"Revenues from 'one million barrels of oil per day' go entirely to 'five or six princes'."
-- Cable from the U.S. Embassy in Riyadh, Saudi Arabia
A secret 1996 cable -- sent from the U.S. Embassy in Riyadh, Saudi Arabia and released by Wikileaks -- offers a detailed account of the mechanisms of wealth distribution and waste within Saudi Arabia's royal family. Despite the considerable riches doled out to "thousands" of Saudi princes and princesses, the cable observes that Saudi royals "seem more adept at squandering than accumulating wealth." (The embassy notes that the country has more commoner billionaires than royal billionaires.) As reported in the cable, corruption also abounds largely unchecked.
Oil revenue is said primarily to enrich the Al Saud. The embassy explains that Saudi Arabia's Ministry of Finance distributes a portion of the country's oil proceeds to each Saudi royal family member in the form of monthly stipends. At the time the secret cable was issued, every royal reportedly received a monthly allowance from birth, on a sliding pay scale of US$ 800 (for distant royals) to US$ 270,000 (for sons and daughters of King Abd Al-Aziz). The embassy calculated these stipends to total more than US$ 2 billion of the Saudi government's US$ 40 billion annual budget. For this and other reasons, the embassy concludes that "getting a grip on royal family excesses is at the top" of priorities for Saudi Arabia.
In addition to the state-budgeted stipend, the cable reports, a royal may obtain a bonus of as much as US$ 3 million, as reward for getting married or building a palace. The existing stipend-and-bonus system provides Saudi royals with a significant incentive to procreate, particularly since stipend distributions begin at birth. It was stated that the central life aspiration of one Saudi prince was to have more children, so as to increase his monthly allowance.
According to the cable, some members of the Al Saud resort to "royal rakeoffs" in order to supplement their already-substantial income. Such schemes may include confiscating land from commoners and reselling it to the government for a substantial profit; borrowing from the banks and defaulting on these loans; and acting as "sponsors" to "sometimes hundreds" of expatriate workers who are permitted to work locally as long as they pay monthly fees to the royals (this latter arrangement reportedly earns a single royal sponsor an average of US$ 10,000 per month from 100 ex-pats).
Al Saud land and asset grabs are said to have caused resentment among the populace. In one instance, Defense Minister Prince Sultan bin Abd Al-Aziz allegedly ordered Mecca officials to transfer to him a plot of land that had belonged to one family for centuries. Similarly, royals are said to routinely seize the assets of profitable businesses -- one reason, the cable explains, why some successful Saudis invest their money outside the country.
The embassy reports, however, that the most pervasive form of royal corruption consists of skimming from billions in off-budget spending that is controlled by Sultan and a few other princes. "In a recent meeting with the Ambassador," the cable states, "Saudi billionaire Prince Al-Walid bin Talal, alluding to these off-budget programs, lamented the travesty that revenues from "one million barrels of oil per day" go entirely to "five or six princes." According to the cable, many in the kingdom feel that royal greed "has gone beyond the bounds of reason."
But the embassy strikes a pessimistic tone in contemplating a solution to the situation, concluding:
"As long as the royal family views this country as 'Al Saud Inc.,' ever increasing numbers of princes and princesses will see it as their birthright to receive lavish dividend payments, and dip into the till from time to time, by sheer virtue of company ownership."