Ritz Carlton Riyadh
- The $100 billion in expected settlement deals will boost the economy, still struggling to recover from the 2014 drop in oil prices.
Around midnight on Jan. 21, the Ritz-Carlton in Riyadh hardly looks
like the holding pen for some of Saudi Arabia’s most wanted. Since
November, some of the kingdom’s richest princes, cabinet officials, and
businessmen have been detained in the palatial five-star hotel
as part of a sweeping anticorruption purge. There are no armed guards
visible; only one police car is seen outside the compound. In the
well-lit lobby, with Arabic music playing over speakers, government
staffers are scattered around cafe tables. There’s a buffet, but nobody
is eating.
On
a couch near the reception desk, Sheikh Saud Al Mojeb, the Saudi
attorney general, does a head count of detainees. So far, about 90 have
been released, having reached settlement deals with the government.
Fewer than 100 remain, including five who are weighing proposed deals.
Those who don’t reach an agreement will be referred to prosecutors. “The
royal order was clear,” Al Mojeb says. “Those who express remorse and
agree to settle will have any criminal proceedings against them
dropped.”
The
Saudi detention plan is winding down, with authorities expecting the
Ritz to be cleared of detainees by the end of January. The government
sees it as a resounding success. One senior official believes it will
net more than $100 billion in settlement deals. That money could be a
shot in the arm for the Saudi economy, still struggling to recover from
the 2014 drop in oil prices. The payments have been a combination of
cash, real estate, stocks, and other assets and will likely be managed
by a government committee, according to the official.
Alwaleed.
Photographer: Chesnot/Getty Images
The purge, led by Crown Prince Mohammed bin Salman, the
32-year-old son of King Salman, began without notice on Nov. 4, as
authorities swept across the country rounding up hundreds of suspects, including some of the most prominent citizens. Prince Alwaleed bin Talal,
considered the richest man in Saudi Arabia, was detained, as was former
Finance Minister Ibrahim Al-Assaf and Adel Al Fakeih, who was removed
as minister of economy and planning on the eve of the arrests. Prince
Miteb, son of the late King Abdullah and minister of the powerful
National Guard, was held and then released a few weeks later after
agreeing to pay more than $1 billion.
News
of the purge reverberated across boardrooms, financial markets, and
world capitals as bankers, analysts, and diplomats sought to assess its
impact on the biggest Arab economy. Stocks in companies owned by
detainees slumped.
Although Saudi Arabia is trying to become more open, the probe was
conducted in a “pretty nontransparent way,” Moritz Kraemer, global chief
rating officer at S&P Global Ratings, said in a Jan. 22 interview
on Bloomberg Television. The probe “could be a step in the right
direction, but it could also be a step towards more arbitrary ruling,”
he said.
Saudi officials say Prince Mohammed had to tackle graft
as he tries to revitalize the economy by weaning it off oil. “Corruption
had reached epidemic proportions,” says the senior official. “It was as
if the nation woke up and realized there was good news and bad news:
The bad news was that it had cancer. The good news was that it’s
treatable, but we have to go through surgery, chemotherapy, radiation,
and amputation.”
One
of the biggest mysteries is the fate of Alwaleed. Three people
following his case say he’s left the Ritz and wasn’t in prison—rather,
he was held at another location as he negotiates an agreement. Three
others, however, say he’s still at the hotel. In December two people
with knowledge of the matter said Alwaleed was balking at steep
financial demands that would force him to give up control of his $9 billion holding company.
Bloomberg
was unable to meet with detainees or to verify the attorney general’s
claims that all of them were allowed access to legal counsel. Two people
who’ve spoken to some of them say not everyone was given access to
lawyers or let out of their rooms except for questioning. Al Mojeb
denies the suspects’ rights were violated and says the antigraft
committee wants to exhaust all options that can lead to a settlement
before referring anyone to prosecution. Still, the message is clear. “We
are in a new era,” Al Mojeb says. “The campaign against corruption
won’t stop.”
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