Anti-corruption campaign in Saudi brings hope to businessmen

Lebanon-based businessmen who lost enterprises through dealings with members of Saudi Arabia's royal family and others in the kingdom are closely watching a new campaign led by the powerful crown prince targeting officials, princes and tycoons in the oil-rich kingdom, hoping it will help them win back what they lost over the years.

The campaign, which Crown Prince Mohammed bin Salman says is aimed at cracking down on corruption in the kingdom, has been met with skepticism by many. With dozens of powerful princes, business leaders and government officials in custody, the move has provoked speculation the crackdown is more about consolidating power than curbing corruption. Others speculate the move amounts to a shake-down of wealthy players for their assets as the crown prince tries to implement sensitive economic reforms in the face of lower oil prices.

FILE - In this file picture taken May 14, 2012, Saudi Arabia's Interior Minister Prince Mohammed bin Nayef, left, his older brother Saud bin Nayef, center, Prince Miteb bin Abdullah, son of Saudi King Abdullah bin Abdul Aziz al-Saud wait for Gulf Arab leaders ahead of the opening of Gulf Cooperation Council, also known as GCC summit, in Riyadh, Saudi Arabia. (AP Photo/Hassan Ammar, File)

Either way, many in the kingdom welcome efforts to fight rampant corruption and abuse of power, and many outside it hope the move will encourage people to invest in the kingdom without fear.

Since the first week of November, some 201 people have been taken into custody by Saudi authorities in a sweep that investigators say has uncovered at least $100 billion in corruption. The detainees include Cabinet ministers, members of the royal family and the owners of three TV networks that are among the largest in the Middle East.

The crackdown that began on Nov. 4 initially targeted 11 princes, 38 officials, military officers as well as business leaders. An estimated 1,700 individual bank accounts have been frozen.

Saudi critics and experts have called the unprecedented purge of top princes and businessmen by the crown prince, also known by his initials MBS, a bold and risky move aimed at consolidating power as he keeps an eye on the throne, sidelining potential rivals and dismantling alliances built with other branches of the royal family.

Pierre Daher, who founded the first private TV station in Lebanon in 1985 and turned it into one of the top media outlets in the Arab world, has been locked in court cases with detained Saudi Prince Alwaleed bin Talal, one of the world's richest men, since 2011. The prince, whose maternal grandfather Riad Solh was once Lebanon's prime minister and also holds Lebanese citizenship, has investments that include Twitter, Apple, Citigroup and the Four Seasons hotel chain and was once a significant shareholder in Rupert Murdoch's News Corporation, but sold much of those shares in 2015.

FILE - In this file picture taken May 14, 2012, Prince Mohammed bin Salman (MBS) speaks with a Saudi prince while he waits for Gulf Arab leaders ahead of the opening of Gulf Cooperation Council summit, in Riyadh, Saudi Arabia. (AP Photo/Hassan Ammar, File)

Their court battles are over Lebanon's leading LBC and the affiliated Production and Acquisition Company, widely known as PAC, which filed for liquidation in 2012. Some 400 PAC employees lost their jobs and are still waiting for Prince Alwaleed to compensate them.

Prince Alwaleed and Daher, now chairman and CEO of LBC, were once allies when the prince pumped money into LBC TV before the two split over several issues and Daher was removed from his job as head of PAC. Prince Alwaleed ended up taking over the LBC SAT and PAC while Daher took LBC.

"The disgraceful behavior of Alwaleed by making the company (PAC) bankrupt fraudulently while it was not bankrupt and had assets. PAC was able to continue normally but he mechanically made up bankruptcy," said Daher in his LBC office in the posh town of Adma north of Beirut.

Several cases between the two are still ongoing in countries including Lebanon, Britain and the Cayman Islands. Daher says that he is suing Prince Alwaleed for more than $100 million and is optimistic he will win.

Lebanese media outlets reported this month that two Beirut hotels owned by Prince Alwaleed's Kingdom Holding are for sale. The Four Seasons and Mövenpick Hotel are among Beirut's most luxurious hotels and are located in two of the capital's most posh neighborhoods.

"If the hotels are not in the person's name, not in the name of the defendant himself in person, you cannot garnish them since they belong to a company," said Paul Morcos, legal expert and founder and owner of Justicia Consulting Law firm in Beirut.

In this picture taken Wednesday, Nov. 15, 2017, a general view shows the master control room at the LBC TV station in Beirut, Lebanon.(AP Photo/Hassan Ammar)

Morcos added that the prosecution that is done in Saudi Arabia does not directly affect a prosecution taking place in Lebanon.

Attempts to reach a representative of Prince Alwaleed at Kingdom Holding were not immediately successful.

Another person who lost millions of dollars in the kingdom as a result of alleged corruption is Lebanon-based U.S. citizen Yahya Lotfi Khader who for more than 20 years ran petrochemical businesses along with his two partners in eastern Saudi Arabia.

The Syria-born, 57-year-old businessman said he left the kingdom two years ago after he became the victim of interference by officials who worked in the office of a once powerful prince, Saoud bin Nayef, the brother of the former crown prince who was removed from his post earlier this year. Khader put forward documents that proves they have lost tens of millions of dollars in cases that he says were manipulated by powerful people in the kingdom.

"There is widespread corruption from princes to ministers to judges to lawyers to businessmen," Khader said, speaking in his posh apartment overlooking the Mediterranean Sea in the north Beirut suburb of Dbayeh. "Regrettably there are people who are taking advantage of the wealth and powers of the kingdom and are taking it in the wrong direction."

