See Also: Maureen Dawd article, Perle's Plunder Blunder 

Richard N. Perle, a key adviser to the Bush national security team who recently has been dogged by conflict-of-interest allegations, resigned yesterday as the unpaid chairman of an influential Pentagon advisory board but intends to stay on as a member.

In his resignation letter to Defense Secretary Donald H. Rumsfeld, Perle stressed that he had not broken any ethics rules but said: "I have seen controversies like that before and I know that this one will inevitably distract from the urgent challenge in which you are now engaged."

Rumsfeld in a statement praised Perle, 61, as a "man of integrity and honor" who has a "deep understanding of our national security process."

Perle has been an intellectual force behind the war on Iraq. His recent problems emerged from reports describing his ties to companies that have business before the Defense Department.

Most notably, he agreed to represent Global Crossing, a telecommunications company that had sought his help in getting the Pentagon's support for its proposed sale to a foreign firm controlled by investors from China and Singapore. Under the arrangement, Perle was to be paid a $125,000 retainer and would earn another $600,000 if the deal is approved by a government review panel that includes Rumsfeld, the New York Times reported last Friday.

In an interview last night, Perle said he has ended his relationship with Global Crossing and will contribute his fees "to families of servicemen and servicewomen killed in Iraq." He also said his work involved getting company officials to agree to what he believed the Pentagon wanted for the sale to be approved, "not vice versa."

"Nobody asked me to resign," said Perle, who was appointed chairman in July 2001, "but it was becoming a feeding frenzy with new stories every day."

Perle has told friends that he believes he was singled out by his critics because of his outspoken views and support of the Bush administration's defense policies. An assistant defense secretary under President Ronald Reagan, he was a strong proponent of the current administration's withdrawal from the Antiballistic Missile Treaty with Russia.

His decision to step down didn't quiet his critics, however.

Rep. John Conyers Jr. (Mich.), the ranking Democrat on the House Judiciary Committee, called the move "a small step in the right direction." But he said he will press on with his request for the Pentagon's inspector general to investigate Perle's business dealings. "If he is continuing as member of the [advisory] board, that continues to be a problem," Conyers said

On Wednesday, Sen. Carl M. Levin (Mich.), the ranking Democrat on the Senate Armed Services Committee, wrote Rumsfeld that Perle's business dealings create "the appearance that he is using public office for private gain and [undermine] public confidence that important decisions of the department will be made on the merits."

Levin called on Perle to resign from the board "or make a commitment not to have any formal contact with [defense] officials on behalf of a client." Levin declined to comment yesterday on Perle's remaining on the policy board.

The advisory panel, which meets at least quarterly, brings together academics and former government and military officials to advise Pentagon officials on a wide range of strategic issues and defense policy matters. The agendas of recent meetings included discussions on Iran, North Korea and the Pentagon's controversial Total Information Awareness initiative, which seeks to build a global data surveillance system to help predict terrorist activity.

Perle sits on the board of Autonomy Corp., a British data-mining firm that lists contracts with the Homeland Security and Defense departments.

Charles Lewis, executive director of the Center for Public Integrity, a nonprofit watchdog group, said questions about the ethical standards of the advisory board go beyond Perle. At least 10 of the panel's 30 members are executives or lobbyists with private companies that have tens of billions of dollars' worth of contracts with the Defense Department and other government agencies, according to a report to be released by the center today.

To the public, it looks like you have folks feathering their nest. . . . I'm shocked and awed by audacity of who has been selected and who is serving on this board," Lewis said. "There really is a tin ear when it comes to ethical-appearance considerations."

Members of the board are unpaid and serve as "special government employees." They are covered by ethics laws and regulations known as the Standards of Ethical Conduct, which prohibit financial conflicts of interest.

Board members must file confidential financial disclosure forms when they are nominated and every year thereafter when they are reappointed to the panel. The forms are reviewed by the Pentagon's ethics officer but are not open to the public, said Maj. Ted Wadsworth, a department spokesman. "If there was an objection from the ethics office . . . then the nomination would not go through," said Wadsworth.

Board members are expected to recuse themselves from matters that directly affect their financial interests.

Earlier this month, an article in the New Yorker said Perle, a longtime critic of the Saudi government, had lunch in January in France with a Saudi-born businessman and a Saudi industrialist. The industrialist was interested in investing in a venture capital firm, Trireme Partners, of which Perle is a managing partner. No investment was made, but the story, written by Seymour M. Hersh, accused Perle of mixing business and politics.

Perle has threatened to sue Hersh for libel.

© 2003 The Washington Post Company

 March 27

— WASHINGTON (Reuters) - Richard Perle, an architect of the U.S.-led war on Iraq, offered to resign as chairman of a Pentagon advisory panel, according to a letter obtained by Reuters on Thursday.

Noting criticism of a possible conflict of interest over his roles as corporate adviser and Defense Department consultant, Perle wrote to Defense Secretary Donald Rumsfeld, "As I cannot quickly or easily quell criticism of me based on errors of fact concerning my activities, the least I can do under these circumstances is to ask you to accept my resignation as chairman of the Defense Policy Board."

