The Fall of the House of Saud

Americans have long considered Saudi Arabia the one constant in the Arab Middle East—a source of cheap oil, political stability, and lucrative business relationships. But the country is run by an increasingly dysfunctional royal family that has been funding militant Islamic movements abroad in an attempt to protect itself from them at home. A former CIA operative argues, in an article drawn form his new book, Sleeping With the Devil, that today's Saudi Arabia can't last much longer—and the social and economic fallout of its demise could be calamitous

Abdullah had always been the odd prince out. To begin with, his mother was from the Rashid tribe, traditional enemies of the Saud. Ibn Saud had married her to cement a truce with the Rashid, and although the Rashid were now loyal subjects, Abdullah was still mistrusted by Fahd's full brothers. Almost alone among the top members of the royal family, Abdullah had chosen the way of the desert, turning his back on the luxuries of Riyadh, Jidda, and Ta'if. He never vacationed lavishly in Europe, unlike King Fahd and his entourage, who typically spent $5 million a day during visits to the palace at Marbella, on the Spanish Riviera. Abdullah preferred to spend his time in a tent, drinking camel's milk and eating dates. He interspersed his conversation with Bedouin aphorisms and turns of phrase. All his children were raised according to the customs of the desert. It is Abdullah who has recently called publicly for democratic reforms, the reining in of the conservative clergy, and military disengagement from the United States.

The royal family hated being reminded that they had abandoned their Bedouin roots, but they hated still more that Abdullah was trying to cut back royal corruption and entitlements. Aping the senior members of the family, the lesser princes had fantastic financial expectations, and their stipends didn't suffice. The third-generation princes were getting only about $19,000 a month—a fraction of what they needed for the lifestyles they sought. To keep even a modest yacht on the French Riviera requires a million dollars a year. What were they supposed to do? In order to make ends meet they had been getting into nastier and nastier business, taking bribes from construction firms (mostly the bin Laden family's) seeking government contracts, getting involved in arms deals, expropriating property from commoners, and selling Saudi visas to guest workers. Another trick they'd discovered was borrowing money from private banks and simply refusing to pay it back. It wasn't as if the larger family could somehow discipline or shame them. There were so many princes that they didn't even all know one another.

Abdullah had made no secret of his intention to put an end to the thievery when he became king—and for a while it looked as if he might get his way even before becoming king. In the mid-1990s, as Saudi Arabia was facing increasingly dire financial difficulties, he persuaded King Fahd to appoint a handful of reformist ministers. Abdullah first had them zero in on expropriations. The practice had become so widespread among the lesser princes that it was completely alienating Saudi Arabia's traditional merchant class and fledgling middle class. A prince might walk into a restaurant, see that it was doing well, and write out a check to buy the place, usually well below market price. There was nothing the owner could do. He knew that if he resisted, he'd end up in jail on trumped-up charges.

The senior princes used their government positions to do the same thing, but on a much grander scale. One of them would pick out a valuable piece of property—maybe a particularly good location for a shopping mall or a new road—and then order a court to condemn it in the name of the state, which would clear the way for the king to award it to him. The money to be earned was staggering, and senior princes had started to rely on the practice to maintain their ever more bloated personal budgets. In Abdullah's view, however, crooked property deals and the like were only a small part of the problem. The off-budget deals were a much bigger part. In off-budget spending, revenue from oil sales goes directly to special accounts, bypassing the Saudi treasury altogether. The money is then used to pay for pet projects, from defense procurement to construction, with no government audits or accountability of any sort. Commissions and bribes are enormous.

As a reformer, Abdullah was kept out of the tight circle that gathered around Fahd after his stroke. Bitterness against Abdullah within the family was so deep that he was in fact blamed for the stroke. One version had it that Fahd and Abdullah had been on the telephone, arguing about who would attend a meeting of the Gulf Cooperation Council in Oman. It was a fundamentally unimportant decision, but relations between the two men had become so toxic, it was said, that Fahd's anger brought on the event. Another rumor in circulation held that Fahd and Abdullah had been arguing about what they always argued about—looming financial collapse. There were even whispers that Abdullah had intentionally provoked Fahd, knowing his health wouldn't withstand a shouting match.

