One of the world’s richest men opens up about his confinement by the Saudi government.
Prince Alwaleed bin Talal has taken a few knocks en route to becoming the richest investor in the Middle East and one of Saudi Arabia’s most recognizable faces. In the 1980s, he went broke. In 2008, during the financial crisis, he lost billions of dollars on Citigroup Inc. But nothing compares with the humiliation he sustained over the past few months. Last November, Alwaleed’s uncle, King Salman, and his cousin, Crown Prince Mohammed bin Salman, engineered a government roundup of alleged fraudsters, embezzlers, and money launderers that landed Alwaleed in Riyadh’s now-infamous Ritz-Carlton hotel. He didn’t leave for 83 days.
I saw Alwaleed in late October, the week before he became a prisoner of the state. We spent an evening at his desert camp chatting about the financial markets and US politics, watching a soccer match on TV, taking a walk through the sands, and eating a late dinner in the cool midnight air. Seven weeks after his release, in mid-March, I returned to the kingdom. Alwaleed had decided to break his silence and grant me an interview on Bloomberg Television.
We met informally the day before the interview at his palace in Riyadh. As I waited in the foyer, the prince descended the grand staircase from the second floor. He was dressed casually in a beige thobe, brown wool sports jacket, and sandals, and he struck me as relaxed. Over the next two hours, between sips of Arabic coffee and ginger tea, while his five granddaughters sang and danced to Katy Perry’s ‘Hot n Cold’ in the palace gym, he recounted his ordeal.
Alwaleed with his family at his Riyadh palace.
In the early hours of Nov 4, Alwaleed, at his desert camp for the weekend, received a phone call summoning him to the royal court. He left at once, without any inkling he was walking into a trap. Soon government officials were leaking the sensational details of an anti-corruption purge, with news reports pinpointing Alwaleed as the most prominent among hundreds of tycoons, government ministers, and other princes who were being detained at the Ritz-Carlton. Shares of his main company, Kingdom Holding Co, plummeted 21 percent in three days.
Alwaleed was quite the prize for a government eager to show its people that no Saudi was exempt from an ongoing crackdown on freeloading and graft: His fortune of $17.1 billion places him 65th on the Bloomberg Billionaires Index. And his international profile – forged through friendships and business partnerships with the likes of Bill Gates and Rupert Murdoch – rivals that of Prince Mohammed. Kingdom Holding’s portfolio includes Four Seasons Hotels & Resorts, Citigroup, Euro Disney, and Twitter. Rotana Group, which he controls separately, is the Arab world’s largest entertainment company.
The government offered detainees a stark choice: pay up, sign an admission of guilt, and walk free – or refuse and languish. According to a Wall Street Journal report, the price for Alwaleed’s release was $6 billion. Negotiations were held in secret, and the government never disclosed any charges or produced any evidence. Critics said that due process was being denied and accused Prince Mohammed of conducting an intimidation campaign or simply a shakedown under the guise of fighting corruption.
Rumors of mistreatment and even torture at the Ritz-Carlton began to swirl, finding their way into reports by the Daily Mail Online and regional news media. So when the prince, still at the hotel, surfaced in a smartphone video in late January, after more than 2½ months of confinement, appearing underfed and haggard, the speculation only intensified. He said he was being treated decently. No one believed it. (Others may not have fared as well. More recently the New York Times reported, citing anonymous sources, that some detainees were physically abused and otherwise coerced into confessions, and that one military officer in custody died bearing signs of a brutal beating.)
Since his release, hours after the video was shot, Alwaleed has regained some weight, and he seems as energetic, intense, and engaged as ever. But in conversation it’s clear he’s struggling mightily with the experience. Even if he’s innocent – and he insists he is – the government lumped him in with a group it cast largely as a bunch of crooks. And to complain about that or otherwise fall out of line is to invite a wrath he’s witnessed all too closely.
We recorded the interview on a makeshift set in Alwaleed’s apartment on the 67th floor of Riyadh’s Kingdom Tower. Walking in, I wondered how candid he could be. Would he be forthcoming about life inside the Ritz-Carlton? If he’d been harmed, would he admit it? Had he been forced to accept a devil’s bargain to win his release? Would he be credible? What if the government had threatened him? Would I be able to tell?
The games room at Alwaleed’s palace in Riyadh.
The following is an excerpted version of our conversation, lightly edited for clarity.
Starting with the obvious: Why
Alwaleed’s detention was more mysterious than most. Of all the princes who were brought in, he alone hadn’t served in the Saudi government, where kickbacks are considered common. And unlike other businessmen, he wasn’t a government contractor and so couldn’t have overbilled the state. He made most of his wealth transparently, in real estate and as an investor in public markets.
Erik Schatzker: Why were you arrested in the first place?
Prince Alwaleed: Well, I would not use the word “arrested,” because we were invited to the king’s house and then asked to go to the Ritz-Carlton. So it was done with honor and dignity, and our prestige was maintained. Not only me; everybody else.
