Riyadh, Saudi Arabia.
November 2017.
Planes grounded, borders closed.
They've seized as many as 500 of the rich people in Saudi Arabia
in the middle of the night, 11 of them princes.
A five-star hotel turned into a prison
in a massive crackdown on corruption.
This was dramatic, it was almost like a theatrical performance
because the humiliation was really absolute.
A crackdown at this level is unprecedented in Saudi Arabia.
These are the household names that become the stuff of legend
and the stuff of myth.
The Kingdom is getting very serious about anti-corruption,
that it's starting with some of the wealthiest individuals
\ in the Kingdom. I
It opened the door on the secret world of huge kickbacks and bribes,
involving companies and governments around the world.
Saudi Arabia is probably the most corrupt country on the planet.
And that corruption goes to the very top of the Saudi royal family.
A new Saudi leader has led the crackdown,
at the same time as seizing control of the country's security forces.
THEY CHANT
It was a raw demonstration of a level of power
that none of his predecessors had.
Can he finally end the corruption?
This is the story of how powerful Saudi princes
have lined their pockets for decades.
And how the crackdown has left the family in turmoil.
Princes who believed in the past that they were above the law
now have to fear that they could be next.
The House of Saud is now in a state of fear and terror.
THEY CHANT
The Malaysian people are angry.
THEY CHANT
They believe they have been robbed.
THEY CHANT
You're not talking about 1 million or 2 million,
we're talking about billions of dollars.
And yet, the Malaysian government acted as if nothing happened.
Absolutely nothing happened.
THEY CHANT
The money has gone missing
from a company called 1MDB.
1MDB is what's known as a sovereign wealth fund,
an investment fund intended to benefit the people of Malaysia.
The foundations are being laid for today's aspirations
to become tomorrow's reality.
Tony Pua is an opposition MP.
He's spent the last eight years trying to find out
what happened to the money invested in 1MDB.
I thought it was really strange for the government
to set up a company and borrow
$1.2 billion.
And invest it, practically 90% of the funds,
in a single company
out of Saudi Arabia, that no-one has really heard of.
That company was called PetroSaudi.
Its co-founder was the seventh son of a Saudi king,
Prince Turki bin Abdullah.
And if you do a bit of digging,
you realise the company was set up barely three or four years ago
and is run by a guy who is no older than 32 years old.
It's like, what?
And that's when you start asking questions
and start digging to see if there's anything strange going on.
If it's even a real deal in the first place.
The story of 1MDB's first deal
begins in the Mediterranean.
The very start of the whole 1MDB adventure with PetroSaudi
took place on a grand yacht off Monaco.
The Tatoosh,
which had been hired by Prince Turki for the occasion.
On board the Prince's hired yacht was a very special guest -
the Prime Minister of Malaysia, Najib Razak.
Prince Turki was there from the start.
And he entertained Najib and his wife Rosmah
and some of their children on board this yacht
at the time that the deal was made.
1MDB had invested $1 billion in a young Saudi prince's company.
But within clays, $700 million had allegedly gone missing.
PetroSaudi insist they have done nothing wrong, and say that
leaked e-mails attributed to them have been tampered with.
1MDB would go on to invest many more billions in other joint ventures.
Most of this cash would also disappear.
It was a con from its conception.
Najib is not only the Prime Minister,
but the Finance Minister, and he was also the sole signatory
and shareholder of this 1MDB fund,
so it was totally opaque and he had total control
over how the money was raised and how it was spent.
And I had quite a lot of fun
actually unravelling the mystery of how it was spent.
The Malaysian people were left with nothing.
Except huge debts.
You were promised a tasty bowl of noodles.
Full of meat, vegetables, dumplings,
and the people will get to enjoy the feast.
I was suspicious.
We know they're going to siphon off the meat, and give it to themselves.
But what actually took place, what really took place,
not only they took the meat, they took the dumplings,
they took the whole bowl of noodles!
And the only thing they left for us
is for us to taste the spicy chilli.
It hurts!
But the Malaysian Prime Minister fared slightly better,
according to leaked e-mails.
What they told me was that $681 million
had been transferred into the Prime Minister's personal account
in March 2013,
as part of the 1MDB supposed joint ventures of that time.
Nobody believed it when it first happened.
