The recent spate of arrests in Saudi Arabia caught global businesses and diplomats off guard. Crown Prince Mohammed bin Salman rounded up dozens of the kingdom's most influential people, including members of the royal family, and reportedly threw them in five-star detention at Riyadh's Ritz-Carlton Hotel on suspicions of corruption. Bin Salman also recently ordered the arrests of prominent clerics, activists and scholars. Continuing a pattern the young crown prince has established in his rise to power, the surprise move demonstrates bin Salman's intention to tighten his grip over Saudi Arabia's political, economic and security institutions.
As the dust settles, international investors are wondering what will be the fallout of the corruption accusations against Prince Alwaleed bin Talal bin Abdulaziz al-Saud, one of the world's wealthiest entrepreneurs and a cousin of bin Salman. Bin Talal's Kingdom Holding Company (KHC) manages more than $12.5 billion in investments across 13 distinct sectors worldwide, according to its website. In addition, the prince, one of Twitter's top five shareholders, invested $300 million in the social media platform in 2011 and holds stakes in Apple Inc., Citigroup Inc. and the Walt Disney Co, as well. But bin Talal, whom Forbes calls one of the world's most intelligent and creative investors, is famous not only for his investments in banking, real estate and media. He is also renowned as a philanthropic mogul, and his arrest sent shock waves through that powerful and prestigious amalgam of public and private sectors.
Portrait of a Philanthropist
In 2014, the Wealth-X and UBS Billionaire Census ranked Saudi Arabia 10th among the 40 countries and territories with the most billionaires in their populations. The report counted 57 billionaires in the kingdom — bin Talal among them — whose collected wealth totaled $166 billion. The Saudi prince fits the international profile of an ultra-high net worth individual who is philanthropic. One of 35 percent of the world's billionaires with his own foundation, bin Talal is active in the philanthropic sphere, contributing to numerous charities. And like others in this category of philanthropists, he sees his giving as a means to preserve his culture and values for future generations. But rather than channeling the bulk of his philanthropic contributions into one or two causes, like education and health — as many of his peers do — bin Talal gives to more than 100 organizations through his foundation, Alwaleed Philanthropies.
Alwaleed Philanthropies supports an array of causes, including health, women's empowerment, education, cross-cultural bridge building and disaster relief. In 2013, the organization donated 1.5 million Saudi riyals (about $400,000 at the time) to address the harsh conditions in which some 46,000 Syrian refugees were living after a winter storm froze much of the Middle East. Partnering with other charitable organizations such as Food Banking Regional Network and Save the Children, bin Talal's foundation provided "food, medicine and clothing," along with health care services, to people living in refugee camps, according to a press release from Alwaleed Philanthropies' website.
Sometimes the aid isn't welcome. During a ceremony of condolence at ground zero in October 2001, for example, bin Talal offered a check for $10 million to assist New York City in the aftermath of the 9/11 attacks. Then-Mayor Rudy Giuliani refused the gift, citing the prince's comment that the United States needed to "address some of the issues that led to such a criminal attack." Bin Talal's statement continued:
"While the U.N. passed clear resolutions numbered 242 and 338 calling for the Israeli withdrawal from the West Bank and Gaza Strip decades ago, our Palestinian brethren continue to be slaughtered at the hands of Israelis while the world turns the other cheek."
Although some observers characterize the prince as a candid, flamboyant social liberal, the motive behind his philanthropy is based in his faith. On his website, bin Talal quotes the Prophet Muhammad, saying, "The wealth of a man will not diminish by Sadaqah (charity)." He goes on to assert the role of personal responsibility in managing global crises:
"The myriad challenges facing the world cannot be left to governments alone. It requires the concerted efforts of each and every one of us who can participate in the search for solutions on both a local and a global scale. … Alwaleed Philanthropies supports and initiates projects around the world, regardless of gender, race or religion. We collaborate with a range of philanthropic, governmental and educational organizations to combat poverty, empower women and the youth, develop communities, provide disaster relief and create cultural understanding through education. Together, we can build bridges for a more compassionate, tolerant and accepting world."
Laying a Broad Foundation
The foundation partners with a diverse array of organizations, including the Danish Refugee Council, the New Zealand Red Cross and the King Hussein Cancer Center in Amman, Jordan. In December 2005, bin Talal gave $20 million to expand Georgetown University's Center for Muslim-Christian Understanding, which was subsequently renamed in his honor. The endowment was the second-largest single gift in the university's history, according to the center's website. In response to the prince's arrest, John Esposito, the center's director, told me:
"In light of the 9/11 attacks, the impact and importance of Muslim-West relations was magnified. Alwaleed generously endowed new centers ... (in the Middle East and North Africa) in American Studies so that students in (the) Arab world would understand America and the West better and then four centers (in the West) so that students in (the United States, United Kingdom and Europe) would understand Islam and Muslim-West relations better."
In 2015, bin Talal even pledged to donate his $32 billion fortune to charity after his death. He has said of his foundation's activities:
"Our work is only just beginning. With the mounting problems of understanding, equity, poverty and disasters facing the world, our work is more necessary than ever before. Building on our proven history, we will continue to play an active role, finding intelligent solutions to the world's most pressing issues with empathy, dedication and commitment."
An Arrest Felt Round the World
Since the cascade of high-profile arrests in Saudi Arabia, thousands of bank accounts in the kingdom have been frozen. Saudi Attorney General Saud al-Mojeb insists that the frozen accounts are strictly personal and that businesses and financial institutions will be "free to continue with transactions as usual." But under which category will Alwaleed Philanthropies be assessed? Already, KHC's shares have plummeted on the Saudi stock exchange, despite al-Mojeb's assurances Nov. 9 that the corruption sweeps wouldn't hurt business in the kingdom.
The challenges of understanding, equality, poverty and disaster are on the rise worldwide, and governments are not positioned to solve the existential problems of hunger, homelessness and climate change. Though bin Talal's philanthropic efforts can't cure all of the world's ills, they make a difference in a handful of crucial areas. Where will his beneficiaries look if his accounts are frozen, and if his promised $32 billion posthumous charitable gift shrinks or evaporates? To what degree will other philanthropists of his financial stature step in? Even without the recent arrests in Saudi Arabia, we are already standing at the breech.