The letter was dated Wednesday.

Richard Perle, a prime mover behind the neo-conservative lobby which pressed for war against Iraq, resigned from a top advisory job to the Pentagon last night, amid allegations of improperly conflicting business interests.

In a letter to Donald Rumsfeld, the Defence Secretary, Mr Perle denied the claims – arising from a $725,000 (£463,000) consultancy post at GlobalCrossing, a bankrupt telecommunications company – as based on "errors of fact". However, he said he had no alternative but to step down from his post as chairman of the Defence Policy Board, an important outside advisory panel to the Pentagon.

The controversy arose earlier this month when it was disclosed that GlobalCrossing was trying to overcome objections by the Pentagon to its sale to Far Eastern interests. Of the fee, $600,000 is said to be conditional on the sale going through.

Mr Perle, known as "The Prince of Darkness" for his unrelenting opposition to nuclear-arms control during his years as a top Pentagon official in the 1980s, is a vocal proponent of removing Saddam Hussein by force, and an architect of the Bush administration doctrine of pre-emptive attacks. He is a close friend of Mr Rumsfeld and his deputy, Paul Wolfowitz.

The resignation is unlikely to see any lessening of Mr Perle's influence. Mr Rumsfeld has asked him to remain on the Board, and he will undoubtedly remain an unofficial adviser to the Bush administration.

Nor will corporate America lose interest in him. Last week he reportedly took part in a Goldman Sachs conference call to advise clients on investment opportunities arising from the war, and its implications for confrontation with North Korea.

28 March 2003 08:48

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Friday

March 28, 2003

Richard N. Perle is chairman of the Defense Policy Board. Although an unpaid position, it is highly influential and prestigious and fully subject to government ethics conflict-of-interest regulations. Mr. Perle also has been hired by the telecommunications company Global Crossing for a six-figure fee to lobby the Department of Defense on behalf of the bankrupt company for an important concession.

Mr. Perle should resign from either the Defense or the lobbying position, or, better yet, in the interests of cleanliness in government, he should be dismissed from the Defense Policy Board position immediately for having accepted the lobbying contract. Federal ethics rules bar anyone from using public office for private gain.

Mr. Perle's situation with respect to the conflict of interest is already subject to considerable media, public and congressional discussion, given his controversial political views. He has long been associated with advocacy of the "pre-emptive war" strategy, the one that says the United States should not feel itself constrained to work with allies inside the rules of international political order, but should attack Iraq and other countries across the world as it feels necessary. Generous use of U.S. military capacity is a given in this approach.

Global Crossing as a company can be said to be in the Enron category in its approach to corporate practice. It is currently in bankruptcy. The concession it is seeking is permission to sell itself to Chinese and Singapore companies. The Defense Department and the Federal Bureau of Investigation oppose the sale because they say it would put the company's worldwide fiber optics network under the Chinese government's control.

Reporter Seymour Hersh, in the March 17 issue of The New Yorker, spelled out at some length what he alleges is Mr. Perle's relationship with a software company called Trireme Partners LP. U.S. Rep. John Conyers, D-Mich., the ranking Democrat on the House Judiciary Committee, has called for an inquiry into Mr. Perle's relationship with Trireme Partners, which Mr. Hersh says has unsavory links, and a British company, the Autonomy Corp., which recently won a major federal contract in the area of homeland security.

Mr. Perle's arrangement with Global Crossing calls for him to get $125,000 whether or not Global Crossing obtains the concession it seeks from the Department of Defense. But if he gets the concession, he receives another $600,000. Mr. Perle says he is "counseling" Global Crossing.

The bottom line is that neither Mr. Perle's politics nor Global Crossing's nor Trireme's nor Autonomy's character or nature is the question in point. It is the conflict of interest that is the problem. Secretary of Defense Donald H. Rumsfeld, who appointed Mr. Perle in 2001, should tell him to withdraw from the Global Crossing contract or resign from the Defense post, or should fire him, now.

America Knows Best Who Should Rule Germany

"It would be better for the chancellor to resign."

The White House is dissatisfied with Germany very much, and the Pentagon is even more so. And this dissatisfaction is because of the German chancellor’s strict opinion concerning the US-led campaign against Iraq. Schroeder mentioned several times already that Germany will not participate in this war, even if the UN approves it. The statement made by German Minister of Justice Herta Daubler-Gmelin when she compared George W. Bush with Hitler only added fuel to the fire.

During the past several days, German diplomats have made every possible effort to reduce the tension in relations with America, which arose after the above mentioned statements. The scandal seemed practically hushed up when Pentagon senior adviser Richard Perle arrived in Berlin. He was the aide to the US defense secretary under Ronald Reagan. As soon as he arrived in Berlin, he immediately announced that Gerhard Schroeder should resign. Perle doesn’t care at all that Germans elected the chancellor in accordance with their domestic interests. However, the American official strongly believes that if the chancellor doesn’t support US policy concerning Iraq, he should resign. Germany’s Handelsblat quotes Perle: "It would be better for the chancellor to resign."

