The Assad–Makhlouf Rift: A Sign of Assad’s Strength

By Aiman Mansour
7 May 2020
For Syria Comment

Recent developments in Syria suggest that the country is about to go through a significant change. Many reporters and analysts have jumped to the conclusion that Assad’s grip on power is weakening. This conclusion is fueled by an unprecedented public challenge to President Assad by Rami Makhlouf, Syria’s top oligarch and Assad’s cousin. Adding fuel to the fire are a number of broadsides of President Assad made by prominent Russians and published in Russian media. But the truth is quite the opposite of what it at first seems. Assad’s position in Syria is stronger than it has been for years, not weaker. 

Rami Makhlouf shocked Syrians and outside observers alike with two unusual Facebook videos:

Rami Video 1
Rami Video 2

These represent his first public appearances since a 2011 press conference where he came across as inarticulate and explained that he was leaving business to focus on charity. Needless to say, Makhlouf did not leave business nor did he give up control of his companies; rather, he expanded his economic activities. He also established a militia, which he attached to his charity, Jamaiat al-Bustan. 

Brig.Gen.Suheil Salman al-Hassan

This militia was formed in 2012 to support the security forces, but became an important source of Makhlouf’s influence. Its numbers grew to 30,000. Suheil Hassan, commander of the Tiger Forces, and current commander of the 25th Division, was at first associated with Makhlouf’s militia before departing to work directly with the Russians.

Because of his control of a large militia, Makhlouf was entrusted with a large contract worth millions of dollars to protect and secure Syria’s oil and gas fields. These were a main source of the government’s income. Makhlouf bungled his mission nad lost the fields to insurgents, ISIS, and the Kurds. Makhlouf’s failure meant that Syrians had to suffered with little cooking gas and electricity. Makhlouf received the money for the contracts, but failed to deliver on them. Hundreds of poorly equipped, mostly Alawi, youth were captured or killed by the insurgents, who overran the sites. In no small measure, this was due to Makhlouf’s lack of preparation, corruption, and unprofessional management of the military effort. As a result, the Syrian government was forced to turn to the Russians and Iranians to spearhead the reconquest of the oil and gas fields from ISIS. Today, Russia and Iran own the contracts to operate them and reap much of the reward. Most notorious examples of Makhlouf’s failures was ISIS’s capture of the Hayan Gas factory, which produces gas for 1/3 of Syria’s electricity. Syrians are still suffering from this loss today because, although the gas fields have been retaken, the factory has been largely destroyed.

Islamic State group militants blew up the Hayyan gas plant in the eastern Homs province in January 2017. The cost of building the plant came to 291 million euros, when it was opened in 2010 and it produced enough gas to supply one-third of Syria’s electricity.

It will cost three hundred millions euros to rebuild it. Makhlouf received tens of millions of dollars per month to secure the factory, but sent only a fraction of the men required to protect it, which was in a well-supplied location that was not cut off from supply routes. Makhlouf’s bad planning and stinginess was a main factor in its loss. ISIS blew it up one month after getting its hands on the facility.

Tensions between Makhlouf and the regime bubbled to the surface in 2019. Bushra al Assad, the president’s sister and wife of the late deputy chief of staff Asef Shawkat, became embittered with Makhlouf because he was given all the contracts for billboards and media by the minister of information. Some of these had once belonged to Asef. Assad denied Rami Makhlouf’s request to take control of certain oilfields, which were likewise denied to Iran.

While Bashar al Assad was demanding monthly payments of money from each of the big businessmen in Syria and punishing those who failed to pay, only Makhlouf was able to escape both payment and retribution. Rami came to believe that he was not only untouchable, but also that he was Assad’s equal or superior. In private meetings with friends, Assad openly expressed his anger and disappointed with Makhlouf. By 2019 Assad had become convinced that his cousin was cheating him and set about to extract revenge and bring his errant family member to heal.

Meanwhile Makhlouf loomed for protection where he could. He funneled money to Hizballah as a form of insurance. He even sent direct payments to the son of Hassan Nasrallah, Hizballah’s secretary general. Makhlouf also adopted Shia Islam and worked on becoming closer to Hizbullah than Assad himself. In the summer, Assad began to shrink Makhlouf’s share of the economy. He also took control of Makhlouf’s Bustan militia, with military security seizing its properties, though Makhlouf kept the charitable wing of Bustan. Assad’s move against Makhlouf was a continuation of similar steps against other businessmen, like the Jaber brothers and Muhammad al-Qatarji.

Assad had long wanted to weaken Makhlouf but he had to wait until after the death of his mother, a formidable woman, and the growing infirmity of her brother and Rami’s father, Mohammad Makhlouf, who had been Hafiz al-Assad’s chief financial fixer. With her death in 2016, Rami Makhlouf lost his most important protector. Both Bashar al-Assad’s wife, Asma, and Maher al-Assad’s wife Manal, had been pushing for the Makhlouf’s to be chastened.