Why would the Prime Minister be so stupid
as to transfer that big an amount of money
into his personal bank account?
When I met people on the streets, they were asking me,
"No, that's false news."
But later on, we discover it was true.
The scandal now hit the US.
The FBI called 1MDB the biggest kleptocracy case in history.
They started seizing assets -
a painting by Monet,
a $33 million jet.
Properties in Beverly Hills.
All, they claimed, bought with money stolen from the Malaysian people.
The cash had even been invested in a Hollywood movie.
A film that just happened to be about rampant corruption and fraud.
Come on! Let's go!
One, two, three!
The FBI says it is still investigating.
The Prime Minister insists he has done nothing wrong.
The $681 million in his account
was a gift from a different Saudi prince,
most of which he had already returned.
And what of the Saudi prince
who signed the first ever deal with 1MDB?
While there is no evidence that he personally took part
in the alleged scheme to defraud 1MDB,
leaked company e-mails do suggest he made a lot of money on the deal.
All Turki bin Abdullah knew was that he was getting
a vast commission for what was involved here.
After the initial payment into PetroSaudi,
$77 million was transferred to Prince Turki.
The House of Saud ultimately controls one fifth
of all the world's known oil reserves.
You might think this would provide them with enough money.
But for many princes, it would seem there is no such thing as enough.
The royal family obviously has profited mightily
from ruling the country.
Many of the senior members in particular are absurdly wealthy.
With access to the Kingdom highly restricted for foreigners,
the only Westerners to get a close-up view
of how the country is run are the diplomats we send there.
The great wealth of the senior members of the family
have come from commissions and, in effect,
rake-offs from public business.
For the most part, people accept the system.
Some complain about corruption.
But they turn out to be the people who aren't getting their cut of it.
In my opinion,
as a long-time corruption investigator and researcher,
I have never come across a transaction with Saudi Arabia
that doesn't involve the massive payment of bribes.
MUSIC: What Do You Want? by Adam Faith
# What do you want if you don't want money?
# What do you want if you don't want gold?
# Say what you want and I'll give it to you, darling
# Wish you wanted my love, baby
# Well, I'm offering you... #
One country more than most has been a massive source of bribes
for the House of Saud.
It's a story that goes back more than 50 years.
Whitehall, the half mile of government buildings
stretching from Westminster up to Trafalgar Square,
which mark the heart of the civil service.
By the 1960s, Saudi oil wealth was growing,
and British civil servants saw an opportunity for UK plc.
They began to broker deals with the Kingdom worth millions.
Foreign Office memos reveal that officials were conflicted
about the payment of bribes.
The longer this affair goes on, the less I like it.
Some governments are prepared to get involved in shady dealings.
Her Majesty's Government, I assume, quite rightly not.
While we understand your feelings,
we do not think we can primly stand aside altogether.
If bribing a certain person will probably lead
to the winning of a contract, we cannot very well sit tight.
For 50 years, it has been the normal practice for commissions
to be paid to very senior princes or officials
within the Saudi royal family to secure arms deals,
and I don't think there's any doubt.
The documents in question implicated very senior people
in the Saudi government,
like the former king, for example, Abdullah.
Abdullah was one of the most powerful princes in Saudi Arabia.
In the 1960s, he was appointed head of the Saudi Arabian National Guard.
This National Guard is made up of Bedouins
traditionally loyal to the king,
an army 30,000 strong, as large as the regular army.
Abdullah wanted to modernise his army
and he wanted Britain to supply the weapons.
What he didn't want was to discuss bribes face-to-face.
Beirut is a crossroads where literally East meets West.
The deal first began, strangely, in Beirut.
A person approached the British Embassy in Beirut
and told them that, if they used his services
and paid him commission, he would be able to get Britain
arms deals with the Saudi Arabian National Guard.
The man was Mahmoud Fustok.
He was married to Prince Abdullah's sister,
which made him the perfect middleman.
Britain agreed to hand Fustok 7.5% of the contract.
Today, that would be worth a cool £170 million.
Eventually the problem they faced
was that Abdullah wasn't able to get the deal approved
by the Saudi Council of Ministers.
So it was a very squalid episode,
with the British government heavily involved.
This deal failed, but a few years later Prince Abdullah signed
an even bigger deal with the UK,
to supply communications equipment to the Saudi National Guard.
