EP TRIBAL FAMILY FLEXES ITS POLITICAL AND ECONOMIC

C O N F I D E N T I A L SECTION 01 OF 02 RIYADH 009434 SIPDIS SIPDIS DHAHRAN SENDS PARIS FOR ZEYA, LONDON FOR TSOU E.O. 12958: DECL: 12/20/2015 TAGS: PGOV ECON KDEM SA SUBJECT: EP TRIBAL FAMILY FLEXES ITS POLITICAL AND ECONOMIC MUSCLE REF: RIYADH 6859 Classified by Consul General John Kincannon for reasons 1.4 (b) and (d). -------------- Summary -------------- ¶1. (C) Four brothers from the Al-Dossari family outlined to the CG and Consulate staff their family's business and political enterprises. Yousef, Khalifa, Khalid, and Mohammed Al-Dossari, together with two other brothers, run a company that has expanded from supplying auto parts to managing international investment and real-estate holding companies from their Eastern Province (EP) base. Their foray into politics began earlier this year, when Khalifa received the most votes of any candidate for the metropolitan Dammam municipal council. Yousef, the eldest brother, is organizing a group to challenge the slate of powerful current head of the EP Chamber of Commerce & Industry (EPCCI),Abdul Rahman Al-Rashed, in the February elections to the EPCCI. The brothers appear to be activists: "we need to engage the government," said Yousef. Western-educated, with ample financial resources, formidable campaign skills, and strong relationships with EP tribal groups, the Dossaris are a force to be reckoned with in the EP. End summary. -------------- From Car Parts to Financial Services -------------- ¶2. (C) CG and PolOff met with Yousef, Khalifa, Khalid, and Mohammed Al-Dossari on December 19 at their offices on the outskirts of Dammam. The Dossari brothers own Yousef Ahmed Rashid Al-Dossari & Brothers Company and Al Dammam Development. Yousef Al-Dossari & Brothers Company began in the auto parts and service business (primarily dealing in General Motors products) but has since evolved to focus on investments, particularly in the financial services sector, while Al Dammam Development focuses on real estate. Khalid and Mohammed, who have primary operational responsibility for the companies, outlined some of their holdings, all owned in partnership with other investors and companies: three companies in Bahrain, including a bank and the first mortgage company; a USD 600 million joint venture with a Kuwaiti partner in consumer finance; a mortgage company and bank in Riyadh; etc. ¶3. (C) The company is investing in the Saudi stock market but hedging its bets through holdings in real estate and in investments outside of Saudi Arabia, including the Gulf countries (except for Qatar, which "doesn't like the Saudis") and China. "We consider the Gulf as one large market dependent on the price of oil," Khalid explained, "so we see investing in China as a way of diversifying out of the Gulf." The brothers believe that investment banking will provide excellent opportunities for companies that enter the market quickly. They are looking for an American partner for a USD 1 billion investment in the sector but say that U.S. companies are reluctant because of concerns with "procedures and regulations." Citigroup and HSBC are said to be looking to enter the investment banking sector directly, the brothers said, whereas BNP Paribas and a Japanese bank were looking to enter with local partners. -------------- Dreams and Realities for a Council Member -------------- ¶4. (C) The conversation turned to Dammam's run-down infrastructure and other regional development problems, and PolOff suggested that Khalifa, recipient of the most votes in the election for the municipal council of metropolitan Dammam, was in a good position to tackle these problems. "It turns out we are just editors," Khalifa replied ruefully, referring to the council members and to their limited authority to make non-binding recommendations to the mayor; "I am beginning to wonder why I ran." His brother Yousef was more optimistic: "If the council elects a good president," he said with a smile, nodding at Khalifa, "we will see what they can do. We need to give the government confidence that we will help develop the area in the best way, and we need to speak up." ¶5. (C) Khalifa went on to share some of his visions for Dammam: "I was thinking to build up a city like a Dubai or Houston, from what we already have or even from reclaimed land. We need to build a real downtown." Another part of his vision involved developing a marina and waterfront area for the city, modeled on successful projects he had seen in the United States. -------------- The Dossari Electoral Machine Gears Up Again -------------- ¶6. (C) The CG said he understood that Yousef was going to run for the EPCCI elections in February. Yousef confirmed that he was indeed leading a slate of candidates to challenge the "Ta'awwun" slate of Abdul Rahman Al-Rashed, the powerful current president of the EPCCI. "Don't get me wrong - Abdul Rahman is a friend, and when this is all over he will still be a friend. But the problem with him is that he is too closed. He does not want to spend any money. He has too many people sitting on the Board doing nothing. What have they done in four years? It is time for a new generation with vision." Launching with animation into his campaign platform, he ticked off the major issues facing the EP business community: "Saudization, the impact of the WTO accession, labor, development, mergers." If elected as president of the Board, Yousef said, he would devote himself entirely to running the chamber as an activist, in contrast to Al-Rashed, whom he described as devoting too little time to the Chamber. If elected, Yousef said he would actively lobby the government for changes that would improve the business climate, especially for small and medium-sized businesses. ¶7. (C) Asked by PolOff if any women were on his slate, Yousef said no. "I began planning my slate eight months ago, building a coalition and developing a platform" he said. "The government should have announced that women could run further in advance." He went on to outline his campaign strategy, which includes extensive outreach throughout the EP. "We will host a dinner here for 3,000 small businessmen here this week, and we will do it everywhere in the province, all the way to Hafr Al-Batn. Abdul Rahman will now know what to do," he continued with a grin. "Remember, he does not like to spend money." The Dossari brothers attributed Khalifa's success in the municipal council elections to a well-planned election campaign that included massive spending ("We don't tell people how much, but it was a lot," Mohammed said),personal outreach, and the general popularity of the Dossaris, perhaps the EP's largest tribe. "After Khalifa won in the elections, we took out an ad in the paper inviting all of his supporters to a dinner in Dammam," Yousef said. "Seven thousand came. And even if they hadn't found dinner, we were there to shake their hands." -------------- Comment and Tribal Bio Note -------------- ¶8. (C) The Ahmed Rashid branch of the Dossari family is clearly one to be reckoned with. We were impressed with the business acumen of the four brothers we met, three of whom were educated in the U.S. (as were the two other brothers we did not meet). Their political skill is perhaps even more impressive: they seem to have melded western-style campaign tactics of planning, developing a platform, and managing a media campaign with Saudi values of personal availability and tribal hospitality. In the past, prominent local businessmen seem to have contested election to the EPCCI board more for the prestige of winning than for the chance to lead the chamber (reftel). Yousef's slate may represent a positive change to that trend. "In the last three years, can you name one Saudi minister Abdul Rahman has brought down from Riyadh?" Yousef asked. "We should be doing that all the time." ¶9. (C) The Dossaris are a tribe originally from Wadi Al-Dawaser, a relatively fertile area in the Najd. Several centuries ago, in response to a severe drought, part of the tribe moved east, settling on the Saudi coast and in neighboring Gulf states, fortuitously and coincidentally in oil-rich areas - many Dossaris now work at Aramco, including Aramco CEO Abdullah Jumaa'. There is currently no recognized leader to the Dossari tribe in the EP, although, according to Yousef, the tribe would select a leader during a major crisis. End comment and tribal bio note. (APPROVED: KINCANNON) GFOELLER