What’s behind Saudi Arabia’s anti-corruption crackdown, which it says led to the recovery of more than $100 billion?
Money, power and princely standing offered no protection: Nearly three months ago, Saudi Arabia’s crown prince unexpectedly staged a stunning roundup of hundreds of fellow members of the kingdom’s wealthy and powerful elite.
Those targeted included a bevy of royal relatives and one of the world’s richest men, billionaire investor Prince Alwaleed bin Talal.
Painted as an anti-corruption drive, the detentions were widely viewed as an attempt by Prince Mohammed bin Salman, the 32-year-old heir apparent to the Saudi throne, to intimidate royal rivals, consolidate his own power — and perhaps carry out what amounted to an epic shakedown.
This week, Saudi authorities announced they had recouped more than $106 billion in assets from targets of the investigation, who agreed to financial “settlements” in exchange for their freedom.
Prince Alwaleed, released over the weekend, was back at his desk in his skyscraper headquarters, his global investment company said. The luxury hotel in Riyadh, the capital, where hundreds spent weeks in confinement is preparing to reopen to regular guests this month. And Saudi officials hailed what they described as a successful bid to rein in brazen graft that has plagued the kingdom for decades.
But long-term effects of the strange, startling episode are still not known. Will foreign investors be spooked, dragging down the kingdom’s efforts to revitalize and diversify its economy? Can the crown prince push ahead with social reforms, including women’s right to drive, promised to take effect this spring? Will that reformist agenda obscure a continued human rights crackdown in Saudi Arabia and a disastrous war in Yemen?
Here’s some background.
Who were the detainees?
Prince Alwaleed, the chairman of Kingdom Holding Co. and a stakeholder in companies including Apple, Twitter, Citicorp and Lyft, was probably the best known internationally. But the roster included many other prominent figures who would previously have been considered untouchable, such as tycoon Waleed Ibrahim, the chairman of the regional broadcaster MBC, and Prince Miteb bin Abdullah, a son of the late King Abdullah who had headed the powerful National Guard.
How wide-ranging was the investigation?
The attorney general, Sheik Saud Mojeb, said Tuesday that detainees signed over 400 billion Saudi riyals, nearly $107 billion, in assets that included cash, real estate and other holdings. But Saudi authorities did not disclose who had been accused of what illicit activities, nor the amounts individuals signed over to forestall charges. The total number of detainees was not specified, although Mojeb said 381 people were subpoenaed for questioning. Of those taken into custody, about 100 were thought to have been freed from detention, according to observers and news reports. The attorney general said 56 people remained in custody and could face formal charges.
How have detainees been treated?
If there has been maltreatment, no one appears eager to talk publicly about it. In a videotaped interview with the Reuters news agency hours before his release, Prince Alwaleed, who maintained his innocence, showed off what he said was the opulent suite where he was held at the Riyadh Ritz-Carlton.
“I feel at home,” he said in the video. “It’s no problem at all; everything’s fine.” News reports said many of the detainees had access to the hotel’s concierge-style services on site, including medical care, but had no access to the internet and other means of communication.
How has the crackdown affected the business outlook?
Saudi stocks have made up nearly all of the ground lost when the detentions were made public. Some business analysts, however, say the crackdown, and its attendant lack of official transparency, might scare off foreign investors who wonder whether their Saudi partners and proxies might be swept up in similar circumstances, with assets potentially made vulnerable to seizure. Cold feet outside the kingdom could be bad news for the crown prince, who has made attracting foreign investment a top priority, the centerpiece of an ambitious plan known as Vision 2030. Saudi Arabia is also planning a public offering this year of shares of its oil giant Aramco, which it hopes will generate $100 billion.
What social changes has Prince Mohammed set in motion?
Women are to be allowed to drive beginning in June, ending a ban that has marked Saudi Arabia as an outlier among nations. Last month, Saudi Arabia also lifted a 3 1/2 decade ban on commercial cinema, and in December the country for the first time allowed a female singer to perform solo at a public concert. But while such changes are largely hailed by the outside world, they threaten to trigger a backlash by Saudi clerics and other conservative elements.
Has Saudi Arabia’s human rights stance changed?
Rights groups say the picture remains grim, with little tolerance for dissent. Two prominent activists recently received long prison terms, and concerted international appeals have failed to win the release of prisoners including blogger Raif Badawi, who is midway through a 10-year prison term. His sentence, denounced by groups such as Amnesty International, included 1,000 lashes, the first 50 of which were publicly meted out in 2015.
The crackdown marked a decisive break with the royal family’s long tradition of consensus, and alienated powerful clans and seasoned advisors who might in previous times have come to the aid of an inexperienced young leader. Prince Mohammed has had some high-profile miscalculations, including the calamitous war in Yemen, whose launch he oversaw, and a blockade meant to bludgeon tiny neighbor Qatar into submission. The prince is also preoccupied with trying to counter the regional influence of Shiite Muslim rival Iran.
What’s been the U.S. position?
President Trump has gone out of his way to cultivate friendly ties with the Saudis, making Riyadh his first foreign destination as president and receiving a lavish welcome from the royal family. The surprise crackdown was seen as having at least the tacit approval of the president, who said early on that Prince Mohammed knew what he was doing. Trump’s son-in-law and advisor, Jared Kushner, has visited Saudi Arabia several times, reportedly forging a close personal rapport with the prince.
What about the Riyadh Ritz-Carlton?
After a flurry of worldwide fascination over its role as a five-star prison for the VIP detainees, the lushly landscaped hotel is turning attention to once again touting “majestic surroundings and discreet, attentive service.” It is accepting normal bookings again from mid-February, with room rates listed as starting at $660.
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