Top Syrian businessman Rami Makhlouf shows rifts in Regime’s inner circle

An extraordinary media appearance from one of Syria’s most powerful businessmen close to Syrian President Bashar al-Assad gives a rare glimpse into rifts in the regime’s inner circle.

In a video broadcast live on Facebook, Rami Makhlouf, chairman of the state-owned telecoms company Syriatel, opposed recent government measures to seize his assets. Syriatel he said, had paid $23.4 million in taxes for 2019 and 50 percent of its profits went to the government. “For every lira we make, the state takes another lira” he said.

Yet government auditors, he said, had now ordered him to pay an additional $244.3 million and $254 million, more than 20 times the amount. “I spend 10 million liras on my employees, they tell me to cut it to 5 million liras,” he said. “These are real expenses. They are not made up.”

For years, Damascus’s decisions and spending have been controlled by the Assads and a small, elite circle of relatives and family friends. Though feuds and rivalries are often rumored, they are seldom made public.

“To have it aired so openly is rare and incredible,” said journalist Sam Dagher, author of Assad or We Burn the Country.

“Makhlouf, you thief!”

Makhlouf is al-Assad’s first cousin and Syria’s richest man. When protests began in the city of Dar’aa in 2011, Makhlouf was evoked in slogans as a “thief”. US diplomatic cables have described the billionaire as a “poster boy for corruption.”

“He was hugely important in helping the regime evade sanctions. Syriatel was a cash cow for al-Assad and the Makhloufs,” adds Dagher.

Yet in the 15-minute long video, Makhlouf portrays himself as the victim of an “unfair” crackdown and as a selfless benefactor to the country.

People are saying there is money I have to pay, regardless of my charitable work,” he said. “We are not playing games. You are our people, our family. Would anyone steal from themselves? These businesses are to serve you, not me. I am a small, small, part in this.”

Makhlouf also described the humanitarian aid that he had provided to through his charities. “At the beginning of the war in 2011, when I found myself a burden to you, I withdrew from my businesses and dedicated myself to humanitarian work,” he said.

One of his charities, Jamiat al-Bustan, funded Allawite militia and made payments to the families of fallen fighters.

“In other words, he warns that if Bashar loses him, he also loses [support from] the Allawite community,” said Bassam Barabandi, a former Syrian diplomat and activist.

“There’s no money hidden beneath the tiles”

The crackdown on Syria’s richest man comes months after sanctions on the regime were tightened and the country faces bankruptcy. The Syrian pound is rapidly depreciating and queues for bread in major Syrian cities reveal the extent of food shortages.

In 2019, al-Assad ordered Syrian businessmen, including Makhlouf, to pay millions of dollars into the Central Bank in an attempt to save the country’s devastated economy. Last week, the government seized the assets of another of Makhlouf’s companies, Abar Petroleum Service SAL.

In the video, Makhlouf claims the new taxes will cause the company to “fall apart,” and requests a payment plan. “There’s no money hidden beneath the tiles,” he said, citing the salaries of Syriatel’s 6,500 employees as an expense.

He agreed to pay the sum in full, but insisted that Assad personally oversees its redistribution to the country’s “poor”. “The money has to be distributed by you, with your trust and assurances,” he said, “I don’t trust anyone else.”

Throwing a bone at Moscow

The move on Makhlouf comes as Damascus faces increased pressure for concessions from Moscow. Assad has repeatedly rejected the Kremlin’s advice of implementing political reforms.

“Makhlouf supports al-Assad’s position that any concession in the political process is the beginning of a relinquishment of power,” said Barabandi. He believes the video signals a disagreement between Makhlouf and Asma al-Assad, the president’s wife. “Asma wants an empty political process that is closer to the Russian position.”

Moscow also doubts Assad’s ability to reign in the corruption that is collapsing the country’s economy.

Last month, a series of reports published by a Russian news agency criticized Assad’s “weak leadership”. “We are investing large sums of money in the Syrian economy, but we are not seeing results”, a Russian expert was quoted as saying. The reports were subsequently removed from the website.

It may be an indication that Russia is calling the shots in the country. “Oligarchs around Putin are driving anger against Assad in Moscow. This group long viewed Makhlouf and his business associates as obstacles to their economic projects in Syria,” wrote the Middle East Institute’s Randa Slim on Twitter.

What next for Makhlouf?

Makhlouf once relied on his late aunt Aniseh, al-Assad’s mother, to mediate with the president. But his options today are less certain.

“It’s too early to say that Makhlouf is finished, or that his relationship with al-Assad is over,” said Dagher. Others disagreed. “The Russians may force Makhlouf to leave for Russia, like they did with Rifaat al-Assad previously, to weaken this wing of the family,” said Barabandi.

The video makes clear, however, that Makhlouf has exhausted all other methods to communicate with his cousin.

“In the past, Bashar avoided requests from those closest to him by ignoring their calls. The same may have happened to Rami: he picked up the phone, but Bashar didn’t answer,” said Dagher, “And this time Aniseh is no longer alive to help.”