Saudi 'Corruption' Probe Widens: Dozens Of Military Officials Arrested

After jailing dozens of members of the royal family, and extorting numerous prominent businessmen, 32-year-old Saudi prince Mohammed bin Salman has widened his so-called 'corruption' probe further still.

The Wall Street Journal reports that at least two dozen military officers, including multiple commanders, recently have been rounded up in connection to the Saudi government’s sweeping corruption investigation, according to two senior advisers to the Saudi government.

Additionally, several prominent businessmen also were taken in by Saudi authorities in recent days.

A number of businessmen including Loai Nasser, Mansour al-Balawi, Zuhair Fayez and Abdulrahman Fakieh also were rounded up in recent days, the people said.


Attempts to reach the businessmen or their associates were unsuccessful.

It isn’t clear if those people are all accused of wrongdoing, or whether some of them have been called in as witnesses. But their detainment signals an intensifying high-stakes campaign spearheaded by Saudi Arabia’s 32-year-old crown prince, Mohammed bin Salman.

There appear to be three scenarios behind MbS' decision to go after the military:

1) They are corrupt and the entire process is all above board and he is doing the right thing by cleaning house;


2) They are wealthy and thus capable of being extorted (a cost of being free) to add to the nation's coffers; or


3) There is a looming military coup and by cutting off the head, he hopes to quell the uprising.

If we had to guess we would weight the scenarios as ALL true with the (3) becoming more likely, not less.

So far over 200 people have been held without charges since the arrests began on November 4th and almost 2000 bank accounts are now frozen, which could be why, as The Daily Mail reports, Saudi prince and billionaire Al-Waleed bin Talal has reportedly put two luxury hotels in Lebanon up for sale after being detained in his country during a corruption sweep.

The Saudi information ministry previously stated the government would seize any asset or property related to the alleged corruption, meaning the Savoy hotel could well become the state property of the kingdom.

'The accounts and balances of those detained will be revealed and frozen,' a spokesman for Saudi Arabia's information ministry said.


'Any asset or property related to these cases of corruption will be registered as state property.'

As we noted previously, it appears clear that MbS has decided to enforce a 70% wealth tax...the Financial Times reports today that the Saudi government has offered the new occupants of the Riyadh Ritz-Carlton a way out.... and it’s going to cost them: In some cases, as much as 70% of their net worth.

Saudi authorities are negotiating settlements with princes and businessmen held over allegations of corruption, offering deals for the detainees to pay for their freedom, people briefed on the discussions say.


In some cases the government is seeking to appropriate as much as 70 per cent of suspects’ wealth, two of the people said, in a bid to channel hundreds of billions of dollars into depleted state coffers.


The arrangements, which have already seen some assets and funds handed over to the state, provide an insight into the strategy behind Crown Prince Mohammed bin Salman’s dramatic corruption purge.

The country’s attorney-general has said he is investigating allegations of corruption amounting to at least $100 billion - though the total value of assets seized could be as high as $800 billion. Though the Financial Times puts the high-end figure at a relatively modest $300 billion; to make up for the delta, more arrests are still expected.

Regular Saudis, who’ve seen their benefits cut and some of their jobs taken away, support MbS’s decision.  “Why should the poor take all the pain of austerity,” said one Saudi academic. “The rich need to pay their way too.”

In Saudi Arabia, they are about to do just that.

*  *  *

While MbS also continues to get the support of US officials, not everyone is convinced that the anti-corruption probe will succeed...

As's Patrick Cockburn warns in fact, it is doomed to fail...

About eight or nine years ago, I had an Afghan friend who previously worked for a large US aid agency funding projects in the Afghan provinces. He had been hired to monitor their progress once work had got underway, but he did not hold the job very long for reasons that he explained to me.

The problem for the Americans at the local agency headquarters in Kabul was that the risk of ambush by the Taliban was deemed too high for them personally to visit the projects that they were funding. Instead, they followed the construction from one step removed, by insisting that the Afghan company involved should transmit back to Kabul, at set intervals, detailed pictures of its activities, to show that they were fulfilling their contract to the letter.

