In gilded Saudi royal cir­cles, cor­rup­tion has long been a way of life

Jerusalem Post - - INTERNATIONAL NEWS - By NABIH BULOS and LAURA KING

BEIRUT (TNS) – Be­hind the walls of one of his many op­u­lent palaces, the king was trou­bled. He knew all too well that the self-deal­ing ways and gold-plated lifestyle of the House of Saud – whose princes and princelings num­bered in the thou­sands – had spi­raled out of con­trol. Things had to change. That was a decade ago. Leaked Amer­i­can di­plo­matic ca­bles from the time de­scribed the at­tempts of then King Ab­dul­lah bin Ab­du­laziz to rein in the money-skim­ming ex­cesses of his fab­u­lously wealthy fel­low roy­als. The Saudi Ara­bian monarch, al­ready an oc­to­ge­nar­ian, re­port­edly told his broth­ers that he didn’t want to face Judg­ment Day with “the bur­den of cor­rup­tion” on his shoul­ders, the di­plo­matic memos said. He died in 2015.

Now the king­dom’s brash young crown prince, 32-year-old Muham­mad bin Sal­man, has pro­claimed a new war on cor­rup­tion. Act­ing at his be­hest, Saudi author­i­ties have ac­cused hun­dreds of peo­ple, in­clud­ing a dizzy­ing roll call of prom­i­nent princes, of crimes that in­clude graft, bribery and money laun­der­ing.

The arid penin­sula’s busi­ness lore brims with tales of am­bi­tious in­fra­struc­ture projects that shim­mered like mi­rages, their cost vastly in­flated by bla­tant bribery de­mands from royal and VIP pa­trons, their com­ple­tion de­layed or doomed al­to­gether by brazen high-level malfea­sance.

A gleam­ing sub­way in the cap­i­tal Riyadh, a promised-but-un­built sewer sys­tem in the port city of Jidda, even the Grand Mosque com­plex in the holy city of Mecca – all have come un­der scru­tiny over kick­backs and mis­ap­pro­pri­ated funds. In past years, other Saudi deals such as lu­cra­tive arms con­tracts have en­snared for­eign part­ners.

The Jidda case had par­tic­u­larly tragic con­se­quences. A pow­er­ful Saudi busi­ness­man had ac­cepted a mul­ti­mil­lion-dol­lar pay­ment to build a new sewage and drainage sys­tem, but merely pre­tended to have com­pleted it – a ruse that was widely known among com­mon­ers as well as the rul­ing elite. Later, in 2009, flood­ing sent tor­rents of wa­ter cours­ing through the city, killing more than 100 peo­ple. The lack of a vi­able drainage sys­tem was a key un­der­ly­ing cause.

To the point of cliché, trap­pings of the luxe life have be­come the Saudi royal fam­ily’s call­ing cards the world over: yachts and pri­vate planes, an end­less ar­ray of de­signer goods, ven­er­a­ble en­ter­prises pur­chased like baubles, sump­tu­ous apart­ments in Lon­don and Paris, the com­man­deer­ing of en­tire wings of the planet’s most ex­clu­sive ho­tels.

“Clearly, they un­der­stand they’ve had a cor­rup­tion prob­lem for decades, and know they have to do some­thing,” said Robert Jor­dan, a for­mer US am­bas­sador to Saudi Ara­bia, cit­ing the “shake­down cul­ture” that sur­rounded the royal fam­ily and other elites.

Many vet­eran Saudi watch­ers, and more than a few wary in­vestors, are ques­tion­ing whether the prince’s os­ten­si­ble cleanup drive is pri­mar­ily a bid to con­sol­i­date power and side­line po­ten­tial ri­vals – fol­low­ing a tem­plate used by au­thor­i­tar­ian lead­ers such as Chi­nese Pres­i­dent Xi Jin­ping or Rus­sian Pres­i­dent Vladimir Putin, both of whom have jailed po­ten­tial ad­ver­saries on cor­rup­tion charges.

“There are some con­cerns that what this is re­ally go­ing to do is cen­tral­ize over­sight of pub­lic spend­ing, and the same prac­tices will con­tinue, but among a smaller group of peo­ple,” said Al­lison Wood, an an­a­lyst for Con­trol Risks, a Lon­don-based global risk and strate­gic con­sult­ing firm.

The “real test” of a se­ri­ous anti-cor­rup­tion drive, she said, would be “not just to pur­sue th­ese peo­ple for cor­rup­tion, but to main­tain and set a new stan­dard for trans­parency.”

Even some of the prince’s many crit­ics, though, ac­knowl­edge that he is cor­rectly read­ing the zeit­geist in the king­dom’s less ex­alted quar­ters, es­pe­cially among less priv­i­leged Saudi youth. Pop­u­lar re­sent­ment over royal money grabs poses a po­tent threat as a new gen­er­a­tion of lead­ers strug­gles to en­vi­sion life be­yond the petrodol­lars that fu­eled Saudi Ara­bia’s ex­tra­or­di­nary trans­for­ma­tion from bar­ren desert to a realm of gilded shop­ping malls and su­per­high­ways.