Perle says that Schroeder’s anti-war election campaign strongly undermined the relations between Germany and America, and in a burst of revelation, he explained to the German people how much the chancellor’s pertinacity will cost the country. Is Germany still wishing to become a permanent member of the UN Security Council? It should forget about it for a long time, Perle says. According to him, it is because of the chancellor that the problem can be considered once again only by the next generation of Germans.

Germany has been deprived of any authority to influence the Iraqi problem because of Schroeder’s "astonishing isolationism," Perle says. He adds that nobody made Schroeder do anything concerning Iraq, the USA especially. However, the chancellor, Perle says, "preferred to stay with his old friend for the sake of several votes at the elections." Many observers say that relations between Berlin and Washington are on the lowest level ever registered since the end of WWII. They also admit that Perle’s statements proved to be the most harsh within the whole period of preparation for the war in Iraq. At first, US officials dared to speak about Hussein’s resignation only. But, as we know, appetite grows while eating.

Published on Thursday, March 13, 2003 by CommonDreams.org 3/13/03: Ari, does the President believe that Richard Perle should resign from the Defense Policy Board? And the second question, do you agree with Richard Perle that Hersh is "the closest thing American journalism has to a terrorist?...

3/5/03: Ari, you have said in the past that every step will be taken to protect innocent and civilian life in Iraq. During the first Gulf War, the United States intentionally bombed water storage facilities and sewage treatment plants. This led to the deaths of an estimated half million civilian Iraqis from cholera, hepatitis, and typhoid. In what sense is that protecting civilian and innocent life?...

3/4/03: What about going in order, Ari?...

3/3/03: Ari, why won't the President meet with victims of medical malpractice just to get their point of view? And two, why won't he meet also with a wide range of Americans who have asked to meet with the President, who are opposed to the war, including religious leaders?...

2/26/03: Ari, you said yesterday that if we go to war with Iraq, the Iraqi leadership, including Saddam Hussein, would be a legitimate target under international law. Does this mean that if we go to war with Iraq, our leadership would be a legitimate target under international law?...

2/25/03: Ari, the Washington Post reported yesterday on its front page that "many people in the world increasingly think that President Bush is a greater threat to world peace than Iraqi President Saddam Hussein." Why do you think that millions of people around the world hold that view?...

2/19/03: Ari, you said last week that, "Every step will be taken to protect civilian and innocent life in Iraq." But Pentagon officials have said that under a battle plan called 'shock and awe,' "there will not be a safe place in Baghdad when we attack."...

2/11/03: Ari, according to the current Business Week, the Commerce Department estimated [in 1992] that tens of thousands of Iraqi civilians were killed as a result of the first Gulf War. And a Zogby poll yesterday shows that 54 percent of Americans are opposed to the upcoming war in Iraq if it means thousands of Iraqi civilian deaths. So, the question is, what is the administration's estimate of Iraqi civilian deaths in the upcoming war?...

2/6/03: Ari, a group of bishops and pastors from the National Council of Churches, the United Methodist Church, Episcopal Church, among others -- sent a letter to the President last week. They said they want a meeting face-to-face with him because they're "uneasy about the moral justification for war on Iraq." Will the President meet with these church leaders?...

2/3/03: Ari, last week the President said, on Iraq, "you are either with us or you are with the enemy." France and Germany are clearly not with us. Why aren't they with the enemy?...

more Ari & I...

Ari the Evader by Russell Mokhiber...

Official Transcripts of the Daily White House Briefings...

Ari & I

White House Press Briefing with Ari Fleischer

Thursday, March 13, 2003 - 12:30 PM

by Russell Mokhiber

Mokhiber: Richard N. Perle is the chairman of the Defense Policy Board and a leading public advocate for war on Iraq. In the New Yorker magazine this week, Seymour Hersh reports that Perle is also managing partner in a venture capital company, Trireme Partners, that is positioned to profit from a war with Iraq. The federal Code of Conduct, which governs Perle in this matter, prohibits conflicts of interest. Henry Kissinger resigned from the 911 commission because of similar business conflicts. When asked on Sunday by Wolf Blitzer about the New Yorker article, Perle called Hersh "the closest thing American journalism has to a terrorist." Two questions. Given Perle's conflict of interest, and given the widespread public belief that this war is being driven by corporate interests -- war for oil, war for defense contracts, war for construction contracts -- does the President believe -

Fleischer: Whose informed judgement is that?

Mokhiber: Widespread public belief.

Fleischer: Widespread?

Mokhiber: Yes, widespread.

Fleischer: Widespread, or just that chair?

Mokhiber: No, widespread. Does the President believe that Richard Perle should resign from the Defense Policy Board? And the second question, do you agree with Richard Perle that Hersh is "the closest thing American journalism has to a terrorist."

Fleischer: Russell, there is absolutely no basis to your own individual and personal statement about what may lead to war. If anything leads to it is the fact that Saddam Hussein has refused to disarm. And I think you do an injustice to people, no matter what their background, if you believe that people believe that Saddam Hussein should be disarmed for any reason that suggests personal profit.

Mokhiber: What about the question Ari? Should he resign - and is he a terrorist?

Fleischer: Russell, you have made your speech.

Mokhiber: You didn't answer the question.

