Words: Gentleman's Journal
Adnan Khashoggi was the charismatic arms fixer clients, classmates and even the US government could rely on. But unlike his rivals, his deals were brokered not in backstreet dens but at parties drowning in Champagne, caviar and Hollywood A-listers. So just how did the world’s richest man lose his fortune?
I first heard of Adnan Khashoggi at a gathering in a golf club outside Marbella. The guests were the owners of mansions dotting the hills on the outskirts of town. If you looked down the valley past the fairways and greens, you could see the tax haven of Gibraltar just out to sea. I was chatting to a London hedge fund manager who, realising I didn’t work in finance, changed the topic to the club’s previous owner.
‘You know all of this used to belong to Khashoggi?’ he said. ‘This whole estate used to be his private hunting ground. This was his lodge.’ I’d wondered what relation the taxidermy and animal skulls plastered on the walls bore to golf, but I had no idea who the man was. Having seen the size of the estate spread across the face of two mountains, I was intrigued to find out.
One of Khashaggi’s many homes
Today, he is something of a forgotten legend, but in the Eighties he was at the very centre of the international jet set. Although never convicted of any crime, he made his $4bn fortune from brokering deals between arms manufacturers, governments and private clients. He was considered the richest man in the world and became famous for his life of extravagance and excess.
The media labelled him the era’s most prolific weapon dealer before he was implicated in a scandal that destroyed his business and almost brought down the US government in the process.
The hedge fund manager was surprised I’d never heard of him and told me that Khashoggi’s sister was Dodi Al Fayed’s mother, thinking it’d give some idea of who he was talking about. ‘The Spanish government seized the estate from him and sold it on, but the basement is completely untouched since he lived here. It’s like a time warp. The parties he had down there were legendary.’
Khashoggi on the cover of The Washington Post in 1984
It was enough to spark my curiosity and over the course of the last few years I have spoken to people who knew him or have watched his movements with intense interest. And, I eventually found my way into that forgotten basement.
Some months after the meeting at the golf club I spoke to Ronald Kessler, Khashoggi’s biographer. He attended some of the soirées at the lodge when Khashoggi was at the height of his fame. His 50th birthday saw the party to end them all.
‘One of his brothers gave him a lion cub,’ he says. ‘Shirley Bassey belted out, “Happy birthday dear Adnan.”’ There were Hollywood stars, including Brooke Shields and Sean Connery. Several refrigerator trucks were parked outside solely to cool the champagne. ‘The birthday cake was a work of art – literally,’ Kessler continues. ‘On top was a gold crown measuring 3ft across and made of sugar. Khashoggi’s chief chef had flown to the Louvre to study Louis XIV’s coronation crown, then returned with his plan for the cake.’ Balloons were dropped from the ceiling adorned with the slogan ‘World’s Greatest’. ‘Anyone who was there knew they’d reached the pinnacle of high society.’
Although it may all sound like a trumped-up Ferrero Rocher advert, in the rarefied world of the Eighties, business magnate reputation was everything. If you needed an arms deal funded or a shopping mall built, a healthy bottom line or triple-A credit rating were by the by. Far better to throw a $6m birthday party and sweep your creditors away to Marbella on one of your three private jets. Risky deals were made and dubious loans granted over little more than a hunch and an expensive dinner. No one knew this better than Adnan Khashoggi.
With his second wife, Lamia, in Monaco in 2006
According to folklore, the young Khashoggi brokered his first business deal when still at high school. He arranged a meeting between the fathers of two classmates, one a hotel manager, the other an oil magnate, charging $1,000 for the privilege. A few years later he quit university in the US and used the money his father gave him for his studies to broker a deal between US and Saudi logistics companies and received $50,000 in commission. With this he formed his company Triad Holdings, which he used for legitimate business interests throughout his career. It was the front companies in Switzerland and Liechtenstein he used for the other deals.