The prob­lem, de­trac­tors say, is that the crown prince and his par­tic­u­lar branch of the fam­ily tree are part of the king­dom’s pa­tron­age sys­tem, which makes his star­tling move against his royal brethren even more of a high-wire act.

Crit­ics call it a cam­paign of se­lec­tive pros­e­cu­tion waged by an in­dulged young royal – widely known by his ini­tials, MBS – who re­port­edly made an on-the-spot pur­chase of a $500 mil­lion yacht while va­ca­tion­ing on the Riviera in 2015, and is tied to busi­ness en­ti­ties that stand to ben­e­fit im­mensely from the re­moval of some of those ar­rested.

Prom­i­nent whis­tle-blower Ali Dubeisi, a Saudi in self-ex­ile who heads the Berlin-based Euro­pean-Saudi Or­ga­ni­za­tion for Hu­man Rights, called the crown prince’s cam­paign a “black com­edy.”

“This move is more a mat­ter of or­ga­niz­ing cor­rup­tion,” he said, “so that it is in the hands of MBS and his co­terie.”

As Saudi in­vest­ments tighten the once-in­su­lar king­dom’s ties to the out­side world, head-spin­ning sums of money are in play. And those are likely to in­crease ex­po­nen­tially with next year’s ex­pected pub­lic of­fer­ing of shares in Saudi Aramco, the oil be­he­moth, and moves to pri­va­tize other state as­sets un­der an eco­nomic blue­print known as Vi­sion 2030.

US Pres­i­dent Don­ald Trump has openly wooed the Saudis, tweet­ing just be­fore the wave of week­end ar­rests that he hoped the Aramco of­fer­ing would be made on the New York Stock Ex­change. And just as openly, the pres­i­dent has taken sides in the crown prince’s crack­down, declar­ing on Twit­ter that some of those tar­geted had been “‘milk­ing’ their coun­try for years.”

The State De­part­ment has been more cir­cum­spect, with spokes­woman Heather Nauert ex­press­ing sup­port for the anti-cor­rup­tion ef­fort but call­ing on Saudi of­fi­cials to carry it out in a “fair and trans­par­ent man­ner.”

True re­form would have to go much fur­ther than th­ese ar­rests, many an­a­lysts say. With few West­ern-style reg­u­la­tory mech­a­nisms in place, very lit­tle is made pub­lic about the scale and na­ture of hold­ings of the royal fam­ily and the myr­iad ways in which the roy­als’ wealth over­laps with the state bud­get.

It’s not even clear pre­cisely how many roy­als there are. Joseph A. Kechichian, a scholar at the King Faisal Cen­ter for Re­search and Is­lamic Stud­ies, es­ti­mates the de­scen­dants of found­ing monarch King Ab­du­laziz al Saud at about 20,000 men and women, with an in­flu­en­tial core of about 200 mem­bers.

“No one knows what the col­lec­tive wealth is,” Kechichian, who has au­thored a book about the clan, wrote in an email from Riyadh, “but prob­a­bly in the hun­dreds of bil­lions.”

Also known for its opac­ity is the state-run Pub­lic In­vest­ment Fund, whose hold­ings are thought to to­tal about $200 bil­lion and could balloon with the Aramco of­fer­ing and other mea­sures en­vis­aged by the crown prince. In the last two years, the fund’s over­sight was trans­ferred from the Saudi fi­nance com­mit­tee to a coun­cil un­der Crown Prince Muham­mad’s con­trol.

In oc­ca­sional bursts of can­dor over the years, some prom­i­nent Saudis have ac­knowl­edged the stag­ger­ing scale of the royal fam­ily’s fi­nan­cial en­tan­gle­ments, but de­scribed them as un­der­pin­ning the coun­try’s emer­gence as not only a re­gional power, but also a player on the world stage.

In a mem­o­rable 2001 in­ter­view with PBS’s Front­line, Prince Ban­dar bin Sul­tan, who served for years as the Saudi en­voy to Wash­ing­ton, said three decades of de­vel­op­ment had in­volved an ex­pen­di­ture of about $400b., per­haps an eighth of which had found its way into il­licit chan­nels.

“If you tell me... that we mis­used, or got cor­rupted with $50b., I’ll tell you ‘Yes,’” he said. “But I’ll take that any­time. There are so many coun­tries in the Third World that have oil that are still 30 years be­hind.”

“We did not in­vent cor­rup­tion,” the vet­eran am­bas­sador added. “This has hap­pened since Adam and Eve .... This is hu­man na­ture.”

(Balkis Press/Abaca Press/TNS)

SAUDI CROWN Prince Muham­mad bin Sal­man re­ceives Le­banese prime min­is­ter Saad Hariri in Riyadh, prior to Hariri’s res­ig­na­tion, on Oc­to­ber 30.

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