This summer, a pair of Syrian brothers journeyed across Europe. Their story did not begin with a rubber dinghy afloat on the Aegean and a scramble for safety on to a Greek island: a well-worn route for many Syrian refugees fleeing a conflict that has lasted eight years and taken an estimated half a million lives.
Instead, these brothers landed in Cannes; their transportation, a plane, then a pair of Ferraris; their extravagances documented on social media and culminating on the party island of Mykonos.
Before war broke out in 2011, Makhlouf was thought to control more than half of Syria’s economy despite the fact that he has been under international sanctions since 2008.
The 50-year-old tycoon was long considered the pariah regime’s banker but a recent fall from grace has given other war profiteers a chance to challenge his dominance.
The brutal civil war has torn Syria’s social fabric, creating the biggest population displacement since the second world war, with more than 12 million people forced to leave their homes.
The Assad family, autocratic rulers for nearly five decades, have all but wiped out the secular rebels, leaving jihadists as the armed opposition. Assad’s army is accused by the US and Europe of detaining, torturing and gassing tens of thousands of civilians.
With help from its military allies Russia and Iran, the regime has regained most of the country, though fighting continues in the north-west. But the battlefield victories have not brought financial relief. Most Syrians are sliding ever deeper into poverty.
When the FT visited a cold, grey Damascus earlier this year, people queued in vain for government-subsidised cooking fuel and bread amid rolling blackouts and gas shortages. Some said they could only afford meat once a month.
“I’m waiting for a miracle,” sighed the owner of a generator shop who apologised for not offering tea because he was out of gas. “It’s the same for everyone.”
The war has hollowed out Syrian society. “The middle class is gone,” said Nabih, a regime insider speaking at a smart Damascus hotel. “Only the rich and poor are left.” As Makhlouf’s sons sped through Monte Carlo and Saint-Tropez in their expensive cars, the gulf between their extravagant summer holiday and the painful poverty inside their own country was enormous.
More than 80 per cent of Syrians were living below the poverty line by 2015, according to the most recent data available. The UN says the signs are that this has worsened.
Few can make money in Syria now. Gross domestic product has crumpled from $60bn annually before the conflict to an estimated $15bn in 2016. Military conscription, exile, injury and death have warped the labour force, leaving companies scrabbling for staff.
Businesses are hampered by energy and water shortages, and are regularly shaken down by the cash-strapped state. International sanctions have all but frozen trade with the outside world, while paying bribes are another squeeze on revenues — Syria is the second most corrupt country in the world, according to Transparency International.
But in every war there are winners. Newcomers who have profited over nearly a decade of conflict are now jostling with those at the top. This is the story of how a handful of men — two of them brothers — grew to dominate Syria’s devastated economy.
“There is a new class of wealthy war traders,” said Mazen, an Aleppo businessman from an old industrial family. The old guard call these people “new faces”. “We don’t know how they make money,” he continued. “Sometimes we ask ourselves if we’re in the wrong business.”
These individuals have made fortunes picking clean the carcass of the country’s economy. From melting down steel ripped from its shattered cities to brokering oil deals forbidden under international sanctions, to selling hotel rooms to aid workers, following the money leads us into the dark dealings of today’s Syria.
Their dramatic rise to fortune has also helped the regime to survive by keeping trade going, oil flowing and helping to fund pro-regime militias, even as the country lies in ruins around them.
Since coming to power in 1971, the Assad family has forged various alliances with Syrian elites. Under Hafez al-Assad, and his Ba’ath party, Syria was socialist. His chosen partisans were mostly military men from his own minority Alawite sect.
Bashar, his son, was never supposed to be president. But the untimely death of Bashar’s swaggering older brother Bassel in a car crash pushed the shy London-trained ophthalmologist to the throne. Bashar and his wife Asma, a British-Syrian former banker, returned to Damascus where Hafez put him through military training.
When Bashar took the keys to Damascus’s presidential palace in 2000, he began making changes, increasing his appeal to western governments that his father had alienated.
He made a show of launching a neoliberalist programme to open up the economy, passing more than 1,000 laws and decrees between 2000 and 2011. Investment flowed into services and real estate, sidelining traditional manufacturing, while annual gross domestic product doubled between 2005 and 2010.
Opportunity in the new economy was unequally distributed — growth doubled, but so did the proportion of Syrians living below the poverty line. Bashar had further concentrated economic power in the hands of his chosen elite.
“The Assads run Syria as a family business,” critiqued a leaked 2006 US diplomatic cable, “and the corrupt classes are the ones that make the business function.”
At the top of the so-called corrupt class, diplomats and sanctions filings alleged, was Rami Makhlouf. The diplomatic cable called him a “poster boy for corruption”. He was originally sanctioned by the US in 2008 on allegations of public corruption.
As Assad’s crackdown on civilians began in 2011, western powers, wary of entering another Middle Eastern war, chose instead to impose further harsh sanctions on the president’s financial backers, including Makhlouf.
But the international penalties on Makhlouf — from frozen assets to punishment for Europeans or Americans who did business with him — are believed to have done little to dent his fortune. “Rami Makhlouf most probably increased his wealth during the war,” said Joseph Daher, a Syrian-Swiss political economist based in Switzerland, “by opening new smuggling routes, investing in new business opportunities.”
