Billionaire vs president — Assad family dispute grips Syria

During Ramadan, Syrians are usually entertained by lurid television dramas. But this holy month they are gripped by a real-life family saga like no other. An unprecedented dispute within Syria’s secretive ruling clan has blown open, pitting a billionaire against his cousin — who happens to be the president.

After nine years below the radar while controlling a sprawling business empire, Rami Makhlouf, maternal first cousin of President Bashar al-Assad and the civil war-torn country’s most powerful tycoon, last week filmed himself making an unexpected claim — that Syrian authorities are ransacking his businesses and secret police are targeting his employees.

“Did anyone expect that the security services would come after the companies of Rami Makhlouf, who was the biggest supporter of these services?” said Mr Makhlouf, filmed cross-legged in a second video broadcast live on Facebook last Sunday. “I have been asked to step aside,” he added, pleading with Mr Assad for “fairness”.

Once thought untouchable because of his family connections, Mr Makhlouf’s extraordinary appeals to Mr Assad illuminate profound changes within the power structure of the clan, which belongs to the minority Alawite sect and has dominated Syria since Mr Assad’s father Hafez seized power in 1970.

Although Hafez’s brother attempted a coup in 1984, “the ruling family in Syria had never aired its dirty laundry in public in this way before”, said Lina Khatib, MENA programme director for Chatham House. Resorting to Facebook shows Mr Makhlouf’s “lines of direct communication with Bashar al-Assad must be completely broken”.

The raids on Mr Makhlouf’s financial dominion, whose crown jewel is Syria’s biggest mobile network Syriatel, comes as Mr Assad battles to consolidate authority over the war-ravaged country and its crippled economy. Although Russian and Iranian military intervention have helped Mr Assad regain 70 per cent of Syria, jihadist rebels dominate a pocket of the north-west and the government-held south is wracked by lawlessness. More than 80 per cent of Syrians live in poverty.

Although unlikely to seriously challenge Mr Assad, Mr Makhlouf has unveiled “tensions inside the first circle at a time when the pie is shrinking, and competition and recriminations more intense”, said Emile Hokayem, Middle East analyst at the International Institute for Strategic Studies: “[Mr] Makhlouf is no mere consigliere or lieutenant. He sits a notch below Bashar.”

Syriatel, owned by Rami Makhlouf, is Syria’s biggest mobile network © Khaled al-Hariri/Reuters

Accused by Washington of using family connections to amass wealth corruptly, the EU has sanctioned Mr Makhlouf for allegedly bankrolling the regime’s war effort during the nearly decade-long conflict. On Sunday, he called himself the Syrian security services’ “biggest sponsor”.

But there were already signs last year that the mogul had fallen out of Mr Assad’s inner circle. In December, Syria’s finance ministry froze his assets and those of a Lebanon-registered, US-sanctioned offshore oil company over alleged unpaid customs fees. Mr Makhlouf later denied being connected to the company.

Then in April, Egyptian authorities raided a cargo ship carrying drugs from Syria stuffed into “MilkMan” milk cartons — a brand owned by Mr Makhlouf. In a Facebook post, he denied his company’s involvement.

But the move which provoked Mr Makhlouf’s appearance on Facebook came from the telecommunications ministry, which last month demanded Syriatel, and its smaller competitor MTN, pay a total of $180m between them as re-evaluated licence fees. The ministry defended the order in a statement after Mr Makhlouf alleged the charge was unwarranted.

“Not even the MBS shakedown had billionaires grovelling over tax payments,” said one Syrian businessman of Mr Makhlouf’s public humiliation, citing the Saudi crown prince’s infamous incarceration of billionaires in the Ritz Carlton hotel.

With Damascus palace politics shrouded in mystery, analysts cannot pinpoint why Mr Makhlouf is in the line of fire. However, the Syrian state is cash-strapped, its local currency is shedding value and many business people complain customs and other authorities pursue them for back-taxes and other charges.

Meanwhile, Mr Assad’s main military backer Moscow is being dragged into an ever-longer engagement in Syria, which is dogged by what a former Russian diplomat called “rampant corruption”.

But roots of the family’s feud may go deeper: two sources with insight into Assad’s inner circle reported years of tensions between Mr Makhlouf and Asma al-Assad, Syria’s first lady. Ms Assad heads Syria’s two biggest aid organisations, which annually funnel tens of millions of dollars in international humanitarian funding.

Although reviled by many for his alleged corruption and support to the regime, Mr Makhlouf has support in parts of the Alawite community. Mr Makhlouf has stressed his philanthropy and his foundation is reportedly active on the coast, an area with a big Alawite population. The US treasury sanctioned Mr Makhlouf’s Al Bustan Charity in 2017 over its alleged links to pro-regime militias.

Ms Khatib argued that Mr Makhlouf used the videos to paint himself as safeguarding Alawite interests and some loyalist commentators have warned that further action against Mr Makhlouf could create intra-Alawite conflict.

“Do not [expose the coastal region] to fire, wars and destruction,” wrote Sharif Shuhada, a former member of parliament and prominent loyalist, on Facebook.

Alleging that security services were targeting Syriatel employees, without specifying which agencies, Mr Makhlouf pleaded with Mr Assad: “These are your people, they are loyal to you.”

But Mr Assad has not publicly responded. In a speech broadcast on Monday, Mr Assad asked officials for solutions to rein in runaway price rises and corruption. He did not mention his cousin.