This would pay Abdullah close to half a billion pounds in bribes.
One British government after another
would keep the embarrassing details secret...
...for more than 40 years.
In 2005, Prince Abdullah was crowned King of Saudi Arabia
and his secret British arms contract was still in place.
Five years later, a former soldier
was just settling into his new job as programme director in Riyadh.
Ian Foxley had been hired by
military contractor GPT Special Project Management.
He was now in charge of the latest plan
to modernise communications for the Saudi Arabian National Guard.
It was bigger than the British Army, and better equipped.
This contract was to modernise
communications for that force,
so effectively you had a signed-off, funded project
of £1.96 billion
over a ten-year period
to re-equip the army.
Wonderful. You know, as a project manager, as a programme director,
that's a fantastic opportunity.
It was going to be the pinnacle
of my professional communications career.
But I found out very quickly
that I was the third programme director in six months...
...and that's highly unusual.
So you had this escalating worry in your mind
about things that aren't quite right.
Within weeks, the first alarm bell went off.
And this is like a murder story
where you don't find the body at first.
When Ian Foxley was asked to sign off a company invoice,
he noticed something odd on the paperwork,
something called "bought-in services".
And I said, "What's that?"
And they said, "Oh...
"this is for funding stuff that we don't have in country."
This bought-in services on this first contract is £1.5 million.
And that's when I go, "So what is it and who are we buying it from?"
And that's when it all started getting difficult.
That's when you're asking questions they don't want asked.
This was a UK Ministry of Defence supervised contract.
Ian Foxley wanted to tell them his concerns.
He went to the MOD office in Riyadh,
where he met a Brigadier, by chance an old Army colleague.
He told Foxley to get him proof of illegality.
That proof was back at GPT, on Foxley's employers' e-mail system.
LIFT BEEPS
I got into the office early.
I rang the IT manager and I said, "I've got a problem.
"I need you to let me into this account,"
and I sit at this console next to this window,
knowing that if anybody walks past...
...tensions are such at the higher level in this company that they're
going to know immediately what I'm doing at that time in the morning.
It felt like being in a Hollywood movie
but with the added tension that this time it's for real.
I'm not quite sure what I'm looking for
but I know I'm looking for something that's an attachment.
So I just took the lot.
This is one of the key documents
and if I just show you here, the contract is worth
77.7 million Saudi riyals.
So this is about £12 million...
...of which the element, the suspect element for bought-in services
is 9.5 million riyals.
That's £1.5 million.
Ian Foxley then sent the MOD these documents relating
to the so-called bought-in services.
The Brigadier, having got the evidence, wanted to ring London,
wanted to ring back to UK and find out what he should do with it,
and they told him to hand it back to the company.
And I couldn't believe this.
If I turn round and say,
"I've discovered corruption in one of your major contracts,"
and I hand you the evidence and you hand it back to the company,
you're betraying me.
You have just hung me out to dry.
GPT then threatened Foxley with arrest
for stealing company information.
With his wife and family still in the UK,
he knew he had to get out of Riyadh.
I was on my way to the airport and my wife rang.
PHONE RINGS
I'd been told already that my phones were monitored.
I couldn't say that I was actually desperately trying
to get out of the country.
We had a nice, gentle conversation about,
you know, "I'll see you in a couple of weeks' time,"
and actually I'm en route to the airport.
It's like combat.
Your brain is going at a million miles an hour.
You take a gulp and go forward.
I waited till we cleared Riyadh airspace and had a big drink.
You know, "Stewardess, bring me the biggest whisky you can let me have!"
Back in the UK, Ian Foxley was approached for his evidence
by Richard Brooks, a journalist from Private Eye.
Some of the material that Ian Foxley got hold of really was explosive.
So it kind of showed that, centrally,
within this massive multinational defence company,
business took priority over integrity or honesty, basically.
The public position here and in Saudi Arabia -
everybody pretends there are no bribes,
so they have to go under all these weird and wonderful euphemisms
of things like bought-in services, commissions and so on.
Bought-in services weren't services at all. They were bribes.
There were no services being provided.
They were simply kickbacks to important officials.
This man was crucial for making the system of bribes work.
Peter Austin, a British businessman.
He's the owner of this place, Little Whale Cay,
a private island in the Caribbean.
