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Tackling Corruption: Why Saudi Prince Mohammed’s approach raises questions

Dr. James M. Dorsey

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Leave aside for a moment questions of due process. Analysis of  Saudi Arabia’s three largest corporate failures explains why Crown Prince Mohammed bin Salman’s recent moves look more like a power and asset grab than a credible effort to eradicate corruption.

Dependency on government contracts was at the core of the bankruptcy of Saudi Oger, owned by the family of embattled Lebanese Prime Minister Saad Hariri, and the near-demise of the Saudi Bin Laden Group.

Granted, the $22 billion downfall of 70-year old Ahmad Hamad Algosaibi & Brothers Company (AHAB) that took down two Bahraini banks as well as the Saad Group in one the largest financial collapses of the 2009 global credit crunch, occurred because of mismanagement, lacking corporate and financial governance, and allegations of fraud, theft and forgery.

Yet, like the Bin Ladens and the Hariris, a major chunk of the group’s business was with the government, selling steel piping to Saudi Aramco, the kingdom’s national oil and natural gas behemoth. The settlement of the collapse with more than 100 banks was long viewed as a litmus test for foreign investors.

For Saudi Oger and Bin Laden, the government’s predicament meant cancellation of projects and failure to pay. The government’s default had a ripple effect, including the companies’ inability to pay their workers, who in a country in which protests are banned, took their plight to the streets.

What emerges from the failures is the vulnerability of major private corporations at a time that government, the dominant economic player, was forced to diversify, rationalize, and cut costs. The failures also highlighted the lack of oversight of corporate governance.

Ironically, a raid on the Saudi mansion of the head of the Saad Group, Kuwaiti billionaire Maan al-Sanea, two weeks before Prince Mohammed’s arrest of some 200 princes, officials and businessmen on charges of corruption, set the stage for the purge.

The history of the troubled companies as well as Mr. Al-Sanea’s detention speak to a system in which beyond private enterprise dependency, members of the ruling family were rentiers of the state since its founding and allowed to drink at the trough, and concepts of conflict of interest were non-existent.

Transparency and accountability did not enter the equation in a country that did not tax companies or individuals except for zakat, a religious obligation for all Muslims who meet the necessary criteria of wealth. Instead, the social contract that is now being unilaterally rewritten by Prince Mohammed involved popular surrender of political rights, adherence to a strict social code, and acceptance of an absence of transparency and accountability in exchange for cradle-to-grave welfare.

Despite citizens being asked to increasingly contribute by moves towards market rates for services and the planned introduction of indirect taxes like a highway toll, there is no accountability with billions of dollars that the inhabitants of Riyadh’s Ritz Carlton Hotel-turned-gilded prison are being asked to surrender and transfer to a finance ministry account in exchange for their freedom. What happens to those funds once they have been transferred remains unclear.

In other words, transparency and accountability do not figure in Prince Mohammed’s top-down moves. Aides to Prince Mohammed have asserted that the arrests were the result of almost three years of investigations. No details of those investigations have been made public nor have their results been interrogated by a credible and independent judiciary.

The assertion would explain why the government announced the establishment of a new anti-corruption commission headed by Prince Mohammed only hours before the purge and why its functions were seemingly primarily defined as an arm of law enforcement rather than a vehicle to create an anti-corruption legal structure that would also govern the commercial relationship between the government and members of the ruling family. The commission’s powers include the ability to detain suspects, seize their assets and ban them from travel.

The impression that power and assets rather than anti-corruption drove Prince Mohammed in his purge is enhanced by the fact that it appears designed to intimidate and put the kingdom’s elite on notice. There has been neither a decree nor a process in the country’s Shura or Advisory Council to draft legislation as well as rules and regulation that would create a legal anti-corruption infrastructure, govern the way government agencies do business, and set a template for defining and preventing conflict of interest.

While one could argue that Prince Mohammed needed to set an example, that effort appears undermined by the fact that the alleged investigations and arrests have a selective or arbitrary taste to them. Fact of the matter is that in the permissive environment that was written into the kingdom’s DNA at founding, few, if any, members of the ruling family are likely to emerge with flying colours.

All of this, explains with the kingdom’s elite was caught off guard even though Mr. Al-Sanea’s arrest should have set off alarm bells. Instead, the ruling family and the business community saw the arrest as a one-off event in a long-standing financial sage. It also clarifies why the elite grossly underestimated Prince Mohammed’s brashness and ruthlessness and ignored hiswarning in June that “no one who got involved in a corruption case will escape, regardless if he was a minister or a prince.”  