It eventually became clear that Fahd would live, but the extent of his impairment also became clear—embarrassingly so when, during a therapy session not long after the stroke, Fahd defecated in his pool, in front of his family. His mind was affected too. Those close to him knew that he would never truly rule again, though he is still led out for ceremonial appearances.

A year and a half after Fahd's stroke Sultan had come to so despise Abdullah that he stopped attending cabinet meetings chaired by him. For Abdullah, the feeling was mutual. In July of 1997 he simply bypassed the Council of Ministers, which was heavily stacked in favor of the Sudayri, and tried to get Fahd to sign off on decrees and laws he thought needed passing. Jawhara and Abdul Aziz teamed up to thwart him.

ind you, it is not as if the rest of the Fahd clan is united. Sultan, Salman, and Nayef may have arrived at the hospital together in a show of solidarity, but they got a rude shock once they pushed through the front doors. Jawhara and Abdul Aziz blocked them from seeing their brother. The two had set up camp outside Fahd's hospital room and were deciding who and what would or would not get in. That included ministers, senior princes, and doctors, along with petitions, decrees, and everything else.

Saudi succession doesn't operate according to primogeniture. By tradition, senior princes come to a consensus on succession, usually choosing one from their ranks who is thought to have the necessary experience and wisdom. So far the system had served the royal family well, even though Abdullah had become a gadfly, but now Fahd's brothers were afraid that Abdul Aziz was trying to circumvent custom and place himself higher in the line of succession. For one thing, he had started getting more and more involved in national security, from foreign affairs to intelligence. Even the Americans noticed it. When the commander of U.S. forces in the Middle East, General J. H. Binford Peay, came to Riyadh to meet with Fahd, in July of 1997, he was surprised to find Abdul Aziz at Fahd's side, whispering in his father's ear. Where was Abdullah? What had become of Sultan? Peay had to meet with Abdullah separately, and even then Abdullah didn't talk about the issues at hand.

What really worried some members of his family was that Abdul Aziz was funding radical Wahhabi causes and was gaining strength and popularity as a result. They had little doubt that money was going to clerics and causes that were associated with Osama bin Laden. Abdul Aziz hadn't rediscovered his faith, of course: he was courting favor with the Wahhabis because he knew he would need their support to become king. In September of 1997 he helped to coordinate that $100 million aid package for the Taliban, even though the Taliban were protecting bin Laden—a man who not only had vowed to overthrow the House of Saud but also seemed increasingly capable of doing so. Abdul Aziz was buying support wherever he could find it. In December of 1993 Abdul Aziz authorized $100,000 for a Kansas City mosque. On September 15, 1995, he opened the King Fahd Academy, in Bonn, and two days later he dedicated a new mosque there. Nine days after that he invited the head of the Islamic Society of Spain, Mansur Abdul Salam, to Riyadh. In May of 1996 he and Jawhara arranged for King Fahd to release Muhammad al Fasi from prison. Al Fasi had been imprisoned for opposing the Gulf War and the presence of U.S. troops in Saudi Arabia; in other words, he shared some of bin Laden's chief grievances. In December of 1999 the press finally caught wind of Abdul Aziz's penchant for backing radical Islamic causes. One regional account made available by U.S. translation services noted that he was believed to have been funding an associate of bin Laden's, Sa'd al Burayk, who in turn was giving the money to Islamic groups dedicated to killing Russian soldiers and civilians in Chechnya. Nayef promised to put a stop to Abdul Aziz and bring his charity back under control—but he appears to have done nothing.