The Makhloufs, especially Rami and his children, Muhammad and Ali, were being increasingly disrespectful of Assad in their interactions with interlocutors. It also appears that Bushra took exception to the arrogance of Rami’s two sons who were splashing about photos of their expensive cars, planes, and exploits. That summer there were already false rumors that Makhlouf was arrested, when his share of the economic pie was simply reduced a little. This is when Makhlouf began reaching out to Hizbullah and adopting Shia Islam in order to get closer to Iran and cement his self-perceived immunity.

Muhammad R Makhlouf flaunting his cars
Muhammad R Makhlouf’s jet

Already in 2019 Makhlouf was being weakened in Damascus. He lost his militia, which was the last independent militia in Syria, his control over his main companies was reduced, the government took his Shweifat private schools, and it seemed that Syriatel would be next. In addition, the Prime Minister was told to cancel the contracts Makhlouf had with the government on things like energy and commodities. 

Assad had been nursing his resentment of his cousin for some time, but feared bringing the conflict to a head before Syria’s war was decided. He had to focus on battling his external enemies. Assad also ordered Makhlouf to dissolve his branch of the Syrian Social Nationalist Party. Rami had formed his own wing of the SSNP. Assad also began to whittle away at Rami’s share of Syriatel, bringing it under the wing of the state.

Among Alawis, Rami Makhlouf was not universally resented. He provided salaries, charity and medical help to many in the poor loyalist communities. Others who were closer to being warlords, like Abu Ali Khudr or the Qaterji brothers, were more resented for being both parasitic and emerging out of nowhere and adopting lavish lifestyles thanks to their militias and smuggling. But while military security seized control of his militia, they took weapons, vehicles, and headquarters, not personnel. Most of the militiamen returned to their homes since the government could not offer them the same salaries. Some remain on Rami’s payroll, but not as militiamen. Makhlouf does not pose a military threat to the Assads, but he can he can hurt his cousin through propaganda and by exploiting the poverty and hunger that is widespread among Alawis, made weary by war, and ground down by years of sacrifice. Makhlouf used the opportunity created by the war to project the image of a philanthropist, as did his attention-seeking son, but in fact he gave Syria’s poor only a small percentage of what he made illegally.

Despite the claims of many observers, Alawis do not identify as Shia and should not be considered Shia. Members of the sect are overwhelmingly secular in belief and practice. Makhlouf tried to Shia-fy the Alawis to secure himself. He encountered Shia sheikhs thanks to his militia and was impressed with their ability to control masses of people and also receive the tithe (khums) of one fifth of their followers’ yearly salaries, which many were willing to contribute with little question. He also secured Iranian training for his militia. This interaction with his militia and charity led him to meet with Shia religious figures. Makhlouf tried to take control of Alawi shrines so he could control their money and Alawi religious men throughout the mountain. He wanted Alawis to donate to the shrines’ money boxes, the way Shi’is donate to their clerics. There is no textual or institutional foundation in the Alawi religion that commands Alawis to obey their religious leaders as there is in Shi’a Islam. Alawi sheikhs cannot legitimize a leader or direct their followers to obey him. Makhlouf thought Shi’a-izing Alawis could change that. But Assad thwarted these aspirations. Many Alawis, including the president, were concerned about these attempts to make the poor Alawis religious. They believed that Syrian stability requires Alawis to remain secular and that the only hope for Syrian nationalism and possible reconciliation is for the separation of church and state. They fear that to make Alawis religious would destroy the Syria they are trying to build. It would condemn their community to endless sectarian strife.

Alawites do not have leaders. Makhlouf, like some other Alawites in the past, believe that given the nature of the region, their sect needs to be better organized and shepherded by a strict leadership like the Druze have. This had previously been tried by Jamil al-Assad and Refaat al-Assad, but they both failed. Unlike them, Makhlouf wanted to modify Alawis to be more similar to Shias and hence more controllable. In meetings, he would suggest an Alawi rapprochement with Shi’a Islam. His attempts to seize control of Alawi shrines and impose guardians over them was an effort to further this objective. But he failed win over local Alawi leaders, who blocked his experiment. 

Makhlouf bought Beirut’s beachside Summerland hotel and Resort for $300,000,000 from a prominent Druze family and sought to make it a popular watering hole for both Iraq and Iranian Shia elites. Iraq’s former militia commander, Abu Mahdi al Muhandes, stayed there when he visited Beirut as did the Iraqi Shia political kingpin Ezzat Shahbandar. When Makhlouf’s sons traveled to Beirut or stayed there they received protection from Hizballah. Because of Hizballah’s financial crisis, Makhlouf found it easy to buy friendship from the Lebanese organization.

Kempinski Summerland Hotel & Resort Beirut, Lebanon

Earlier this year, the special government committee formed to go over Syriatel’s finances found that Syriatel was paying its service providers much more than its competitor, MTN, was doing. After interrogating some of Makhlouf’s assistants, the investigators discovered that Makhlouf owned the service providers and was using them to cook Syriatel’s books by charging inflated prices and in this way he reduced Syriatel’s profits and the share that it owed the government. By denying the government income, Rami was contributing to the collapse of the Syrian pound and weakness of the state.

