The first time I set eyes on the town of Abu Dhabi in 1974, I was not impressed. Small adobe houses sprawled haphazardly along the coastal lowlands and swamps, and a sharp wind off the Gulf filled the air with dust and sand. Sheep and goats wandered everywhere along the unpaved streets. A large fort, constructed by the British a century earlier, dominated this uninspiring scene. In the absence of a more suitable structure, the fort served as the seat of Abu Dhabi’s essentially nomadic government.
The ruler, Sheik bin Sultan al-Nahayan Zayed, was away, and his brother received us in a room furnished in traditional Bedouin fashion. We sat on cushions placed along the walls and drank small cups of strong Arab coffee poured from brass coffeepots with long curved spouts. Our host, who wore fine Arab robes, had a large dagger in his belt and was surrounded by others in similar garb. He was courteous, speaking through an interpreter, but gave the impression that he would be more comfortable on horseback in the desert than discussing finance with Wall Street bankers.
On my next visit two years later, oil revenues had already begun the transformation of Abu Dhabi. International-style skyscrapers were under construction, and an elaborate road system had replaced the dirt roads. Abu Dhabi had become a modern city, and the old fort seemed a relic of the distant past. As in Saudi Arabia, all of the oil revenue, by this time several billion dollars a year, flowed directly into Sheik Zayed’s treasury.
The Sheik was an impressive man with a strong, sharply chiseled face and piercing eyes. He spoke no English but was always in full command of the conversation. I was impressed that his home was quite modestly decorated and bore a striking resemblance to a Bedouin tent—not at all like the pretentious palaces so common by then in Saudi Arabia. It was Sheik Zayed’s custom to receive visitors late at night, after the heat of the day had dissipated. In addition to obligatory cups of coffee, he served us hot spiced camel’s milk in small glasses. I found it very sweet and rather pleasant, but not everyone who accompanied me agreed.
Like many Arab rulers, Zayed loved hunting. During one of my visits he told me he had just returned from Pakistan where his prized falcons—costing up to $100,000 each—had bagged a number of bustards. Bustards are a bit smaller than our wild turkeys and, like them, are crafty and difficult to hunt, so Zayed was quite pleased with his triumph. He asked if I had ever tasted bustard, and when I answered in the negative, he insisted I take a few with me. I explained we were in the middle of a long business trip and had no means of storing the bustards. He asked whom we would be seeing after we left Abu Dhabi, and when I told him Sheik Isa in Bahrain, he was delighted. Sheik Isa’s chef, he told me, was particularly proficient at preparing bustard.
So we carried the bustards with us to Bahrain, where Sheik Isa immediately dispatched them to his chef. Since Isa had arranged a dinner for us that evening and we were leaving early the next day for Yemen, we would not be able to eat the bustards in Bahrain. Instead, the next morning a picnic basket—actually a large hamper carried by two people—was delivered to the Chase plane. We loaded it on board and took off for Yemen. After landing there, we drove over the mountains and stopped for our picnic lunch of bustard and the other delectables Sheik Isa had stuffed in the hamper. Unfortunately, by then the bustards were cold and rather tough. Nevertheless, we enjoyed the experience of eating Central Asian bustards snared by Sheik Zayed’s falcons in Pakistan, cooked in Bahrain, and finally consumed by a carload of hungry Chase bankers on a hillside in Yemen!
Sheik Zayed may have preferred the desert and falcon hunting, but he was a good businessman who, for the most part, prudently managed his nation’s immense oil earnings. He did, however, become involved in the Bank of Credit and Commerce International (BCCI) scandal in the early 1990s. He provided more than $1 billion to shore up this institution during the 1980s, and a court settlement required the Sheik and a number of his close associates to provide another $1.8 billion to reimburse BCCI shareholders.
Before that unfortunate incident, Chase had worked closely with him through our new investment banking operation based in Bahrain and headed by Nemir Kirdar, an officer of Iraqi origins. Nemir was an excellent credit officer, and his knowledge of the area did much to promote our business throughout the Gulf. Prior to one meeting with the Sheik, Nemir suggested that I raise the issue of Chase involvement with the Abu Dhabi Investment Authority. At our meeting I asked the Sheik to “allow us the opportunity to serve you as an advisor to the Investment Authority.” Shortly thereafter, Nemir received the go-ahead for Chase to manage $200 million of the Authority’s assets.