All the while, throughout the 1990s, the royal family kept growing and growing. A prince might sire forty to seventy children during a lifetime of healthy copulation; however, the resources to support the growing population of the entitled were shrinking, not just in relative terms but in absolute ones. Young royals were pushing up from below, chafing at leaders who were slipping into their late seventies and eighties. The incapacitated King Fahd will turn eighty this year; Crown Prince Abdullah will turn seventy-nine. Many of the most active court intriguers are also in their seventies.

The House of Saud currently has some 30,000 members. The number will be 60,000 in a generation, maybe much higher. According to reliable sources, anecdotal evidence, and the Saudi gossip machine, the royal family is obsessed with gambling, alcohol, prostitution, and parties. And the commissions and other outlays to fund their vices are constant. What would the price of oil have to be in 2025 to support even the most basic privileges—for example, free air travel anywhere in the world on Saudia, the Saudi national airline—that the Saudi royals have come to enjoy? Once the family numbers 60,000, or 100,000, will there even be a spare seat for a mere commoner who wants to fly out of Riyadh or Jidda? Reformers among the royal family talk about cutting back the perks, but that's a hard package to sell.

Saudi Arabia operates the world's most advanced welfare state, a kind of anti-Marxian non-workers' paradise. Saudis get free health care and interest-free home and business loans. College education is free within the kingdom, and heavily subsidized for those who study abroad. In one of the world's driest spots water is almost free. Electricity, domestic air travel, gasoline, and telephone service are available at far below cost. Many of the kingdom's best and brightest—the most well-educated and, in theory, the best prepared for the work world—have little motivation to do any work at all.

About a quarter of Saudi Arabia's population, and more than a third of all residents aged fifteen to sixty-four, are foreign nationals, allowed into the kingdom to do the dirty work in the oil fields and to provide domestic help, but also to program the computers and manage the refineries. Seventy percent of all jobs in Saudi Arabia—and close to 90 percent of all private-sector jobs—are filled by foreigners.

Among men, at least, the Saudis have an admirably high literacy rate, especially for a place that only three generations back was inhabited mostly by nomadic tribesmen. About 85 percent of Saudi men aged fifteen and older can read and write, as opposed to less than 70 percent of Saudi women of the same age. But because in recent years the Saudi education system has been largely entrusted to Wahhabi fundamentalists, as a form of appeasement that many in the royal family hope will direct the fundamentalists' animus at foreign targets, its products are generally ill prepared to compete in a technological age or a global economy. Today two out of every three Ph.D.s earned in Saudi Arabia are in Islamic studies. Doctorates are only very rarely granted in computer sciences, engineering, and other worldly vocations. Younger Saudis are being educated to take part in a world that will exist only if the Wahhabi jihadists succeed in turning back the clock not just a few decades but a few centuries.

Then there's the demographic problem. Saudi Arabia has one of the highest birth rates in the world outside Africa—37.25 births for every 1,000 citizens last year, compared with 14.5 per 1,000 in the United States. Ninety-seven percent of all Saudis are sixty-four or younger, and half the population is under eighteen. The simple presence of so many people of working age, and especially so many just now ready to enter the work force, places enormous pressure on an economy—particularly one designed less to accommodate those who want to work than to provide sustenance for those who would rather contemplate original intent in the Koran. A middle class stabilizes society. Saudi Arabia's middle class is imploding.

The functioning of the world's most advanced welfare state is influenced overwhelmingly by fluctuations in the price of oil. In 1981, when the entire kingdom was in effect being put on the dole, oil was selling at nearly $40 a barrel, and the annual per capita income was $28,600. A decade later, just before Iraq invaded Kuwait, refiners were able to buy oil for about $15 a barrel. The Gulf War sent prices back up to about $36 a barrel before they quickly fell. Today a barrel of oil once again fetches around $40, but twenty years' worth of inflation, combined with a population explosion, has brought per capita income down to below $7,000. Because roughly 85 percent of Saudi Arabia's total revenues are oil-based, every dollar increase in the price of a barrel of oil means a gain of about $3 billion to the Saudi treasury. In the early 1980s the kingdom boasted cash reserves on the order of $120 billion; today the figure is estimated to be $21 billion.

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