By WILLIAM D. HARTUNG

William D. Hartung is a Senior Fellow at the World Policy Institute at the New School for Social Research in New York City and the author of "And Weapons for All" (Harper Collins, 1995). The author would like to thank his colleague Jennifer Washburn for providing research assistance in the preparation of this article. (19K)

On November 13, 1995, a bomb exploded at the headquarters of the Saudi Arabian National Guard and an adjacent building that housed a U.S. military training mission. The bomb killed five Americans and wounded thirty more. President Clinton tried to paint the bombing as just another senseless act of terrorism perpetrated by armed Islamic extremists. But the target was chosen much more carefully than that.

The Saudi National Guard is a 55,000-man military force whose main job is to protect the Saudi monarchy from its own people. A January 1996 article in Jane's Defence Weekly describes the Saudi Arabian National Guard as "a kind of Praetorian Guard for the House of Saud, the royal family's defense of last resort against internal opposition. "

The Saudi National Guard uses arms from the United States. That is well known. But few Americans are aware that the U.S. government has subcontracted the training of the Saudi National Guard to roughly 750 retired U.S. military and intelligence personnel employed by the Vinnell Corporation of Fairfax, Virginia.

In this context, the November bombing was certainly brutal, but it was far from senseless. As one retired American military officer familiar with Vinnell's operations put it, "I don't think it was an accident that it was that office that got bombed. If you wanted to make a political statement about the Saudi regime, you'd single out the National Guard, and if you wanted to make a statement about American involvement, you'd pick the only American contractor involved in training the guard: Vinnell."

The story of this obscure American company shows how the U.S. government, even after Ollie North and Iran-contra, still relies on unaccountable private companies to do its dirty work around the world, short-circuiting democracy at home and abroad in the process. If anyone believed that the era of covert policymaking by the United States had ended, Vinnell' s role in Saudi Arabia proves otherwise.

As one of Vinnell's former presidents says, the company didn't start out as a "spook outfit." Founded in 1931 as a small Los Angeles-area construction company, the firm profited from contracts for the L.A. freeway system. Some of Vinnell's best-known projects are decidedly civilian in character, including work on the Grand Coulee Dam and the construction of L.A.'s Dodger Stadium. But by the end of World War II, the company was already dabbling in military and intelligence work. Vinnell's first overseas contract involved shipping supplies to Chinese Nationalist Chiang Kai-shek as part of his futile attempt to beat back the revolutionary forces of Mao Tse-tung. The company soon embarked on a booming military construction business in Asia, building military airfields in Okinawa, Taiwan, Thailand, South Vietnam, and Pakistan.

Vinnell's Asian adventures marked its emergence as a global company more than willing to do a little intelligence work on the side. In his memoir, Ropes of Sand, former CIA operative Wilbur Crane Eveland describes how he used his Vinnell connection as a cover during his tours of duty in Africa and the Middle East in the early 1960s, noting that company founder Albert Vinnell expressed his willingness to help the agency any way he could (for a fee, of course). Eveland returned the favor by negotiating contracts for Vinnell to do construction services on oil fields in Iran and Libya, bribing the appropriate officials along the way.

Vinnell's big break in the military/intelligence field came during the U.S. invasion of Vietnam, when the company won hundreds of millions of dollars worth of business doing everything from building military bases to repairing armored personnel carriers to running military warehouses. At the peak of its involvement, Vinnell had 5,000 employees in Vietnam, but not all of them were engaged in straightforward military operations. Several retired Army and Marine officers familiar with Vinnell's work in Vietnam have indicated that the company ran several "black" (secret) programs.

In a March 1975 interview with The Village Voice, a Pentagon official described Vinnell as "our own little mercenary army in Vietnam" and asserted that "we used them to do things we either didn't have the manpower to do ourselves, or because of legal problems." The official indicated that one of Vinneli's jobs was as "rear security forces, " assigned to "clean up" U.S. military bases in Vietnam during the U.S. withdrawal: "How they 'cleaned up' was pretty much up to them . . . . If we figured an area was certain to be overrun by the VC [Viet Cong] . . . they were to demolish everything and anything."

Vinnell nearly demolished its own financial viability in Vietnam. Vinnell posted losses every year from 1970 through 1974, and in January 1975 the company filed a reorganization plan with the California Department of Corporations in which it proposed to sell voting control in the company to a Lebanese investor for the modest sum of $500,000. With this dismal financial picture looming in the background, the firm' s February 1975 contract for $77 million to train the Saudi National Guard brought Vinnell back from the brink of bankruptcy and kept it from being sold.

