Doc's Talk: Syria's Makhlouf Dynasty: President Assad's Financier

Wednesday, May 18, 2011

Syria's Makhlouf Dynasty: President Assad's Financier

Gary H. Johnson, Jr.

“If there is no stability here, there's no way there will be stability in Israel.”
-Rami Makhlouf, President of Syriatel, May 10, 2011

Nearly 1000 people have died and upwards of 10,000 dissidents have been detained in Syria's eight week uprising. Anthony Shadid stole across the border of Lebanon into Syria for an interview with the Syrian tycoon associated with the Assad regime's ferocious crackdown in over a dozen cities. In the resultant May 10 New York Times interview, Rami Makhlouf (pictured) advised the international community to back off the Assad regime in Syria or expect a destabilized regional picture. According to Makhlouf, one of 13 Assad associates recently sanctioned by the European Union, the Syrian regime was ready to fight “to the end.” On The Takeaway Radio Program, Shadid discussed his trip to Damascus. His sense of the Assad regime's fight for survival clarifies Western perceptions of the Syrian leadership's concerns:

This government for 40 years has relied on the Alawite sect to buttress its power. And I think the thinking within the government, in particular the ruling elite is that the fall of the government means perhaps the extermination of the Alawite sect in Syria. I think that is why you are hearing language that suggests a fight to the end, a fight for survival.... If this government falls no one is going to protect the Alawites; no one is going to protect other minorities in the country. And it's an argument that the government has relentlessly used since this uprising began. The alternative to us is chaos. The alternative to us is sectarian strife - even civil war - and it has had some resonance among minorities in the country.

Following the release of the NYT exposé, the Syrian Ambassador to Washington, Imad Moustapha, characterized Rami Makhlouf's remarks as those of a private citizen who does not speak on behalf of the authorities in Syria. Yet the EU's official journal of May 6, 2011 charges Makhlouf with bankrolling the Assad regime's activities.

Rami and Hafez Makhlouf have been on the U.S. Treasury's radar for years. For instance, in February 2008, the U.S. Treasury designated Makhlouf as an individual profiteering off of the public corruption of a number of Syrian regime officials:

Makhlouf is the maternal cousin of President Bashar al-Assad and through this relationship, Makhlouf has become a focal point of Syria's telecommunications, commercial, oil, gas and banking sectors. Despite President Assad's highly publicized anti-corruption campaigns, Makhlouf remains one of the primary centers of corruption in Syria.

Makhlouf's influence with certain Syrian government officials has led to his being able to control the issuance of certain types of profitable commodities contracts. His close business associations with some Syrian cabinet ministers have enabled him to gain access to lucrative oil exploration and power plant projects. Makhlouf's preferential access to Syrian economic sectors has led to complaints about him from members of the Syrian business community.

According to a BBC report:

In addition to Syriatel, Mr Makhlouf is believed to control two banks, free trade zones, duty free shops, a construction company, an airline, two TV channels, and imports luxury cars and tobacco. He is also vice-chairman of Cham Holding, considered Syria's largest private company, and has stakes in several oil and gas companies.

In late April, the UK Telegraph's Adrian Blomfield noted that upwards of 60% of the Syrian economy is believed controlled by Makhlouf. This explains why demonstrators have been burning down Syriatel offices in Syria, chanting “Go away Makhlouf. We don't want thieves.” Indeed, it is unlikely that a communications blackout could be effectively implemented without Rami Makhlouf's control of mobile phone networks in the country.

Cronyism does not end with Makhlouf's relation to President Assad. Rami Makhlouf is the brother of Colonel Hafez Makhlouf, head of the Damascus branch of the General Intelligence Directorate. In 2007, Colonel Makhlouf was designated by the United States Treasury as an individual “furthering the Syrian regime's efforts to undermine Lebanese Democracy.” It is not surprising that the EU sanctions regime on Assad's inner circle includes Colonel Makhlouf.

