Syria’s richest man inflames rare public dispute with Assad

Syria’s richest man and first cousin of President Bashar al-Assad, who is accused by the US and EU of bankrolling the regime, has exacerbated a spectacular falling out with the Syrian leader, accusing him of sending security forces to arrest his employees and take over his businesses.

Rami Makhlouf on Sunday released a second Facebook video –two days after an earlier shock appearance – which lifted the lid on his split with Assad and laid bare the workings of the ruling family’s normally inscrutable inner sanctum.

The tycoon has bankrolled the Syrian leader for the past 20 years and much of the regime’s war effort since 2012. Through a conglomerate empire that has controlled up to 60% of the Syrian economy, Makhlouf had amassed a fortune thought to be as high as £8bn ($10bn) – attracting US and EU sanctions but considered untouchable inside Syria until a family split last October.

The unravelling and its unusual public nature comes as Assad has been subjected to rare criticism from one of his two patrons, Russia, which has grown impatient as the long, costly war grinds slowly on and is looking for returns on its five-year investment.

Syria has been devastated by the nine-year war, which has greatly diminished Assad’s power and placed unprecedented pressure on the ruling clans and their networks, who have run the economy like a personal fiefdom.

Makhlouf had controlled nearly every pillar of the economy, including construction, car imports, retail, tourism and telecommunications, where the mobile network Syriatel has been its main cash cow – and the target of Assad’s interest.

“They are asking me to distance myself from my companies and do exactly as they order me to do, while I’m blindfolded and not able to respond,” said Makhlouf. “The pressures have started with the senior figures in these companies being arrested already.

“The pressure began in unacceptable ways and the security forces, in an inhumane way, are arresting our employees.” Addressing the Syrian leader, he added: “President (Assad), the security forces have started attacking people’s freedoms. These are your loyal supporters. The situation is dangerous and by God, if we continue, the situation of the country will be very difficult.”

Makhlouf claimed he had been asked to pay up to £180m in taxes, which he said he was willing to do over time. However, he said he would not step down from Syriatel, which is the economic artery of Syria’s sanctions-hit government and one of its biggest assets.

Makhlouf’s fall from grace, and the public animosity between him and Assad, has stunned Damascus and the Syrian diaspora. Family manoeuvrings are traditionally conducted in secret in the brutal police state, leaving even establishment figures guessing about what transpired.

The highly visible nature of this falling out, however, has exposed deep concern surrounding the country’s precarious finances and led to speculation that the Syrian first lady, Asma al-Assad, has taken a leading role in driving an economic recovery.

Makhlouf built his fortune largely from commissions paid to him by large networks of businesspeople. He said Assad had accused him of minimising profits in Syriatel in order to avoid taxes.

One Syrian businessman described Makhlouf’s fortune as “staggering”. “Syria’s GDP was $60bn in 2010,” he said. “He controls easily half of that. Multiply that by 20 years and add in the family silver from [the former Syrian president] Hafez al-Assad’s days and you have tremendous wealth, much of it that would not pass any audit.”

Moscow meanwhile appears to have decided to look for ways to cash in on its efforts to save the Assad regime, which – along with Iran’s involvement – have proven decisive. Assad has been left ruler of a much-diminished country and struggles to assert his sovereignty over that of his two patrons, both of whom remain committed to Syria while maintaining divergent visions about the type of country that should emerge from the ruins.

Assad has faced mounting pressure from Russia to concede to peace talks that would involve sharing power in return for renewed international recognition – as well as desperately needed reconstruction money, which would be a treasure trove for Russia.

In mid-April, a Kremlin-linked thinktank published a critique of Assad by Aleksandr Aksenenok, a senior diplomat and former ambassador to Syria, which said: “Judging by everything we see, Damascus is not particularly interested in displaying a far-sighted and flexible approach continuing to look to a military solution with the support of its allies and unconditional financial and economic aid like during the old days of the Soviet-US confrontation in the Middle East.”

The pointed criticism comes despite a Russian view that no alternative to Assad has emerged during the conflict, and amid increasing concerns about Iran’s role in the country.

“They want Assad because they think they can control him,” a Turkish diplomat said of Russia’s position. “They don’t want Iran because they can’t. Both sides are giving them headaches.”