The Assads Versus the Makhloufs A Bitter Feud over Power and Money Erupts in Syria

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For the last several months, a heated conflict has been escalating between the most powerful families in Syria. It has been trying Russia’s patience and could decide who will ultimately wield control.

By Christoph Reuter

The hashish was packed in milk cartons, a total of four tons of the stuff, carefully packed in 19,000 individual Tetra Paks. Customs officials discovered the cargo in mid-April on a ship in the Egyptian port of Said. It had come from Syria, and it was presumably bound for Libya, another country torn apart by civil war.

It’s not the first time that drugs produced in Syria have been discovered in one of the region’s ports. Indeed, such cases are no longer out of the ordinary. In Dubai, investigators have confiscated several payloads of amphetamine pills, most recently in January. And in Saudi Arabia, customs officials in late April found 45 million Captagon pills, likely produced by laboratories in Syria. Most of the tablets were hidden in packages intended for mate tea from a company with connections to the family of Syrian dictator Bashar Assad.

The ships all put to sea from Latakia, the Syrian city on the Mediterranean whose port Iran leased last fall. The drug discoveries show just how desperate Assad’s regime and his allies in Tehran have grown when it comes to finding new revenue streams. The country, after all, is essentially broke. According to the United Nations, 80 percent of Syrians are living in poverty, and it is estimated that gross domestic product has fallen to just a quarter of its prewar level. The currency continues to collapse and prices are rising, while wages have remained largely stagnant. Iran is unable to help and Russia is no longer willing.

A Family Feud

The drug trade is one of the few remaining routes to obtaining hard currency. Already in 2013, Hezbollah – Iran’s proxy in Lebanon – conquered the Syrian city of Qusayr and its surroundings and declared the region a restricted zone. The militia established dozens of small production sites for amphetamines known as Captagon. At the same time, the group forced farmers to cultivate cannabis. According to several sources, Maher Assad, Bashar’s younger brother and commander of the 4th Division of the Syrian army, took on the task of protecting Qusayr and the transportation routes to the port of Latakia on the Mediterranean. Maher Assad’s division is one of just two halfway battle-ready units left in the badly deteriorated Syrian army. And it belongs to that faction of the Syrian army that is largely controlled by Iran.

The consortium of companies belonging to the Syrian billionaire businessman Rami Makhlouf, the dictator’s cousin, is responsible for concealing and exporting the drugs. The four tons of hashish that appeared in Egypt were packed in cartons from the company Milkman, which belongs to Makhlouf. He has denied involvement.

Assad’s nine-year-long campaign against his own people has largely resulted in victory for his regime, despite destruction on a vast scale in the country. But the ongoing terror and economic collapse in the country has weakened his regime, with the fight for money and power within the tightest circles of Assad’s family now escalating.

In the center of that battle are the two families surrounding Bashar Assad and Rami Makhlouf, the dictator and the businessman. The dispute has been so heated because even though the two families are related, they don’t really like each other. They complemented each other for as long as there was enough plunder to go around. But that is no longer the case.

Now, Syria’s richest man has launched a public offensive against those in power. On April 30, and over the next days, Rami Makhlouf posted a total of three videos on Facebook in which the tycoon complained bitterly that demands from the financial authorities, according to which he had to pay the equivalent of around 100 million euros, had been “manipulated” by a “cadre” of officials. Looking pained, he also expressed outrage that employees of his had been arrested by the secret service, calling it “a violation of the law and the constitution,” particularly since, he claimed, he had been “the biggest sponsor of the security apparatus during the war.” He pleaded to Assad, saying: “Mr. President, do not allow it!”

Rejecting the Humdrum of Domesticity

Many Syrians have nothing but contempt for Makhlouf, and he has long been referred to in some quarters by his nickname “Rami, al-Harami,” or “Rami, the criminal.” At the beginning of the uprising, he was the wealthiest man in Syrian, estimated to have been worth $5 billion at the time, and he was in the habit of having all his competitors either kicked out of the country or thrown in prison. He controlled the highly profitable telecommunications company SyriaTel. He also owns construction and oil companies and has a stake in almost everything that generates a profit.