If you'd like to stay here, you can rent it for around £13,000 a night.
For years, Peter Austin was the man who distributed
the money for the Saudis.
Every contract would have what was then known
as an administrative charge attached to it.
Peter Austin would turn up
every now and then to check everything was fine,
he would get the administrative charge and then pass it around.
The money was handed out to members of King Abdullah's inner circle.
Over the lifetime of the contract,
the bribes paid amounted to around half a billion pounds.
Come on, you two.
Ian Foxley had uncovered a scandal going back decades.
The Serious Fraud Office launched an enquiry
into his allegations in 2012.
Neither GPT nor the Ministry of Defence
will comment until that enquiry is concluded.
To date, no-one has been charged.
You don't plot on being a whistle-blower,
it's not a career path.
You fall into it through doing the right thing.
And the effect of that is that you end up in a very lonely place.
You end up isolated professionally and physically...
...and certainly spiritually and mentally.
And that's a very difficult place.
Come on. Come on, you two.
Saudi Arabia hasn't always had a reputation for corruption.
The first King of Saudi Arabia
had a reputation for giving away his riches.
In the early days of the Kingdom,
Abdulaziz, the founder of this particular dynasty,
was famous for driving around in an open car with a bag of gold coins
and if he saw someone looking destitute,
he'd get out of the car and give them a gold coin,
making them instantly rich.
SHOUTING THROUGH LOUDSPEAKER
These are the new inheritors of the earth.
This country has unlocked an Ali Baba Cave of riches.
By the 1960s, Faisal was on the throne.
He continued the traditions of his father and was widely regarded
as an honest king, who did his best to clamp down on corruption.
Faisal's power is absolute.
It's as if the Queen were to rule us without Parliament.
But things were changing.
The Saudi Treasury was filling up with petrodollars.
Within three years, Saudi Arabia will have more foreign currency
than japan, Germany and the United States put together.
There was now more money than the King could control on his own.
He inherited a country that
I think would be safe to say was in the eighth or ninth century,
and he had to move it forward quickly.
So he created a Ministry of Defence and Aviation,
a Ministry of the Interior, a Foreign Ministry.
Each one of those ministries got as its head one of his brothers
and in many cases they stayed in that position for the next 50 years
and those became their power centres,
and each got bigger and bigger.
Power was now spread across a number of senior princes.
As it did, opportunities for corruption grew
and there was little that even King Faisal could do to control it.
At the Ministry of Defence, Prince Sultan had probably
the worst reputation of any Saudi royal.
As one diplomatic cable put it,
"He has a corrupt interest in all contracts."
We had lots of dealings with Crown Prince Sultan.
He was fabulously wealthy, no doubt about it,
and that was one of those areas
where the funds of the Ministry of Defence
and the funds available to Crown Prince Sultan
often merged, and difficult to distinguish.
Over the years, the rake-offs and the bribes took off...
...increasing first from 7% to 10%
and then to around 15% on each contract.
Senior British civil servants had concluded that the bribes...
...will, unless some restraint is applied, become enormous.
But with thousands of jobs at stake in the British arms industry,
there wasn't much sign of restraint.
In 1985, the UK and Saudi governments signed Britain's
biggest ever arms contract.
And the deal would set
an astonishing new precedent for backhanders.
It was called Al-Yamamah.
Today's signing at Lancaster House
was the triumphant climax to a year of patient bargaining.
The Al-Yamamah deal was this extraordinary deal
in which the United Kingdom sold Saudi Arabia
what ultimately amounted to £43 billion of weaponry.
And it was all sorts of stuff, but predominantly jet fighters,
the maintenance and servicing of those jet fighters,
the training of pilots, the training of maintenance staff, etc, etc.
The UK would get tens of billions of pounds in valuable exports,
and as part of the deal,
we would promise to keep the Saudi rake-off secret.
In the 1970s, Peter Gardiner ran an upmarket travel business.
I dealt with quite a few VIPs and famous people.
And, you know, very wealthy.
LAUGHTER
But it was not on the same lines...
...or to the same extent as the Saudis have
with their diplomatic status...
...and their private jets.
The Saudis had started to arrive in London,
the playground for the international jet set.
# T'ain't no big thing
# To wait for the bell to ring... #
Can you see? It's on... It's the very end one there.
8O Sussex Square.
