had no idea about Perle’s involvement with either Trireme or Khashoggi, and exclaims: “Oh, get out of here. He’s the chairman!… Seems to me this is at the edge of or off the ethical charts. I think it would stink to high heaven.” The DPB member is equally disturbed that fellow board member Gerald Hillman, Perle’s partner in Trireme, was recently added to the board at Perle’s request. Hillman has virtually no senior policy or military experience in government before joining the board. Larry Noble, the executive director of the Washington-based Center for Responsive Politics, says of Perle’s Trireme involvement: “It’s not illegal, but it presents an appearance of a conflict. It’s enough to raise questions about the advice he’s giving to the Pentagon and why people in business are dealing with him.… The question is whether he’s trading off his advisory-committee relationship.”

Lining up Investors, Overthrowing Saddam - According to Khashoggi, Perle met with him in January 2003 to solicit his assistance in lining up wealthy Saudi investors for Trireme. “I was the intermediary,” Khashoggi says. Together with Saudi businessman Harb Zuhair, Perle hoped to put together a consortium of investors that would sink $100 million into his firm. “It was normal for us to see Perle,” Khashoggi says. “We in the Middle East are accustomed to politicians who use their offices for whatever business they want.” But Khashoggi says Perle wanted more than just money—he wanted to use his position in both Trireme and the DPB to, in Perle’s words, “get rid of Saddam” Hussein. Perle admits to meeting with Khashoggi and Zuhair, but says that money never came up in conversation, and as for Hussein, Perle says he was at the meeting to facilitate a surrender bargain between Hussein and the US.

Khashoggi Amused - Khashoggi is amused by Perle’s denials. “If there is no war, why is there a need for security? If there is a war, of course, billions of dollars will have to be spent.… You Americans blind yourself with your high integrity and your democratic morality against peddling influence, but they were peddling influence.” Hillman sent Zuhair several documents proposing a possible surrender, but Zuhair found them “absurd,” and Khashoggi describes them as silly. (Hillman says he drafted the peace proposals with the assistance of his daughter, a college student.) Perle denies any involvement in the proposals. When the proposals found their way into the Arabic press, Perle, not Hillman, was named as the author.

Blackmailing the Saudis? - Prince Bandar bin Sultan, the influential Saudi ambassador to the US and a close friend of the Bush family, says he was told that the meeting between Perle and the Saudi businessmen was purely business, but he does not believe the disclaimers. He says of Perle, who publicly is a vociferous critic of Saudi Arabia (see July 10, 2002): “There is a split personality to Perle. Here he is, on the one hand, trying to make a hundred-million-dollar deal, and, on the other hand, there were elements of the appearance of blackmail—‘If we get in business, he’ll back off on Saudi Arabia’—as I have been informed by participants in the meeting.” Iraq was never a serious topic of discussion, Bandar says: “There has to be deniability, and a cover story—a possible peace initiative in Iraq—is needed. I believe the Iraqi events are irrelevant. A business meeting took place.” [New Yorker, 3/17/2003]