So the word “arrest” is fair to use for those who did commit a crime, admit their guilt?
Exactly. And reached a settlement with the government. But in my case, you know, it’s very much different.
So were there never any charges? Were you ever accused of anything?
There were no charges. Because I have a fiduciary responsibility to my shareholders in Kingdom Holding, to my friends in Saudi Arabia, and to the world community, because we have international investments all over the place, it’s very important to say that there was zero accusation and zero guilt.
You’ve described the whole ordeal as a misunderstanding. A misunderstanding over what?
When I say misunderstanding, it’s because I believe I shouldn’t have been there. Now that I’ve left, I would say that I’ve been vindicated. Yet I have to acknowledge to you, for the first time, that yes, we do have with the government a confirmed understanding, going forward.
What does that mean?
It is very confidential. I cannot get into that. But there is a confirmed understanding between the kingdom of Saudi Arabia and me personally.
Does that require you to do certain things?
Not necessarily. I cannot get into that, because it is confidential and secret between me and the government. But rest assured that this does not really handcuff me.
What did the government want from you?
I will not get into the discussions that took place between me and representatives of the government.
They must have wanted something.
I read what was written, that they wanted a chunk of A or B or C of what I have. This was all rumors.
According to one report, it was $6 billion.
I read $6 billion, I read more than that and less than that.
Did it cost you anything to leave? Did you have to pay the government any money, did you have to hand over any land, did you have to surrender any shares?
When I say it’s a confidential and secret agreement, an arrangement based on a confirmed understanding between me and the government of Saudi Arabia, you have to respect that.
I’m a Saudi citizen. But I’m also a member of the royal family. The king is my uncle. Mohammed bin Salman is my cousin. So my interest is in maintaining the relationship between us and keeping it unscratched.
You maintain your innocence. You say you didn’t sign a settlement acknowledging guilt and that you’re different.
We signed something, yes, a confirmed understanding. Some others may call it a settlement. I don’t call it a settlement, because settlement to me is an acknowledgment you’ve done something wrong.
You realize, of course, how important it is to be candid and honest with me about this, because the circle of knowledge is too wide. If a different story emerges, your credibility will suffer.
So everything you’ve told me is 100 percent true?
I have a confirmed understanding with the government, and it’s ongoing. I’ll elaborate on that: It’s an ongoing process with the government.
The matter of Alwaleed’s reputation
Already, Kingdom Holding is talking to lenders about getting as much as $2 billion in debt financing – “firepower,” the prince says, for his next deal.
This whole ordeal has affected your reputation. People will still believe, no matter what you tell me, that because you were in the Ritz-Carlton you must be guilty of something. You must realize that.
When you are detained, for sure some of the business community, some of the banking community will say they have doubts. That’s my job right now, to interact, to meet with all of them individually or jointly and tell my story.
I understand it’s not going to be easy at all, because some banks and some people in the business community will be doubtful. They’ll say, “What’s going on?” However, I assure them that everything is normal, everything is back to normal, and that we are functioning as we were before.
It would surely help if the government said, “Alwaleed did nothing wrong, it was a misunderstanding, he paid nothing to leave, he remains a Saudi citizen in good standing.” That hasn’t happened.
All of these points were covered in the confirmed understanding, the agreement between me and the government.
The fact that I’m speaking to you right now, and I’m saying everything truthfully and honestly, and the fact the government is not going to say, “Alwaleed is wrong,” is an approval of what I’m saying.
So you feel you need to speak out to, what, clear your name, because you’ve been maligned?
I need to clear my name, No. 1, and to clear up a lot of the lies. For example, when they said that I was tortured, I was sent to a prison, you know, during my 83 days in the Ritz-Carlton hotel. All these were lies. I stayed there the whole time. I was never tortured.
Inside the Ritz-Carlton
Across three months, 381 Saudis were hauled in and locked up at the Ritz-Carlton, which boasts 492 rooms, 52 acres of land, and 62,000 feet of conference space. Many left quickly. Alwaleed’s stay was among the longest. The prince says he was kept in Room 628, a 4,575-square-foot royal suite.
How did you spend your time?
A lot of sports, a lot of walking, a lot of meditation, a lot of watching news, a lot of praying.
What was a typical day like?
I would go to sleep at 6, 7 o’clock [am] and then wake up around noon. We prayed five times a day.
You had access to television, to newspapers?
I had access to everything, everything.
So no one on the outside knew what was happening inside, but those of you on the inside knew everything about what was happening on the outside?
Exactly. That’s why I was able to get information about this so-called torture.
So you were not harmed or mistreated in any way?
Not one iota.
You’re certain that nobody else who was at the Ritz-Carlton suffered anything akin to abuse, torture, wasn’t even roughed up?