Chase’s presence in the Persian Gulf grew dramatically during the 1970s, and we eventually had a staff of two hundred. One indication of the bank’s growing clout was a $350 million Chase-led financing for four industrial projects in Qatar, which was named the “1977 Deal of the Year” by Institutional Investor magazine.
SULTAN QABUS OF OMAN
O man, standing astride the Straits of Hormuz at the mouth of the Persian Gulf, through which a good part of the world’s supply of crude oil must pass, is the oldest and, in many ways, the most sophisticated nation on the Arabian peninsula. The Albusaid family gained control of Muscat and much of the hinterland in the mid–eighteenth century and extended their maritime empire as far south as Zanzibar, off the coast of East Africa. In the nineteenth century the British protected the ruling family from both the Ottoman Turks and marauding Bedouin tribes from the interior, and built a strong political and financial relationship with the Sultan.
The British withdrawal in the early 1970s had created an opportunity for the United States in Oman. However, when I arrived in Muscat for the first time in January 1974, I discovered the United States had no permanent diplomatic staff based there. The State Department seemed not to have grasped the growing economic and political importance of the region. I reported these facts to Henry Kissinger after my return. I told him that despite continuing British economic influence, the rulers were looking for a closer relationship with the United States. Henry was fully absorbed by the effort to work out a cease-fire between the Israelis and Egyptians at the time, but within a few months he appointed an ambassador to Oman and another to the UAE.
At the time of my arrival Sultan Qabus was actively involved in suppressing an insurrection in the western province of Dhofar, supported by the Soviet-sponsored government of South Yemen. The Shah of Iran, with American financial and military assistance, had provided the Sultan with three thousand soldiers to help in the campaign. We flew to Salalah, the capital of Dhofar, to meet the Sultan. Sharpshooters and antiaircraft were stationed in the hills overlooking the city, and we had to make a long, low approach over the water in order to avoid their fire. The Sultan was impressed that we had made such a dangerous journey in order to see him, and the meeting came off rather well.
Sultan Qabus had only recently taken power when I met him. With British help he had staged a successful coup in 1970 against his father, a rather disagreeable man who had kept his son under a form of house arrest for six years. Qabus had been educated at Sandhurst and was only thirty-four at the time I met him. He was a strikingly handsome man with an erect bearing, a full black beard, and dark piercing eyes, and he always wore an elegant turban. Over the ensuing years he and I developed a good relationship. While I was visiting the Sultan in January 1979, I received word that my brother Nelson had died of a heart attack. The Sultan offered to send me home in his plane, but since I had the Chase plane, I declined his gracious offer.
YEMEN AND A QAT PARTY
By the late 1970s one of the few areas in the Middle East I had not visited was Yemen, site of the biblical kingdom of Sheba and the place where the fabled “Frankincense Road” had its beginning. At the time of my 1977 visit the country was in the midst of a savage civil war pitting the traditional tribal groups of the north against the radical Marxist forces that dominated the southern portion of the country. North Yemen (the Yemen Arab Republic) was closely allied with Saudi Arabia, while the People’s D
emocratic Republic of Yemen was a Soviet client state. In fact, the republic had granted the Soviet navy access to the former British naval base at Aden, providing them with a strategic base that controlled access to both the Red Sea and the Horn of Africa.
North Yemen had little oil but considerable economic potential because hundreds of thousands of Yemenis worked in the Persian Gulf fields and sent home millions of dollars in remittances each month. The main reason for my visit was to ask Prime Minister Abdalaziz Abdal Ghani if Chase might establish a broader relationship with his government. On our arrival we learned that Abdal Ghani was with some friends at his home some twenty or so miles outside San’a. He left word that we were all invited to his home.
