Understanding the Saudi Corruption Arrests

  • November 11, 2017

This week’s mass arrests in Saudi Arabia under the banner of fighting corruption is one of several historic earthquakes to shake Saudi politics since 2015 when King Salman inherited the throne. But unlike those previous episodes, this one may be the most telling about the kingdom's future direction, because of what it says about the crown prince's intention to continue centralizing power even after having already guaranteed his succession to the throne. Not only is he now likely to rule the kingdom for half a century, but it appears more evident than before that he will do so in a manner that is personalized and prone to sudden changes.

On Saturday night, Saudi authorities announced the formation of a new anti-corruption committee under the king's son and heir, Crown Prince Mohammed bin Salman (who is often referred to by his initials as MbS). State organs also announced the dismissal of several prominent officials, including the economy minister as well as the cabinet minister for the national guard. Almost immediately thereafter, news began to emerge of a massive wave of elite detentions, framed as a campaign to root out corruption.

The prominence of the figures who were arrested is nothing short of stunning, including four ministers, eleven princes, dozens of former officials, and titans of business and mass media in the kingdom. Much of the news coverage has focused on the detention of Prince Alwaleed bin Talal, a member of the royal family and billionaire intellectual who holds sizable shares of Western firms such as Twitter, Citigroup, and 21st Century Fox.

As time went on, it became clear that the scope of the arrests netted a who's who of top figures in the kingdom. Individuals close to the late King Abdullah were detained, including two of his sons and his former chief of staff. Several of the other richest men in the kingdom were reportedly detained, as were the heads of three major television networks. This included the chairman of the parent company for Al-Arabiya, the most moderate major television network aimed at a Saudi audience. As a former US official told Robin Wright for the New Yorker, "It’s the equivalent of waking up to find Warren Buffett and the heads of ABC, CBS and NBC have been arrested," to name a few.

Saudi authorities reportedly are now housing the detainees in the Ritz Carlton in Riyadh, which only weeks earlier had hosted an investment mega-conference featuring the Crown Prince. The airport for private planes in Riyadh was shut down, and in an incident likely to feed conspiracy theories, a helicopter bearing a prominent prince whose father had been removed from the line of succession in 2015 crashed near the Yemeni border, killing all onboard.

Arrests reportedly continued into Monday, and the Wall Street Journal reported that the Saudi central bank gave lenders a list of not dozens but hundreds of names of individuals whose accounts are to be frozen. According to a U.S. official cited by the New York Times, as many as 500 individuals had been detained by Monday.

What the arrests reveal about Saudi Arabia:

This is not the first effort to centralize authority by MbS with the permission of his father, the king. When his King Salman was previously minister of defense, MbS was reportedly responsible for Salman's decision to push out a succession of deputy ministers. Upon becoming king in January 2015, Salman then appointed MbS to be the youngest defense minister in the world at the age of 29. Saudi Arabia’s National Security Council was disbanded, and MbS was placed in charge of one of the two bodies that took its place.

That April, he was placed second in line for the throne, and then this year he precipitated the dismissal of his cousin Mohammed bin Nayef to take on the position of Crown Prince, making him first in line to the throne. In the interim, MbS acquired so many others portfolios (such as oil, internal security, and reform czar) that he has informally been referred to as Saudi Arabia’s “Mr. Everything.”

But this is the first move to centralize power by Mohammed bin Salman since becoming the unchallenged heir apparent. His authority was already complete in all but title. And Saudi Arabia's attorney general described this round of arrests as “just the start”.

President Trump tweeted on Monday that he has complete confidence in what King Salman and MbS are doing. But it may still carry costs. Many political observers are now arguing that this week's events raise questions about the kingdom's future rule of law and market stability. Foreign governments will no doubt continue seeking lucrative contracts with Riyadh, but foreign investors may now be less sanguine about projects like the partial IPO of Saudi Aramco and the "NeoM" robotic city project MbS recently announced at a “Davos in the desert” summit that require long time horizons and enormous sums of outside capital to be successful.

Implications:

First, this style of highly personalized authority appears to be the new normal in Saudi politics. MbS will likely continue to pursue, big, bold ideas, some of which can change the world for the better and many of which do not work out for lack of appropriate vetting.

Second, the tired excuses for why reform couldn't happen in Saudi Arabia now have no leg to stand on. The Wahhabi clergy, long thought to be an unbeatable obstacle to women driving, rolled over with next to no resistance. The other key factions among the ruling family, most notably the late King Abdullah's inner circle, have now been completely marginalized, as have the backers of King Salman's two earlier crown princes who had preceded MbS. Not only can rival power centers no longer threaten the crown prince or his agenda, but rather there now seems to be no room in Saudi politics for such power centers.

That also means that there is one very unchallenged authority who can determine whether or not Saudi Arabia chooses to play a more constructive role vis-à-vis the Middle East peace process, as well as how the kingdom approaches anti-Semitism and the Jewish people. If Saudi Arabia is to stop religious incitement by state-backed preachers, in state textbooks, and by state officials, there is now one official who could choose to do so by fiat if he so desires. If he decides tomorrow that he wants to visit Jerusalem, opt out of the Arab boycott, or provide a clearer Arab umbrella for partial steps toward a two state solution, then he is singlehandedly capable of doing so.

However, the feasibility of engaging Saudi Arabia to take these sorts of steps also may now be more daunting for some actors than even a week ago. Saudi Arabia started to seriously address its image problem in the West when it announced plans this fall to grant women the right to drive in 2018. Those diplomatic gains by the kingdom may now be in question.

Despite the clear value of combating corruption, the exceptional and politically-driven nature of this week’s arrests, its human rights consequences, and its potential implications for the nature of the Saudi state may provide added impetus to those audiences in the outside world who oppose intimate engagement with Riyadh.

Lastly, the latest Saudi developments hold considerable significance for the region. MbS has called for a more assertive Saudi regional posture, and that is likely to continue without organized opposition at home, even as the tragic war in Yemen drags on without an end in sight. The possibility of a future Saudi war with the terror-sponsoring government of Iran is also a stronger possibility. Indeed, since the weekend Saudi Arabia has described not one but two Iran-linked activities as acts of war: the launching of a missile toward Riyadh by Iran-backed rebels in Yemen and aggression by Iran's proxy Hezbollah against Saudi Arabia and its Lebanese client, Prime Minister Saad Harari who resigned this week from inside the kingdom.