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Saudi arrest of Binladin family scion shatters royal entente

FILE – In this 1998 file photo made available on March 19, 2004, Osama bin Laden is seen at a news conference in Khost, Afghanistan. The reported arrest on Saturday, Nov. 4, 2017 of Bakr Binladin, who was Osama bin Laden’s half brother and chairman of the expansive Saudi Binladin Group, signals the end of the Al Saud-Binladin family alliance. His arrest also speaks to the larger demands being made on the business community to pay into the crown prince’s economic vision in this era of lower oil prices. (AP Photo/Mazhar Ali Khan, File)

DUBAI, United Arab Emirates (AP) — Among those caught in the unprecedented arrests this week of top princes, wealthy businessmen and senior officials was the scion of one of Saudi Arabia’s most recognizable families: Bakr Binladin, the chairman of the kingdom’s pre-eminent contractor — and Osama bin Laden’s half-brother.

It was a stunning end to a decades-old alliance between the ruling Al Saud and Binladin families that saw the Saudi Binladin Group secure a near-monopoly on mega-expansion projects in Islam’s two holiest sites, Mecca and Medina, throughout the reigns of successive Saudi monarchs.

The government says 201 people have been taken into custody in the purge, which comes amid an anti-corruption probe it says uncovered at least $100 billion in graft and embezzlement.

Saudi critics and experts have called the arrests a bold and risky move by Crown Prince Mohammed bin Salman aimed at consolidating power as he sidelines potential rivals, silences critics and dismantles alliances built with other branches of the royal family.

The 32-year-old crown prince, who is the son of King Salman and is popularly known by his initials MBS, is leading the anti-corruption investigation. He’s also the force behind the so-called Vision 2030 plan, a blueprint for how to restructure the country and wean it from its dependence on oil revenue.

The arrests of Binladin and the others not only signal the end of old alliances, but also speak to the larger demands being made on the business community to pay into the crown prince’s economic vision in an era of lower oil prices.

“This is the beginning of the rise of economic nationalism,” said Ayham Kamel, head of the Middle East and North Africa division of the Eurasia Group.

A centerpiece of that plan is NEOM, a $500 billion project that promises to be the world’s most futuristic and technologically-advanced city, which was unveiled by the crown prince at a headline-grabbing global investment conference in Saudi Arabia last month.

But instead of receiving major pledges to the project by Saudi business leaders, MBS “got deafening silence”, Kamel said.

Since the 1950’s, the Binladins have been the royal family’s go-to contractor for some of its most sensitive projects, including construction of private palaces in the immediate boon years after oil was discovered in Saudi Arabia.

As the royal family spent lavishly on trips abroad and new palaces at home, the Binladins became their creditors, as well as contractors.

Reliable and discreet, the Binladin Group would go on to build confidential defense projects in the kingdom, as well as landmark skyscrapers, universities, a military hospital, an airport, a financial district and much more.

Run as a private company by members of the large Binladin family, the firm is no stranger to political upheaval and changes in the kingdom. In fact, part of its success has been in its ability to adapt to the whims of kings and princes.

“The Binladins were able to remain essential to the royal family despite very dramatic events within the royal family,” said Steve Coll, author of “The Bin Ladens: An Arabian Family in the American Century.”

The Binladins were also no strangers to controversy. They weathered the blow to the family name and reputation after the 9/11 attacks in New York masterminded by Osama bin Laden, a son of family patriarch Mohammed Binladin.

In 1931, the elder Binladin, a poor Yemeni migrant who had traveled north in the 1920s to the Red Sea port of Jiddah, founded the company that bears his name. He married some two dozen women and fathered more than 50 children, including the future al-Qaida leader.

After the 9/11 attacks, the Binladins hired lawyers and public relations specialists in the U.S. to try to communicate their disdain for Osama bin Laden, and their willingness to cooperate with Washington, Coll said.

In the 1990s, under pressure from the Saudi government, Bakr Binladin oversaw proceedings to strip his brother of all his shares in the family’s company and wealth, a move that came as the kingdom stripped the al-Qaida leader of his nationality.

“Bakr achieved what he set out to do, which is he kept the company intact, he kept it legitimate in the international economy and went on to concentrate primarily on construction in the region, and in Saudi Arabia in particular,” Coll said.

The Binladin Group was crucial to Saudi rulers in 1979 when militants laid siege to Islam’s holiest site in Mecca for 15 days. The company, which had been working on expansion projects there, helped flush the rebels out of tunnels because they had the blueprints and maps, Coll said.

But while the Al Saud-Binladin alliance has been a pillar of how the royal family retained power over the years, the needs of the kingdom have changed, Kamel said.

“They helped the Al Saud family in their time of need, but the utility of that relationship has been exhausted,” he said. “It is no longer attractive for Al Saud to retain that, nor can they afford to.”

In 2015, the Binladin Group suffered two major blows: the collapse of oil prices and the collapse of one of its cranes.

The crane disaster killed 111 hajj pilgrims on the pristine marble floors of the Grand Mosque housing the cube-shaped Kaaba. The firm came under investigation, a travel ban was imposed on Bakr Binladin and the company remains embroiled in litigation to this day.

The collapse of oil prices delayed government payments to contractors, and by 2016, the Binladin Group was forced to cut tens of thousands of jobs. Disgruntled workers complained they had not been paid in months and hundreds took to the streets of Mecca in rare protests, setting company buses alight.

At the time, the company was in the midst of the largest expansion in the history of the Grand Mosque, a project initiated by the late King Abdullah that included the construction of one of the world’s tallest towers topped by a neon clock. The firm was also involved in controversial construction projects ordered by the king that historians say wiped out key traces of Mecca’s history dating back to the Prophet Muhammad.

In many ways, the Binladins were seen as part of the old guard— a part of the economy that was based on personal relationships and not transparent, Coll said.

As part of that system, the Binladin Group appeared to be doing well financially before the collapse of oil prices, though it does not disclose its figures. Bakr Binladin is known to have private planes and real estate around the world.

It may have cost the Binladins heavily as the crown prince moves to take down old alliances and power bases. “You could easily see them caught up in a story about corruption and privilege,” Coll said.