That was the home of Prince Turki bin Nasser and his family.
One Saudi royal would become Peter Gardiner's best client.
Prince Turki bin Nasser enjoyed the life of a Saudi expat
in 1970s London.
And when a special trip abroad needed arranging,
he summoned Peter Gardiner.
Money wasn't a problem.
# Love is the drug I'm thinking of
# O-oh
# Can't you see?
# Love is the drug for me. #
Brought out a briefcase.
To my amazement, it was just stacked with hundred-dollar bills,
brand-new, wrapped up, and he said,
"This is $20,000, which will do as a deposit."
Prince Turki had always been rich,
but in the mid-1980s,
even his lavish spending suddenly went through the roof.
Then it became the private charters, 70 people going to a luxury hotel,
cash being transferred,
all sorts of very, very expensive transactions,
and before too long, the invoicing
could reach as high as £2 million in a month.
Peter Gardiner was now flying all over the world
for Prince Turki, jetting
back and forth to the Prince's sprawling Los Angeles estate.
On one occasion, he even chartered an entire 747
just to bring home the Princess's shopping.
So where did the extra money to pay for all this luxury come from?
Prince Turki just happened to be
a major general in the Saudi Air Force.
He was getting huge rake-offs from the Al-Yamamah deal.
The company that would build and sell the jets
on behalf of the UK government was arms manufacturer BAE.
They were paying for Prince Turki's lavish holidays.
In 1989, Prince Turki asked me to meet
and speak to a general from BAE.
I had no idea what it was about, but, as requested, I met him.
Told me quite clearly this was all now part
of a government-to-government arrangement, highly confidential,
that I was never to talk about it or discuss it with anybody.
In 2002, when a new bribery law came in, that changed.
Peter Gardiner went public and told the Guardian newspaper everything.
The Serious Fraud Office launched an enquiry.
Investigators began to uncover the scale of what had been going on.
Piece of the story that Peter Gardiner had to tell was,
at the end of the day, only one small piece of a much larger
...more significant corruption case.
The real grand corruption involved in the Al-Yamamah contract
didn't involve, you know, millions of pounds -
it involved hundreds of millions of pounds.
To acquire the deal...
...Britain effectively paid
what this country described as commissions of £6 billion,
and this was to various intermediaries or agents
who then unpaid the vast majority of that amount
to various members of the Saudi royal family
and various other officials of the Saudi government.
This was the most corrupt transaction in commercial history.
Sir William Patey became
Britain's ambassador to Saudi Arabia in 2007.
By then, it was clear that the arms contract
and system of payments were wide open to abuse.
There were all sorts of contracts and deals, but, yeah.
And there were lots of rules around the payments,
but it was fatally flawed.
The Saudis insisted on paying for the British weapons
not in cash but in barrels of oil.
However, the price of a barrel of oil isn't fixed, so when oil
is sold to pay for the weapons, it could often generate surplus cash.
The cash ended up in an account at the Bank of England.
So, some days you would build up more money in the account than was
needed for the contract, but it was
kind of like a big oil slush fund, you know.
In a proper accounting world, the surplus would have just been
transferred back to the Ministry of Finance.
But nothing about the Al-Yamamah project was simple.
Over 20 years, billions of pounds flowed through the Bank of England.
Some of that cash was transferred to accounts in the United States...
...controlled by the son of the Defence Minister,
Prince Bandar bin Sultan.
He's always maintained they weren't his personal accounts
but were government accounts that he controlled.
So Prince Bandar received over £1 billion into his accounts,
into his bank accounts,
via various offshore operations, obviously.
But he also, additionally, received a gift
of an Airbus jet.
Private birthday present.
A jet that was painted in the colours
of his favourite American football team, the Dallas Cowboys.
And until at least 2007,
the British taxpayer actually contributed
to the ongoing running and maintenance
of this birthday present to Prince Bandar bin Sultan.
We paid for Prince Bandar's aircraft to be serviced.
Now, there's a debate
on whether Prince Bandar's aircraft
was crewed and flown
by the Saudi Air Force.
So was this a payment to the Air Force,
or was it a payment to Prince Bandar personally?
He was using it when he was ambassador in the United States,
so it was kind of an official function,
but it was seen to benefit him personally,
which is why it didn't meet the smell test.
The scandal kept growing.
