Last weekend, Mohammad bin Salman, the young crown prince of Saudi
Arabia, converted Riyadh’s Ritz-Carlton into a jail. Salman, whose
father appointed him crown prince in June, has vowed to end some of the
kingdom’s old ways. He was instrumental in the King’s recent decision to
overturn the ban on female drivers, according to The Economist. And on
Saturday, he ordered that dozens of allegedly corrupt princes and
businessmen be arrested and held at the Ritz.
Contentious matters involving wealthy Saudis are, typically, handled
with discretion, and the arrests generated shocked headlines around the
world. But Salman’s sweep may have been foreshadowed two weeks ago, when
Maan al-Sanea, a raffish Kuwaiti billionaire, was arrested at his home
on the eastern coast of Saudi Arabia.
Two years ago, I wrote about Sanea and a feud he was having with his
in-laws, the Gosaibis, for The New Yorker. The saga began in 2009, when the Gosaibis, a tremendously wealthy Saudi family, fell on hard
times. The family owned a multibillion-dollar empire of hotels, real
estate, and financial services—plus a Pepsi bottling-and-distribution
center. But that May one of the banks owned by the family collapsed.
An exceedingly messy affair ensued. The head of the Gosaibi family
accused Sanea of opening the bank—which was called the International
Banking Corporation, or T.I.B.C.—without his consent, and of
systematically defrauding the family and the bank’s customers. Corporate
investigators subsequently uncovered what they believed was evidence of
a scheme involving forged signatures and the issuing of fake loans.
Lawyers for Sanea claimed in court that the Gosaibis knew what he was
doing all along, but they never explained the signatures or loans the
investigators had raised questions about.
The financial complexities of the case were daunting—in part because of
the opacity of the Saudi legal system. The dispute between the Gosaibis
and Sanea played out in separate lawsuits in the Cayman Islands,
Switzerland, Bahrain, the U.A.E., and other legal jurisdictions around
the world. Yet only one jurisdiction, Sanea’s lawyers claimed, truly
mattered. “Our client’s position has always been that the substantive
dispute between him and the al-Gosaibi family can be dealt with properly
in Saudi Arabia,” they said.
Sanea lived in a beachfront palace near the city of Khobar. He was well
connected with the senior-most officials in the country’s Eastern
Province, and he lived in splendor. On the grounds of his compound, he
had his own zoo, which included lion cubs and flamingos; in one court
filing, he estimated the value of his “safari animals” at between
thirteen million and twenty-three million dollars. Some years ago, one
of his lawyers said that Sanea’s utility bills ran to about eight
hundred thousand dollars per month. In his private harbor, he kept
multiple yachts docked.
In mid-October of this year, a police squad was dispatched to the
palace. According to reports, Salman personally approved the raid. When
the police arrived, they could not find Sanea at first. “A palace so
big, you will get tired walking in it,” one officer observed, in a
lengthy text message posted on social media. Several hours after
arriving, an officer spotted a ladder leaning against a boathouse.
Climbing up, he discovered a “secret room” full of security monitors.
Sanea was inside; he had been watching the raid unfold. Officers
arrested him and took him away. An official statement posted on Twitter
by the Eastern Province’s local government said that authorities there
were determined to “eliminate all kinds of corruption” and hold
accountable “proven accomplices of any violations of the law.” HuffPost
Arabic quoted one Saudi who proclaimed on Twitter, “Welcome to our new
Saudi Arabia.”
Sanea did not work alone at T.I.B.C. An American named Glenn Stewart was
the bank’s C.E.O. As one former colleague explained it to me, Sanea was
the field marshal, and Stewart was his “main general.” At the time of
T.I.B.C.’s collapse, Stewart was living in Bahrain—he was prohibited, by
local authorities, from leaving the island nation. One night in 2010, he
escaped aboard a thirty-four-foot cabin cruiser, made it to Iraq, flew
to Jordan, then London, and finally home, to Los Angeles.
As I was reporting my magazine piece, I interviewed Stewart several
times. He repeatedly denied any wrongdoing and claimed that he had been
“tricked, big time” by Sanea. He told me that he’d learned a valuable
lesson from the whole mess: “Never do business with princes or kings.”
Stewart is a brash, overbearing man. He once crashed a Bahrain
Association of Banks event at the Mandarin Oriental, in Washington,
D.C., in order to confront the governor of Bahrain’s central bank. “I
wanted to assert my rights as a free man, not one of their semi-slaves,”
Stewart told me.
He pulled a similar stunt this July, when he showed up at the law
offices of K&L Gates LLP, in London. The firm, which represents the
Gosaibis, was hosting a discussion about banking in the Middle East.
Toward the end of the talk, the moderators solicited questions from the
audience. Stewart stood up. (He was, according to one attendee, wearing
a name badge that identified his affiliation as Penn Associates or Penn
Advisers.) Stewart accused the Gosaibis of lying about what they knew in
an attempt to cover their own liabilities, and then he plugged a
forthcoming movie being made about his life, based on an “unpublished
autobiography” he’d written titled “Never Do Business with Princes orKings.” The working title of the film was the same as a line that this
magazine used to promote my article, in 2015: “A Billion-Dollar Mirage.”
Two weeks ago, I called Stewart. We’d not spoken since the publication
of my story. “What do you want?” he said, upon hearing my voice.
I asked if he’d heard about Sanea’s arrest. “Of course,” he said.
“They’ve thrown him in equivalent of debtors’ prison for domestic
obligations that he’s got to either banks or salaries unpaid.” (In late October, Dwight Wolczak, a former employee at a hospital owned by Sanea told me, by e-mail, “I am one of hundreds of former Saad Specialist Hospital employees
hoping to win our case against him for 12 months back pay.”) The arrest
had nothing to do with anything that transpired at T.I.B.C., Stewart
believed. Speaking before Salman had rounded up his fellow-princes in
the Ritz, Stewart told me that Sanea’s apprehension was evidence of
changes in the power structure inside Saudi Arabia: “He’s lost whatever
political protection he had.”
Before he hung up on me, I inquired about the event he’d attended in
London. Was Penn Associates a new company of his? “It’s nothing to do
with anything to do with you,” he replied.
“Is it a real thing, or a fake thing that you put on the badge?” I
asked. (Stewart subsequently said that the company is real.)
“This conversation is over,” he said.