When we arrived, we found only men were in attendance. They were sitting on the floor on cushions and rugs listening to Arab music. Occasionally two men would get up and dance with each other. There were no chairs, tables, or other furniture. The Prime Minister didn’t interrupt the party but warmly incorporated us in it. The most unusual aspect of the party, however, was the refreshment provided. Alcohol is prohibited in most Islamic countries. In Yemen the stimulant of choice, so to speak, is qat, a rather mild narcotic said to produce hallucinogenic effects. The leaves of the plant are chewed and then formed into a little ball that is placed under the lower lip. If one chews enough of it over a long enough period of time, it will produce an enjoyable experience. We had joined a qat party. All the guests were chewing qat, and I was given a few leaves to chew as well, which I did. The leaves had little taste, and I experienced no hallucinations. Years of drinking martinis straight up had probably immunized me sufficiently! However, to my surprise, the Prime Minister did ask me to dance, a rather unusual way to get to know a potential client. It was a rather memorable afternoon!
Unfortunately, the Prime Minister came to a gruesome end only a few weeks after our meeting. A “special emissary” from South Yemen called on him with a gift from the president of South Yemen. The gift was actually a bomb, which the emissary triggered once he was inside the Prime Minister’s office. Both men were killed instantaneously.
IRAQ AND SADDAM HUSSEIN
Saddam Hussein emerged in the late twentieth century as one of the world’s most ruthless dictators, willing to subject his people to constant warfare and incredible privations in order to maintain his grip on power. I met him only once.
Hussein was a product of the Ba’ath Party, an extreme political faction organized in the 1940s by Syrian and Iraqi intellectuals who propounded a mixture of Socialism, anticolonialism, and Arab nationalism. Ba’athist rhetoric was both enormously popular with the mass of the Iraqi people and riddled with political and economic contradictions. The party seized power in 1958, killing King Faisal II by dragging him through the streets of Baghdad behind a car. That was the way they behaved then and, it would seem, are still behaving today.
Iraq’s new rulers immediately adopted a pro-Soviet foreign policy, nationalized the assets of foreign companies, and established a police state. Iraq became a radical voice within OPEC, arguing consistently for higher prices and strict limits on the shipment of oil to Western industrial nations. In many ways Iraq also emerged as Israel’s most implacable enemy in the Middle East. Saddam Hussein and his predecessors not only participated in all the Arab wars against Israel but also provided funding for Arafat’s PLO, sponsored terrorist groups around the world, and persecuted their own indigenous Jewish population.
While Chase did little direct business with Iraq, we maintained a modest correspondent relationship with their central bank, the Bank Rafidian, for many years. When the Iraqis severed diplomatic relations with the United States after the 1967 war, this connection provided one of the few links between the two countries. Henry Kissinger, searching for the means to include the Iraqis in a comprehensive Middle Eastern peace process, asked if I would try to establish contact with the Iraqi leadership during one of my trips to the region.
I agreed to do this and through the president of the Bank Rafidian I obtained a visa allowing me to enter Baghdad to discuss banking matters. I was also able to secure an appointment with Foreign Minister Sadoom Hammadi. Hammadi was a graduate of the University of Wisconsin and spoke fluent English, but his manner was hostile from the moment I entered his office. It became even more pronounced when I told him I had come at Henry Kissinger’s request to deliver a message to Saddam Hussein, who was widely regarded as the strongman of Iraqi politics.
Hammadi said, “Totally impossible. He couldn’t possibly receive you.” I replied, “I will be in Baghdad for twenty-four hours, and I am available to meet with him at any time of the day or night.” Hammadi was insistent. “A meeting is impossible, so give me the message.” “I’m sorry, Mr. Minister,” I said, “but my message is for the ears of Saddam Hussein alone, and I am not authorized to give it to anyone else.” When Hammadi insisted a meeting would not occur, I said, “I am going to be here until midday tomorrow and would appreciate your advising Saddam Hussein that I have a message from the Secretary of State and that I would be happy to see him if he wishes to receive me.”
That evening as I was about to leave for a dinner hosted by the Bank Rafidian, I received a message that Hussein would receive me at nine o’clock that evening in his office. I was instructed to come alone.
I was taken by car to the National Council building on the banks of the Tigris River. The building radiated an aura of foreboding, which was not dispelled by a long walk down an endless series of darkened corridors past armed sentries. When I finally arrived at his office, a small, bare, windowless room deep in the bowels of the building, Hussein greeted me courteously. He was a man of average height with a sturdy build. His face was stern and unsmiling, and even then he wore his trademark mustache.
