Saudi Arabia Moves Elites to Prison, Threatens Trial
Seeking financial settlements, kingdom increases pressure on dozens still detained in corruption purge
At a Riyadh event on
Dec. 30, Saudi Arabia's Crown Prince Mohammed Bin Salman, right, stands
beside Prince Miteb bin Abdullah, who had been detained on Nov. 4 and
released later that month.
Photo:
Bandar Algaloud/Saudi Royal Court/REUTERS
The kingdom has wrested about $100 billion from most of the 350 Saudi royals and prominent business people arrested in what the Saudi leader has said is a corruption purge, Saudi officials said.
The public prosecutor’s office said this week that officials were moving ahead with plans for trials of 95 holdouts who were still detained and have declined to pay what the government describes as financial settlements.
Many detained Saudi
elites have been moved from the Ritz-Carlton Hotel in the Saudi capital
Riyadh, shown above in May, to al Hayer prison to the south of the city,
shown below, in 2015.
Photo:
GIUSEPPE CACACE/AFP/Getty Images (Ritz-Carlton); Faisal Al Nasser/REUTERS (al Hayer prison)
The number of detainees has been dropping as the negotiations
continue. Saudi officials have said they want to make financial deals
rather than prosecute, and initially calculated that they could
confiscate over $800 billion in assets.But
rich Saudis have long parked much of their wealth outside the country,
putting it out of reach of authorities who would have to overcome legal
hurdles and secrecy protections to seize it.The Saudi leadership
“is now realizing that you can’t just press the button ‘give me the
money’ because there’s no such button in the first place,” said a
Europe-based financial adviser with clients detained in Saudi Arabia.Among
the holdouts are
Prince Turki bin Abdullah,
son of the late King Abdullah, and Prince al-Waleed bin Talal,
one of the world’s richest men and holder of stakes in companies
including
Twitter
Inc.
and Four Seasons Hotel & Resorts.Saudi officials have ordered Prince al-Waleed to pay $6 billion,
people close to him said. The billionaire has been moved from the
Riyadh Ritz-Carlton to a palace compound in eastern Riyadh surrounded by
a recently added barbed-wire fence, according to people familiar with
his situation.
Prince al-Waleed, who hasn’t spoken publicly since
his detention began in early November, denies wrongdoing and is
fighting allegations of bribery, extortion and money laundering, a
person close to him said. Representatives of Prince Turki couldn’t be
reached for comment.
Saudi Prince al-Waleed bin Talal, center, in Jeddah, Saudi Arabia in May.
Photo:
AMER HILABI/AFP/Getty Images
Officials have said the crackdown comes under Saudi legislation and Islamic law forbidding forms of corruption—though no charges have been made public and it isn’t clear whether the accused have been brought before judges.
Crown Prince Mohammed bin Salman has described the arrests as part of an effort to remake Saudi Arabia as a modern society with less graft, a more moderate Islam and less dependence on oil.
The purge has also helped the crown prince consolidate power and sideline opponents.
The 32-year-old heir to the Saudi throne launched the antigraft campaign before announcing record government spending and unpopular measures including new taxes and cuts to fuel subsidies.
The government has tried to offset such measures with direct payments to Saudi citizens. Saudi Finance Minister Mohammed Al-Jadaan on Thursday touted the settlement figures at the World Economic Forum in Davos, Switzerland, and said confiscated money would be used for welfare payments to poor families.
Outside the kingdom, officials have only had success in freezing assets in politically allied countries, including the United Arab Emirates, two of the people said.
Assets beyond their reach include London property trusts, offshore companies and shares in publicly traded companies, the people said.
Those who have settled so far paid with cash, real estate and other unspecified assets, Saudi officials said.
The Saudi Central Bank has frozen Saudi assets of some detained individuals and the government has taken control of some companies owned by detainees, including construction company Saudi Binladin Group.
Saudi officials have pressed Swiss banks to disclose information about citizens’ accounts, but most have declined, citing secrecy laws, while others are still negotiating, said the Europe-based financial adviser.
Another reason the Saudis are coming short: Some detainees don’t have such large amounts of easily accessibly cash, the adviser said.
“Repatriating money has been a problem that has probably slowed down the settlement process,” said Steffen Hertog, a London School of Economics professor who studies Saudi Arabian politics.
Putting prominent Saudis on trial could put on international display the kingdom’s Islam-based legal system. King Salman and the crown prince have ultimate power over the judiciary.
“A public trial could bring a lot of dirt and that could create social problems,” said Salah Al-Hejailan, a Saudi attorney. “They have to look at how retroactively they can go in the past. They would have to draw a line.”
Mr. Hejailan said prosecutors could use a 1992 antibribery law stipulating that money obtained through kickbacks would be confiscated. The law carries potential jail terms of up to 10 years for someone offering a bribe or two years for the person receiving it.
“For the time being, the international business community has been skeptical about the crackdown since they have detained very high-level people and it was all done with little transparency,” said Mr. Hertog. “It’s putting a pause on international business sentiment.”
Saudi officials, responding to questions about international business concerns, have described the anticorruption campaign as way to support a healthy environment that attracts foreign investment.
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