Cham Holding's Islamic Window

Rami Makhlouf made his fortune by forcing competitors into a corner and then squeezing them out of the market altogether. For instance, SyriaTel represents one of two licensed companies operating Syria's mobile phone market. Out of roughly 10 million cell phones in Syria, over 5 million run through SyriaTel's network. According to Syria Today's May 2011 edition, a third license for the cell phone market was offered. Five companies initially bid for the lucrative market; however, three dropped out of the bidding because the $126 million dollar concession would require 25% of revenues to kick back to the Syrian regime. But the fun doesn't stop there. The state-owned Syrian Telecommunications Company would ride along with a 20% stake in the network. Plus, after investing over a hundred million dollars and countless man hours on branding, marketing and building the network from scratch, the licensed company must hand back ownership to the state per the BOT contract.

Beyond Rami Makhlouf's powerful pull in the world of cellular and cyber communications, Banking features prominently in the Cham Holding portfolio. In 2007, Cham Holding was established with over $360 million in assets pooled by 73 investors to serve as “the opportunity delivery tool” of the Syrian people.

Cham Investment Group is similar to the Libya Investment Authority. However, instead of investing on an international platform, its handlers chose a regional investment matrix. Of course, construction and development led the way. Osama bin Laden's father made his fortune in construction. Rafik Hariri, too, was known as Mr. Lebanon largely due to his status as a construction magnate. In this tradition, Cham Holding signed a Memorandum of Understanding to partner with Amlak Finance in April of 2008.

Amlak Finance was the largest real estate financier of the Middle East at the time. The objective of the merger was to make available Amlak's “innovative and pioneering home finance solutions in the Syrian market.” The innovative financing solutions have a name – shariah compliant mortgage finance products.

Interestingly, Amlak Finance is an affiliate of the Saudi real estate giant Emaar Properties. Amlak Finance began operations in Egypt in October of 2007. “It was the first company to provide shariah-compliant mortgage finance products in Egypt.” Within three months of Egyptian operations, Amlak had “sealed agreements to exclusively provide mortgage finance schemes with some 30 real estate developers in Egypt, including Emaar Egypt, SODIC, Mountain View, El Dyar, Dorra, Degla Group, among others.”

In June of 2008, Cham Holding partnered with the Islamic Al Salam Bank out of Bahrain. In 2006, two-thirds of the initial offerings of Al Salam Bank were snapped up by Amlak Finance, Dubai Holding, Dubai Investment Group, Emaar Properties and Global Investment House. Today, Al Salam Bank has four Shariah Advisors on a supervisory board: Dr. Hussain Hamid Hassan (Chairman); Dr. Ali Mohuddin Al'Qurra Daghi (Member); Shaikh Adnan Abdulla Al Qattan (Member); and Dr. Mohamed Abdulhakim Zoeir (Member & Committee Secretary).

The United States Treasury, the EU, and the dissidents of Syria have documented the corruptions of the Makhlouf clan's dynastic designs in Syria. The monopolies and tactics of the ruling elites of the Assad regime will naturally fall into a number of investment portfolios. Syria's real estate market is largely controlled by Emaar Properties and its affiliate Amlak Finance. Unilateral sanctions that do not shut down SCF windows such as Islamic Al Salam Bank of Bahrain will have no effect on the Assad regime's behavior. If sharia compliant finance remains a “no-go” zone for sanctions regimes aimed at curbing the behavior of tyrants, then criminal syndicates, terrorist networks and hawaladar activism will continue to undermine liberty for the foreseeable future.

U.S. naval interests in Bahrain and long-standing relations with Saudi Arabia complicate the ability of the UN and other international organizations to implement sanctions with teeth upon butchers like Syria's President Bashar al-Assad. While sharia-compliant finance windows remain open for dictators in the Greater Middle East, the Arab League and the OIC must guarantee transparency in all Islamic finance transactions to maintain their standing in the international community.

Without complete transparency from business hubs such as Bahrain and Dubai, regimes of the Gaddafi/Assad stripe will continue to act with impunity in the face of international condemnation.

Family Security Matters Contributing Editor Gary H. Johnson, Jr. is the Senior Advisor for International Security Affairs at the Victory Institute and is host of The Elemental Struggle on the Radio Jihad Network at 6pm every Wednesday.