Almost as an afterthought, the aid agency thought it might be useful to send along an Afghan in their employ to check that all was well. His first mission was to go to Kandahar province, where some plant – I seem to remember it was a vegetable packing facility – was believed to be rising somewhere in the dangerous hinterland. He went there, but, despite earnest inquiries, was unable to locate the project.

Back in Kandahar city, he asked around about the mystery of the missing vegetable plant, but found that his questions were answered evasively by those he contacted.

Finally, he met somebody who, under a pledge of secrecy about the source of the information, explained to him what was happening.

Businessmen in Kandahar receiving funds from the aid agency and knowing its reliance on photographs to monitor works in progress, had found it safer and more profitable to fake the whole process.

They engaged a small local company with experience of making TV advertisements and documentaries to rig up what was, in effect, a film studio – in which workers played by extras would be shown busily engaged in whatever activity the agency was paying for. In the case of the vegetable-packing facility, this must have been simple enough to fake by buying cabbages and cauliflowers in the market to be placed in boxes inside some shed by labourers hired by the day.

My friend returned to Kabul and hinted to his employers that this particular project in Kandahar was not doing as well as they imagined. He thought that it would be unhealthy for himself to go into detail, but he did not, at this stage, resign from his well-paying job. This only happened a few months later, when he was sent to Jalalabad to check on a chicken farm supposedly nearing completion outside the city.

Once again, he could not find the project in question and, when he met those in charge, put it to them that it did not exist. They admitted that this was indeed so, but – according to his report – they added menacingly that he should keep in mind that “it was a long road back to Kabul from Kandahar”. In other words, they would kill him if he exposed their scam: a threat that convinced him his long-term chances of survival were low unless he rapidly resigned and found new employment.

I was thinking of the story of the Kandahar packing plant and the Jalalabad chicken farm, when Crown Prince Mohammed bin Salman launched his anti-corruption drive in Saudi Arabia last weekend.

There may be a big difference in the amount of money to be made out of looting the Saudi state compared to US aid agencies in Afghanistan, but the psychology and processes at work have similarities.

In both cases, those making a lot of money out of corruption will put more effort into going on doing just that, than those who say they are determined to stop them. If a few wealthy individuals are scapegoated, then others will jostle to take their place.

It is important to take on board, when considering the case of Saudi Arabia, that many oil- or resource-rich states – be they monarchies or republics – have launched their own anti-corruption drives down the years. All have failed, and for roughly the same reasons.

Iraq, so different from Saudi Arabia in terms of history, religion and politics, is likewise entirely dependent on oil revenues. Its next biggest export used to be dates, though today even these are often imported from China. Corruption is chronic, particularly in giant infrastructure projects. Four years ago, I was in Baghdad early in the year, when there was heavier than usual rainfall, which led to a large part of the eastern side of the city disappearing under a foot of grey water mixed with sewage. This was despite $7bn (£5.3bn) supposedly spent on new sewers and drainage systems, but which, in the event, turned out not to function – or even to exist.

The problem in resource-rich states is that corruption is not marginal to political power, but central to acquiring it and keeping it. Corruption at the top is a form of patronage manipulated by those in charge, to create and reward a network of self-interested loyalists. It is the ruling family and its friends and allies who cherrypick what is profitable: this is as true of Saudi Arabia as it was true of Libya under Gaddafi, Iraq under Saddam Hussein and his successors, or Iraqi Kurdistan that was supposedly different from the rest of the country.

Corruption is a nebulous concept when it comes to states with arbitrary rulers, who can decide – unrestrained by law or democratic process – what is legal and what is illegal. What typifies the politics of oil states is that everybody is trying to plug into the oil revenues in order to get their share of the cake.

This is true at the top, but the same is the case of the rest of the population, or at least a large and favoured section of it.

The Iraqi government pays $4bn a month to about seven million state employees and pensioners. These may or may not do productive work, but it would be politically risky to fire them because they are the base support of the regime in power.

