Tag: Makhlouf

France Finds Syria’s Rifaat al-Assad Guilty of Money Laundering

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On June 17, a French court found Rifaat al-Assad, the 82-year-old brother of former Syrian President Hafez al-Assad, guilty of money laundering. The judiciary  sentenced him to four years in prison and he will have all his French and London-based properties seized after he used Syrian state funds to purchase the real estate.

Court case

According to the court documents, between 1984 and 2016, al-Assad acquired property in some of France’s most prestigious neighborhoods and amassed a fortune of roughly $113 million. The French court established that much of al-Assad’s wealth came from Syria, even as he himself claims the Saudi king had offered the fortune as a gift.

Spanish authorities, in a 2017 anti-money laundering operation, seized 500 of his properties estimated to be worth roughly $785 million.

Al-Assad will appeal the sentencing and will not enter detention until his appeal has been processed. Bashar al-Assad’s uncle was also ordered to pay $33,680 to Sherpa and Transparency International France, the two anti-corruption NGOs that first brought al-Assad’s practices to the attention of the French court in 2013.

Sherpa’s lawyer, Vincent Brengarth, told Reuters that “this ruling shows that nobody escapes justice and there is no impunity.”

Rifaat’s past

Rifaat al-Assad was listed as Syria’s vice president until 1998, but lost most practical political power after being accused of a 1984 coup attempt when his brother, Hafez al-Assad, was suffering from heart problems. The Assad-aligned Alawites had been excluded from a council entrusted with ruling Syria, leading some high-ranking officers to throw their support behind the president’s brother, Rifaat.

Rifaat al-Assad led an army of 55,000 to take control of Damascus and disarm Syrian troops but Hafez used his seniority in the Assad family and his recovery to force Rifaat and his allies to abandon the coup attempt. According to News Arabia, Rifaat left for exile with $300 million of Syrian state funds, which he later claimed was a gift from the then-crown prince of Saudi Arabia, Prince Abdullah.

Palace intrigue

Similar to the current palace intrigue over the Makhlouf family, Rifaat had access to state funds through the business empire of his son, Sumer. Like Rami Makhlouf, Sumer was part of the business elite that ensured the Assad family received a cut of all economic activity in the country.

When Bashar al-Assad succeeded his father in 2000, Rifaat positioned himself as the logical successor to the Syrian presidency after having held the vice presidency for decades. But his claims while exiled in France produced no significant opposition to Bashar, who ascended to the presidency as their father had intended.

Rifaat became known as the “butcher of Hama” for his part in the bombardment of Hama, where thousands of civilians died. He had called for Bashar to step down during the Syrian civil war but his little remaining influence proved to be insufficient to achieve his objective.

Syrians Brace for Looming Sanctions

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On June 17, the ‘Caesar Act’ will come into effect in the United States, with potentially devastating consequences for Syria’s economy. The act consists of a broad package of sanctions that would, in effect, make it illegal for most countries to do business with Syrian enterprises.

The Caeser act shares the pseudonym of a Syrian military photographer who smuggled thousands of photographs of Syrian torture out of the country, revealing the brutality of the Syrian regime’s practices against detainees.

However, the package of sanctions could have far-reaching consequences for Syria. The war-torn country’s economy is already suffering from hyperinflation that has caused food prices to rise by 50% in a single month.

“Prices of goods in Syria, including locally produced ones, are rising with the exchange rate,” Elizabeth Tsurkov, of the Foreign Policy Research Institute told the Guardian. “The inflation is so rapid that prices in the morning would be lower than in the evening,” she explained.

Looming sanctions

The already dire situation in Syria is about to get worse since the Caesar Act will effectively penalize any country that does business with any company in Syria.

While existing EU and US sanctions already target senior regime officials and aligned business interests, the US sanctions set to trigger on June 17 will target any country that trades with Syrian entities, effectively targeting Syria’s few remaining trade-partners in neighboring countries and with businesses in Europe and the Gulf states.

The largest impact of the sanctions will be felt both in Damascus and Beirut, as trade with Lebanon has been one of the few remaining lifelines on which Syria’s fragile economy depended. Both Lebanon and Syria are facing spiraling currency crises and  the US sanctions aim to exacerbate these troubles in order to weaken Iranian influence in the two countries.

Hezbollah’s role in Lebanon’s government and Iranian support for both countries have long been a thorn in the side of the US military and the US now aims to break business ties between the two countries and plunge both into a dire economic crisis.

Victims

However, the victims of sanctions are rarely the elite that they nominally target. Rising prices of basic essentials and food scarcity are inevitable, but the regime’s leadership will always have enough to eat. The sanctions hope to make the economic situation in Syria and Lebanon so dire that the starving people will rise up and hold the governments responsible.

In over a century of sanctions, they have never actually produced this result. Sanctions on apartheid south-Africa actually further impoverished the black population, according to the then prime-minister de Klerk. Cuba has been under crushing US sanctions since it’s communist revolution, but the sanctions actually allow the regime to blame the US for any economic issues.

In Syria, an already devastated country with its infrastructure in ruins is facing an economic crisis even without the new sanctions. Rising bread prices have sparked protests which were met with counter-protests by government supporters, who directly highlighted Western sanctions as the reason for the economic troubles.

Following a nine-year conflict, Syria has few resources left to rebuild. The US now attempts to once again spark a popular uprising and reduce the influence of Iran and Hezbollah. But, after the first uprising was crushed with little to no official western backing, how are Syrians supposed to topple al-Assad now?

Syrian Palace Intrigue Over Stolen Fortune Continues to Devolve

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The dirty laundry of Syria’s governing Assad family is airing publicly as the family attempts to gain control over an opaque fortune held by one side of the family. For decades the Makhloufs, the family of Bashar al-Assad’s mother, used their network of international businesses and government connections to channel a slice of Syria’s oil revenue into foreign bank accounts.

The bargain benefited the Makhlouf family while providing the Assads with financial firepower outside general taxation. But the relationship between the two branches of the same family started to fracture during the Syrian civil war, which required Russian military assistance to regain control over the population at a price.

Post-war tensions

If the conflict’s aftermath, Russia and Bashar al-Assad’s wife Asma have become increasingly influential in palace intrigue that would make for an interesting television drama. Russia benefits from a concentration of power around the Assads, who owe Russia for their intervention. Asma al-Assad competes with the Makhloufs for influence over the Alawites, an important political bloc that is the bedrock of Assad’s power.

Rami Makhlouf, the cousin of Bashar al-Assad, has become the focal point in the family rift. He followed in his father, Mohammed Makhlouf’s footsteps and used his family’s connections to accumulate tremendous wealth while backing the Assads with financial support and influence over the Alawites.

The mutually beneficial relationship between Rami Makhlouf’s business empire and al-Assad’s grip on power has now fractured to the point where both sides are making public moves. The conflict is revealing much about a structural kleptocracy where state and business overlap and intertwine.

Stand-off

The latest chapter in the palace drama has come in the way of a travel ban for Rami Makhlouf and an order for the Syrian stock market to ban trading in Makhlouf’s telecom business. In response, Rami Makhlouf “donated” his assets to a charity, one that he founded and controls.

Rami Makhlouf’s function as a “money man” for the Assad family appears to have come to an end, but the trouble with opaque hidden fortunes is that they are difficult to retrieve. Much of the money that the Assads channeled into foreign banks was routed by the Makhlouf family and it appears they now are the only ones that can provide access to the vast treasure of stolen Syrian wealth.

With the two family branches at a stand-off, more explosive developments and revelations will surely soon become public.

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