You can find this online at: http://www.familysecuritymatters.org/publications/id.9542/pub_detail.asp

The views expressed in the articles published in FamilySecurityMatters.org are those of the authors. These views should not be construed as the views of FamilySecurityMatters.org or of the Family Security Foundation, Inc., as an attempt to help or prevent the passage of any legislation, or as an intervention in any political campaign for public office.

COPYRIGHT 2011 FAMILY SECURITY MATTERS INC.

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The IDF’s Minorities in Numbers and Pictures

In honor of IDF Diversity Week, we present diversity through numbers and pictures. Each year, more and more Muslims, Christians, Druze, Bedouin and immigrants from around the world take on the responsibility of defending Israel.

MUSLIMS:

Muslim Arab Israelis are not required to draft in the IDF, but there are many who volunteer. In 2013, there were over 200 Muslims serving in the IDF and over 300 in the reserves.

Bedouins:

Bedouins are nomadic Muslims who were in Israel when modern borders were set in place and are now considered Israeli citizens. They are not required to draft but a growing number choose to enlist. In 2012, there were over 1,400 Bedouin Muslim soldiers doing regular IDF service and almost 1,500 in the reserves.

Read more:http://www.idfblog.com/2014/02/27/truth-idf-numbers-pictures/#more-34027

Are you aware that in 2013, Middle class taxes go up-significantly?

In January of next year, the federal income tax rate for middle-class taxpayers is scheduled to rise from 25 percent to 28 percent, and the payroll tax is scheduled to rise from 13.3 percent to 15.3 percent… This drives the marginal tax rate based on the aforementioned three taxes to 48.12 percent. Add in state and local property, corporate, excise, and other state and local taxes, and the percentage of each additional dollar that is taxed hovers around 50 percent… When half of each additional dollar earned is taxed away, taxpayers experience a disincentive to start businesses or expand existing ones. This leads to fewer jobs being created.

Why is HAMAS Inside Tampa Schools?

Clare Lopez

Kelly Miliziano, who teaches history classes at Steinbrenner High School in the Tampa, Florida area apparently thinks it’s perfectly OK to invite a senior official of a HAMAS-affiliated organization into her classroom to discuss Islam with her students. According to local media reports, not only has this been going on for years, but in spite of the civil and criminal proceedings that could result from such reckless negligence, the Hillsborough County school superintendent, Mary Ellen Elia, and the chairman of the school board, Candy Olson, also expressed approval for students under their responsibility to be exposed repeatedly to guest speaker, Hassan Shibly, who is the Executive Director for the Council on American-Islamic Relations (CAIR) in the Tampa area.
More...

Did You Know... Ignoring the Call to Islam will Bring Jihad

‘Conquest through Da’wa [proselytizing] that is what we hope for. We will conquer Europe, we will conquer America! Not through sword but through Da’wa.’
-- Yousef al-Qaradawi , Muslim Brotherhood spiritual leader The Arabic word ‘Da’wa’ means the “call to Islam.” But do not think that Da’wa is the same thing as an invitation to an optional holiday event. The classical Islamic doctrine of jihad mandates that enemies must be given the opportunity to convert to Islam or pay the jizya tax before it is permissible to attack them.
Clare M. Lopez

Who is being discriminated-facts tell the truth

Religious bias

Hate crimes motivated by religious bias accounted for 1,409 offenses reported by law enforcement. A breakdown of the bias motivation of religious-bias offenses showed:

65.4 percent were anti-Jewish.
13.2 percent were anti-Islamic.
9.5 percent were anti-other religion, i.e., those not specified.
4.3 percent were anti-Catholic.
3.8 percent were anti-multiple religions, group.
3.3 percent were anti-Protestant.
0.5 percent were anti-Atheism/Agnosticism/etc.

http://www.fbi.gov/about-us/cjis/ucr/hate-crime/2010/narratives/hate-crime-2010-incidents-and-offenses.

On March 31, 1977, the Dutch newspaper Trouw published an interview

with PLO executive committee member Zahir Muhsein. Here's what he said:

"The Palestinian people does not exist. The creation of a Palestinian state is only a means for continuing our struggle against the state of Israel for our Arab unity. In reality today there is no difference between Jordanians, Palestinians, Syrians and Lebanese. Only for political and tactical reasons do we speak today about the existence of a Palestinian people, since Arab national interests demand that we posit the existence of a distinct "Palestinian people" to oppose Zionism.