Anti-corruption drives don’t work, because if they are at all serious, they soon begin to cut into the very roots of political power by touching the “untouchables”. At this point principled anti-corruption campaigners will find themselves in serious trouble and may have to flee the country, while the less-principled ones will become a feared weapon to be used against anybody whom the government wants to target.

A further consequence of the traditional anti-corruption drive is that it can paralyse government activities in general. This is because all officials, corrupt and incorrupt alike, know that they are vulnerable to investigation.

“The safest course for them is to take no decision and sign no document which might be used or misused against them,” a frustrated American businessman told me in Baghdad some years ago. He added that it was only those so politically powerful that they did not have to fear legal sanctions who would take decisions – and such people were often the most corrupt of all.


Manthong Paul Kersey Fri, 11/17/2017 - 18:46 Permalink

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  Oh, for the love of the Christian God… Please do not lose any public square sword decapitated heads over this little matter.

In reply to by Paul Kersey

Mr. Universe Manthong Fri, 11/17/2017 - 19:06 Permalink

"Orgies with underage girls, heavy drug and alcohol abuse" - Saudi princess unveils the Kingdom's dark side" 

Amira Bint Aidan Bin Nayef, the ex-wife of the Saudi Prince Al Waleed bin Talal (who was recently arrested in scope of the anti-corruption purges in the country), went on a rampage against the ruling Saudi regime in her exclusive statements to the French newspaper Le Monde, saying that those who accuse others of corruption and money laundering, are in fact highly corrupted themselves.


The princess said they’ve turned the city of Jeddah into a slave market where underage girls are being exploited for noisy sex parties involving drug and alcohol abuse.

She said that one of the main reasons why this keeps going on is that the members of the Committee for the Promotion of Virtue and the Prevention of Vice (Saudi Sharia police) tend to keep away from the matter, fearing they might lose their jobs, should they intervene.

The newspaper quoted the princess as saying that a Hallowen event was recently held in Jeddah, and which was attended by 150 people, including employees of the consulates. The scene was like a typical nightclub anywhere outside the Kingdom, with available wines, dancing couples in fancy costumes, and a DJ. 

Bint Aidan said the price of smuggled liquor in the country is very high. For instance, the price of the Smirnoff vodka is 1500 Riyals ($ 400), sometimes forcing party organizers to refill the original bottles with a local wine called Siddiqui. 

She said that slavery in Saudi Arabia has different forms, but it is done in secrecy and permitted only among the primary beneficiaries of the princes of the House of Saud.

But then she mentioned one of the most repulsive things: Buying and renting the children, especially the orphans, from countries like Sri Lanka, Bangladesh, the Philippines, Djibouti, Somalia, Nigeria, Romania and Bulgaria.

The children become the property of those who buy them and are not allowed to leave without permission.

Even the Asian maids who come to work often find themselves in a kind of slave-like position.

Young girls are divided into smaller groups and exploited for immoral acts. 

Trafficking of white women and exploiting them for sexual practices is also relatively common.…    

In reply to by Manthong

ludwigvmises Fri, 11/17/2017 - 18:38 Permalink

Just wait when this sh** happens here. You already see Mueller going crazy, with Manafort and fabricated "money laundering". It won't be long before they will take down half of the Fortune 400 to plug the holes in DC's budget. U-NAZIed States of Murica.

jeff montanye Fri, 11/17/2017 - 18:43 Permalink

yet corruption increases and decreases over time.  the late nineteenth century, the "gilded age" with tammany hall and the monopolitic trusts in business yielded, for a time, to the progressive era and the trust buster theodore roosevelt.  ditto the roaring twenties to the reforms of the new deal.and whatever was going on under the bushes, the clintons and obama, seems to be being revealed in some fashion under trump.  perhaps because we have actual opposition in politics instead of the professional wrestling that preceded it.

nmewn Fri, 11/17/2017 - 18:46 Permalink

I think officially qualifies as a purge. So the question becomes, just what did Trump say he now knows when he went to SA? ;-) 

Rex Andrus Fri, 11/17/2017 - 19:01 Permalink

MBS is getting ready to hand over the perpetrators of 9/11, Paulson's heist and the uniparty's deep pocket owners. The swamp is livid in its complete impotence to do a damn thing to stop this from happening. HA HA

smacker Fri, 11/17/2017 - 19:10 Permalink

How appropriate that Prince Charles is in the photo. The Royal who got HRH Tony Blair' to spend around £8 million of taxpayers money to build a flood diversion overflow for the River Thames in Windsor to avoid the small risk of the Royals weekend retreat Windsor Castle from ever suffering flooding.

