How Saudi Princes and Princess Skim Oil Revenues: Wikileaks
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Saudi Arabia’s King Abdullah handed out $37 billion to appease Saudis of modest means and
cushion the world’s biggest oil exporter from the wave of protest sweeping the Arab world.
However the biggest handouts over the past two decades have gone to his extended family,
according to unpublished American diplomatic cables dating back to 1996 according to cables obtained by WikiLeaks.
In addition to the huge monthly stipends that every Saudi royal receives,
Saudi Arabia’s King Abdullah handed out $37 billion to appease Saudis of modest means and
cushion the world’s biggest oil exporter from the wave of protest sweeping the Arab world.
However the biggest handouts over the past two decades have gone to his extended family,
according to unpublished American diplomatic cables dating back to 1996 according to cables obtained by WikiLeaks.
In addition to the huge monthly stipends that every Saudi royal receives,
the cables detail various money-making schemes some royals have used to finance their lavish lifestyles.
Among them:
- siphoning off money from “off-budget” programs controlled by senior princes,
- sponsoring expatriate workers who then pay a small monthly fee to their royal patron and
- “borrowing from the banks, and not paying them back.”
As a result, the 12 commercial banks in the country were “generally leary of lending to royals.”
The November 1996 cable was entitled “Saudi Royal Wealth: Where Do They Get All That Money?”
It gives a detailed picture of how the royal patronage system works.
The most common way of distributing Saudi Arabia’s wealth to the royal family is the
formal, budgeted system of monthly stipends that members of the Al Saud family receive, according to the cable.
Managed by the Ministry of Finance’s “Office of Decisions and Rules,”
the royal stipends in the mid-1990s ran from about $800 a month for “the lowliest member of the most remote branch of the family”
to $200,000-$270,000 a month for one of the surviving sons of Abdul-Aziz Ibn Saud, the founder of modern Saudi Arabia.
- Grandchildren received around $27,000 a month,
- great-grandchildren received about $13,000 and
- great-great- grandchildren $8,000 a month.
“Bonus payments are available for marriage and palace building,” according to the cable,
which estimates that the system cost the country, which had an annual budget of $40 billion at the time, some $2 billion a year.
On top of the stipend system, many royals use a range of other ways to make money, “not counting business activities.”
“By far the largest is likely royal skimming from the approximately $10 billion in annual off-budget spending controlled by a few key princes,” the 1996 cable states.
Another popular money-making scheme: seize land from commoners.
The cable cites a banker who claimed to have a copy of “written instructions” from one powerful royal
that ordered local authorities in the Mecca area to transfer to his name a “Waqf” — religious endowment —
of a small parcel of land that had been in the hands of one family for centuries.
“The banker noted that it was the brazenness of the letter … that was particularly egregious.”
The confiscation of land extends to businesses as well, the cable notes.
Read the full report on Yahoo News.
