Bell, Khashoggi and Salem Bin Ladin
In addition to entertaining Saudi billionaire and arms dealer Adnan Khashoggi on some of his many junkets to Toronto, Bell has done business for about a decade with Prince Mohammed ibn Fahd, the 34- year-old son of Saudi King Fahd ibn Abdul Aziz Saud.
Sources familiar with the utility's international contract operations say Mr. Khashoggi has met Bell executives several times since 1983, but the extent and purpose of Mr. Khashoggi's business dealings with Bell is not known. Other sources connected with Bell's 10-year-old contract in Saudi Arabia say Prince Mohammed is one of Bell's business agents in that country.
Bell Canada is the largest domestic telephone company and both it and Bell Canada International Inc. are subsidiaries of Montreal-based Bell Canada Enterprises Inc.
There is no evidence that indicates BCI or any other subsidiary of BCE has played a role in the Iranian arms deal, but Mr. Khashoggi and companies linked to Prince Mohammed are key figures in the scandal.
Two Canadian businessmen have been implicated in the scheme to divert profits from U.S. arms sales to Iran through a secret Swiss bank account to finance U.S.-backed contra rebels in Nicaragua. Donald Fraser, a former Toronto accountant, and Walter Ernest Miller, a businessman from Gormley, Ont., lent at least $40-million to Mr. Khashoggi's Triad America Corp. - the Salt Lake City company that helped finance the purchase of arms and spare parts for Iran in a secret White House operation aimed at gaining the release of U.S. hostages in Lebanon.
Mr. Khashoggi admitted last week to moving at least $10-million for an arms deal to Iran into a Swiss bank account established by Lt.-Col. Oliver North and Richard Secord, a retired U.S. Air Force major- general. Col. North was dismissed from the National Security Council staff by Mr. Reagan for his role in managing the deals.
The Vancouver Stock Exchange halted trading in shares of two Canadian companies with ties to Mr. Khashoggi: Skyhigh Resources Ltd., which appointed Mr. Khashoggi to its board of directors five months ago; and Tangent Oil & Gas Ltd. Trading in Tangent shares resumed on Wednesday.
Saudi involvement in the arms deals may extend beyond Mr. Khashoggi's empire to the private dealings of a member of the ruling House of Saud.
Prince Mohammed has been indirectly linked to the ever-widening web by the U.S. Federal Bureau of Investigation. Investigators asked Swiss authorities earlier this week to freeze nine more Swiss bank accounts, including one for a Panamanian-registered company headed by Mohammed Said Ayas - a Saudi Arabian who manages Prince Mohammed's business affairs, The New York Times reported.
The bulk of BCI's business is in Saudi Arabia where it is currently supervising the construction and management of a new national telephone network under a second five-year contract, which expires in December, 1987.
The current contract is worth $1.4-billion (U.S.), while the first, which expired in December, 1982, was worth $1.2-billion. Bell has not disclosed the terms of the confidential contracts and does not publicly discuss its business arrangements in Saudi Arabia.
However, documents filed with the U.S. Securities and Exchange Commission show that Bell pays its business agents in Saudi Arabia 8 per cent of its total payments. Documents obtained by The Globe and Mail indicate that Sheik Salem Binladen, head of a wealthy Saudi business family, was paid 1.6 per cent of the value of the first five-year contract, which would have resulted in payments of $78-million to Prince Mohammed as one of BCI's business agents.
In addition to its business in Saudi Arabia, BCI has had extensive contracts in Iraq and has an office in Baghdad.
However, a BCI spokesman denied rumors within Bell that the company recently landed a job in Iran. "To our knowledge, we have no business there and it would come as a complete surprise to us if we did," he said.