WORLD

Of guns and a guru

‘There is nothing sweeter than revenge’

MARCI McDONALD March 27 1989
WORLD

Of guns and a guru

‘There is nothing sweeter than revenge’

MARCI McDONALD March 27 1989

Of guns and a guru

WORLD

THE UNITED STATES

‘There is nothing sweeter than revenge’

The plot line might have been plucked from an airport thriller rack. But there was nothing fictional about it. On Sept. 2, 1985, Washington lawyer-lobbyist Steven Martindale received a phone call from Adnan Khashoggi, the flamboyant Saudi Arabian arms dealer, who was in Paris at the time. Khashoggi asked to meet Martindale’s associate, a globe-trotting Indian guru named Shri Chandra Swamiji Maharaj, in an effort to repair his frayed financial relationship with one of the swami’s acolytes, the billionaire Sultan of Brunei.

At the swami’s insistence, Martindale arranged the meeting for the following day. The haste forced Khashoggi—whose personal DC-8 jetliner was on loan to President Mobutu Sese Seko of Zaire—to take the Air France Concorde to New York City, the first time he had flown by commercial airliner in 15 years. Then, a private chartered jet and limousine carried him to his final destination: a cluster of expensive homes amid the vacant fields of Gormley, Ont., half an hour’s drive north of Toronto. There, behind stout iron gates, the white-robed swami greeted Khashoggi in a sprawling mansion owned by his follower and longtime business manager, Richmond Hill property developer Walter

Ernest (Ernie) Miller—one of two

shadowy Canadians later named as secret financiers behind covert U.S. arms shipments to Iran. Within three days of that four-hour meeting, the holy man had moved into Khashoggi’s lavish Olympic Towers suite in New York City and, within the next four months, Miller had funnelled at least $40 million to Khashoggi from his accounts in the Caribbean’s Cayman Islands.

Khashoggi’s extraordinary pilgrimage ultimately implicated Miller and his Cayman Islands-based Canadian accountant, Donald Fraser, in the 1986 Iran-contra scandal that rocked Ronald Reagan’s presidency. But, as the trial of former National Security Council aide Lt.-Col. Oliver North enters its fifth week in a Washington courthouse—shedding little new light on the affair’s lingering questions— the details of Khashoggi’s trip have emerged from an unexpected source. That source is Martindale, the 45-year-old celebrity lawyer who made the front pages 10 years ago, dancing with Margaret Trudeau while acting as the agent for her memoir, Beyond Reason.

Now, two years after a personal bankruptcy, Martindale has written his own book, By Hook or by Crook, which is scheduled for publication this week in Britain. In it, he chronicles how, as the swami’s Washington contact from 1984 to

1986, he found himself caught up in a series of international intrigues which netted the guru a vast fortune. Chandra Swami, as he is known in India—where police arrested him on charges of currency fraud in October, 1987—reportedly collected millions of dollars as a self-styled “fixer,” and as a one-man jet-set introduction service, from such assorted figures as Zaire’s Mobutu, the Sultan of Brunei and the deposed first lady of the Philippines, Imelda Marcos. In his book, Martindale brands the swami a “con artist,” while claiming that he himself never made a cent from the guru, beyond expenses, despite promises to the contrary. And Martindale insists that he did not learn about the Iranian arms deal until the scandal broke in November, 1986. “It was like being the doorman at a whorehouse,” he told Maclean ’s, “and not knowing what was going on inside.”

But Martindale’s most significant revelation may be his portrayal of Miller as the swami’s chief bagman, a tough-talking, mantra-chanting wheeler-dealer who managed the guru’s mysterious millions through a network of off-

shore bank accounts. Miller jetted around the world with his guru in a private Falcon-50 registered to one of Miller’s companies in the Cayman Islands, alighting in such exotic places as the Indian Ocean island of Bali and Brunei, the sultan’s enclave in Borneo. Through a spokesman in Toronto last week, Miller declined to speak to Maclean’s about Martindale’s charges.

Martindale depicts Miller as constantly juggling the swami’s money with commodities brokers by telephone while the swami—accompanied by Miller—hobnobbed with such rich and powerful people as Jordan’s King Hussein, Prince Hans Adam of Liechtenstein and film star Elizabeth Taylor. In August, 1985, Miller flew with Swamiji, as he called his

guru, to Monaco, where Martindale had arranged a meeting between the swami and Prince Rainier. And the book describes a scene in the lobby of the principality’s luxurious Hôtel de Paris that may provide a telling glimpse into Chandra Swamiji’s business operation. When officials at the hotel’s check-out counter told Miller that his credit card had been rejected to pay the group’s substantial bill, an altercation ensued. The swami sent his trusted aide, Kailish Nath Agarwal, better known as Mamaji, to settle the argument. “The little man pushed his way through the crowd,” Martindale writes, “opened his briefcase on the counter, and to the astonishment of all, solemnly counted out $12,000 in cash from an enormous stack of bills.”

