January 5, 2011--Saudi Arabia One

WikiLeaks is leaking much more than nasty stuff about what is going on behind the scenes in Iraq, Afghanistan, and Pakistan. Just the other day the New York Times reported about how U.S. diplomats intervene around the world to get non-competitive, sweetheart deals for American businesses. (Linked below.)

For example, anyone who thinks that the global competition between Boeing and Airbus for multi-billion dollar aircraft orders operates through the mechanisms of a free market needs to look at some of the cable traffic WikiLeaks obtained from State Department files.

That allegedly blind-handed market that my Republican friends revere, and in support of which they ironically cite Boeing's dominant worldwide role, is not as free of government intervention as they imagine. They especially need to look at how big government (in this case, ours) has its fingerprints all over these deals, acting as a virtual salesman in brokering mega-orders from the Saudi Arabians and many others.

A brief look at that deal provides both enlightenment and amusement because what the Saudi royal family demanded before placing orders for scores of Boeing's wide-bodies and Dreamliners reveals how things of this kind work in the "real" world and how over-reaching and preposterous everyone's behavior can be when big, big bucks are at stake.

Again, as we have learned, a great deal that is currently disturbing in the world is traceable to decisions and actions taken during the years of the recent Bush administration. In regard to international business, since there are laws on the books that do not allow Americans to bribe or make gifts to foreign companies or governmental officials, including to intermediaries who act as agents for those very businesses and governments, since other nations play by different rules--seeing the bribing of officials as culturally-acceptable--we have devised different ways to be competitive.

WikiLeaks has uncovered documents that show our ambassadorial corps doing what would be illegal if carried out by American businessmen. There is evidence that even the president of the United States at times gets directly involved. The king of Saudi Arabia, when negotiating with Boeing officials for the purchase of forty-three 747s for Saudi Arabian Airlines and another 13 for the Saudi royal fleet (!) read a letter from President Bush to Boeing executives that said Boeing planes were his "personal favorites."

So persuaded were the Saudi royals by Bush's recommendation that in return for placing the order they demanded that the jets designated for the royal family come equipped with exactly the same communications and defensive capabilities that America president have on Air Force One.

The king himself boldly wrote to Israel Hernandez, a senior Commerce Department official:

I am instructing you to speak to the president and all concerned authorities that [I] want to have all the technology that [my] friend, President Bush, [has] on Air Force One.

Mr. Hernandez responded:

God willing, he will make a decision that will please you very much.

God apparently was willing and King Abdullah got the high-tech toys he was seeking and his government placed the full order.

Having said this, we also live in a complicated world where for every billion dollars worth of orders it receives Boeing employs 11,000 workers and since the Saudi order was ultimately for about $4.0 billion worth of planes that translates into nearly 50,000 well-paying jobs. So what are we to do?