Kissenger: Probing The Client Controversy

White House aides were taken aback last week when Henry Kissinger, seeking to avoid further controversy about his consulting business, abruptly stepped down as chair of the independent commission to investigate the 9-11 terrorist attacks. But some administration sources say they may have only themselves to blame. Unlike other high-profile presidential appointments, NEWSWEEK has learned, Kissinger was never "vetted" for conflicts of interest by White House lawyers.

Only a few weeks ago, White House staffers were crowing about Kissinger. But their view of the ex-secretary of State blinded them to the firestorm that quickly developed over his secretive consulting firm, Kissinger Associates. Normally, White House lawyers review such matters as part of a thorough check of the personal and financial lives of all appointments. But sources said Kissinger had only cursory talks about his business affairs with top aides. "It's amazing how tone deaf they can be," said Steve Push, a leader of the 9-11 victims' families.

Nobody was angrier than Kissinger. At a meeting with 9-11 family members before he resigned, the 79-year-old Kissinger told them he was "personally humiliated" to have his integrity questioned in newspaper editorials demanding that he disclose his clients. Kissinger reassured the group he did no current work for any oil companies or Mideast clients. But sources familiar with Kissinger's business tell NEWSWEEK that some of his clients could have been problematic. Among firms that pay a minimum of $250,000 a year to Kissinger are several with heavy investments in Saudi Arabia, such as ABB Group, a Swiss-Swedish engineering firm, and Boeing Corp.

Boeing's sale of $7.2 billion worth of aircraft to Saudi Arabia in 1995 was the largest single overseas deal in the airline giant's history. After the 9-11 attacks, Boeing helped pay for a newspaper advertising supplement that touted close U.S.- Saudi ties and included such articles as "Crown Prince Abdullah: A Leader With a Global Vision." (A Boeing spokesman acknowledged the firm had a "longstanding" relationship with Kissinger's firm, but said it involved advice on deals in East Asia, not Saudi Arabia.) Similar issues confronted former Sen. George Mitchell, who resigned last week as vice chair. Mitchell cited time constraints as his reason. But his move came just a few days after congressional lawyers said he, too, would be required to disclose all the clients of his lawyer lobbying firm, Piper Rudnick. Among recent clients were two Mideast governments--Yemen and the United Arab Emirates--and a firm owned by Mohammed Hussain Al-Amoudi, a Saudi magnate under scrutiny from U.S. anti-terror investigators. (Mitchell didn't return calls for comment. Through his lawyers, Al-Amoudi denies any connection to terrorism.)

The upshot has been a major setback for the commission. White House lawyers were scrambling to find a replacement for Kissinger. But congressional staffers worried that the commission only has an 18-month time limit and, as one said, "The clock is ticking."