The Serious Fraud Office discovered that many more millions
had been spirited out of the Bank of England
into secret numbered accounts offshore.
There were a number that went out, I think, to Switzerland,
and we wanted to follow those through,
to see what accounts they had gone into,
who those accounts benefited,
who they were being paid over to.
The investigators were now getting close
to the Saudis at the heart of the scandal.
That happened in 2006.
And it was towards the end of the summer in 2006 that we
found that the Saudi authorities did not want those enquiries to be made.
I think it's important to say that in trying to investigate
the Al-Yamamah deal, the Serious Fraud Office,
the senior officials and investigators in the Serious Fraud Office,
were put under the most extraordinary pressure.
That pressure was coming from right across the UK government.
By December 2006,
the head of the Serious Fraud Office was being told that the Saudis
were threatening to withdraw all cooperation on counterterrorism.
Having seen all this, there was a risk to people's lives in the UK.
Put shortly, if we didn't have their cooperation on terrorism
matters, we would have a much bigger terrorism problem.
I mean, I'm not aware of any threats having been made.
I think the fear was that we'd have an awful lot of dirt,
there wouldn't be any prosecutions, there wouldn't be any case to answer
but the process of going through it would have so...
...would have been so messy
that UK/Saudi relations would have been in jeopardy.
I think that was interpreted as the Saudis have threatened to withdraw
counterterrorist cooperation - I don't think the Saudis ever had.
INTERVIEWER: How would you describe
the sort of approach that the Saudis were taking on this?
Um, well, if somebody in the United Kingdom - in England, Wales -
had made those sort of threats, one would obviously have to deal
with it, and they could easily be regarded as criminal.
MUSIC: God Save The Queen
Eventually, Prime Minister Tony Blair got involved.
He signed off on a letter,
adding his personal support
to the idea that the enquiry into BAE should be abandoned.
It was a very difficult decision to make, for obvious reasons,
but one had...we took, well, as much time as we could,
given the circumstances.
It was a fairly busy week, as you can imagine!
At the end...
At the end, you can't actually second-guess this.
If you're being told,
"This is British lives on British streets at risk..."
Right, that was it.
The enquiry in the UK was shut down.
In America, prosecutors then tried to pick up
where the Serious Fraud Office had left off.
But Britain was determined to keep the House of Saud's secrets safe.
The British government and BAE
took the position that much of that was
state secrets or classified
and couldn't be shared with the US,
so without being able to put our hands directly on that
type of evidence, it would have been difficult to bring
the kind of corruption case we would have wanted to bring.
The kind of corruption case we would have wanted to bring.
But the US authorities did not give up.
After a lengthy investigation,
BAE admitted criminal charges for wilfully misleading
the US government about payments made to win contracts.
A US court fined BAE $400 million,
at the time one of the largest corporate fines in history.
A few months after Britain shut down its investigation,
the UK government signed another multi-billion-pound extension
to the Al-Yamamah deal,
guaranteeing thousands of British jobs in the aerospace industry.
For Peter Gardiner, the man who had broken the scandal,
life would never be the same again.
The fallout was pretty bad for me.
I lost my business.
The financial strain was...broke my marriage.
'And I've... l
I tried to get a job in the industry,
but I was now a known whistle-blower.
I hate that phrase.
And...
I did lots of different... I did cleaning jobs.
I had to clean churches, I cleaned restaurants, I did anything,
but I tried to get back into the industry.
Everybody was very nice, but...
...they couldn't take the risk.
These deals actually undermine
the rule of law in the United Kingdom itself
or in other selling countries. Why do I say that?
Because the reality is that those who either arrange,
and in some instances, in the case of senior politicians,
condone this bribery and corruption,
never face the legal consequences of their actions.
So on the most corrupt transaction the world has ever seen,
nobody has ever faced justice.
For 40 years, a series of corruption scandals have touched
many of the most senior Saudi royals.
Prince Bandar bin Sultan,
one of those accused of taking money from the Al-Yamamah deal,
gave an interview in 2001
where he appeared to justify corruption.
We did not invent...
"corruption.
This has happened since Adam and Eve.
I mean, Adam and Eve were in heaven.
And they had hanky-panky, and they had to go down to earth.
So, I mean, this is human nature.
