Arrest of billionaire Alwaleed bin Talal signals tightening circle of power in Saudi Arabia

Saudi Arabian authorities are presenting the arrests of dozens of powerful princes government ministers, military officers and business leaders as part of an aggressive push to root out corruption that has long plagued the kingdom and hindered attempts at reform.

But the dramatic purge, announced late Saturday by the state-run Saudi Press Agency and the Saudi-owned news network Al Arabiya, is also viewed as the latest move by its young crown prince to cement his hold on power by eliminating potential rivals for the throne.

At least 11 princes, four sitting Cabinet members and “tens” of former ministers were arrested overnight on the orders of a new anti-corruption committee headed by Crown Prince Mohammed bin Salman, Al Arabiya reported.

No names were provided. But they reportedly include Prince Alwaleed bin Talal, a billionaire investor with major stakes in top-name Western companies, and two of the late King Abdullah’s sons.

The moves sent shock waves through the kingdom and international business circles, among whom such high-profile individuals have for decades been seen as operating above the law.

Al Arabiya said the new committee was investigating the response to flooding in the city of Jeddah that killed more than 100 people in 2009, as well as an outbreak of the sometimes fatal Middle East Respiratory Syndrome, or MERS. But the specific accusations against those detained were not immediately clear.

“I think they are using corruption as a tool to further smooth the path towards the eventual succession of the crown prince,” said Kristian Coates Ulrichsen, a Middle East fellow at Rice University’s Baker Institute for Public Policy.

The 32-year-old prince, popularly known as “MBS,” was propelled from relative obscurity when his father, King Salman, succeeded Abdullah in 2015.

In less than three years, he has acquired oversight of nearly every major aspect of the country’s economy, defense, internal security, social reforms and foreign policy, likely causing some resentment in a royal family unaccustomed to the concentration of so much power in the hands of one young prince.

But the prince’s many supporters have applauded his ambitious plan to modernize the ultraconservative kingdom, which is home to Islam’s holiest shrines, and reduce its historic dependence on oil.

His “Saudi Vision 2030” calls for liberalizing the economy and easing social restrictions in order to preserve stability in the face of lower oil prices and a burgeoning youth population in need of employment.

“MBS has talked about this vision as a matter of life and death for the Saudi economy,” said Fawaz Gerges, a professor of international relations at the London School of Economics. “Anyone who doesn’t subscribe to it is liable to be seen as a person who doesn’t want the kingdom to move forward.”

Saudi leaders said the launch of the corruption investigation heralds a “new era” of transparency and accountability, reforms that are needed to attract more foreign investment.

“The state will never tolerate or condone any violations of local or international business standards,” Finance Minister Mohammed bin Abdullah pledged in a statement Sunday carried by the Saudi Press Agency. “Nothing and no one will prevent us providing a world-class investment environment to accelerate the pace and momentum of national transformation.”

Analysts, however, said the move is likely to rattle investors because so many of the people rounded up were key players in the Saudi business community for decades.

Prince Alwaleed, one of the world’s richest men, has major holdings in iconic Western brands such as Twitter, Apple and Citigroup. Shares in his investment firm, Kingdom Holding, tumbled 9.9% Sunday in the wake of the news of his arrest. (Saudi stocks have a 10% daily loss limit.)

“People like him will have business networks that will now anxiously be re-examining whether or not the commercial interests they have will be safe,” Ulrichsen said.

Others reported to have been swept up in the investigation include Adel Fakeih, minister of economy and planning; Ibrahim Assaf, a former finance minister; Amr Dabbagh, the former head of the Saudi Arabian General Investment Authority; Bakr Binladin, head of the Saudi Binladin Group, a major construction conglomerate; and Waleed Ibrahim, who runs the Arabic satellite group MBC.

“Anti-corruption commissions in the past never targeted people that were this influential and this important,” said Mohammed Khalid Alyahya, a non-resident fellow at the Atlantic Council’s Rafik Hariri Center for the Middle East. “The message that was sent is this will no longer be tolerated.”

The roundup follows another palace coup in June, when the current crown prince replaced his older cousin, Mohammed bin Nayef, as heir apparent and head of the interior ministry.

The latest purge cleared away another former rival for the throne, Prince Miteb bin Abdullah, who was arrested and replaced as head of the elite National Guard. Prince Miteb was the last member of King Abdullah’s branch of the family to retain high office. His brother, Prince Turki bin Abdullah, a former governor of Riyadh, was also believed to have been swept up in the investigation.

Reports suggested that a number of the detained princes were being held at the Ritz Carlton hotel and other five-star hotels in the capital, Riyadh. The hotel chain Marriott International said it was “evaluating the situation,” according to the Associated Press.

President Trump spoke to King Salman on Saturday, as the president headed to Japan, but did not mention the crackdown in remarks afterward.

In response to requests from reporters, the White House on Sunday released a detailed description of Trump’s phone call with the king. Salman had called Trump to express his condolences following the terror attack in New York City that left eight people dead, the White House said.

The two also discussed the extremist group Islamic State, the successful interception of a missile attack against Riyadh from territory in neighboring Yemen, Saudi purchases of U.S. military equipment and the expected public offering of Aramco, the national oil company. The arrests were not mentioned in the White House’s description of the call.

News of the arrests came just hours after Salman ordered the establishment of the anti-corruption committee to counter what he described in a decree as “exploitation by some of the weak souls who have put their own interests above the public interest in order to illicitly accrue money.”

The new body was given the authority to issue arrest warrants and travel bans, freeze accounts and portfolios and seize assets to be returned to the state treasury.

But a statement from the attorney general’s office stressed that no assets would be seized during the investigation.

“Everyone is presumed innocent until proven guilty, and everyone’s legal rights will be preserved,” the statement said.

The country’s top religious commission endorsed the corruption investigation, declaring that “Islamic sharia commands that corruption be combatted … and fighting it is no less important than fighting terrorism.”

The move also appeared to be popular among the country’s many Twitter users, who catapulted the phrase “the king is fighting corruption” to one of the top trending hashtags on Sunday morning, according to local reports.

“Fighting corruption in Saudi Arabia has become a complete matrix strongly supported by the head of the state,” tweeted Salman Dosary, a writer for the Saudi daily Sharq al-Awsat. “The corrupt will not be able to trick it after today.”

Special correspondent Bulos reported from Beirut and Times staff writer Zavis from Irbil, Iraq. Times staff writer Brian Bennett contributed to this report from Tokyo.

alexandra.zavis@latimes.com

Twitter: @alexzavis