We spoke for more than an hour through an interpreter. Although there were only the three of us present in the room, a few days later an almost verbatim account of the conversation appeared in the Beirut newspaper an Nahar. For whatever reason, Saddam wanted the substance of our conversation made public.
I explained that Henry Kissinger felt it was contrary to the best interests of both Iraq and the United States that no means of communication existed and that the Secretary wanted to find a way to establish a dialogue. I asked how to accomplish this.
Pointing his finger at the door by which I had entered the room, Saddam said, “The door might be opened a crack if two conditions are met.” First, the United States had to stop supplying arms to Israel that might be used against Iraq and begin to play a “decisive role in securing the rights of the Palestinian people.” Second, the United States must stop selling arms to Iran or at least make the sales conditional on Iran’s promise not to use those arms against “Iraq or any other Arab nation.” Saddam insisted that as long as the Shah continued to arm the rebelling Iraqi Kurds, he would not be interested in resuming diplomatic relations with the United States.
I reported this to Henry Kissinger upon my return to the United States. Saddam’s first condition regarding Israel was, of course, one that the United States was never going to meet. However, within a few months a rapprochement between the Iraqis and Iranians did lead to the end of military assistance to the Kurds and, within a few years, a dramatic improvement in U.S.-Iraqi relations.
Saddam seemed an essentially humorless man who was adamant but not hostile to me in the presentation of his views. Sitting opposite him that night I had no reason to believe that within a relatively few years he would become known to all as the “Butcher of Baghdad,” as ruthless and contemptible a leader as the world had ever known.
The historical continuity of the Saudis and the Kuwaitis, the discipline and financial acumen of the emirate sheiks, the sinister intelligence of Saddam Hussein, the tragedy of Lebanon and the Palestinian people, the strength and courage of the Israelis, the honor and heroism of King Hussein and Anwar Sadat—all these images come to mind when I consider my experiences in this confounding and unpredictable region of the worl
d. How “unpredictable” I would learn as I became embroiled in the effort to find a refuge for the exiled Shah of Iran.
*On another occasion I attempted to bring a copy of my brother Nelson’s art catalogue to a friend in Saudi Arabia. A customs official confiscated the book because it included the image of a female nude by Henri Matisse. I had to ask the Saudi finance minister to intercede in order to get the book released.
CHAPTER 21
BUSINESS TURBULENCE
In October 1972, with Bill Butcher in place as Chase’s chief operating officer, I felt confident for the first time since becoming CEO three years earlier that my effort to transform the bank into a stronger, more innovative and competitive institution would now be pursued purposefully and aggressively. The top leadership was now in place to sustain Chase’s drive toward global success.
Neither Bill nor I anticipated the significant bumps in the road we would encounter. As the decade wore on, well before our reforms and strategies could be fully implemented, Chase and I were subjected to a series of harsh—and occasionally savage—public attacks. Our management competence, investment policy, and strategic direction were all openly questioned. Throughout those painful days I never lost confidence in my vision for Chase as a great international financial institution or in the quality of the corps of capable officers we were assembling. I was committed to seeing the bank through the rough patches that it—and I—would inevitably encounter.
PROBLEMS FOR THE BANK AND ITS CHAIRMAN
A quality that has served the Rockefeller family well over the generations has been a thick skin. While on the one hand we are mindful that we have been blessed with great wealth and abundant opportunity, on the other we recognize that the privileges we have been accorded often cause others to look upon us with suspicion and resentment. The actions of a Rockefeller—particularly a “public” Rockefeller—like those of a movie star or sports hero, are analyzed microscopically, and when we fail, critics duly note it. Thus, ever since the 1880s, when the muckraking journalists attacked Grandfather and Standard Oil, Rockefellers, especially “public” Rockefellers, have had to develop thick protective skins. And so it was that when I opened the New York Times business section on the morning of Sunday, February 1, 1976, I was fully prepared to absorb yet another attack. But my heart sank as I read the page-one headline: “The Chase and David Rockefeller: Problems at the Bank and for Its Chairman.” I only needed to scan the first paragraph to understand the article’s main thrust: “The Chase Manhattan Bank has emerged in the public spotlight as a symbol of the nation’s troubled banking system at one of its most difficult moments. In the process, the job security of David Rockefeller, its well-known chairman and chief executive officer, has come under question.”
Memoirs Page 39