For anti-corruption to be perceived as the main driver of the purge, Prince Mohammed will have to introduce due process, transparency and accountability to the process. In theory, that would mean targeting all who potentially could be under suspicion, an approach that would be tough, if not impossible, in an environment in which the suspicion of guilt is likely to include many who were not detained, rather than only some. Instead, Prince Mohammed would be better advised to focus on structural and institutional change.

Dr. James M. Dorsey is a senior fellow at the S. Rajaratnam School of International Studies, co-director of the University of Würzburg’s Institute for Fan Culture, and the author of The Turbulent World of Middle East Soccer blog, a book with the same title, Comparative Political Transitions between Southeast Asia and the Middle East and North Africa, co-authored with Dr. Teresita Cruz-Del Rosario and three forthcoming books, Shifting Sands, Essays on Sports and Politics in the Middle East and North Africaas well as Creating Frankenstein: The Saudi Export of Ultra-conservatism and China and the Middle East: Venturing into the Maelstrom.

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NATO and the puzzle of a nuclear deal with Iran

Mohammad Ghaderi

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A meeting of NATO (North Atlantic Treaty Organization) Heads of State and Government was held on Wednesday 11 and Thursday 12 July 2018 in Brussels, Belgium. NATO leaders met in Brussels amidst a terse environment that threatens to further weaken the post-war order.

This year’s meeting came at a tense time for transatlantic relations since the US president is set to sit down one-on-one with Russian president Vladimir Putin on May 16 in Helsinki. One of the topics the US president sought to discuss with his Western counterparts in Brussels was “the nuclear deal with Iran” and its fate.  Regarding this controversial issue Time wrote:

“After ripping up the Iran nuclear deal in May, the Trump Administration is fanning out across the globe to rally support for a return to economy-crippling sanctions against Tehran.”

It continues: “The effort comes ahead of President Donald Trump’s trip next week to Europe, where he is expected to pressure leaders into joining the far-reaching campaign to handcuff major aspects of Iran’s economy, including driving oil exports to zero. If European allies don’t join, Trump has threatened secondary sanctions on any company that does business with Tehran.”

According to the Time and other Western sources, Donald Trump intends to press NATO leaders over the Joint Comprehensive Plan of Action (JCPOA), and “The president hopes his bare-knuckled approach will coerce European leaders to unite behind him, even as they publicly oppose a return to sanctions and scamper to salvage the existing nuclear deal without American participation. This is while the White House keeps to press its European allies for increasing the military and defense budget (to 2% of their GDP).

While the transatlantic tensions are raising day by day due to the imposition of tariffs on steel and aluminum imported from Europe, what meaning can negotiations on the JCPOA imply? Does Trump intend to make a deal with his European partners in this regard? Do NATO’s European members welcome the integration of the JCPOA amid their conflicts with the US?

The British Prime Minister Theresa May has recently asked other European countries to remain silent against Trump’s actions in imposing tariffs on imported goods from Europe, and not to seek retaliatory measures. She also asked European authorities to negotiate with the US president on the JCPOA. Indeed, what’s going on among NATO members?

The truth is that in near future, the JCPOA will turn to the Europe’s leverage for making deals with the United States in security grounds, an issue witch its signs we could well see in the Brussels summit. It shouldn’t be forgotten that in its calculations, the EU is still regarding itself as dependent to the United States. Those like Theresa May, Emmanuel Macron and Angela Merkel are adjusting their policies in the international system based on their security dependence on the United States. It might be possible that the European officials agree on “restraining Trump”, but that’s all, and we can’t expect them to go further as to fulfil their obligations in this regard. The EU would never confront the US seriously, since “resisting against the White House” is in no way defined in Europe’s strategies and tactics.

In the course of the G7 recent meeting in Canada, Donald Trump discussed various subjects with Angela Merkel, the German Chancellor, including Iran nuclear deal, tariffs on steel and aluminum imported from Europe, and the increase of NATO defense budget. But these talks resulted in the intensified disagreements among EU member states and Trump. The tensions were so high that the meeting ended with no final statement. Now the US president is pursuing the same approach I dealing with NATO states.

Trump and the European countries both regard the tensions raised in the international system as a “single package”. In this equation, Trump asks the European authorities to cease their support for the JCPOA and the continuation of the nuclear deal in exchange for a decrease in the US economic and security pressures. It should be noted that one of the main reasons for the European leaders’ refusal of offering a conclusive, detailed and effective package to Iran regarding the JCPOA was their secret negotiations with the American officials. Since the U.S. withdrawal from the nuclear deal, Mike Pompeo the American Secretary of State had been constantly in contact with the European troika’s foreign ministers, and announced them the exact positions and policies of the US government.