The Vinnell-Saudi training deal drew considerable fire, both in the press and on Capitol Hill.

On February 9, 1975, Peter Arnett filed a piece for the Associated Press that raised questions about the propriety of a private U.S. company serving as a hired protection service for an undemocratic regime. When Arnett asked one of Vinnell's men in Riyadh whether he viewed himself as a mercenary, the question drew a classic bureaucratic response: "We are not mercenaries because we are not pulling the triggers. We train people to pull the triggers. Maybe that makes us executive mercenaries."

This setup was a bit too blatant even for the more hawkish members of Congress. Senator Henry Jackson of Washington and Armed Services committee chairman John Stennis of Mississippi demanded hearings on the contract, which Jackson purported to find "completely baffling. " Meanwhile, a reform-minded young Congressman from Wisconsin named Les Aspin aired charges that the $77 million Saudi contract may have been greased with a $4.5 million payment to a middleman. The hearings were held, but the contract to train the Saudi National Guard was allowed to stand.

By 1979, when a rebellion rocked the Saudi regime and opposition forces occupied the Grand Mosque at Mecca, Vinnell's "executive mercenaries" were called out from behind the scenes. The Washington Post reported at the time that in the final stages of storming the Mosque, the Saudi princes who were running the military operation relied on "advice from the large U.S. military training mission" (including Vinnell contract employees) and were "in frequent telephone contact with U. S. officials." Counterspy magazine further reported that when the initial National Guard assault failed, Vinnell personnel were brought to Mecca to "provide the tactical support needed to capture the Mosque. "

During the 1980s, things returned to "normal" in Saudi Arabia, with strict controls on freedom of expression of the rights of women, public beheadings of common criminals, and the maintenance of a fiercely anti-communist, pro-U.S. foreign policy. These same practices continue to this day.

Vinnell's role as the regime's principal security "prop" was barely discussed in the U.S. media, but the company did figure indirectly in the biggest intelligence scandal of the decade, Iran-contra. Lieutenant Colonel Richard Gadd, who went on to become the chief operations officer for Ollie North and Richard Secord's private weapons air-drop service for the Contras, was hired by Vinnell for his first job out of the Air Force. According to Steven Emerson's 1988 book, Secret Warriors, Gadd's work at Vinnell involved setting up a private, "black" air- transport service called Sumairco, which was to be dedicated solely to secret U.S. Army operations. Gadd left Vinnell after a few months, taking Sumairco with him. He also used his stopover at Vinnell to get started on two other "special services" companies, American National Management and Eagle Aviation Services, which were secretly involved in the 1983 U.S. invasion of Grenada and other U.S. military operations.

That someone like Gadd would use Vinnell as his transition from serving in the armed forces to joining the nether world of private companies involved in covert operations on behalf of the U.S. government is not surprising. Although Vinnell is one of hundreds of companies that do work for the CIA and military intelligence agencies, its strong ties to Saudi Arabia and its experience in military training and logistics make it a central player in this still burgeoning field.

Today, the biggest question regarding Vinnell's ongoing operations is the same one that was posed twenty years ago: Why is a U.S. company using retired U.S. military and intelligence personnel to defend a corrupt monarchy in Saudi Arabia? What's in it for the monarchy is obvious: protection from rebels and democrats who might want to change the kingdom's form of government. On this front, Vinnell must be busier than ever. Human Rights Watch reported that in 1994, "Saudi Arabia witnessed the largest roundup in recent history of opposition activists and a new low in the dismal human-rights record of the Kingdom." The organization's report for 1995 cited "further deterioration in human- rights observance," including a harsh crackdown on peaceful Islamist organizations. Political parties and demonstrations are outlawed, there is no independent free press, and there has been a systematic crackdown on peaceful Islamic dissenters.

This January, Saudi officials tried to get Britain to deport Mohammed al-Mas'ari. His London-based Committee for the Defense of Legitimate Rights has been faxing reports about the Riyadh government to contacts within Saudi Arabia. The none-too-subtle message conveyed to Conservative Prime Minister John Major's government was that if Mas'ari was allowed to continue operating, Britain's future arms sales and other commercial contracts with Saudi Arabia might suffer. "The Saudi regime is a mafia that has enormous wealth under its control and doesn't want to give it up," Mas'ari told The New York Times. "We want to have an elected, accountable government with a real rule of law and an independent judiciary."

