VZCZCXYZ0011
PP RUEHWEB

DE RUEHDM #0274/01 0991518
ZNY SSSSS ZZH
P 091518Z APR 09
FM AMEMBASSY DAMASCUS
TO RUEHC/SECSTATE WASHDC PRIORITY 6245
INFO RUEHAM/AMEMBASSY AMMAN PRIORITY 7573
RUEHGB/AMEMBASSY BAGHDAD PRIORITY 1047
RUEHLB/AMEMBASSY BEIRUT PRIORITY 5119
RUEHEG/AMEMBASSY CAIRO PRIORITY 3877
RUEHLO/AMEMBASSY LONDON PRIORITY 0517
RUEHFR/AMEMBASSY PARIS PRIORITY 0486
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

S E C R E T DAMASCUS 000274 
 
SIPDIS 
 
DEPT FOR NEA/ELA; NSC FOR SHAPIRO/MCDERMOTT; PARIS FOR 
WALLER; LONDON FOR TSOU 
 
E.O. 12958: DECL: 04/08/2019 
TAGS: ETRD EFIN ETTC PGOV PREL SY
SUBJECT: CORRUPTION INVESTIGATION RATTLES BUSINESS COMMUNITY 
 
REF: A. DAMASCUS 168 
     ¶B. DAMASCUS 218 
     ¶C. 08 DAMASCUS 541 
 
Classified By: Charge d'Affaires Maura Connelly for reasons 1.4(b,d) 
 
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Summary 
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¶1. (S) The recent imprisonment of a prominent businessman 
thought to be close to President Asad has rattled the Syrian 
business community.  Although the high-profile arrest was not 
reported by Syrian media, Prime Minister Utri made a veiled 
reference to it in a daily newspaper, saying, "we will cut 
off the hand of any who dare to abuse the public funds." 
Business contacts report that two other business elites are 
currently under investigation for corruption charges linked 
to the February arrest of Customs Directorate Chief Brigadier 
General Hasan Makhlouf, including the current Chairman of the 
Damascus Chamber of Industry.  Adding to their concern, a 
popular local business magazine recently published profiles 
of "The Top 100 Syrian Businessmen," which many feared would 
raise their profile to the regime.  Conspicuously absent from 
the article was Syria's most famous tycoon, Rami Makhlouf. 
End summary. 
 
--------------------------- 
Computer Magnate Imprisoned 
--------------------------- 
 
¶2. (C) Syrian business elites are abuzz with the news that 
SARG security officials jailed Engineer Firas Bakour (DOB: 
01/30/1966) in late March, along with former Minister of 
Communication and Technology Amro Salem and two unnamed 
employees of Syria Telecommunications Establishment (STE). 
Contacts report that Bakour's arrest stemmed from a USD 65 
million SARG tender that he was awarded to provide a Voice 
Over Internet Protocol (VOIP) service to STE.  According to 
the reports, SARG officials were angered at the slow pace of 
Bakour's progress in fulfilling the contract -- particularly 
when his "winning" bid for the tender had been over twice as 
high as those of several foreign companies.  A close friend 
of Bakour's offered a different take, claiming that the Sunni 
Bakour's Alawi enemies had grown jealous of the virtual 
monopoly his company enjoyed over IT in Syria and the USD 10 
million that he was reportedly earning each month. 
 
¶3. (C) The President and CEO of INANA Group -- an umbrella of 
eight subsidiary companies that offer a variety of 
information technology, telecommunications, marketing, 
entertainment and business development lines -- Bakour was 
close to President Bashar al-Asad in the mid-1990s when Asad 
headed the then-nascent Syrian Computer Society (SCS).  A 
longtime Embassy contact with a sister living in Florida, 
Bakour's presence at Embassy rep events in 2007 had a 
chilling effect on other guests due to his alleged ties to 
SARG security services.  While Syrian media has not reported 
the high-profile arrest, Prime Minister Utri made a 
thinly-veiled reference to it in the March 31 edition of 
daily Tishreen, saying, "we will cut off the hand of any who 
dare to abuse the public funds." 
 
¶4. (C) In 2008, former Minister of Communications and 
Technology Amro Salem told us that he was asked to resign 
from his ministerial post in December 2007 because he had 
launched an investigation into Bakour's suspicious business 
activities.  He claimed then that President Asad had 
personally cleared him of any wrongdoing and had ordered the 
investigation of Bakour to proceed.  (Note: It would not be 
unusual for Syrian security forces to arrest all suspects 
while sorting out individual stories.  End note.) 
 