Fleischer: You have made your speech.

###

-Thanks to Russell Mokhiber

White House reporter Russell Mokhiber is the editor of the Washington, D.C.-based Corporate Crime Reporter. He co-authors the weekly Focus on the Corporation column with Robert Weissman which Common Dreams publishes. He can be reached at: russell@nationalpress.com

Ari & I

White House Press Briefing with Ari Fleischer

Monday, February 3, 2003 - 12:15 PM

by Russell Mokhiber

Mokhiber: Ari, last week the President said, on Iraq, "you are either with us or you are with the enemy." France and Germany are clearly not with us. Why aren't they with the enemy?

Ari Fleischer:: That's not true Russell. France and Germany are with us. They just -- in the case of Germany, they have made the decision not to use military force. And in the case of France -- France is still exploring what their ultimate position will be. Clearly, they are both with us. The question is the use of military force. So, I don't think that is quite doing justice to what the President said.

washingtonpost.com

Perle Threatens Lawsuit Over Hersh Article In New Yorker

By Howard Kurtz

Washington Post Staff Writer

Friday, March 14, 2003; Page C01

Seymour Hersh has a knack for arousing strong reactions in the people he investigates.

Richard Perle, his latest target, has gone nuclear in recent days, likening the New Yorker reporter to a "terrorist."

Why the incendiary language? "He ignites bombs and I don't think he cares whether the victims are innocent civilians," the former assistant defense secretary declares.

New Yorker Editor David Remnick calls Perle's attack "disgusting."

Hersh says that Perle, a businessman who is also chairman of President Bush's Defense Policy Board, hasn't cited a single inaccuracy in this week's New Yorker piece. "It's not about me and Richard. It's about what Richard did," Hersh says.

What Perle did, according to the magazine, is to have lunched in January with controversial Saudi-born businessman Adnan Khashoggi and a Saudi industrialist. The industrialist, Harb Saleh Zuhair, was interested in investing in a venture capital firm, Trireme Partners, of which Perle is a managing partner.

Nothing ever came of the lunch in Marseilles; no investment was made. But the Hersh piece suggests that Perle, a longtime critic of the Saudi regime, was inappropriately mixing business and politics.

Khashoggi, a former arms broker who says he lost $10 million as a middleman between the White House and Iran in the 1980s arms-for-hostages deal, told Hersh: "It was normal for us to see Perle. We in the Middle East are accustomed to politicians who use their offices for whatever business they want."

The piece contains this extraordinary quote from Prince Bandar bin Sultan, the Saudi ambassador to the United States: "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."

"Just preposterous," Perle says, adding that "my views are completely unchanged about the appalling record of the Saudis in making money available to extremist groups. . . . That accusation is so monstrous -- that my view is for sale -- and there is not a shred of anything to support that."

This is, at bottom, a clash between two old Washington warriors who have tangled over the years. Perle, 61, is a tenacious infighter who so strongly opposed arms control with the Soviets when he worked in the Reagan administration that he was dubbed the Prince of Darkness. From his office in suburban Maryland, he wields considerable clout as a hawkish adviser on Iraq, in part through his chairmanship of the Pentagon advisory board, a blue-chip assortment of former officials.

Hersh, 65, who won a Pulitzer Prize for exposing the 1968 My Lai massacre in Vietnam, is a bulldog journalist and former New York Times reporter who takes on powerful people and thorny subjects. He drew criticism for initially accepting a bogus batch of Kennedy papers while researching his 1997 book "The Dark Side of Camelot," but has scored repeatedly with stories about U.S. intelligence and military matters.

Three years ago, retired Gen. Barry McCaffrey, then the White House drug czar, denounced a piece that Hersh was writing about his role in alleged brutality during the Persian Gulf War, sparking a war of words even before the article was published.

Perle, a frequent talk show guest, has been one of the leading voices demanding the ouster of Saddam Hussein. Because Trireme, which was founded in 2001, specializes in homeland security and defense, Hersh writes that Perle "has set up a company that may gain from a war."

Perle calls the piece "inaccurate" but doesn't dispute that the lunch took place. He says he will likely sue Hersh in Britain, where libel cases face a lesser burden of proof.

Perle says he has a four-page letter -- he won't say whether it's from Khashoggi or Zuhair -- complaining of "egregious misquotes and flagrant errors derived from my interview with Mr. Hersh," along with "reckless, grotesque renditions and innuendos."

Remnick says he believes the letter is from Khashoggi and that "those quotes were all gone over carefully with Khashoggi." He says that when Perle called him Wednesday, he replied that there was nothing for the New Yorker to retract.

Perle launched his counterattack Sunday on CNN's "Late Edition," declaring that Hersh is "the closest thing American journalism has to a terrorist."

"He should know better," Remnick says. "The only loose talk I know of where this entire story is concerned is coming from Mr. Perle. That story was deeply and well reported and thoroughly checked, with Mr. Perle's cooperation."

In Perle's telling -- which also appears in the Hersh article -- he was invited to meet with Zuhair, who had recently been in Baghdad and was said to have information about Hussein being willing to step down. "I went there as a private citizen to hear what this man had to say," Perle says. "There was never any business discussed."

