Detained Saudi Prince Buys His Freedom For $1 Billion

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by Tyler Durden
Wednesday, Nov 29, 2017 - 6:32

One day you were the billionaire head of the National Guard in one of the world’s most brutal dictatorships. Although that carries some risk, you were probably reassured by your position as a senior prince in the ruling family, never mind your strong ties to the US military... oh and of course the many zeros in your bank account. The next day, in a turn of events akin to Shakespearian drama, you were imprisoned (kind of) with ten of your fellow princes and a bunch of ministers and former ministers in a 5 star hotel on charges of money laundering, bribery and general corruption.

Despite being a cousin of the Kingdom’s uber-autocratic crown prince, Mohammed bin Salman (MBS), Prince Miteb bin Abdullah was a son of former King Abdullah and got caught up in a clan war in the ruling family. Former Riyadh governor and another of King Abdullah’s sons, Turki bin Abdullah, was also arrested in the crackdown.

Miteb was accused of conducting normal business practices in Saudi Arabia, such as embezzlement, hiring “ghost” employees and awarding his own companies a $10 billion contract for walkie-talkies and bullet proof protection. However, after what must have been the worst three and a half weeks of his life in the Ritz Carlton “prison”, Miteb has purchased his freedom for a cool $1 billion.

According to Bloomberg, "Prince Miteb bin Abdullah, one of the most senior Saudi royals detained in the kingdom’s corruption crackdown, has been released after reaching a settlement deal believed to exceed the equivalent of $1 billion, an official involved in the anti-graft campaign said."

Prince Miteb, who headed the powerful National Guard until earlier this month, was released Tuesday, the official said on condition of anonymity in discussing matters under the supervision of the public prosecutor. At least three other suspects have also finalized settlement deals, the official said. It wasn’t immediately possible to reach Prince Miteb, son of the late King Abdullah, for comment.

The unnamed official told Bloomberg that the public prosecutor will proceed with prosecutions of at least five others. However, Bloomberg notes that the leadership is keen to resolve the corruption issue quickly, a.k.a. extract as much money as possible for the Kingdom’s ailing economy and remove the unwanted media focus from the key western ally dysfunctional country and its royal family.

Prince Miteb’s release, less than a month since his arrest, shows the speed at which Saudi Arabia wants to settle the corruption probe that involved the sudden arrests of royals and billionaires such as Prince Alwaleed bin Talal. The crackdown has shaken the kingdom and reverberated across the world as analysts, bankers and diplomats assess its impact on power in the world’s biggest oil exporter.

Crown Prince Mohammed bin Salman, the kingdom’s predominant leader known as MBS, said the majority of those being detained had agreed to pay back some of the money they had gained illegally in exchange for their freedom. The prince said authorities could recover as much as $100 billion in settlements.

Some suspects started making payments to settle cases in exchange for freedom, people with knowledge of the matter said last week. Businessmen and officials signed agreements with authorities to transfer a portion of their assets to avoid trial and have started to transfer funds from personal accounts to government-controlled accounts, the people said, asking not to be identified because the discussions are private.

While researching the story, Bloomberg found an academic with finely honed skills in stating the obvious with regard to Saudi Arabia’s version of a “night of the long knives.”

“Most princes arrested will certainly try to buy their way out, and we will see more of them doing just that to avoid jail time," said Raihan Ismail, an associate lecturer at the Centre for Arab & Islamic Studies at the Australian National University in Canberra. “This process lacks accountability and integrity. I doubt that detailed charges will ever be released, especially if settlements are reached.”

Speaking to Bloomberg, Alef Advisory, a political risk advisory firm, paints the “corruption crackdown” by MBS in glowing terms, expecting it to earn political capital with the Saudi population.

The opacity of the system doesn’t take away “from the political capital that MBS probably earned from this from the Saudi public” by declaring war on corruption, Hani Sabra, founder of New York-based Alef Advisory wrote in a report. “We continue to believe that MBS’s risky domestic gambits are likely to succeed.”

We doubt that the long-suffering Saudi population will view it as anything more than MBS tightening his grip on power, in an effort to stop the nation splitting apart due to growing economic and political fissures. According to Bloomberg, however, our cynicism is unjustified…MBS says so.

King Salman fired Prince Miteb shortly before midnight Nov. 4 and announced the formation of an anti-corruption commission headed by the crown prince. Prince Miteb’s arrest fueled speculation that the crackdown was more about tightening the crown prince’s grip on power, a claim he dismissed as “ludicrous” in an interview with the New York Times’ columnist Thomas Friedman this month.

In “Groveling In Excrement’: Thomas Friedman Mercilessly Mocked For Bizarre Saudi Puff Piece”, we noted that Friedman’s “fawning hagiography” of MBS has received the derision is deserved.

…most astute observers of developments in the Saudi kingdom of horrors hardly need convincing that Saudi's rulers are among the most backwards and repressive on earth, which makes Thomas Friedman's interview and column on MbS all the more absurd and laughable.

It’s not clear yet what the terms of Miteb’s release are, and whether he will be again detained, this time under house arrest at yet another luxury "prison." However, by showing uncharacteristic leniency in not putting senior rivals to the sword (or at least imprisoning them indefinitely), we wonder whether MBS has ended the clan fight within the ruling family, or whether it's on hold.