------------------------ 
Known By the Company You Keep 
------------------------ 
 
¶5. (C) Adding to the business community's case of the 
jitters, the locally popular Syrian business magazine 
al-Iqtissadi (the Economist) dedicated this week's edition to 
profiling "The Top 100 Syrian Businessmen."  Listing the 
businessmen alphabetically, the 55-page article contained 
photographs and 3-5 paragraph corporate biographies of each 
prominent businessman and his family.  Firas Bakour was 
featured in the magazine, as was one-time SyriaTel Chief 
Operating Officer Nader Qa'lai, who is reportedly himself 
under investigation for embezzlement.  Syria's most infamous 
tycoon -- Rami Makhlouf -- was conspicuously absent, as were 
Muhammad and Abdulsalam al-Haykal, who own the media company 
that publishes al-Iqtissadi.  The website "Syrian Informer," 
which is blocked in Syria, commented disparagingly on the 
list as largely comprising nouveaux riches who have acquired 
wealth through opportunism and corruption, presumably in 
contrast to the more "virtuous" Damascenes who inherited 
their fortunes. 
 
¶6. (C) Embassy contacts who were listed in the article 
expressed nervousness at having their profiles publicly 
elevated, while others were relieved to have not been 
mentioned.  The head of one featured family lamented that the 
article was probably already in the hands of the SARG's 
equivalent to the Internal Revenue Service (IRS), which he 
claimed would be examining the tax returns of each listed 
family over the last several years.  (Note: The only Syrians 
who consistently pay the correct amount of income tax seem to 
be public servants, whose taxes are withheld automatically 
from their government salaries.  End note.) 
 
----------------------------- 
Wider SARG Campaign Underway? 
----------------------------- 
 
¶7. (S) Bakour's arrest is the latest event in what contacts 
report is a wide-ranging SARG crackdown on "corruption" that 
began with the January sacking of Political Security 
Department Chief Major General Muhammad Mansurah and 
mid-February arrest of Chief Customs official Brigadier 
General Hasan Makhlouf (refs A,B).  (Note: By all accounts, 
Hasan is not close to his more famous cousins Muhammad, Rami 
and Hafiz Makhlouf.  End note.)  The oft-heard rumor on the 
Damascus streets is that Hasan Makhlouf attracted the ire of 
Maher Asad after the President's brother learned from a real 
estate agent that the Customs Director's driver had tried to 
purchase a multi-million dollar property in Lattakia. 
Investigators allegedly discovered some USD 50 million hidden 
in the driver's home, which -- according to the story -- 
enraged Maher and prompted the Palace to act. 
 
¶8. (S) The rumor of Hasan Makhlouf's millions is strikingly 
similar to another story that circulated around Damascus 
following the August 2008 assassination of Brigadier General 
Muhammad Sulayman (ref C).  Sulayman, who was Asad's top 
security aide and reportedly managed several sensitive 
military projects, was killed by sniper fire in the coastal 
city of Tartous while Asad was visiting Tehran.  The 
subsequent investigation into Sulayman's slaying reportedly 
uncovered USD 80 million cash in a basement room of the 
general's home in the mountains between Damascus and the 
Lebanese border.  Asad was said to be devastated by the 
discovery, and, fearing Sulayman had betrayed him, redirected 
the investigation from solving his murder to finding out how 
the general had acquired so much money. 
 
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Car Importers Under Suspicion 
------------------- 
 
¶9. (S) Embassy contacts report that two prominent businessmen 
are under suspicion in the Makhlouf/Mansurah investigation -- 
Ammar Karkour and Chairman of the Damascus Chamber of 
Industry Imad Ghreiwati.  Karkour, the Syrian agent for 
Audi/VW, and Ghreiwati, who owns the Ford dealership and 
represents LG electronics, are both suspected of bribing the 
Customs Director to accept grossly reduced invoices on their 
imported cars and electronics in order to avoid paying 
customs duties on the goods' actual value.  The Ghreiwati 
family may have had a falling out with the Asad clan in fall 
2008, as Imad's brother Issam then complained bitterly to us 
about the President, the SARG's decision to close Damascus 
Community School -- where the Ghreiwati children studied -- 
and revealed that the entire family was considering 
emigrating to the U.S.  (Note: Ghreiwati's fall from grace 
would be cheered by many of his class-conscious peers, who 
resent his family's meteoric ascent to social prominence and 
his once-favored status among the Alawis.  End note.) 
 
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Comment 
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¶10. (S) While there does not yet appear to be a direct link 
between Bakour's arrest and the Makhlouf/Mansurah 
investigation, our contacts believe that his incarceration is 
part of a broader "anti-corruption" campaign ordered by the 
Palace to re-assert Asad's authority and to shake-up the 
status quo.  The Palace has probably already chosen the 
eventual winners and losers in this investigation, the timing 
of which may coincide with a long-anticipated cabinet 
reshuffle.  Regardless of the SARG's motivation, the business 
community's concern is illustrative of their tenuous 
relationship with the Syrian government. While Bakour's and 
Ghreiwati's situations demonstrate that proximity to the 
regime is no guarantee of long-term security, other 
businessmen equate Syria's byzantine legal and tax codes -- 
and not their lack of compliance to them -- to a sword of 
Damocles the regime dangles over their heads to keep them in 
line. 
 
CONNELLY