For tactical reasons, Jordan, which is a sovereign state with defined borders, cannot raise claims to Haifa and Jaffa, while as a Palestinian, I can undoubtedly demand Haifa, Jaffa, Beer-Sheva and Jerusalem. However, the moment we reclaim our right to all of Palestine, we will not wait even a minute to unite Palestine and Jordan."

In March 1977, Zahir Muhsein, a PLO executive, said:

"The Palestinian people does not exist. The creation of a Palestinian state is only a means for continuing our struggle against the state of Israel for our Arab unity. In reality today there is no difference between Jordanians, Palestinians, Syrians and Lebanese. Only for political and tactical reasons do we speak today about the existence of a Palestinian people, since Arab national interests demand that we posit the existence of a distinct Palestinian people to oppose Zionism."

"For tactical reasons, Jordan, which is a sovereign state with defined borders, cannot raise claims to Haifa and Jaffa, while as a Palestinian, I can undoubtedly demand Haifa, Jaffa, Beer-Sheva and Jerusalem. However, the moment we reclaim our right to all of Palestine, we will not wait even a minute to unite Palestine and Jordan."

The Arab Apartheid

Ben-Dror Yemini
In 1948, the Arab countries refused to accept the UN partition proposal and they launched a war of annihilation against the State of Israel which had barely been established. All precedents in this matter showed that the party that starts the war - and with a declaration of annihilation, yet - pays a price for it. Between 550,000 and 710,000 Arabs fled because of the war and a larger number of 850,000 Jews were expelled or fled from Arab countries (the "Jewish nakba").
Population exchanges and expulsions were the norm at that time, occurring in dozens of other conflict points and affecting about 52 million people. In all the population exchange precedents that occurred during or at the end of an armed conflict, there was no return of refugees to the previous region, which had turned into a new national state.
Only the Arab states acted completely differently from the rest of the world. Instead of assimilating the refugees, they crushed them despite the fact that they were their coreligionists and members of the Arab nation - instituting a regime of apartheid. So the "nakba" was not caused by the actual dispossession, which had also been experienced by tens of millions of others. The "nakba" is the story of the apartheid, oppression, abuse and denial of rights suffered by the Arab refugees at the hands of the Arab countries. (Maariv)

International Law and Military Operations in Practice - Col. Richard Kemp

"Islamist fighting groups study the international laws of armed conflict carefully and they understand it well. They know that a British or Israeli commander and his men are bound by international law and the rules of engagement that flow from it. They then do their utmost to exploit what they view as one of their enemy's main weaknesses. Their very modus operandi is built on the correct assumption that Western armies will normally abide by the rules, while these insurgents employ a deliberate policy of operating consistently outside international law. "

Lost Historical Moments

What Rabin’s last Knesset speech really said:repudiation of a Palestinian state

Rabin ruled out a fully sovereign Palestinian state :

“We view the permanent solution in the framework of State of Israel which will include most of the area of the Land of Israel as it was under the rule of the British Mandate, and alongside it a Palestinian entity which will be a home to most of the Palestinian residents living in the Gaza Strip and the West Bank. We would like this to be an entity which is less than a state, and which will independently run the lives of the Palestinians under its authority.”

Rabin ruled out a total withdrawal from Judea and Samaria and thus a return to the pre-June 1967 borders :

“The borders of the State of Israel, during the permanent solution, will be beyond the lines which existed before the Six Day War. We will not return to the 4 June 1967 lines.”

Rabin ruled out withdrawing form the Jordan Valley:

“The security border of the State of Israel will be located in the Jordan Valley, in the broadest meaning of that term.”

Rabin ruled out uprooting settlement blocs, like the Gush Katif bloc in Gaza (which was subsequently uprooted by former Prime Minister Ariel Sharon):

“The establishment of blocs of settlements in Judea and Samaria, like the one in Gush Katif.

