Syria's Assad seeks to control economy, goes after cousin

Beirut, Jun 4 (AP) On a summer day last year, presidential guards drove out of the charity organisation founded by Syria's wealthiest businessman and a close cousin of President Bashar Assad, carting away boxes of documents and computers.

At the same time, the charity's director was being questioned at the palace on suspicion of corruption. The confiscated data included names of thousands of militia fighters who have supported the government in the 9-year-old civil war, including salaries they received from Al-Bustan, the charity group founded by Rami Makhlouf.

The incident last August was the opening salvo in a crackdown on Makhlouf's power, signaling the beginning of the end of his role as the Assad family's top financier.

The unprecedented crackdown burst into the public with a series of Facebook videos Makhlouf posted contesting the measures. It revealed a new fragility of the embattled president - and gave a rare glimpse into the intrigues of an opaque inner circle involving a powerful first lady and business rivalries.

Assad, who marks 20 years in power this month, has survived nearly a decade of war with the backing of Russia and Iran and a loyal class of businessmen. A number of those businessmen helped protect the state and economic interests by also forming their own militias.

Now the war-ravaged country faces a new level of hardship.

The Syrian pound has fallen to 1,800 to the dollar, from 50 before the war. Prices have soared, and electricity and fuel shortages are recurrent. More than 80% of the population lives in poverty. Once an oil exporter, Syria now lives on a credit line from Iran, which faces its own economic troubles.

Sanctions in place before the war mean Syria can hardly export anything, and new U.S. sanctions threaten to further choke the country.

With the crackdown, Assad seems set on bringing the economy more firmly under his control and bolstering the state's empty coffers.

"Rami's potential demise is mostly a reflection of a change at the helm of the regime" - in players, not policy, said Jihad Yazigi, editor-in-chief of the Syria Report. New actors are competing with traditional powers within the family over the shrinking resources, he said.

For instance, first lady Asmaa Assad has increasingly sought to centralize all charity work under her aegis. She heads the Syria Trust for Development, where most foreign aid for post-war reconstruction is channeled.

The Makhloufs have been the Assad family's longtime partners. Makhlouf's father, Mohammad, was the brother-in-law of Assad's father Hafez and a mentor to the younger Assad. Notably, he too now appears to have been sidelined.

Rami Makhlouf rose alongside Bashar Assad, who succeeded his father in 2000.

Benefiting economic liberalization, Makhlouf became an overwhelming figure in Syrian business, most importantly controlling the largest telecommunications company, Syriatel.

His name became synonymous with Assad's power. Early in the conflict, protesters torched his companies - and Makhlouf moved out of the public eye.

Some Syria watchers compare the current crackdown to Saudi Arabia's Ritz-Carlton moment. Seeking to consolidate power, Saudi Crown Prince Mohammad Bin Salman arrested dozens of royals and key business figures, locking many in the five-star hotel, in a 2017 anti-corruption campaign.

Signs of cracks emerged last year. Last spring, a paper owned by Makhlouf criticized a rival businessman, Samer Foz, considered close to the first lady.

Soon after, an audit was launched against Makhlouf's Al-Bustan charity - with the raid on its offices and interrogation of its staff, details of which were reported in Arab media and confirmed by an emigre Syrian businessman, Firas Tlass.

Tlass said the crackdown was driven by the first lady.

A career investment banker, Asmaa Assad is trying to secure her three children's future, fearing consolidation of the family wealth in the hands of Makhlouf and his sons, who live in Dubai, said Tlass. He estimates Makhlouf's fortune at $13 billion. (AP) AMS AMS