FoggyWorld smacker Fri, 11/17/2017 - 20:50 Permalink

Prince Charles did the right thing.  Windsor Castle was originally built by William the Conqueror a decade or so after he won the Battle of Hastings in 1066.   It has been added to many times and restored and Charles was concerned that it be preserved - not for the Royal family - but for the people of Great Britain who are the owners.It is one of the very few Grade 1 listed buildings in that entire nation and it did need protection because at one point there had been a moat around it and it was filled in but there was genuine concern that it needed more substantial safety added.Charles has had a lifetime interest in the architecture of the UK and often has spent his own money to restore buildings that were on the verge of decay.  If your premise is that old things should just crumble, then flail away.  We in the US spend a fortune on preserving our much more recently built governmental treasures and in both countries it seems wise to do so.  It's about cultural preservation which is out of favor these days but once those treasures are gone, they are gone forever.And as a footnote, Charles has indicated that when he becomes King he would prefer to stay right where he is in Clarence House and NOT move into Buckingham Palace.  He envisions it being turned back completely to the nation and it would be used for formal occasions and the art gallery most likely would be expanded but the private quarters which aren't huge, would not be lived in by Royal family members.  

In reply to by smacker

joroco smacker Sat, 11/18/2017 - 09:07 Permalink

Charles may have an interest in architecture and the environment of Windsor, but certainly no interest in the same in the village of Datchet, three miles downstream and the place of where the river and flood channel converge. As a result, a few years ago, thousands of homes throughout Datchet and Wraysbury were flooded, just so their majesties wouldn't have to get their feet wet when attending their offsprings' school on the other side of the river!

In reply to by smacker

Alfred Fri, 11/17/2017 - 19:18 Permalink

Great article. Corruption artfully illustrated by the Suadi's...Loved the part of it being patronage and central to maintaining power. Exactly... That's why it works so well.

My Days Are Ge… Fri, 11/17/2017 - 19:36 Permalink

This is fraud from the top down, with everyone getting a piece of the action.To track the project, all you would have to do is have all building components purchased to be delivered to the agency in Kabul.  There, the parts would be marked with special paints and coatings detectible by infrared photography.  The parts and pieces are released, dispatched and offloaded at the job site.  Photos of the offloading are sent to the agency.  Weekly work-in-progress photos are sent.  You dispatch people to to photograph the site from afar.  Etc.  Until the project is built out and ready for an acceptance review.  By closely controlling everything, you will withhold progress payments for every questionable act.It is easier for the agency director to look with a blind eye and bag 10%poject value in cash and then later go through the routine described above.  The director shoveled half of his take to his boss in DC - that is how the system works.

Chhelo Fri, 11/17/2017 - 19:52 Permalink

Saudi's = rank amatuers. Just look at all the money our politicians have looted from its citizens since Wilson signed on to the FED and the 16th Amendment in 1913.

That's when we lost our freedom.

chestergimli Fri, 11/17/2017 - 19:56 Permalink

This is just one of the millions of reasons that any and all monetary systems need to be destroyed. As long as money is in existence, there are weak people who will try to corner it for their own aggrandizement.

When Our Lord returns, he will totally remake the world and there will be justice. Justice cannot be maintained with any sort of monetary system.

redmudhooch Fri, 11/17/2017 - 20:02 Permalink

Yes, lets sell the money worshiping (((psychopaths))) $250 billion in weapons.Go ahead and give Israel another $10 billion to use against us too while you're at it.Sad!

Stu Elsample Fri, 11/17/2017 - 20:49 Permalink

32 years old, wet behind the ears, and making himself a lot of enemies who don't want to lose what they have.I'm betting that his dismembered carcass will be dumped in the Red Sea before January 1st