Maybe someone tried to run away or do something crazy. Maybe he was put down and controlled. Maybe. But for sure there was nothing you could call systematic torturing.
Were you allowed to talk to other detainees?
No. No two people in the Ritz-Carlton could talk to each other. Even in my case. I did not see anyone. I did not talk to anyone.
You were allowed to make some phone calls. To whom and under what conditions?
I made my calls to my son, to my daughter and my granddaughters. And I talked to the heads of my companies, the CEO of Kingdom Holding, the head of my private office, and the secretary general of my foundation.
Were those calls being monitored?
Most likely, yes.
Dealing with the crown prince
For more than 70 years, the Saudi throne passed from one brother to another, but Salman broke with the past, first giving his son control over several government portfolios, then elevating him last year to crown prince. Prince Mohammed’s plans include Vision 2030, an economic program that may see Saudi Aramco, the world’s largest oil company, go public. Movie theaters, banned since the early 1980s, are back, and in parts of Riyadh women walk without an abaya covering their heads. Starting in June, they’ll be permitted to drive for the first time since 1990.
What was it like being held captive by your own cousin?
It was not easy, I have to confess. It’s not easy to be held against your will. But when I left, I had a very strange feeling. I gathered all the senior officers in my companies and all my close confidants and I told them, “I swear to you I have complete serenity, complete comfort, and no grudge and no bad feelings at all.”
And sure enough, within 24 hours we were back in communication with the king’s office, with the crown prince and his people. That’s a very strange situation. But it’s a fact.
That’s because you simply had to move forward?
No. I’m a nationalist. I’m patriotic. I believe in my country. So I’m not going to have this, this irritation that happened to me create a vendetta and turn me against my uncle, my cousin, my nation, and my people.
How would you describe your relationship with Prince Mohammed?
It’s stronger. That’s shocking to many people, even to my people.
You’ve forgiven him?
I’ve forgotten and forgiven the whole process completely. It’s behind me.
How often are you and he in contact?
Barely three days go by without me texting or calling or talking to him.
You and he talk almost every three days?
We text a lot, but we talk less frequently. Barely a week goes without us communicating.
Prince Mohammed has a grand plan for the transformation of the Saudi economy and Saudi society. Do you remain supportive?
Yes. His vision took a lot of my ideas, but he multiplied them. I had the sovereign wealth fund idea, I talked about Aramco going public. Women’s rights, women competing in society, women driving, all of these things I called for.
He’s establishing a new era in Saudi Arabia. Any person who does not support what Mohammed bin Salman is doing right now, I say, is a traitor.
Navigating the new Saudi Arabia
The crown prince has also become the biggest Saudi investor, plowing tens of billions of state dollars into Uber Technologies Inc. and funds run by Blackstone Group and SoftBank Group.
Does the government want you building and maintaining relationships with heads of state and CEOs of multinational companies?
When I left, there were zero conditions on me, which means life as usual. I’ve been in touch with many heads of states, in Europe and the Middle East. Everything’s normal.
Can you travel?
Sure I can.
Do you know whether the government is monitoring your whereabouts?
I’m not worried about that.
And your bank accounts?
Everything’s back to normal.
You’re looking for foreign investments and so is the Public Investment Fund, Saudi Arabia’s sovereign wealth fund. Doesn’t that put you in competition?
Actually, we’re in touch with the government to be involved in many projects. They’re going to have a big project in the Red Sea with Maldives-type resorts. Four Seasons was invited to be there. We’ve also been invited to be part of another project in Riyadh, where there’s going to be a huge entertainment center. You know, Disney-type.
We’re in hotels, we’re in media and in entertainment, so we’re invited. So no, no competition, we complement each other.
What about co-investment? Will the PIF invest together with Kingdom Holding, or perhaps Rotana, or Prince Alwaleed personally?
Yes, this will happen. We’re in discussions right now with the PIF on certain projects.
Domestic projects or international ventures?
Domestically, to begin with.
The crown prince is touring the West. He’s meeting President Trump at the White House, and he’s trying to attract capital to Saudi Arabia. Given your experience at the Ritz-Carlton, how good can you feel about presenting a common front with the government, the very same government that put you in the hotel?
I’m supportive of Saudi Arabia, supportive of my government, supportive of King Salman and Prince Mohammed bin Salman all the way. Before, during, and after detention.
People will find that hard to understand.
They don’t understand that you’re talking to a person who is a member of the royal family. We’re all one party here. One party. The ruling family of Saudi Arabia.
I understand it sounds weird to people. They’ll say, “You’ve been detained by the king and by the crown prince and you’re still supporting them?” You bet.
You have to wonder how comfortable CEOs will be investing in Saudi Arabia after seeing the Ritz-Carlton method of dealing with disputes.
They have to decide that. But I can speak on my own behalf, and I can tell you it’s business as usual: We’re going to invest in Saudi Arabia. – By Erik Schatzker