Kessler told me that, like all great networkers, he genuinely liked people and people genuinely liked him. Many years ago Donald Trump said, ‘Khashoggi understood the art of bringing people together and putting together a deal better than almost anyone – all the bullshitting part, of talk and entertainment.’
Trump, like so many business tycoons of the era, seemed to have inherited some of Khashoggi’s panache for making deals and some of his taste for garish decadence. He also inherited his multi-million dollar superyacht, Nabila. Trump bought it from the Sultan of Brunei who seized it from Khashoggi when he defaulted on a loan for which the boat was security.
The Nabila, named after Khashoggi’s daughter, was the jewel in the crown of his billionaire lifestyle. At a total cost of around $80m, it had a 12-seat movie theatre, two saunas, a swimming pool, a discothèque, a jacuzzi, a billiard room and 11 guest rooms all clad in white chamois leather and spread over five decks. The master suite had four rooms and a bathroom with a solid gold sink. The glass was bulletproof, but the ship also had an on-board ‘hospital’ with the slightly macabre addition of a morgue, if all else failed. In the Bond film Never Say Never Again, the ship was used as the nerve centre for an international criminal mastermind.
By the mid-Eighties, Khashoggi’s property empire included 12 homes spread across the world: Cannes, Paris, Madrid, London, and, of course, Marbella. In New York he bought 16 flats and knocked them together into one vast apartment. He owned 100 limousines, three private jets and boasted a South Korean bodyguard trained in martial arts. He also featured on the cover of Time magazine and TV shows such as Lifestyles of the Rich and Famous, which typified the image of the Eighties tycoon.
The show was hosted by Robin Leach, who joined Khashoggi at his homes, on his private jets and his superyachts. ‘He was the Gatsby of his time,’ he says. ‘At his parties it was unlimited champagne, unlimited caviar, fancy dresses, beautiful jewels and a slew of Hollywood celebrities flown in on private jets.’
Inside Khashoggi’s private jet
As Mr Leach had met so many of the Eighties wealthiest, I asked him what set Khashoggi apart? ‘The ability to fly to any continent at a minute’s notice, the houses in all the swanky places including his Mount Kenya Safari Club estate, the New York apartment – all fabulously decorated. No expense spared.’
His comments on Khashoggi’s character sounded very familiar. ‘Warm, friendly, sociable, a winning smile that could charm anybody, even his detractors. The time spent in his company was always fun and enjoyable except once when his bodyguards wanted me to throw a game of table tennis so he won. You would never have guessed he was involved in arms deals.’
The fact that Khashoggi worked so hard to cultivate a lifestyle of extravagance might suggest he grew up in the orbit of exceptional wealth, but he didn’t. He was from a relatively modest, middle-class family. His father was a physician, distinguished by the fact he was family doctor to King Abdulaziz of the House of Saud. Abdulaziz was the ruler who unified Arabia before he oversaw the discovery of petroleum and its mass export to the west.
‘Carnegie began manufacturing steel when there was a great need for it for railroads,’ Kessler suggests. ‘One could argue that Khashoggi fell into a similarly fortunate situation.’ He came along at just the same time as Saudi Arabia’s billions of petrodollars and was canny enough to identify it along with their need for arms. All that was left was to bring together the American arms manufacturers and his childhood connections. He put two and two together and made billions over the course of the Sixties and Seventies.
Not that Khashoggi himself saw what he did as arms dealing. When an interviewer, perplexed at how it could be called anything but, asked what it was he was up to Khashoggi replied simply, ‘Marketing’.
Khasshoggi on the cover in 1987
Indeed, the director of Lockheed Martin described Khashoggi as a one-man marketing department, and the company rewarded him in kind with over $100m in the time he worked with them. The main customer was the Saudi government, but he helped smaller clients too. He reportedly provided David Stirling, who founded the modern SAS, with arms for a covert operation in Yemen in 1963 and countless others we may never know about.