Salon columnist Joe Conason says Perle "arguably should be required to resign" from the Defense Policy Board "because of his grossly intemperate public attack on Hersh." But former Bush speechwriter David Frum writes in National Review Online: "Would such an investment have been improper if it had been discussed? Despite Hersh's heavy breathing, the article has to concede that the answer is once more no: Richard Perle is a private citizen, who serves the U.S. government without pay, and is entitled to earn a living so long as he avoids conflicts of interest -- of which Hersh could show none."

Hersh says he has "immense respect" for Perle for being willing to talk to the press. But, he says, "if Richard Perle having a private lunch in Marseilles with Adnan Khashoggi about a business deal -- or about politics -- isn't a story, I've been in the wrong business for 40 years. It's a story, period. That's what I do for a living. I write stories."

© 2003 The Washington Post Company

RENSE.COM

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At the peak of his deal-making activities, in the nineteen-seventies, the Saudi-born businessman Adnan Khashoggi brokered billions of dollars in arms and aircraft sales for the Saudi royal family, earning hundreds of millions in commissions and fees. Though never convicted of wrongdoing, he was repeatedly involved in disputes with federal prosecutors and with the Securities and Exchange Commission, and in recent years he has been in litigation in Thailand and Los Angeles, among other places, concerning allegations of stock manipulation and fraud. During the Reagan Administration, Khashoggi was one of the middlemen between Oliver North, in the White House, and the mullahs in Iran in what became known as the Iran-Contra scandal. Khashoggi subsequently claimed that he lost ten million dollars that he had put up to obtain embargoed weapons for Iran which were to be bartered (with Presidential approval) for American hostages. The scandals of those times seemed to feed off each other: a congressional investigation revealed that Khashoggi had borrowed much of the money for the weapons from the Bank of Credit and Commerce International (B.C.C.I.), whose collapse, in 1991, defrauded thousands of depositors and led to years of inquiry and litigation.

Khashoggi is still brokering. In January of this year, he arranged a private lunch, in France, to bring together Harb Saleh al-Zuhair, a Saudi industrialist whose family fortune includes extensive holdings in construction, electronics, and engineering companies throughout the Middle East, and Richard N. Perle, the chairman of the Defense Policy Board, who is one of the most outspoken and influential American advocates of war with Iraq.

The Defense Policy Board is a Defense Department advisory group composed primarily of highly respected former government officials, retired military officers, and academics. Its members, who serve without pay, include former national-security advisers, Secretaries of Defense, and heads of the C.I.A. The board meets several times a year at the Pentagon to review and assess the country's strategic defense policies.

Perle is also a managing partner in a venture-capital company called Trireme Partners L.P., which was registered in November, 2001, in Delaware. Trireme' s main business, according to a two-page letter that one of its representatives sent to Khashoggi last November, is to invest in companies dealing in technology, goods, and services that are of value to homeland security and defense. The letter argued that the fear of terrorism would increase the demand for such products in Europe and in countries like Saudi Arabia and Singapore.

The letter mentioned the firm's government connections prominently: "Three of Trireme's Management Group members currently advise the U.S. Secretary of Defense by serving on the U.S. Defense Policy Board, and one of Trireme's principals, Richard Perle, is chairman of that Board." The two other policy-board members associated with Trireme are Henry Kissinger, the former Secretary of State (who is, in fact, only a member of Trireme's advisory group and is not involved in its management), and Gerald Hillman, an investor and a close business associate of Perle's who handles matters in Trireme's New York office. The letter said that forty-five million dollars had already been raised, including twenty million dollars from Boeing; the purpose, clearly, was to attract more investors, such as Khashoggi and Zuhair.

Perle served as a foreign-policy adviser in George W. Bush's Presidential campaign-he had been an Assistant Secretary of Defense under Ronald Reagan-but he chose not to take a senior position in the Administration. In mid-2001, however, he accepted an offer from Secretary of Defense Donald Rumsfeld to chair the Defense Policy Board, a then obscure group that had been created by the Defense Department in 1985. Its members (there are around thirty of them) may be outside the government, but they have access to classified information and to senior policymakers, and give advice not only on strategic policy but also on such matters as weapons procurement. Most of the board's proceedings are confidential.

As chairman of the board, Perle is considered to be a special government employee and therefore subject to a federal Code of Conduct. Those rules bar a special employee from participating in an official capacity in any matter in which he has a financial interest. "One of the general rules is that you don't take advantage of your federal position to help yourself financially in any way," a former government attorney who helped formulate the Code of Conduct told me. The point, the attorney added, is to "protect government processes from actual or apparent conflicts."

Advisory groups like the Defense Policy Board enable knowledgeable people outside government to bring their skills and expertise to bear, in confidence, on key policy issues. Because such experts are often tied to the defense industry, however, there are inevitable conflicts. One board member told me that most members are active in finance and business, and on at least one occasion a member has left a meeting when a military or an intelligence product in which he has an active interest has come under discussion.