In the course of the NATO summit, we witnessed the continuation of the Europe’s paradoxical game playing towards the JCPOA. It shouldn’t be forgotten that the EU’s main strategy towards Iran and the JCPOA, is to make us remain as part of the nuclear deal as long as possible, and without benefiting from its advantages, so that the influence of the US sanctions would be multiplied. The offering of the EU’s unacceptable and useless package of proposals is also to be analyzed in the same vein; a weak package which is resulted from the special relations between the US and Europe.

First published in our partner MNA

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Middle East

God’s Grace: Reichstag Fire and July 15 Military Coup

Zakir Gul, Ph.D.

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“By the grace of God!” Some rulers use the cry to explain why certain events happen and why they play out as they do. They will argue that God, in allowing the events to happen, has bestowed his grace upon the ruler. Two rulers and two events—the Reichstag fire in Germany on February 27, 1933,and the military coup attempt in Turkey on July 15, 2016—illustrate the devastating consequences this twisted logic can have on the lives of ordinary people.When Adolph Hitler arrived at the scene, he told German Chancellor Franz von Pape, “This is a God-given signal” to crush Communists (and later opponents). Immediately after the failed military coup, Recep Tayyip Erdogan announced that the event was “a gift from God” and justification for Erdogan to start cleansing the military (and later purging opponents).

The similarities between the two events are striking in terms of beneficiaries, consequences and suspicions about the rulers’ true intentions going forward. Soon after the fire, Hitler started to consolidate his powers in the name of protecting the state’s security and democracy. To do so, Hitlersuspended civil liberties and shut the door on the rights and freedom of the country’s citizens. The fire in the heart of the countrywas used to justify the notion that the country was in a great danger. With decrees, Hitler purged his opponents, even though there was only one person considered to be responsiblefor the fire. Erdogan followed a similar path when he has declared a state of emergency after the coup attempt and consolidated his powers with radical changes in the country’s political and legal systems. With decrees, Erdogan purged hundreds of thousands of people under the guise of protecting the country’s security and democracy—even though soldiers who allegedly were involved in the coup attempt that night already had been into custody.In the political arena, Hitler increased the number of votes he received in the election that took place a week after the fire. Similarly, public support for Erdogan increased after the coup attempt. History does, indeed, repeat itself. These are two of many examples that could have been cited.

It may not be possible to know for sure who staged and orchestrated the Reichstag fire orthe military coup attempt; however, it is clear that the rulers’ purported motives are suspicious and their explanations filled with inconsistencies, given the many controversies arising from both events.The Reichstag firehas been discussed by scholars and historians who concluded that Hitler and his team—either directly or indirectly—helped to instigate the fire. Indeed, the arsonist responsible for the fire was pardoned years later. The military coup in Turkey wasa terrorizing and wicked deed against humanity and democracy, and the persons responsible must be identified and punished based on the rule of law and democratic values. It is, however, a Herculean task. Too many loopholes and controversies about the coup attempt need to be clarified. Erdogan should provide evidence-based, honest and objective explanations to remove the suspicions surrounding the coup attempt. Many answers are needed. For example,why did Erdogan refuse to answer questions from the major opposition party (the Republican People’s Party, or CHP) about the coup? Why has the investigation case report and the report of the parliament’s investigation committee deemed inappropriate and unsatisfactory even by some members of the committee? More important, why has an international committee not been allowed to investigate the case? Questions such as these highlight the many mysteries and suspicions that still surround the event two years after it occurred.

An independent international investigation committee should be established by the United Nations to examine the coup attempt and eliminate possible suspicions about Erdogan and his governing team. The committee also should determine whether thousands of people were responsible for organizing the coup attempt, as the government alleges, and clarify the following: whether some U.S. citizens, such as Andrew Brunson, who is still in jail, were among the primary plotters of the coup; whether some other U.S. citizens for whom bounties were offered were behind the coup attempt; and whether the United States was behind the coup attempt, as Turkish politicians and government officials claim—even though the United States has denied any involvement in the event.

Another independent international investigation committee should be established by the U.N.(or some other internationally accepted institution)to investigate the aftermath of the coup. Violations of internationally accepted human rights (as reported by credible human rights organizations such as Amnesty International and Human Rights Watch) that have been committed by government security and intelligence officials since the coup attempt should be investigated. The committee also should also determine whether persons victimized in any way (such as imprisonment, job loss, inhumane treatment, and deprival of constitutional rights and freedoms)were based on evidence or resulted from the arbitrary application punishment. A final task of the committee should be to investigate allegations of abductions, extrajudicial executions and torture by government security and intelligence agencies. As John Dalhuisen,Amnesty International’s Europe director, has said, “It is absolutely imperative that the Turkish authorities halt these abhorrent practices and allow international monitors to visit all these detainees in the places they are being held.”

