The vertiginous rise and fall of a #Saudi prince

The announcement of the arrest in Saudi Arabia of dozens of princes, ministers and former ministers in Crown Prince Mohammed bin Salman’s new anti-corruption probe took the world by surprise. But while most media attention outside Saudi Arabia has focused on billionaire investor Prince Alwaleed bin Talal, the detention of two sons of the late King Abdullah has far-reaching political implications, writes Helene Keller.

Prince Mutaib bin Abdullah had been chief and then minister of the Saudi Arabian National Guard (SANG) since 2010, with total control over the country’s praetorian guard. His younger brother Turki was the governor of Riyadh. Both men amassed huge personal fortunes after their father became de facto ruler of the desert kingdom in the late 1990s.

Mutaib was King Abdullah’s favorite son and widely seen as his preferred choice to inherit the throne. Abdullah had a fraught relationship with his half-brother and designated successor Salman, one of the Sudairi Seven - seven full brothers who had formed a powerful alliance within the royal family during the reign of the oldest brother, Fahd, from 1982 to 2005.

Once he became king in 2005, Abdullah was obliged by the arcane traditions of the House of Saud to name two other Sudairi brothers, Sultan and Nayef, as crown prince. Both passed away during Abdullah’s reign, and Salman became crown prince in 2013.

King Abdullah’s entourage, however, was paving the way for the monarch to insert Mutaib in the line of succession. The mastermind was Khalid Al-Tuwaijri, Chief of the Royal Court and the king’s gatekeeper. Deeply unpopular with the senior princes, Al-Tuwaijri was the highest-ranking non-royal in the country. Some princes called him “King Khalid” because of his influence in the court.

As early as 2007, Al-Tuwaijri persuaded King Abdullah to create an Allegiance Council of senior princes to select the king and crown prince. The council's charter stated the monarch must be a son or grandson of the founder of Saudi Arabia, King Abdulaziz. This provided a legal avenue to change the line of succession.

When Abdullah’s health began to falter in 2009, the allies of Mutaib pushed harder to promote their candidate. In 2010, Mutaib was appointed as commander of the National Guard with the rank of a cabinet minister, a position that provided him with military and political clout. He began visiting foreign dignitaries on behalf of his father. On a visit to meet Francois Hollande in 2012, the press in Paris heralded him as “the future king of Arabia”.

While Al-Tuwaijri orchestrated moves inside the corridors of power, Mutaib could count on the unsparing support of another close friend: then-Qatari Prime Minister Hamad bin Jassim. The relationship between Mutaib and Jassim was so close that when Jassim bought the portfolio of twelve top luxury hotels in France from Starwood Capital, he left the crown jewel – Le Crillon – to Mutaib.

The move was surprising, because the Qatari had fought hard against Saudi entrepreneur Mohamed bin Issa Al Jaber to gain control of the hotels. Back in 2008, Al Jaber had signed a contract with Starwood Capital to buy them, but Jassim managed to undo the deal.

Mutaib and Jassim profited enormously from joint projects and, following the fall of Libyan ruler Muammar Khaddafi in 2011, worked to take possession of the billions of dollars that Khaddafi had stashed away in secret Qatari bank accounts. Jassim was allegedly pursuing the goal of helping name Mutaib King Abdullah’s designated successor when he was purged by Qatar’s emir in 2013.

By the spring of 2013, western diplomats in Riyadh were reporting King Abdullah was widely expected to insert his son in the succession. Despite the best efforts of Mutaib, Hamad bin Jassim, Khalid Al-Tuwaijri and their allies, King Abdullah felt more time was needed to replace designated successor Salman with his son. In January 2015, the ailing Abdullah died and Crown Prince Salman immediately acceded to the throne.

The plan that would have changed the power dynamics in Saudi Arabia fell through. Now both Mutaib, his brother Turki and their ally Al-Tuwaijari await an uncertain future in their golden cage in the Ritz-Carlton of Riyadh, as Hamad bin Jassem watches developments unfold from exile in London.

Reports from inside the kingdom indicate the spectacular anti-corruption campaign, while fraught with risk, has won praise from ordinary citizens. Middle East observers agree the move was months in the making; many of the deals that allowed princes and senior officials to amass billion-dollar fortunes are currently being exposed in Saudi and Arab media.

Mutaib bin Abdullah, for his part, stands accused of making a fortune  from commissions received for arms and logistics contracts to equip the National Guard. But investigators in Riyadh are said to be focusing on a deal involving Mutaib and his younger brother Turki, as well as Khalid Al-Tuwaijri and detained Finance Minister Ibrahim Al-Assaf.

Back in 2013, the Financial Times reported the U.S. Department of Justice was looking into the relationship between London-based Barclays and Prince Turki bin Abdullah, who then occupied the powerful post of governor of Riyadh. The Justice Department wanted to know if Barclays violated the U.S. Foreign Corrupt Practices Act that forbids bribes or gifts in kind in return for lucrative business.

The inquiry is centered around an incident that occurred in 2002 involving Barclays and Turki. The Prince’s company, Al-Obayya Corp.  has for years acted as the local partner for foreign companies seeking to expand into the complicated and opaque Saudi market.

Barclays is under investigation for payments to Turki through Al Obayya to destroy the creditworthiness of Saudi philanthropist and businessman Sheikh Mohammed bin Issa Al Jaber. Al Jaber’s construction company, Jadawel, had built two city compounds near Riyadh and Al Khobar in the Eastern Province in the 1990s used to house United States military personnel. In 2002, the Saudi government defaulted on payments to Al Jaber, resulting in the collapse of the credit structure of close to a billion dollars that involved a consortium of Japanese, British, German and American banks.

Investigators in Riyadh have identified Turki bin Abdullah and Ibrahim Al-Assaf as major beneficiaries of the inexplicable decision by the Saudi government to default. They were apparently working in collusion with Barclays, which has admitted the bank worked with Prince Turki and Al Obayya to advise it on “strategic issues” in Saudi Arabia. But the bank said it was not aware of any improper payments made to Al Obayya or Turki. Al Jaber was later forced to sell the two compounds for a fraction of their market value.

Prince Turki is also co-founder of Petrosaudi, the company embroiled in the 1Malaysia Development Bhd scandal. Petrosaudi grew from drilling and oilfield management into trading, opening offices in London’s Mayfair district. The United States is also investigating the multi-billion-dollar embezzlement of public funds in this project.

Saudi authorities also accuse Turki of taking advantage of his influence as governor of Riyadh to take a huge commission in the costly project to construct the city’s urban train network.

While the current investigations will take months to complete, there is no chance for most of the high-profile detainees to emerge unscathed. Ordinary Saudis, at least, hope the arrests represent a sea change in the country’s long tradition of paying for corrupt royals.

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