Four members of the Defense Policy Board told me that the board, which met most recently on February 27th and 28th, had not been informed of Perle's involvement in Trireme. One board member, upon being told of Trireme and Perle's meeting with Khashoggi, exclaimed, "Oh, get out of here. He's the chairman! If you had a story about me setting up a company for homeland security, and I've put people on the board with whom I'm doing that business, I'd be had"-a reference to Gerald Hillman, who had almost no senior policy or military experience in government before being offered a post on the policy board. "Seems to me this is at the edge of or off the ethical charts. I think it would stink to high heaven."

Hillman, a former McKinsey consultant, stunned at least one board member at the February meeting when he raised questions about the validity of Iraq's existing oil contracts. "Hillman said the old contracts are bad news; he said we should kick out the Russians and the French," the board member told me. "This was a serious conversation. We'd become the brokers. Then we'd be selling futures in the Iraqi oil company. I said to myself, 'Oh, man. Don't go down that road.'" Hillman denies making such statements at the meeting.

Larry Noble, the executive director of the Washington-based Center for Responsive Politics, a nonprofit research organization, said 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." Noble added, "The question is whether he's trading off his advisory-committee relationship. If it's a selling point for the firm he's involved with, that means he's a closer-the guy you bring in who doesn't have to talk about money, but he's the reason you're doing the deal."

Perle's association with Trireme was not his first exposure to the link between high finance and high-level politics. He was born in New York City, graduated from the University of Southern California in 1964, and spent a decade in Senate-staff jobs before leaving government in 1980, to work for a military-consulting firm. The next year, he was back in government, as Assistant Secretary of Defense. In 1983, he was the subject of a New York Times investigation into an allegation that he recommended that the Army buy weapons from an Israeli company from whose owners he had, two years earlier, accepted a fifty-thousand-dollar fee. Perle later acknowledged that he had accepted the fee, but vigorously denied any wrongdoing. He had not recused himself in the matter, he explained, because the fee was for work he had done before he took the Defense Department job. He added, "The ultimate issue, of course, was a question of procurement, and I am not a procurement officer." He was never officially accused of any ethical violations in the matter. Perle served in the Pentagon until 1987 and then became deeply involved in the lobbying and business worlds. Among other corporate commitments, he now serves as a director of a company doing business with the federal government: the Autonomy Corporation, a British firm that recently won a major federal contract in homeland security. When I asked him about that contract, Perle told me that there was no possible conflict, because the contract was obtained through competitive bidding, and "I never talked to anybody about it."

Under Perle's leadership, the policy board has become increasingly influential. He has used it as a bully pulpit, from which to advocate the overthrow of Saddam Hussein and the use of premptive military action to combat terrorism. Perle had many allies for this approach, such as Paul Wolfowitz, the Deputy Secretary of Defense, but there was intense resistance throughout the bureaucracy-most notably at the State Department. Premption has since emerged as the overriding idea behind the Administration's foreign policy. One former high-level intelligence official spoke with awe of Perle' s ability to "radically change government policy" even though he is a private citizen. "It's an impressive achievement that an outsider can have so much influence, and has even been given an institutional base for his influence."

Perle's authority in the Bush Administration is buttressed by close association, politically and personally, with many important Administration figures, including Wolfowitz and Douglas Feith, the Under-Secretary of Defense for Policy, who is the Pentagon's third-ranking civilian official. In 1989, Feith created International Advisors Incorporated, a lobbying firm whose main client was the government of Turkey. The firm retained Perle as an adviser between 1989 and 1994. Feith got his current position, according to a former high-level Defense Department official, only after Perle personally intervened with Rumsfeld, who was skeptical about him. Feith was directly involved in the strategic planning and conduct of the military operations against the Taliban in Afghanistan; he now runs various aspects of the planning of the Iraqi war and its aftermath. He and Perle share the same views on many foreign-policy issues. Both have been calling for Saddam Hussein's removal for years, long before September 11th. They also worked together, in 1996, to prepare a list of policy initiatives for Benjamin Netanyahu, shortly after his election as the Israeli Prime Minister. The suggestions included working toward regime change in Iraq. Feith and Perle were energetic supporters of Ahmad Chalabi, the controversial leader of the anti-Saddam Iraqi National Congress, and have struggled with officials at the State Department and the C.I.A. about the future of Iraq.

Perle has also been an outspoken critic of the Saudi government, and Americans who are in its pay. He has often publicly rebuked former American government officials who are connected to research centers and foundations that are funded by the Saudis, and told the National Review last summer, "I think it's a disgrace. They're the people who appear on television, they write op-ed pieces. The Saudis are a major source of the problem we face with terrorism. That would be far more obvious to people if it weren't for this community of former diplomats effectively working for this foreign government." In August, the Saudi government was dismayed when the Washington Post revealed that the Defense Policy Board had received a briefing on July 10th from a Rand Corporation analyst named Laurent Murawiec, who depicted Saudi Arabia as an enemy of the United States, and recommended that the Bush Administration give the Saudi government an ultimatum to stop backing terrorism or face seizure of its financial assets in the United States and its oil fields. Murawiec, it was later found, is a former editor of the Executive Intelligence Review, a magazine controlled by Lyndon H. LaRouche, Jr., the perennial Presidential candidate, conspiracy theorist, and felon. According to Time, it was Perle himself who had invited Murawiec to make his presentation.

