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Riyadh Going After Non-Arrested Princes

Riyadh Going After  Non-Arrested Princes Riyadh Going After  Non-Arrested Princes
A disgraced former Egyptian security chief with a reputation for brutality and graft, Habib el-Adli, is advising the government on the crackdown

Political analyst Jamal Khashoggi has said that Saudi Arabia is now quietly witnessing “billion-dollar settlements with a number of non-arrested princes, under which the funds of the ministry of finance will be recovered, and lands’ shares and properties will be transferred to the state.”

Khashoggi also said those arrests have put Saudis on notice either to “be silent or to follow” MBS (Prince Mohammad bin Salam). “Now he’s doing the same thing in the royal family,” he said.

The Saudi website, Sabq, said that the Saudi General Auditing Bureau has issued a report which revealed huge financial irregularities in one of the sectors of the ministry of national guard including violations in the systems, regulations, payroll, allowances and financial benefits as well as recruitment and contracting, Middle East Monitor reported.

The website said that among the irregularities that the GAB’s report has monitored was the payment of an administrative allowance of 236,000 riyals ($62,930). It stated that one of the administrators was paid more than 99,000 riyals as a monthly salary in addition to other salaries ranging from 70 to 63,000 riyals.

A former minister (unnamed) also faces suspicions he had squandered SR10.3 million on contracts with a private company to run an advertising campaign for seven weeks and SR8.9 million on training staff. The programs were cancelled for their poor quality and modest output.

Recovered Funds Expected

Concerning reimbursing funds from the detainees, a prominent Saudi official revealed that Saudi Arabia expects to recover between $50 and $100 billion from the settlement deals with those arrested in the anti-corruption campaign, which has shown that prominent princes, officials and billionaires have been involved in corruption.

The Bloomberg News Agency quoted the official as saying that the authorities had offered the suspects compromises to avoid the trial. If they agree, discussions would be held with a special committee to determine the details.

This campaign comes at a sensitive time for Saudi Arabia, which has an absolute monarchy and has been suffering from the worst economic slowdown since 2009, as well as the political unrest in the region, which is mainly caused by Prince Mohammad bin Salman’s aggressive foreign policy to counter Iran’s influence.

In the past two years, the prince has thrown Saudi Arabia into a war in Yemen and has led a regional blockade against the neighboring state of Qatar.

Purge Hurting Investments

Ziad Daoud, an economist at Bloomberg  who lives in Dubai, wrote in a memo that the purge operation is likely to affect private investment that is already witnessing recession, which would negatively affect economic growth next year (2018).

“The investment negative impact on economic growth is likely to be significant. Global investment tends to fluctuate and undergo sharp changes in orientations, and Saudi Arabia is no exception.”

In light of absence of compromises on global corruption issues, Saudi Arabia lacks the transparent institutional mechanisms which are used in other countries to determine financial sanctions. It is worth mentioning that the authorities say the accused will get their legal rights.

Detainees Being Squeezed

A tycoon was called home to Saudi Arabia from abroad for a business meeting and detained when he returned. A billionaire was ordered to turn himself in or be picked up like a common criminal. An official was called in to discuss an attack that apparently never happened, NYTimes reported.

Now those three are among the more than 200 people detained in luxury hotels in Riyadh, the Saudi capital, as the government tries to seize hundreds of billions of dollars in assets it says they stole through corrupt means.

"This appears to be taking place outside anything that resembles a clear legal process," said Adam Coogle, a Middle East researcher at Human Rights Watch who monitors Saudi Arabia. "If the Saudi authorities don't offer a chance for legal defense, then this is nothing other than a shakedown."

Any efforts to retrieve wealth from United States, Britain, Switzerland or other western countries where rich Saudis have vast holdings would require demonstrating that Saudi Arabia had followed international standards of human rights and due process.

False Pretences

Associates of three people who were detained said they had been summoned on false pretences and taken into custody. The associates said their colleagues had not had any contact with their lawyers and had made only brief phone calls to their families, in which they could provide no information on their whereabouts or status. The associates spoke on the condition of anonymity so as not to make matters worse for the detainees.

A doctor at the nearest hospital and a US official tracking the situation said that up to 17 of the detainees had required medical attention because of abuse by their captors.

Raising other rights concerns, a disgraced former Egyptian security chief with a reputation for brutality and graft, Habib el-Adli, was advising the government on the crackdown, according to a former Egyptian interior minister and a close associate of el-Adli.

Duncan Hames, director of policy at Transparency International UK, said that despite the billions of pounds in corrupt assets believed to be in Britain, few are ever seized and repatriated. The Arab Spring uprisings across the Arab world that started in 2011 led to the seizure of only one house, he said.

Reserves

Jean-Michel Saliba, an economist at the Bank of America–Merrill Lynch, who lives in London, said it is unlikely that the recovered funds would provide a significant support to the central bank’s foreign exchange reserves, which fell by about $260 billion from their highest levels in 2014.

Saliba wrote that international stocks in Saudi private companies, except banks and investment funds, have not exceeded $100 billion at the end of 2015. He added: “We expect only a small portion of these stocks to be compromised in this investigation.”

The Saudi Arabian Capital Market Authority has frozen the trading bank accounts of the detained or investigated people, according to insiders of this matter. Saudi authorities claimed that at least $100 billion have been embezzled or corrupted over decades.

 

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