Another glimpse into Chandra Swamiji’s methods came a year later, when he invited Martindale to Hawaii, where he was visiting deposed Philippines dictator Ferdinand Marcos. Martindale had initially arranged for the pair to meet in May, 1984, when Marcos was still in power, but severely ill. And he said that, after Marcos suddenly recovered following the swami’s visit, he and his family became convinced that the guru had saved his life. Arriving at the exiled leader’s villa in Honolulu, Martindale said that Marcos greeted the swami “effusively” and ushered him into his bedroom for a two-hour private chat. Later, as Martindale and the swami prepared to leave Hawaii, the guru dictated a thank-you note to Marcos’s wife. In it, Martindale says, he noted the number of the Hong Kong bank account where she was to wire $1.4 million. “I asked, ‘What for?’ ” Martindale writes. “Shaking with laughter, the swami replied: ‘Prayers.’ ”

On another occasion, Martindale flew with Miller, the swami and Khashoggi to France, the first private citizens to pay a call on deposed Haitian dictator Jean-Claude Duvalier. And, according to other witnesses interviewed by Maclean ’s, the swami and Miller also played key roles connected with the bitter takeover battle for the prestigious London department store, Harrods.

British industrialist Roland (Tiny) Rowland had coveted the Knightsbridge emporium ever since 1977, when he first began buying shares.

But after acquiring a 29.9per-cent interest' in the store’s holding company, the House of Fraser, he found his takeover bid stalled by a review of the deal undertaken

by Britain’s Monopolies and Mergers Commission. In November, 1984, hoping to clear up possible objections to his majority bid, Rowland sold his shares to a longtime business associate, Mohamed Al-Fayed, who he believed lacked the means to acquire the outstanding shares. Within four months, however, Rowland learned that Al-Fayed had beaten him in buying out the House of Fraser for more than $1 billion and that the British government had approved his rival’s application without hesitation. Since then, Rowland has devoted a major portion of his energies to winning redress—in the process, attempting to establish the fact that Al-Fayed misrepresented the source of his funds to the British government.

As a result, in October, 1985, while on a business trip to New York City and Washington with Khashoggi—who had met the swami only a month before—Rowland seized upon the discovery that the swami possessed three cassette tape recordings that he claimed he had secretly made of Al-Fayed boasting of virtually unlimited access to the oil billions of the Sultan of Brunei. The next day, on Oct. 8, Rowland, Khashoggi, the swami, Mamaji, Martindale and other members of their colorful entourage clambered into the arms dealer’s lavishly appointed DC-8 and flew to Toronto for a meeting in

Miller’s Gormley house. There, the guru played the tapes for Rowland, who agreed to pay him $2.7 million for them. Rowland said that he later paid the swami another $4 million for documents the guru had promised him. Rowland handed over his first payment to the swami 10 days after their Toronto meeting aboard Khashoggi’s yacht, the Nabila, where the group posed for photographs.

Meanwhile, Miller and the swami appear to have never recovered most of an alleged total of $86 million that Martindale said the pair loaned to Khashoggi. The Saudi arms dealer, having drained most of his U.S. holdings to finance his high-flying, hedonistic lifestyle, has since been forced to sell his DC-8 and real estate. And he has avoided visiting the United States ever since a New York City court indicted him in October, 1988, for allegedly helping Marcos defraud U.S. interests of more than $198 million in Manhattan real estate and other valuables. But Khashoggi has stayed in close touch with the swami. And the guru has since visited Miller in Toronto.

Martindale said that he last saw the group in October, 1986, a month before a Lebanese newspaper exposed the covert U.S. arms deal with Iran. But among those to whom he had introduced the swami were senior Washington politicians, including Democratic senators Claiborne Pell of Rhode Island, now chairman of the Senate foreign relations committee, and Donald Riegle of Michigan. And he claims that his subsequent embarrassment is one of the motivations behind his unflattering portraits of the swami, Miller and Khashoggi. “They finished me in this town,” he said. “There’s nothing sweeter than revenge.”

MARCI McDONALD in Washington