Perle's hostility to the politics of the Saudi government did not stop him from meeting with potential Saudi investors for Trireme. Khashoggi and Zuhair told me that they understood that one of Trireme's objectives was to seek the help of influential Saudis to win homeland-security contracts with the Saudi royal family for the businesses it financed. The profits for such contracts could be substantial. Saudi Arabia has spent nearly a billion dollars to survey and demarcate its eight-hundred-and-fifty-mile border with Yemen, and the second stage of that process will require billions more. Trireme apparently turned to Adnan Khashoggi for help.

Last month, I spoke with Khashoggi, who is sixty-seven and is recovering from open-heart surgery, at his penthouse apartment, overlooking the Mediterranean in Cannes. "I was the intermediary," he said. According to Khashoggi, he was first approached by a Trireme official named Christopher Harriman. Khashoggi said that Harriman, an American businessman whom he knew from his jet-set days, when both men were fixtures on the European social scene, sent him the Trireme pitch letter. (Harriman has not answered my calls.) Khashoggi explained that before Christmas he and Harb Zuhair, the Saudi industrialist, had met with Harriman and Gerald Hillman in Paris and had discussed the possibility of a large investment in Trireme.

Zuhair was interested in more than the financial side; he also wanted to share his views on war and peace with someone who had influence with the Bush Administration. Though a Saudi, he had been born in Iraq, and he hoped that a negotiated, "step by step" solution could be found to avoid war. Zuhair recalls telling Harriman and Hillman, "If we have peace, it would be easy to raise a hundred million. We will bring development to the region." Zuhair's hope, Khashoggi told me, was to combine opportunities for peace with opportunities for investment. According to Khashoggi, Hillman and Harriman said that such a meeting could be arranged. Perle emerged, by virtue of his position on the policy board, as a natural catch; he was "the hook," Khashoggi said, for obtaining the investment from Zuhair. Khashoggi said that he agreed to try to assemble potential investors for a private lunch with Perle.

The lunch took place on January 3rd at a seaside restaurant in Marseilles. (Perle has a vacation home in the South of France.) Those who attended the lunch differ about its purpose. According to both Khashoggi and Zuhair, there were two items on the agenda. The first was to give Zuhair a chance to propose a peaceful alternative to war with Iraq; Khashoggi said that he and Perle knew that such an alternative was far-fetched, but Zuhair had recently returned from a visit to Baghdad, and was eager to talk about it. The second, more important item, according to Khashoggi and Zuhair, was to pave the way for Zuhair to put together a group of ten Saudi businessmen who would invest ten million dollars each in Trireme.

"It was normal for us to see Perle," Khashoggi told me. "We in the Middle East are accustomed to politicians who use their offices for whatever business they want. I organized the lunch for the purpose of Harb Zuhair to put his language to Perle. Perle politely listened, and the lunch was over." Zuhair, in a telephone conversation with me, recalled that Perle had made it clear at the lunch that "he was above the money. He said he was more involved in politics, and the business is through the company"-Trireme. Perle, throughout the lunch, "stuck to his idea that 'we have to get rid of Saddam,'" Zuhair said. As of early March, to the knowledge of Zuhair, no Saudi money had yet been invested in Trireme.

In my first telephone conversation with Gerald Hillman, in mid-February, before I knew of the involvement of Khashoggi and Zuhair, he assured me that Trireme had "nothing to do" with the Saudis. "I don't know what you can do with them," he said. "What we saw on September 11th was a grotesque manifestation of their ideology. Americans believe that the Saudis are supporting terrorism. We have no investment from them, or with them." (Last week, he acknowledged that he had met with Khashoggi and Zuhair, but said that the meeting had been arranged by Harriman and that he hadn't known that Zuhair would be there.) Perle, he insisted in February, "is not a financial creature. He doesn't have any desire for financial gain."

Perle, in a series of telephone interviews, acknowledged that he had met with two Saudis at the lunch in Marseilles, but he did not divulge their identities. (At that time, I still didn't know who they were.) "There were two Saudis there," he said. "But there was no discussion of Trireme. It was never mentioned and never discussed." He firmly stated, "The lunch was not about money. It just would never have occurred to me to discuss investments, given the circumstances." Perle added that one of the Saudis had information that Saddam was ready to surrender. "His message was a plea to negotiate with Saddam."

When I asked Perle whether the Saudi businessmen at the lunch were being considered as possible investors in Trireme, he replied, "I don't want Saudis as such, but the fund is open to any investor, and our European partners said that, through investment banks, they had had Saudis as investors." Both Perle and Hillman stated categorically that there were currently no Saudi investments.

Khashoggi professes to be amused by the activities of Perle and Hillman as members of the policy board. As Khashoggi saw it, Trireme's business potential depended on a war in Iraq taking place. "If there is no war," he told me, "why is there a need for security? If there is a war, of course, billions of dollars will have to be spent." He commented, "You Americans blind yourself with your high integrity and your democratic morality against peddling influence, but they were peddling influence."