Supporters of Mas'ari's organization operating within Saudi Arabia do not fare well. On August 11, 1995, the Saudi regime beheaded Abdalla al-Hudhaif, who was convicted by a secret tribunal of offenses ranging from firearms possession to distributing leaflets criticizing the government to allegedly throwing acid at a security officer. Human Rights Watch notes that this last allegation against Hudhaif is the only violent act alleged against the peaceful Islamist opposition in Saudi Arabia during the government's continuing crackdown on their activities. Since peaceful means of expressing disagreement with the current Saudi ruling circle are systematically blocked, violent outbursts like the bombing of the Saudi National Guard headquarters are more likely to occur. When they do, Saudi Arabia's Vinnell-trained internal security forces will be on hand to quash them.

As for Vinnell and its employees, their main interest in Saudi Arabia is undoubtedly the money. A retired Marine officer who did five years with Vinnell in Saudi Arabia reports that he was able to save up several hundred thousand dollars to buy a retirement home in cash. An official familiar with the work of another U.S. firm that recently got a contract to train the Saudi Navy says that employees at the firm "feel like they've died and gone to heaven, because the Saudis will never run out of money." But the myth of Saudi Arabia as a bottomless source of cash has worn thin lately. Billions of dollars in weapons purchases from the United States plus the cost of the 1991 Persian Gulf War have driven the Saudi budget into deficit for the first time ever. But that hasn't affected Vinell yet; the Saudis recently renewed its contract through 1998.

If anything, Vinnell's fortunes may improve in the short term, now that King Fahd has stepped aside for health reasons, leaving the reins of government in the hands of his brother, Crown Prince Abdullah ibn Abdulaziz, who also happens to run the National Guard. Jane's Defence Weekly has speculated that the guard may be built up even faster now as a way of enhancing Crown Prince Abdullah's personal power base, which will no doubt mean bigger contracts for Vinnell as well.

But is what's good for the Saudi monarchy and Vinnell good for the people of the United States or Saudi Arabia? The short answer is no, but the U.S. government has exerted considerable energy trying to persuade us that we're all in this mess together and that Americans have no choice but to support the Saudi monarchy.

It's true that the Saudi regime provides a wide array of economic and political services to the U.S. government and U.S. corporations, but these services have little to do with promoting either democracy or prosperity for the citizens of the United States or Saudi Arabia. The Saudis provide access to their oil resources to U.S. firms on extremely favorable terms, and adjust their pricing policies within OPEC in ways that support U.S. interests. For years, a significant portion of Saudi "petrodollar" revenues have been invested in U.S. government bonds, helping to ease the burden of the growing U.S. budget deficit. (In exchange, U.S. taxpayers have been asked to spend hundreds of billions of dollars to build a U.S. military force that can get to the Middle East on short notice to defend regimes such as the Saudi monarchy from threats from without or within.)

In the realm of secret wheeling and dealing, the Saudis have not shied from putting up money for joint covert operations with the United States, from arming the Afghan rebels to providing funds to Oliver North's Iran-contra "enterprise." According to The Washington Post, the most recent joint secret initiative was to provide more than $300 million for covert weapons supplies to the Bosnian government during the period of the U.N. embargo on that nation.

Saudi Arabia will be approached about providing funds to train Bosnian Muslim forces as part of the current NATO intervention in Bosnia. A source with contacts within the Vinnell Corporation has indicated that the State Department encouraged Vinnell to bid on the contract to train the Bosnian forces. Vinnell's parent company, BDM, which bought the firm in 1993 to expand its market niche in military training services, already has a contract to provide 500 translators for NATO peacekeeping forces in Bosnia.

The policy of using Vinnell trainers and U.S. arms suppliers to keep the Saudi monarchy in power can't go on forever. For one thing, the money is running out. The lavish social programs that have been used to buy off dissent are being cut sharply to make room for continuing expenditures on advanced American, French, and British weaponry. A number of security analysts are beginning to speak of Saudi Arabia as the "next Iran"--a top-heavy, corrupt regime that is in danger of being overthrown by its own people if it fails to implement major reforms soon.

The people of Saudi Arabia will eventually demand some say in how their government is run. Whether that change comes about through a revolution led by Islamic fundamentalists or an evolution toward democracy will depend in significant part on whether U.S. policy continues to back the monarchy to the hilt.