AND

Rabin ruled out removing any settlement before coming to a full peace agreement with the Palestinians:

“I want to remind you: we committed ourselves, that is, we came to an agreement, and committed ourselves before the Knesset, not to uproot a single settlement in the framework of the interim agreement, and not to hinder building for natural growth.”

Rabin insisted on Israel retaining full security control of the borders with Egypt and Jordan, contrary to Israel’s relinquishment of the Philadelphia Corridor on the border with Egypt:

“The responsibility for external security along the borders with Egypt and Jordan, as well as control over the airspace above all of the territories and Gaza Strip maritime zone, remains in our hands.”

Correcting Oslo Myths-Part 2

3) Kuttab laments that the post-1993 Oslo process resulted in a Palestinian Authority "whose ministers and legislators are not guaranteed passage between Gaza and the West Bank ...."

Before free passage or other perquisites, PA leaders were obligated, among other things, to eliminate the terrorist infrastructure in the West Bank and Gaza Strip, end anti-Israeli, antisemitic incitement in schools, mosques, and communications media, and resolve all outstanding issues through peaceful negotiations. They met none of these commitments, sometimes bolstering terrorism and greatly increasing incitement.

4) Kuttab complains that under Oslo the PA got "lightly armed police ---- but no real sovereignty over the land or contiguity between our communities in Gaza and the West Bank."

Oslo agreements repeatedly were revised, regardless of Palestinian non-compliance, until the authorized number of police grew from 8,000 to 40,000. Though they were to be the only armed forces in the territories, Israeli estimates early in the second intifada put the number of gunmen - police, "security services," terrorists, and armed gangs - at 85,000. Their armament reportedly included not only heavy machine guns and rocket-propelled grenades, but also anti-tank and anti-aircraft missiles.

Sovereignty was to be negotiated in the envisioned 1998 "final status" talks - after a five-year period of confidence-building. Palestinian leadership chronically undermined the process. Palestinian terrorism made the 1993 - 1998 Oslo period more deadly for Israelis than the 15 years preceding it.

The United States doesn't have contiguity between the lower 48 states and Alaska and Hawaii; territorial contiguity between the West Bank and Gaza Strip - that is, through the 20 miles of Israeli territory between them - was never promised and would destroy Israeli contiguity.

5) "Palestinians have been made to endure hundreds of checkpoints in the West Bank, an eight-foot wall deep in our territories, and tight Israeli control over borders."

The security barrier is not "deep in Palestinian territories," but rather encompasses less than 8 percent of Judea and Samaria, and is mostly a fence, rarely a wall; the land in question is not "our [Palestinian] territories" but disputed territory to which, according to the authors of U.N. Security Council Resolution 242, Jews as well as Arabs have claims; and there are no international borders, only the 1949 armistice lines with Jordan. Under 242, borders remain to be negotiated. As for checkpoints - like the security barrier and "tight Israeli control" - Palestinian Arabs precipitated these measures themselves. No terrorism and there would be no fence or tight Israeli control and few checkpoints - like before the first intifada.

Correcting Some Oslo Myths

1) In Oslo "Israeli, Palestinian and other world leaders promised that ... Palestinian sovereignty would be solidified."

No, they didn't. The 1993 Declaration of Principles and subsequent Oslo agreements outlined a process by which final status negotiations about the West Bank and Gaza Strip would be reached. The process required an end to anti-Israel terrorism and incitement and a commitment to peaceful negotiations. The PA, Fatah, Hamas, Islamic Jihad, the Popular Front for the Liberation of Palestine, and other terrorist groups, sabotaged the process from the start.

2) "The reality is that, in defiance of U.N. Security Council Resolution 242, which states that it is inadmissible to occupy land by force, Palestinian territories are still under foreign military occupation."
Wrong again. Resolution 242 (1967) does note "the inadmissibility of the acquisition of territory by war." It also affirms the right of every state in the area "to live in peace with secure and recognized boundaries free from threats or acts of force." There were no "Palestinian territories." Jordan occupied the West Bank, Egypt controlled Gaza. Israel did not have "secure and recognized boundaries," so retention of some of those territories was possible under 242. Israel is not a "foreign" military occupier in the West Bank but, pending final negotiations, the lawful military administrator as a result of a successful war of self-defense.

Doc's Talk