Now, if you tell me that building this whole country
and spending 350 billion out of 400 billion,
that we had misused or are kept corrupt with 50 billion,
I'll tell you, yes.
People in the West accuse Arab royal families of being corrupt
because Arab royal families are very wealthy,
as Western royal families are,
and they generated their wealth in the same form or manner.
The Queen of Holland is wealthy. The Queen of Sweden is wealthy.
You know, and British nobility is extremely wealthy.
So elites have enriched themselves,
and there is no reason why the House of Saud
should be held to a different standard
than the House of Windsor, for example, has.
I think what has happened in the West
is that elites have found sort of much more sophisticated ways
of enriching themselves from power.
Maybe the elites in Saudi Arabia are still on the more basic level.
In recent years, the House of Saud has been working hard on its image.
It wants the world to see it as a modern, outward-looking country,
ready to do business with the world.
One man who symbolises this new, modern image
is Prince Al-Waleed bin Talal.
He is a nephew of the King, a new type of Saudi billionaire.
With stakes in Twitter, Facebook and Apple,
his worldwide business empire
has been valued as high as $30 billion.
He's the richest person in Saudi Arabia, which is saying a lot,
and he's easily the best-known Saudi businessman
and probably the best-known Arab businessman of any kind.
One company in which the Prince has invested is Ballast Nedam,
a Dutch building firm.
Ballast Nedam specialises in infrastructure
so they build roads, hospitals, airbases,
and have quite a history of working in Saudi Arabia.
Ballast Nedam won a contract to refit
airfields for the Kingdom's air force.
The deal was worth half a billion dollars.
But the Dutch prosecutors discovered something
very unusual about the way it worked.
The company kept a secret set of accounts.
These accounts were known as the shadow administration.
The shadow administration that was found
by the Dutch Serious Fraud Office contained a list of about 30 names.
A lot of those names are Saudi nationals.
But they also include the very top of the Saudi royal family,
the late King Fahd,
and then the Crown Prince, his brother,
the late King Abdullah.
Prosecutors believed that this was a list of people
who were to receive payments totalling
hundreds of millions of dollars.
However, the payments were, in reality, bribes.
Backhanders paid to ensure the company were awarded the contract
to build the airports.
It's not often that you see in black and white...
...the documents effectively outlining the corrupt relationship
and who the payments are going to go to and the scale of the payments.
It's the exception rather than the rule.
So this really is extraordinary.
Leaked documents show that the bulk of the bribes
went to someone who was already a billionaire
many times over.
Prince Al-Waleed bin Talal,
Saudi Arabia's most flamboyant businessman.
He received $316 million.
The contract was worth $580 million,
but in order to get the contract,
Ballast Nedam had to pay $330 million,
so 57% of the contract was paid for bribery.
So 57% of the contract was paid for bribery.
Today, Ballast Nedam has new owners
who say they have implemented more robust compliance policies
to prevent anything like this happening again.
Prince Al-Waleed bin Talal
has refused to comment on the case.
He's not the only one.
When Dutch prosecutors fined Ballast Nedam 5 million euros
for making illegal payments to foreign agents,
they didn't say which country those agents were from.
Up until this day, officially,
Saudi Arabia has never been mentioned,
neither by the Dutch government nor Ballast Nedam as being
the country that is at the centre of this bribery scandal.
Saudi Arabia is important to the Netherlands,
as it is to a lot of Western European countries.
I'd say ambivalent is the best word to describe the relationship
the Netherlands have with Saudi Arabia.
They are friends, but at the same time,
they are the kind of friends you don't want to have.
The Dutch bribery scandal is just the latest in a very long line.
Now it's finally accepted,
corruption in Saudi Arabia has got out of control.
When you see other people getting away with it, you emulate them.
And you think that that becomes an accepted policy,
and in a way, it was.
And that's why you have to apply shock therapy to change it.
SIRENS WAIL
In November 2017, that shock therapy arrived.
It all happened in a sort of blizzard of activity.
The main hotel in which foreigners are kept in Riyadh,
the Ritz-Carlton, had been emptied.
They'd shut down the royal airport used for private planes
by members of the royal family when they're leaving the country.
Large police movements, borders closed,
it had all the characteristics of a coup.
The King decrees the creation of a new and all-powerful
anti-corruption committee,
chaired by his son, Prince Mohammad bin Salman.
