In Saudi Arabia, Where Family and State Are One, Arrests May Be Selective

In Saudi Arabia, Where Family and State Are One, Arrests May Be Selective


“It is straight out of the autocrat’s playbook,” said Katherine Dixon, a researcher at Transparency International who has studied the Saudi defense industry. “Using state resources for your own ends is still O.K. if you are part of the right faction or clique, but because corruption is what people care about, it is used as a public rallying cry to justify a crackdown.”

She and others compared Prince Mohammed’s campaign to anti-corruption drives by President Xi Jinping in China or President Vladimir V. Putin in Russia, where prosecutions are often politically motivated.

As many as 500 people have now been detained on allegations of corruption as part of the crackdown. Many are being held at Riyadh Ritz-Carlton in what may be the world’s most luxurious prison.

The Saudi Council of Ministers said Tuesday that all arrests were “based on specific evidence of criminality and acts that were intended criminal transgressions and resulted in unlawful gain.”

“The rights of the accused and the facts relating to the offenses are protected by law at all stages during the investigation and judicial process,” the council added.

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Prince Mutaib bin Abdullah, right, the former chief of the national guard, is among those detained.

Credit
Hassan Ammar/Agence France-Presse — Getty Images

But the government had not disclosed any specific charges or evidence, or even the names of those arrested. The first wave began just hours after a royal decree created an investigating committee under Prince Mohammed, leaving little time for inquiry. The courts are under the effective control of the king and crown prince. And it was unclear which branch of the court system might hear the cases — the main Shariah court system or the more specialized board of grievance courts that handle administrative complaints.

“This is a Pandora’s box to start having anti-corruption trials,” said David Ottaway, a Middle East fellow at the Wilson Center, a nonpartisan research center. “Where does it stop within the royal family? Are there any princes that can show clean hands?”

“The law is not meant to govern the ruling family in any meaningful way, or to govern the relations between the ruling family and the state,” said Nathan J. Brown, a scholar at George Washington University who studies Arab legal systems.

“Ultimately, the king and some high members of the royal family can do what they want and make it legal later,” he said, and the lack of regulation over royal self-dealing “opens the door wide to what would be considered corruption in other systems.”

Many Saudis appear to have applauded the crackdown. Two-thirds are under 30, many are frustrated by high unemployment, and some may take a certain satisfaction at even an arbitrary comeuppance for so many of the rich and powerful.

“It’s going to be popular with the commoners who see important parts of the al-Saud family as a rent-seeking, unaccountable caste,” Steffen Hertog, an associate professor at the London School of Economics and the author of a book on the Saudi bureaucracy. “Saudi businesses have been complaining about royal encroachment for decades.”

Some cases may be clear-cut.

One area that the official Saudi media say Prince Mohammed intends to investigate is flooding in the city of Jidda that killed more than 100 people in 2009. In that case, a Saudi businessman was accused of absconding with millions of dollars allocated for a Jidda sewage system and never installing any pipes.

“We all knew, and we never reported on it,” Jamal Khashoggi, then the editor of a major Saudi newspaper and now living in exile, wrote this week in The Washington Post.

Beyond that case, only a few anonymously sourced reports of the potential charges have emerged. A professionally coordinated social media campaign, which appears to be organized by the government, has accused the most important prisoner, Prince Mutaib bin Abdullah, the former chief of the national guard and a son of the previous king, of enriching himself at public expense by diverting funds from the national guard. Citing unnamed sources, news reports have suggested that he would be accused of hiring ghost employees and paying inflated contracts to companies he owned for equipment like walkie-talkies and bulletproof military gear.

His brother, Prince Turki bin Abdullah, the former governor of Riyadh, will reportedly be accused of paying inflated contracts to companies he owned for a subway under construction in the capital.

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Damages in Jidda after deadly flooding in 2009.

Credit
Agence France-Presse — Getty Images

But in a country named for its ruling family, the line between public and private money can be hard to discern.

Prince Mohammed’s corruption committee “can basically detain anyone for anything they choose to call corruption,” said Robert Jordan, the former United States ambassador to Saudi Arabia. “That’s part of how this web was spun.”

The most famous detainee, Prince Alwaleed bin Talal, had no apparent need for graft. He was well known as an investor in international stock markets and as one of the world’s richest people; the sources of his wealth were more transparent than most princes.

Prince Alwaleed had been a critic of the kingdom’s closed economy and pervasive corruption. A secret 1996 diplomatic memorandum said that Prince Alwaleed told the American ambassador how a handful of senior princes controlled billions of dollars in off-budget programs, revenue roughly equal to one million barrels of the country’s oil per day. According to the memo, the Two Holy Mosques project and the Ministry of Defense’s strategic storage project, were “highly secretive, subject to no ministry of finance oversight or controls.”

The memo, disclosed in the trove of State Department documents released by WikiLeaks seven years ago, provided a detailed blueprint of the varied ways that money flows to members of the royal family either from state coffers or through private business in an otherwise opaque system.

An embassy official received an unprecedented glimpse into royal finances when he visited the Ministry of Finance Office of Decisions and Rules in 1996, where servants came to pick up stipends for their royal masters. Sons of the founding king received as much as $270,000 a month, while a great-great-grandchild collected $8,000 a month. On top of those payments, bonuses of $1 million to $3 million were handed out to, say, construct a palace.

Princes were known for borrowing money and simply never paying it back, which nearly led to the collapse of the National Commercial Bank. Royals were also known to act as the exclusive agents for foreign companies in the kingdom. When they founded their own businesses, they often relied on either government spending or state subsidies.

“The government, specifically the Ministries of Finance and Municipal and Rural Affairs, often transfers public land to princes, who in turn sell it at huge profit to real estate developers,” another diplomat wrote in a 2007 memorandum, noting that Prince Bandar bin Sultan, the longtime ambassador to the United States, and Prince Abdulaziz bin Fahd, the favorite son of King Fahd, profited to the tune of hundreds of millions of dollars by selling land for a centrally planned megacity north of Jidda.

Perhaps the most famous statement on corruption in Saudi Arabia was made by Prince Bandar. In an interview with PBS in 2001, he said: “If you tell me that building this whole country, and spending $350 billion out of $400 billion, that we had misused or got corrupted with $50 billion, I’ll tell you, yes. But I’ll take that anytime.”

Weapons contracts have long been a source of wealth. British media reported that Prince Bandar received well over $1 billion in secret payments from BAE Systems, the leading British military contractor, over the course of a decade. The son of founding King Abdulaziz’s personal doctor, Adnan Khashoggi, became a billionaire as an arms dealer and go-between for weapons makers and members of the royal family.

“In other countries we talk about petty bribes,” said Ms. Dixon of Transparency International. “In Saudi Arabia, it is theft on a grand scale.”

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