Rami Makhlouf saga: Syrian tycoon plays up his role as self-declared philanthropist

Bashar Al Assad’s billionaire cousin says government is damaging the charitable side of his empire as rift mounts within the inner circle over his fortune

Mr Makhlouf owns Syria's largest mobile operator, Syriatel. AFP

Syrian tycoon Rami Makhlouf has accused the regime in Damascus of impeding what he described as his charitable work, pulling out a new card in the most public internecine war since the Assad family took power five decades ago.

The 50-year old billionaire published overnight a letter he sent nine days ago to the authorities, saying the government is preventing charities he runs from accessing their cash to give to people in need.

These charities sit among complex corporate structures headed by Mr Makhlouf that combine business and non-profit organisations.

“The government should be in the service of the people and not the people in the service of the government,” Mr Makhlouf said.

The rift between Mr Makhlouf and the Assads, his maternal cousins, is unmasking his money man role in an inner circle controlling vast resources in Syria and its war economy, as well as crucial societal-financial ties that bound the Assads and their Alawite constituency.

Mr Makhlouf became a pivotal go-between in this relationship since the March 2011 revolt against the Assad family’s rule. In June of the same year, Mr Makhlouf said he was leaving the business to devote himself to charitable work.

But Mr Makhlouf became a major player in the war economy and expanded his business-charity structure to cover activities ranging from the financing of militias to UN aid contracts, as well as the creation of more front companies to position himself for any reconstruction flows, diplomats and regional businessmen said.

The letter is the latest salvo in Mr Makhlouf’s defence strategy, which has been to appeal through Facebook to the Alawite community to shield him from what described as repression by the security apparatus and others in power he did not name.

Mr Makhlouf said that the Central Bank had prevented an increase in the capital of Noor Microfinance, which he described as part of Ramak Humanitarian, an entity at the top of one of his business-charity structures.

He said the restrictions forced Noor Microfinance to stop giving loans three months ago, although it aspired to grow and serve almost 10,000 families badly in need of these types of loans”.

A confidential business database presented to regional and Western governments last year and seen by The National showed Noor Microfinance as a subsidiary of the Al Bustan Association, which falls under Ramak Humanitarian.

The Guardian reported in 2015 that the United Nations International Children's Emergency Fund (UNICEF) gave a $268,000 contact to Al Bustan Association for education and other services in areas controlled by the Syrian regime.

Ramak Humanitarian is also the father company of Rawafed Damascus, a partner in a multi-billion dollar construction project in Damascus called Marota City.

The project is planned in the Basateen Al Razi area of the capital, a hub of the peaceful protest movement against Assad that the regime emptied of its mostly Sunni population.

The European Union put Rawafed Damascus on sanctions in January 2019, along most of the partners in the Marota City project.

EU sources said then that the move was designed to signal to the regime and to Russia that the organisation is against any reconstruction in Syria that is not preceded with a political solution or makes permanent ethnic cleansing and forced population transfers.

The study said that multiple shell companies in the “crony business outfits” of Mr Makhlouf “indicates the ease by which the regime’s business structure is used to avoid sanctions or bid for UN contracts without an obvious link to the system’s patrons”.

“While the Bustan Association’s regime connections are fairly well-known in Syria, 14 shell companies...lurk within the Ramak structure,” the study said.

“The commercial-charity structure serves another use in that it is a vehicle for war economy players who were co-opted by the regime to get a cut of the aid or reconstruction funds,” it added.

Over the last two weeks, Mr Makhlouf has been decrying what he described as repression against him as an established businessman helping the downtrodden, as opposed to what he called war profiteers.

Regional financiers say until he started to fall out with the Assads sometime last year he remained behind the scenes at the top of his business game, as well as the money keeper of the inner circle, managing tens of billions of dollars for the Assads.

The money was amassed after Hafez Al Assad took power in a 1970 coup, which consolidated the Alawite ascendency in the mostly Sunni country.

In 2008, Washington placed sanctions on Mr Makhlouf under a category called public corruption. The EU put him under EU sanctions in 2011 for his support to the crackdown on the peaceful protest movement.

When Bashar Al Assad inherited power, Mr Makhlouf became one of the three most powerful men in Syria, along with Assad and his brother Maher Al Assad, who commands the elite Fourth Mechanised Division, the successor of the Defence Brigades, a praetorian guard unit headed by Hafez Al Assad’s brother Rifaat.

A failed attempt by Rifaat Al Assad in the 1980s to take power from his brother was the last major public rift within the inner circle. In the 1990s, Maher Al Assad shot in the stomach his late brother-in-law Assed Shawkat, another army commander, who survived the shooting. The dispute was kept under wraps.

In a series of videos this month, Mr Makhlouf hinted that families of Alawites who were killed defending the regime would be cut off financially without him.

He signalled that by targeting him, it undermines the cohesion of the Alawite sect, as well as the outlook for its survival.

The regime moved against Mr Makhlouf in recent weeks to strip him of telecom company Syriatel, the crown jewel in his business empire.

Mr Makhlouf confirmed on Wednesday that the authorities froze his assets in the last few days over disputed levies on Syriatel.

But executives who had worked with Mr Makhlouf said Syriatel was the most high profile asset among billions of dollars in assets Mr Makhlouf and his father had managed on behalf of the inner circle for decades.