KING ABDULLAH LAUNCHES ANTI-CORRUPTION STRATEGY

S E C R E T RIYADH 000495

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/11/2017
TAGS: PGOV PREL PINR SA
SUBJECT: KING ABDULLAH LAUNCHES ANTI-CORRUPTION STRATEGY

REF: A. 06 LONDON 8373

B. RIYADH 296

Classified By: Deputy Chief of Mission Michael Gfoeller
for reasons 1.4 (b) and (d).


1. (S) SUMMARY: The Council of Ministers approved the
National Strategy to Protect Honesty and Combat Corruption
during its weekly meeting on February 19. The strategy
includes procedures for investigating officials suspected of
corruption at most levels of the government and establishes
the National Authority for Combating Corruption ("Authority")
to monitor and evaluate the implementation of this strategy.
The strategy is in line with King Abdullah's push to root out
corruption as a necessary component of his reform agenda.
Some analysts argue that the strategy comes on the heels of
the Al-Yamamah military sales investigation, and many hail
the step as an effort to rebound from the 2006 stock market
crash. An official from the General Secretariat of the
Supreme Economic Council doubted the sincerity and potential
success of the strategy, citing corruption within the Royal
Diwan itself and the inevitable turnover of SAG leadership in
the near future. END SUMMARY.


2. (U) The Council of Ministers approved the National
Strategy to Protect Honesty and Combat Corruption during its
weekly meeting on February 19. The strategy's main goals are
to root out corruption, promote accountability, create jobs,
and increase wages in the process. According to media
reports, the strategy established the National Authority for
Combating Corruption ("Authority") as the mechanism
responsible for overseeing implementation, oversight, and
evaluation of the strategy. In the Council of Ministers
meeting, King Abdullah urged all government departments to
combat corruption by following the rule of law and holding
officials at all levels -- including ministers -- accountable
for their actions. Media sources reported that economic
analysts estimate a total loss of 3 trillion Saudi Riyals
(approximately USD 8 billion) due to corrupt practices in
Saudi Arabia.


3. (U) King Abdullah has worked to eradicate corruption in
the SAG since his ascension to the throne in 2005. In early
2006 he opened the Shoura Council's annual session with
assurances of the government's resolve to fight corruption.
Additionally, King Abdullah rewarded the "whistle-blower"
Abeer Ghazi al-Masoudi in 2006 with a job at the Ministry of
Health for reporting dishonest practices between a catering
company and state hospitals.


4. (C) The media reports and editorials were generally in
favor of the new strategy, citing hope for an economic
recovery following the 2006 stock market crash. Many
referred to corruption as a "killing cancer" that destroys
the security of society, ruins the spirit of innovation and
generates disloyalty among citizens. Some Internet chat
rooms expressed hopelessness regarding the proposed reform,
stating that corruption is deep-rooted in Saudi society.
Others called for increased democratic reforms in the Shoura
Council as a follow-on to this strategy. Several comments
also cited the British investigation into the Al-Yamamah
military sales deal, in which Crown Prince Sultan was
suspected of corrupt practices (Ref A),as an example of the
massive scale on which corruption exists and needs to be
curbed in Saudi Arabia.


5. (S) General Secretariat of the Supreme Economic Council
(SEC) Member Hassan Al-Shuaiby (strictly protect) stated in a
February 25 meeting with PolOff that although the SEC was
established to create the national economic strategies, it
did not play a role in the development of this particular
strategy. He said a minister likely developed the strategy
on his own and presented it to the Council of Ministers. In
his opinion, the strategy is "nice on paper" and a "noble
effort" by King Abdullah and his followers to try to stem the
tide of corruption that envelopes the SAG operations. He
agreed that it was necessary, but said that, in his opinion,
it will not work. According to al-Shuaiby, "It will take
decades to knock out the corruption from the SAG because the
SAG is run by a family and not by elected officials. One may
be able to root out the corrupt forces in this King's
administration, but as soon as he is gone and new individuals
take ministerial positions, there will be new corruption all
over again." Al-Shuaiby commented on what he perceived as
corruption in the Royal Diwan -- effectively the King's
Court-- namely that the SEC, which is part of the Royal
Diwan, acts largely as a "rubber stamp" for policies created
by other governmental bodies and individuals close to the
Royal Family. Acting on instructions from the King or
various ministers, the SEC often approves measures without
review or input from their experts.


6. (S) Al-Shuaiby also commended King Abdullah's efforts to
eliminate corruption, particularly among the Royal Family.
However, he talked about the unhappiness of many royals with
King Abdullah's policy to reduce royal entitlements as a
means of curtailing corruption. He claimed that they
expressed their displeasure at this curtailment of
entitlements by effecting the stock market crash in 2006.
Al-Shuaiby gave several examples that have been repeated by
other royals to Emboffs previously, including the termination
of some mobile phone services and subjugation to Saudi law of
royal family members, a concept nearly unheard of under past
monarchs (Ref B). According to al-Shuaiby, these factors
will make implementation of the new anti-corruption strategy
difficult at the highest levels of government-- where it
needs to be if it has any potential to succeed.


7. (S) COMMENT: King Abdullah's push for reform continues,
and this new strategy is an example of his willingness to go
against the wishes of many members of his own family and
government officials in order to make necessary changes. If
King Abdullah can continue to negotiate successfully the
Kingdom's many competing interests -- in this case a public
that wants corruption curbed and royals who want their
entitlements to continue -- this new anti-corruption strategy
could result in yet another step forward for the Saudis.
However, successful implementation of the strategy will
clearly be an uphill battle in a culture where the rule of
law and transparency are exception rather than the rule, and
family ties form one of the strongest societal underpinnings.
END COMMENT.
OBERWETTER