Makhlouf also benefited from the collapse of the Syrian pound. Since most of his money is kept outside of the country in dollars, he benefits from a weaker Syrian pound.  

Makhlouf made it clear in his first Facebook video that he believes himself to be Assad’s equal. He lectured Assad about how he should spend money. He insinuated that Bashar al-Assad allows those that surround him to misappropriate Syriatel’s money. Rami claimed that he wanted to be sure the money goes to the right place and the proper recipients. Makhlouf made this video after his son had boasted about having two billion dollars in his account. So, we were to understand that one of Makhlouf’s sons has more than thirty times the amount that the state is asking from his father.

In his second video Makhlouf challenges the President more directly, the way Rifaat challenged Hafez. Makhlouf is refusing to hand over his assets, claiming that he is entrusted with them on behalf of others, and by this he means Alawis. Thus, Makhlouf, by playing the sectarian card, is threatening to divide the president from his base. Makhlouf also threatens a divine punishment and claimed to have a mission from God. Makhlouf asumes a religious tone and demeanor unusual for the secular Alawi culture from which he comes. His first video was entitled, “Be with God and have no cares.” The second video was entitled, “It is our duty to give victory to the believers.”

The latest episode of drama with Makhlouf comes at the same time as more open criticism of Assad in certain Russian media. This led to the inevitable speculation that maybe this time the Russians are finally going to get rid of Assad, or will finally pressure him to change. That seems unlikely when one understands that the source of the media pressure on Assad was Russia’s version of Makhlouf, or one of them at least, Yevgeny Prigozhin, “the chief” of Putin’s oligarchs. Prigozhin has profited from the Syrian war and is undoubtedly angry at the Syrian government for refusing to renew a major contract he had to manage an oil field. He is using his influence in Moscow to put pressure on Assad. This too poses no real danger to Assad, although “the chief” has a lot of influence in the Kremlin and could try to escalate problems for Damascus. Assad’s willingness to confront Putin’s leading oligarch shows how confidant he is in his position. He is prepared to confront allies to achieve his regime’s vital interests and to preserve his own grip on power.  

All of this is also an opportunity for a better Syria. If Assad decides to discipline and cull the parasitic class of oligarchs who gained great autonomy during the war years, he can help Syria recover from the last nine years of trauma. Most of the oligarchs do not own factories, do not import essential goods into the country, and do not create employment; rather they steal from the country. If Assad is able to empower more legitimate businessmen who can help build the country, such a move should be supported by the Gulf states as they help reintegrate Syria into the region.

Syria’s recovery is also essential for Lebanon’s recovery. Moreover, Syrian businessmen have the necessary skills to help with the rebuilding of Iraq. Syria’s factories used to be the main suppliers of a number of goods purchased by Iraqis. The region needs the return of legitimate businessmen. The continuation of the current regional and Western policies, dictated to a large extent by Washington, will not bring about a realistic change in behavior in Damascus. On the contrary, the heavy sanctions and impediments to trade only strengthen those businessmen who are deeply embedded with Iran and are unlikely to bring hope or a brighter future to the Syrian people.  

*Aiman Mansour is a Research Fellow at the Jerusalem Institute for Strategy and Security. Until Nov 2019, he served as the Head of the Middle East and Africa Division of Israel’s National Security Council. He was previously Liaison Officer and Assistant to the Special Envoy of the Prime Minister, and Director for Syria and Lebanon, NSC.

Comments (5)


Antoinetta III said:

When Makhloof did nothing to defend the oil and gas fields when it seems he easily could have, makes the whole thing look like a deliberate sell-out. In other words, treason.

So how do Makhloof’s family connections protect him. What power did his mother actually have? Henry VIII would have had this guy’s head on a stake at Traitor’s Gate before a day had passed. The mother and other family members would be warned that if they created difficulties they would meet the same fate. Confiscating the wealth, estates, cars, etc would also happen.

Antoinetta III

May 7th, 2020, 5:02 pm

 

Willy Van Damme said:

As the author is a key figure in the Israeli security apparatus one should be very careful with the contents of this story. It could be true, it could be partly true or it could be a big manipulation of events. How can a member of the Israeli security write a serious story about the country? It’s in fact impossible.

May 12th, 2020, 11:50 am

 

Joshua said:

The author no longer works for the NSC or Netanyahu’s office.

May 18th, 2020, 4:08 pm

 

Yonadam said:

regardless of each party circumstances the conflict reveals the disintegration of the Syrian regime>

May 14th, 2020, 2:53 am

 

Michael P Dougherty said:

I find it amusing that someone thinks there’s ‘clean’ businessmen that can replace the ‘bad’ ones in Syria, or anywhere else for that matter. They are ALL crooks.

May 17th, 2020, 7:19 am

 

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