In this picture taken Wednesday, Nov. 15, 2017, a Lebanese flag waves in front the Four Seasons in Beirut, Lebanon. (AP Photo/Hassan Ammar)

Khader added that the first step by MBS is to fight corruption and people in the kingdom have been waiting for an "awakening against corruption." Khader said "Saudi Arabia has all the capabilities to become one of the most important countries in the world If we can fight corruption and it will not be an easy mission but we are very optimistic about what happened."

Khader has sent documents listing all the injustice they were subjected to in the kingdom to the office of King Salman and MBS hoping that it could help them return to the kingdom and get back their money that are worth tens of millions of dollars.

"What is happening in Saudi Arabia is a game changer. It is turning the country on the political, economic, social and religious levels," said Daher of LBC.

He added: "Today there is a new Saudi Arabia that is totally different from what it used to be but it is still early to judge it."

In this picture taken Wednesday, Nov. 15, 2017, Lebanon-based U.S. citizen Yahya Lotfi Khader shows documents during an interview with Associated Press in Beirut, Lebanon.(AP Photo/Hassan Ammar)

Jimmy Dunne, one of the architects behind the PGA Tour's stunning reversal to strike a deal with the Saudi backers of LIV Golf, abruptly resigned Monday from the PGA Tour board with a letter that expressed frustration at the lack of progress that no longer included his input.

Dunne, a power broker on Wall Street and in golf circles, was not included on the PGA Tour Enterprise's new “transaction subcommittee” that will be handling the direct negotiations with the Public Investment Fund of Saudi Arabia.

Dunne and Ed Herlihy, an attorney specializing in mergers and acquisition and chairman of PGA Tour Inc., were whom PGA Tour Commissioner Jay Monahan leaned on when he first met with Yasir Al-Rumayyan, the PIF governor, that led to the June 6 agreement.

The immediate result of the deal was an end to antitrust lawsuits neither side wanted and had already cost the PGA Tour in the neighborhood of $50 million. The tour has since brought on Strategic Sports Group as a minority investor in a deal initially worth $1.5 billion.

“As you are aware, I have not been asked to take part in negotiations with the PIF since June 2023,” Dunne said in his letter to the board first obtained by Sports Illustrated.

“Since the players now outnumber the independent directors on the board, and no meaningful progress has been made towards a transaction with the PIF, I feel like my vote and my role is utterly superfluous,” he wrote.

The tour, feeling pushback and resentment for the secrecy behind the June 6 deal, appointed Tiger Woods to the board with no term limit. The board now has six player directors — Woods, Patrick Cantlay, Jordan Spieth, Webb Simpson, Adam Scott and Peter Malnati — and five independent directors.

Dunne is the second independent director to resign following the June 6 announcement. Randall Stephenson, former AT&T chairman, resigned in July over objections to the agreement with the Saudis.

Rory McIlroy resigned from the board in November, and player directors appointed Spieth to finish his term.

The move signals the tour in a state of disarray as it tries to work out a deal with PIF and start the process of unifying a sport that has been divided since LIV launched in June 2022.

The June 6 agreement included a deadline to complete a deal by the end of 2023. By then, the tour had private equity suitors and LIV Golf signed reigning Masters champion Jon Rahm and eventually Tyrrell Hatton.

Dunne said along with the lawsuits being dismissed — often overlooked as a key point in the agreement with PIF — the agreement did not contain an exclusivity clause that allowed players “a full range of options to seek outside investors.”

“That resulted in a multi-billion-dollar commitment from the Strategic Sports Group,” Dunne wrote. “I believe that history will look favorably on this outcome and the very real opportunities now afforded the tour.”

Monahan and the player directors eventually met with Al-Rumayyan for the first time in March, though there has been no clear progress on any deal — PIF as a minority investor or how to bring back the best players together more than four times a year at the majors.

Simpson, meanwhile, offered to resign from the board contingent on McIlroy replacing him. That never happened, with McIlroy saying last week "there was a subset of people on the board that were maybe uncomfortable with me coming back on for some reason.”

Instead, McIlroy was added to the transaction subcommittee along with Woods; Scott; Monahan; liaison director Joe Ogilvie; Joe Gorder, the CEO of Valero Energy Corp. and chairman of PGA Tour Enterprises; and John W. Henry of Fenway Sports Group, a principal in SSG.

“It is crucial for the board to avoid letting yesterday’s differences interfere with today’s decisions, especially when they influence future opportunities for the tour,” Dunne wrote. “Unifying professional golf is paramount to restoring fan interest and repairing wounds left from a fractured game. I have tried my best to move all minds in that direction.”

According to the tour's bylaws, the four independent directors choose Dunne's replace after consulting the player directors and John Lindert, the PGA of America president who is a nonvoting board member.

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Rory McIlroy, of Northern Ireland, celebrates after an eagle on the 15th hole from the bunker during the final round of the Wells Fargo Championship golf tournament at the Quail Hollow Club Sunday, May 12, 2024, in Charlotte, N.C. (AP Photo/Chris Carlson)

FILE - PGA Tour board member Jimmy Dunne departs the witness table after testifying before a Senate Subcommittee on Investigations hearing on the proposed PGA Tour-LIV Golf partnership, July 11, 2023, on Capitol Hill in Washington. Dunne, one of the architects of the deal with the Saudi backers of LIV, resigned from the PGA Tour board on Monday, May 13, 2024. (AP Photo/Patrick Semansky, File)