When Perle's lunch with Khashoggi and Zuhair, and his connection to Trireme, became known to a few ranking members of the Saudi royal family, they reacted with anger and astonishment. The meeting in Marseilles left Perle, one of the kingdom's most vehement critics, exposed to a ferocious counterattack.

Prince Bandar bin Sultan, who has served as the Saudi Ambassador to the United States for twenty years, told me that he had got wind of Perle's involvement with Trireme and the lunch in Marseilles. Bandar, who is in his early fifties, is a prominent member of the royal family (his father is the defense minister). He said that he was told that the contacts between Perle and Trireme and the Saudis were purely business, on all sides. After the 1991 Gulf War, Bandar told me, Perle had been involved in an unsuccessful attempt to sell security systems to the Saudi government, "and this company does security systems." (Perle confirmed that he had been on the board of a company that attempted to make such a sale but said he was not directly involved in the project.)

"There is a split personality to Perle," Bandar said. "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."

As for Perle's meeting with Khashoggi and Zuhair, and the assertion that its purpose was to discuss politics, Bandar said, "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."

Zuhair, however, was apparently convinced that, thanks to his discussions with Trireme, he would have a chance to enter into a serious discussion with Perle about peace. A few days after the meeting in Paris, Hillman had sent Khashoggi a twelve-point memorandum, dated December 26, 2002, setting the conditions that Iraq would have to meet. "It is my belief," the memorandum stated, "that if the United States obtained the following results it would not go to war against Iraq." Saddam would have to admit that "Iraq has developed, and possesses, weapons of mass destruction." He then would be allowed to resign and leave Iraq immediately, with his sons and some of his ministers.

Hillman sent Khashoggi a second memorandum a week later, the day before the lunch with Perle in Marseilles. "Following our recent discussions," it said, "we have been thinking about an immediate test to ascertain that Iraq is sincere in its desire to surrender." Five more steps were outlined, and an ambitious final request was made: that Khashoggi and Zuhair arrange a meeting with Prince Nawaf Abdul Aziz, the Saudi intelligence chief, "so that we can assist in Washington."

Both Khashoggi and Zuhair were skeptical of the memorandums. Zuhair found them "absurd," and Khashoggi told me that he thought they were amusing, and almost silly. "This was their thinking?" he recalled asking himself. "There was nothing to react to. While Harb was lobbying for Iraq, they were lobbying for Perle."

In my initial conversation with Hillman, he said, "Richard had nothing to do with the writing of those letters. I informed him of it afterward, and he never said one word, even after I sent them to him. I thought my ideas were pretty clear, but I didn't think Saddam would resign and I didn't think he'd go into exile. I'm positive Richard does not believe that any of those things would happen." Hillman said that he had drafted the memorandums with the help of his daughter, a college student. Perle, for his part, told me, "I didn't write them and didn't supply any content to them. I didn't know about them until after they were drafted."

The views set forth in the memorandums were, indeed, very different from those held by Perle, who has said publicly that Saddam will leave office only if he is forced out, and from those of his fellow hard-liners in the Bush Administration. Given Perle's importance in American decision-making, and the risks of relying on a deal-maker with Adnan Khashoggi's history, questions remain about Hillman's drafting of such an amateurish peace proposal for Zuhair. Prince Bandar's assertion-that the talk of peace was merely a pretext for some hard selling-is difficult to dismiss.

Hillman's proposals, meanwhile, took on an unlikely life of their own. A month after the lunch, the proposals made their way to Al Hayat, a Saudi-owned newspaper published in London. If Perle had ever intended to dissociate himself from them, he did not succeed. The newspaper, in a dispatch headlined "washington offers to avert war in return for an international agreement to exile saddam," characterized Hillman's memorandums as "American" documents and said that the new proposals bore Perle's imprimatur. The paper said that Perle and others had attended a series of "secret meetings" in an effort to avoid the pending war with Iraq, and "a scenario was discussed whereby Saddam Hussein would personally admit that his country was attempting to acquire weapons of mass destruction and he would agree to stop trying to acquire these weapons while he awaits exile."

A few days later, the Beirut daily Al Safir published Arabic translations of the memorandums themselves, attributing them to Richard Perle. The proposals were said to have been submitted by Perle, and to "outline Washington's future visions of Iraq." Perle's lunch with two Saudi businessmen was now elevated by Al Safir to a series of "recent American-Saudi negotiations" in which "the American side was represented by Richard Perle." The newspaper added, "Publishing these documents is important because they shed light on the story of how war could have been avoided." The documents, of course, did nothing of the kind.

When Perle was asked whether his dealings with Trireme might present the appearance of a conflict of interest, he said that anyone who saw such a conflict would be thinking "maliciously." But Perle, in crisscrossing between the public and the private sectors, has put himself in a difficult position-one not uncommon to public men. He is credited with being the intellectual force behind a war that not everyone wants and that many suspect, however unfairly, of being driven by American business interests. There is no question that Perle believes that removing Saddam from power is the right thing to do. At the same time, he has set up a company that may gain from a war. In doing so, he has given ammunition not only to the Saudis but to his other ideological opponents as well.

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