Assad’s problem is that the power of his family, which has ruled Syria for the last five decades, is rooted in the religious minority of the Alawites, despite the fact that prior to the war, around three-quarters of the population were Sunnis. Bashar Assad’s mother Anisa, who married the founder of the dynasty Hafez Assad in 1957, is also from the Makhloufs, a powerful Alawite family. She and her family weren’t pleased when, in 2000, Bashar Assad married the Sunni banker Asma al-Akhras, who he had met in London. In the region around Latakia, which has a strong Alawite presence, many people even wore black on the day the two exchanged vows.

Bashar’s mother Anisa felt that the wife of a president should be a homemaker, but Asma is anything but, preferring glamour to the humdrum of domesticity, and she can speak English even better than her husband. But Asma’s feud with Rami Makhlouf is primarily due to economic reasons. Each of them founded charitable organizations that have been among the last means of accessing UN aid money since the imposition of international sanctions.

Starting in 2011, Makhlouf added an armed wing to his charitable foundation, called Bustan, with its up to 20,000 militia fighters not shying away from mowing down their Syrian compatriots. Last fall, though, Assad turned on the private army. Following an assassination attempt on the Bustan commander, arson attacks on its vehicles and dozens of arrests, the foundation has fallen silent.

Now, Asma has allegedly set her sights on taking over Makhlouf’s crown jewel. Last fall, the Syrian telecommunications authority announced that a new mobile service would soon be taking over an existing network. The company, according to an unnamed source, is to be called Ematel, and it allegedly belongs to Asma Assad.

Ratcheting Up the Pressure

Rami Makhlouf’s Facebook videos are dangerous. No mere mortal would ever survive such a thing in Assad’s empire. Ultimately, though, these direct challenges to the president’s authority could prove to be a life-saving maneuver. Those who fall out of favor with the regime, after all, tend to be removed via “suicide,” in the form of several bullets in the back of the head. But after these videos, it is unlikely that anyone would believe that Makhlouf took his own life, should he turn up dead.

Makhlouf, in any case, is still living in Syria, allegedly having moved from his estate in Jaafur, near Damascus, to his hometown of Latakia. But his videos also haven’t yet triggered an uprising by loyal Alawites or among the thousands of people on Makhlouf’s payroll. At least not yet. The authorities have recently been ratcheting up the pressure. Not only did the Finance Ministry order the seizure of assets belonging to Rami and to his wife and children, but he has also been slapped with a travel ban.

A member of one of the most powerful oligarch families in Damascus, who contacts this reporter every few weeks via encrypted communication channels, believes, however, that the turmoil between the two cousins is not of primary importance. “What are they supposed to do? If Rami were to get his followers to march on Damascus, everyone would fall together.” Plus, he adds, someone whose son is fond of showing off on Instagram with his villa and Ferrari collection isn’t particularly popular among poor Alawites who are happy if they can just put food on the table.

More important, continues the oligarch family member from Damascus, is a different arena, one in which Rami Makhlouf also plays a key role, just with a slightly different familial constellation. That conflict involves the immense drug trade, in which a suspicious number of shipments have recently been intercepted. According to the oligarch family member, Makhlouf himself isn’t the target here, but his Iranian partners.

A Threat to Israel

The whole thing, he says, is a clever rouse. Moscow has slowly had enough of the Syrian regime and its insubordination. “Russia wants to consolidate, it finally wants a peace deal so that the billions in recovery funding from abroad can finally start flowing in. But for that to happen, the Iranians have to go.” Because they want to continue to use Syria as a threat to Israel.

Moscow, the oligarch family member says, isn’t interested in a military confrontation with the units under Iranian control, but is pursuing a more elegant solution. With its Iranian allies on the brink of bankruptcy, Moscow, he says, is seeking to cut off Tehran’s revenue streams, including large-scale drug production.

