In Saudi crack­down, some fear cracks

In gilded royal cir­cles, cor­rup­tion long a way of life

Baltimore Sun Sunday - - NEWS - By Nabih Bu­los and Laura King

BEIRUT — 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, 32year-old Mo­hammed 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 promised­but-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 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 cliche, trap­pings of the lux­u­ri­ous 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 U.S. 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.

De­trac­tors say the prob­lem 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 whistle­blower Ali Adu­bisi, a Saudi in self-ex­ile who heads the Ber­lin-based Euro­peanSaudi 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.

True re­form would have to go much fur­ther than these ar­rests, many an­a­lysts say.

With few West­ern-style reg­u­la­tory mech­a­nisms in place, 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 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.”

FAYEZ NUREL­DINE/GETTY-AFP

Hun­dreds have been ac­cused un­der 32-year-old Saudi Crown Prince Mo­hammed bin Sal­man’s new war on cor­rup­tion.

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