While Khashoggi’s public image and business interests entered the stratosphere, his personal life started to become rather more tumultuous. His first marriage in 1961 was to English socialite Sandra Daly, who was half his age, double his height and grew up on a Leicester council estate. She subsequently converted to Islam and took the name Soraya before she became pregnant with Khashoggi’s children. It later transpired the Conservative MP Jonathan Aitken had fathered at least one of them.
‘Khashoggi was 5ft 4in tall and weighed about 200lbs, but he somehow seemed robust more than flabby,’ Kessler told me. ‘He had a deep gaze with a charming mystery to it.’ His diminutive figure didn’t appear to be an issue when it came to women.
Khashoggi was no stranger to infidelities himself. In 2006 he gave an interview freely admitting his penchant for prostitutes and claimed he’d hired Heather Mills, Paul McCartney’s ex-wife, as a call girl for one of his parties at the Marbella hunting lodge. Despite this, when I asked Kessler if he knew what happened at the basement parties I’d been told about he declined to comment.
Khashoggi’s supernova lifestyle reached fever pitch in the mid-Eighties. Some estimates suggest he was spending around $300,000 a day when the scandal that would bring about his downfall began to emerge. The Iran Contra Affair involved a secret sale of weapons by the US government to Iran when it was supposed to be under an arms embargo. The Reagan administration initiated the sale as part of a complex deal that led Iran to release US hostages and fund the Contra rebellion in Nicaragua on behalf of the US. When the scandal hit in 1987, Reagan made a grovelling public apology for misleading the American public (‘There’s nothing I can say that will make the situation right,’ he explained) amid calls for his impeachment and pressure from Congress. And who was it that brokered the arms deal? One Adnan Khashoggi.
In 1988, Khashoggi was arrested in Switzerland accused of concealing funds. He was swiftly extradited to the US on charges of racketeering and fraud, but later cleared by a Federal jury. The damage to his reputation was done though and the court cases came thick and fast after that. He began defaulting on debts and in the early Nineties his empire and obscene lifestyle quickly unravelled. (In 1998, for example, he settled one £10m gambling bill racked up during a three-month spree in 1986 at the Ritz Casino in London.)
Khashoggi with his second wife, Lamia
Now 80, Adnan Khashoggi is still with us. Word has it he ekes out a modest life in Monaco with just $400m to his name. He was implicated in a money laundering scam in 2011 and was allegedly consulted by the US government on the 2003 Iraq invasion, but his profile has all but evaporated. Those who played a role in his life – ex-house maids, ex-wives, those looking to recoup money – tell their stories in the news far more often than Khashoggi himself.
The long line of tales of court cases and companies trying to recoup money remain. One creditor tried to recoup an 11-year-old debt, plus interest, through the Saudi courts, but lost because interest is banned under Sharia. It seems Khashoggi may have retained some of his luck at least.
Years after the night at the golf club, the idea of the untouched basement, the time capsule of Khashoggi’s fame, still hadn’t left me. I got in touch with the owners of the estate in Marbella, who agreed to show me around.
I was led down a staircase that spiralled deep into a hall of mirrors. Ahead was a stage and a dance floor surrounded by velvet sofas, and I was filled with a sense of awe and ghoulishness as I began to realise just how untouched the place really was. The DJ booth, for instance, still had his record collection strewn across the shelves and turntables, while small rooms, into which guests could disappear to find privacy, gathered layers of dust. Past the wine cellar and old hunting trophies was a firing range where human shaped targets still hung at the far end.
But, there my exploration was forced to an abrupt halt by a padded door, shut tight with a huge lever. My hosts told me they had no idea what was back there, no one had ever opened it. Beyond the basement’s veneer of decadence, sociability and nods to great violence was something unknowable, something perhaps only Khashoggi had ever really known. Much of the mystery of Adnan Khashoggi remains, perhaps never to be explained.
This article was written by Henry Wilkins for our March/April issue. Subscribe to the magazine here.
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