An independent and objective domestic committee that consists of members from every political party in the country—regardless of the parties’ percentage of the vote among constituents—should be established to investigate the same issues the two international committees need to review. Care must be taken to ensure that the members of this domestic committee—unlike those serving on the committee that was formed after the coup attempt—can maintain their objectivity and are aware of their responsibilities. The committee should be transparent and its actions and discussions observed and by international representatives of the U.N., the Organization for Security and Co-operation in Europe, the European Union, and individual countries and/or journalists.

Finally, the European Court of Human Rights, an internationally accepted high court of which Turkey is a member,should determine for itself—rather than rely solely on the response from government officials—whether the country’s domestic legal and judicial system can be accessed openly and freely by all citizens and the attorneys representing them in legal matters.

It is only through these independent international and domestic investigations that the truth about the failed coup attempt can come to light.

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Middle East

Ghassan Kanafani, the Palestinian Pioneer Author of Resistance Literature

Sondoss Al Asaad

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The eighth of July marks the 46th martyrdom anniversary of Ghassan Kanafani, who was assassinated by the Zionist Intelligence;  Mossad, along with his 17-year-old niece Lamees. Days before their martyrdom, Lamees had asked Kanafani to diminish his activitism and to concentrate on his writings. He answered her,” I write well because I believe in a cause, in principles. The day I leave these principles, my stories will become purposeless. If I were to leave behind my principles, you yourself would not respect me.”

Kanafani was born in 1936, in Palestine, to a father who was a national activist in the resistance against the British colonialism. After the 1948 Zionist occupation, his family sought refuge to Syria, when he was 12-year-old. In the refuge camps, Kanafani wrote most of his novels which highlights the sufferings that the Palestinians endure in the diaspora. He won multiple awards for his works both during his life and posthumously. For instance, in “Umm Saad,” Kanafani’s protagonist is a symbol of the Palestinian women in the refugee camps.

Kanafani was inspired by Jamal Abd al-Nasser’s ideas of national independence and defiance of imperialism. Due to the decline of Nasserism after the 1961 failure to consolidate Egypt and Syria under a unified United Arab Republic, the ascendancy of imperialism and Zionism and the rise of communism; Kanafani, along with his comrade George Habash, resolved to adopt Marxism. They belived that the political crisis in the Arab world could only be solved by turning the anti-imperialist struggle into a social revolution.

In Lebanon, Kanafani adopted the Communist philosophy and become a leading member of the Marxist-Leninist Popular Front for the Liberation of Palestine (PFLP). He says, “The Palestinian cause is not a cause for Palestinians only, but a cause for every revolutionary, wherever he is, as a cause of the exploited and oppressed masses in our era.”

Besides, he was a prolific creative and brilliant novelist and the first to anticipate the “resistance literature” genre. His literary products and fictitious works have inspired a whole generation of resisting youth, both during and after his lifetime as they are greatly rooted in the Palestinian culture and cause. Kanafani dedicated his works to reflect on the Palestinians’ lives and the challenges they face under the Zionist occupation. He states, “My political position springs from my being a novelist. In so far as I am concerned, politics and the novel are an indivisible case and I can categorically state that I became politically committed because I am a novelist, not the opposite.”

The assassination of Ghassan Kanafani was the result of his commitment to the Palestinian cause and the resistance methodology. Today, his legacy echo within every free revolutionary who devoted his life to confront the imperialist conspiracies. Indeed, Kanafani was murdered merely because he had constituted an intellectual threat to the Zionist entity. He refused the negotiations with the enemy, pointing that it would be “a conversation between the sword and the neck […] I have never seen talks between a colonialist case and a national liberation movement.”

The chief thematic field of Kanafani’s writing was inseparably connected to the anti-imperialism struggle. He stressed that the Palestinian cause could not be resolved in isolation of the Arab ‘s social and political crisis. Further, he insisted on developing the resistance movement from being a nationalist Palestinian liberation movement into being a pan-Arab revolutionary socialist movement of which the liberation of Palestine would be a vital component.

Definitely, Kanafani played an influential role in raising consciousness on the issue of imperialism. He maintains, “Imperialism has laid its body over the world, the head in Eastern Asia, the heart in the Middle East, its arteries reaching Africa and Latin America. Wherever you strike it, you damage it, and you serve the world revolution. “Shortly after Kanafani’s obituary in Lebanon, “The Daily Star” stated, “He was a commando who never fired a gun, whose weapon was a ball-point pen, and his arena the newspaper pages.”

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