For a long time, the Russians were apparently not opposed to the export of illicit goods. But that changed last year when they directed Syrian authorities to investigate Maher Assad’s right-hand man for his involvement in the drug business. A brigadier general and a mafia kingpin were sidelined as a result. As Maher himself admitted, they were his most important operatives. The president’s brother was so furious that he withdrew all units under his command right in the middle of the Idlib offensive. Moscow was not amused.

Maher then announced that he was no longer willing to divert a portion of the hard currency earned by the activities of his 4th Division to the central bank. It was a clear indication of his lack of understanding for Russia’s abrupt interference. Why, he seemed to wonder, should the army suddenly no longer be part of a drug cartel?

Moscow is not fundamentally opposed to one of its vassals engaging in torture or illegal business practices at home, as long as they remain loyal. But when a puppet dictator proves ungrateful and continually stands in the way of the Kremlin’s plans – well, that is a different matter.

Russia, it would seem, is currently in the process of showing Rami Makhlouf, Maher Assad and Hezbollah exactly where the power lies. The drug shipments that have been uncovered are one indication of that, and that is also the interpretation in Damascus, says the oligarch family member: “The Russians want to destroy Iran’s business.” When investigators are waiting every time a ship sails into port, or even intercepts them at sea, it is hardly an accident, he says.

Member of an oligarch family in Syria

Already, Kremlin subcontractors, such as the company Stroitransgas, have positioned themselves perfectly to profit from reconstruction, with contracts for phosphate mines, fertilizer production, the port of Tartus and gas and oil exploitation. Now, they are just waiting for things to get started. “The Russians are running out of time,” says the member of the oligarch family. He adds that at dinners of lackies and generals, there is fear that Russian patience may be wearing thin on the question of who is to rule the country in the future. “They are in the process of giving up on Assad. They just don’t know yet how.”

“Afghanistan-Like Scenario”

That, at least, would explain the drastic criticism of the Damascus regime that has recently been coming from various sources in Moscow. It began in April with articles in Russia media outlets about widescale corruption in Syria and about a survey in the country according to which just 32 percent of Syrians would vote for Assad in the next election. Then, the state news agency TASS wrote that Assad is “not only incapable of governing,” but could even “plunge Moscow into another Afghanistan-like scenario.”

The newspaper Gosnovosti topped them all by writing that Assad had purchased the pop art painting “The Splash” by David Hockney from Sotheby’s for the equivalent of 26 million euros as a gift for Asma – even as his people are suffering and Russia is fighting his war.

The fact that the story was likely a fake makes it all the more interesting: Even Moscow’s troll army is turning against Assad, who had always been described as Syria’s “legitimate president.” One could read such criticism as a warning – or as a way of preparing the Russian and Syrian populations for the fact that the “legitimate president” may suddenly no longer be president one day.

Something is changing in the geopolitical fabric on which Assad’s fate depends. Since April, Israel has launched six airstrikes on Iranian positions in Syria, apparently with Moscow’s approval. The S-300 and S-400 batteries, which are operated by the Russian military and which represent Syria’s most modern air defense systems, haven’t fired a single rocket at the increasing number of jets flying into the country. The U.S. special representative for Syria, James Jeffrey, said in a briefing at the U.S. State Department: “In terms of getting Russia out of Syria, that has never been our goal.”

Meanwhile, ranks are closing in Damascus. Recently, the palace allowed an apparatchik to issue an open threat to Russia. If Moscow continues heaping pressure on Assad, he said, then the Syrian ruler would unleash a war on the “Russian occupiers” that would “forever strike Putin’s name from Russian history.”

Within the ruling family, Maher Assad is likewise seeking to distance himself from his cousin and smuggling partner Rami. But just how close they once were can be seen in the history of the Facebook account Rami used to launch his plea to Assad: The account used to belong to Maher.

Der Spiegel

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