Hours later, they've seized as many as 500 of the rich people
in Saudi Arabia in the middle of the night, 11 of them princes.
They've hauled them all
into the Ritz-Carlton hotel, which has been turned into a prison.
This was dramatic, it was almost like a theatrical performance
because the humiliation was really absolute.
The corruption crackdown was led by the new power behind the throne,
Crown Prince Mohammed bin Salman.
Very few names have been released,
but among those detained at the Ritz
and accused of corruption were...
Prince Turki bin Abdullah,
who made millions from the company that enveloped
the government of Malaysia in a huge bribery scandal.
Prince Turki bin Nasser,
the major general in the Saudi Air Force
who received tens of millions in luxury travel from BAE
as part of the Al-Yamamah contract.
And even Prince Al-Waleed bin Talal,
the most high-profile and flamboyant Saudi billionaire,
linked to the Dutch corruption case.
These are some really big names in the Kingdom
that he's been targeting,
not just people in the royal family,
but heads of industry, heads of telecoms,
heads of entertainment channels.
This is a very, very significant signal.
I think it has been widely acknowledged
by the very senior leaders in Saudi Arabia
that there has been corruption.
They freely acknowledge that this is quite endemic,
it was almost systematic.
I think this is a monumental shift in the way
the government is tackling corruption.
In the past, the government has fought corruption,
but they were always half-measures.
What is happening today
is that the government is sending a very clear message
that corruption will not be tolerated,
regardless of who is behind it.
The Saudi government hopes to recover more than $100 billion
which it says has been creamed off.
So far, nearly 400 people have had their bank accounts frozen.
And there have been allegations that detainees have been tortured.
It is remarkable that Saudi Arabia got to the stage
where it is actually imprisoning its own royals.
The House of Saud is now in a state of fear and terror.
Princes who believed in the past
that they were above the law, and above any kind of reproach,
now have to fear that they could be next,
that their fortunes could be gone after.
The Crown Princes's corruption crackdown
garnered glowing headlines.
But it has also raised questions
about Mohammed bin Salman's own vast wealth.
He has put corruption number one,
on the top of his agenda,
and people, now, he has turned the spotlight on himself.
In October 2016, it was reported
that the Crown Prince splashed out $500 million
on a superyacht on a whim.
He is believed to have spent $300 million
on a huge French chateaux,
rebuilt from scratch...
...complete with a gold-leaf fountain.
320 million, we're still not done.
He has denied allegations that he was behind a world-record bid
for Leonardo da Vinci's painting of Jesus Christ.
At Christie's, $400 million is the bid, and the piece is sold.
CHEERING AND APPLAUSE
Mohammed bin Salman is a privileged prince
who is in charge of the economy. He is in charge of the defence budget.
He is in charge of Saudi Arabia. And he's not accountable.
There is no elected government to question him.
If you ask questions, you will end up being detained.
That night in November, the Crown Prince also took control
of all three Armed Forces in the country.
Among those detained was the son of the previous king,
and the head of the National Guard.
Some say the arrests were less about corruption
and more about seizing power.
In effect, the Crown Prince has rolled up his critics,
his potential opponents within the royal family.
It was a raw demonstration
of a level of power that none of his predecessors had.
We've seen a purge of the Saudi royal family and the Saudi elite,
that we've never seen anything like before in Saudi society.
We've seen two crown princes removed from the line of succession
with no explanation provided.
These are unprecedented developments,
and it raises real possibilities of further fractures
within the royal family.
Some fear, without a clear legal process,
the Crown Prince's anti-corruption drive could fail.
It is a bit disturbing
because of the absence of any identifiable due process.
It is autocratic.
Whether it is a step toward a better Saudi Arabia,
a less corrupt one, one with greater transparency,
and decision-making, or not, we can't say at this point.
The Kingdom is at a crucial crossroads.
Its politics, its economy,
its society are all changing in ways that we have never seen before.
In some ways, the perfect storm is gathering around Saudi Arabia today.
Next time, faced with a restless, young population,
the House of Saud finally offers change.
A royal decree has been issued in Saudi Arabia
giving women the right to drive.
APPLAUSE
But can the family transform itself enough to survive?
If something happens to Saudi Arabia,
this would be catastrophic for the region,
and, frankly, catastrophic for the world.