It is almost impossible to estimate Makhlouf’s wealth. His empire includes business interests in Syria’s oil and gas industries, banking, construction and duty-free shops. For a long time, his crown jewel was Syriatel, one of Syria’s two mobile networks.
He is also believed to have had a large share in a private airline through a front company and owns a quarter of sprawling conglomerate Cham Holdings, whose value was estimated at $2bn in 2011.
In promotional online articles, his son Mohammad, who claims to own a $43m customised private jet, has been attributed with riches of $2bn. An employee at Mohammad’s Dubai-based company MRM Holding said: “Mr Makhlouf will not make any statements.”
For many years, the Assad family had little reason to rein in Rami Makhlouf’s alleged corruption. Syrian businesspeople were so worried about forcible takeovers by him that they would sacrifice growth to make their turnovers less attractive. “We used to have discussions all the time — should we grow? Because if we do, we risk becoming too big and a target,” said Mazen.
“If [Rami] gets jealous of one of your companies, he will destroy you,” said Nicolas, an Aleppo businessman now living abroad.
But today there are whispers that even the untouchable Makhlouf may not be safe. Syrian businesspeople and analysts say he is being forced to give up parts of his empire as the president consolidates control of the country and once again reorders its rentier economy.
These include Makhlouf’s lion’s share of Syriatel and his powerful Bustan foundation, at which an executive position is said to have been filled by a manager associated with Asma al-Assad.
“At the core of it, it’s about asset seizure for the regime,” said a European diplomat about the Syriatel move, adding it was consistent with the president’s drive to consolidate power. Syriatel did not respond to a request for comment.
“The coming few weeks will reveal surprising names,” said Imad Khamis, Syria’s prime minister, commenting on a putative corruption investigation during a recent parliamentary session, adding: “No one is above the law.”
“At the very least what has happened to Makhlouf is a very clear warning from Bashar,” says Jihad Yazji, editor of the Syria Report specialist business website. “Certainly it’s the end of this very special relationship he had with [the president].”
According to Yazji, the alleged action against Makhlouf marks a significant shift at the top of Syria’s economy, towards newer profiteers who have helped the regime and found opportunity in the chaos of war.
The Four Seasons looms over Damascus like a castle. The city’s best-known luxury hotel has been additionally fortified by the UN, whose staff stayed there throughout the war. Rooms start at €487 a night with a junior suite going for €718. Syrian government employees earn about €36 a month.
Last year the hotel was purchased for an undisclosed sum from Saudi Arabian prince Alwaleed bin Talal. The deal closed while he was detained in the Ritz-Carlton Hotel during the kingdom’s infamous anti-corruption campaign. The buyer was a previously little-known Syrian trader named Samer Foz.
Foz, a diminutive 46-year-old Sunni from Syria’s coastal region, has become synonymous with the country’s nouveaux riches. These emerging power brokers are mostly traders who have thrived in a war economy where production had crashed, meaning more goods than ever need to be imported or smuggled from outside.
At the start of the war, Foz’s sole advantages seemed to be a Turkish passport, links to the United Arab Emirates and a family shipping company established in 1988, which mostly dealt in food. “Before the war, nobody had heard of this Samer Foz,” said Rana, a Damascus business owner. But Foz, who had studied at the American University in Paris, was to parlay his assets to their best advantage.
“The main characteristics of these new names is their role as intermediaries for the regime,” says Joseph Daher. Encircled by western bans on selling oil, the Syrian state had to use middlemen to find foreign partners. Foz’s knack for dealmaking and ability to travel outside Syria put him into the Assad family’s good graces.
Enjoying a competition vacuum as other businesses closed, he expanded from basic foodstuffs to other vital imports and oilfield services, all of which made him more important to the president. His business empire grew at pace from 2015 onwards as he snapped up distressed assets.
Foz is chairman and general manager of Aman Holdings, whose company website states: “We are the country’s largest diversified trading company and have a strategic network of suppliers in various countries.”
This portfolio includes a sugar refinery and flour mill, a car assembly plant, an iron smelter and steel rolling mill, stakes in several Syrian banks, a pharmaceuticals factory and a cable manufacturing company that Foz bought after its previous owner fell out of favour with Assad.
Sporting his favoured Wall Street look of smart suits with hair gelled flat, Foz has not limited himself to his war-torn country. A small jet with “FOZ” on the tail has been spotted zipping between Syria, Lebanon and European capitals as late as April this year — leaked Panama Papers linked the plane to someone named Samer Foz.
Some officials considered him useful for his insights into secretive Damascus. Foz has also made trips around Europe, including Stockholm, London and Paris, where an associate said he typically stayed in the penthouse of the Four Seasons.
He owns a media company in Lebanon and told Arabisk magazine that he has a gold mine in southern Ankara, Turkey, and a five-star hotel development in Bodrum.
While Foz appeared to enjoy Bashar’s support, he has not been favoured by everyone in the extended Assad family. Rami Makhlouf’s newspaper, Al Watan, has published a steady stream of articles this year indirectly criticising Foz’s deals.
“I presume it’s the old symptom of the new kid on the block,” said Hani, a business owner who knows Foz. “Mafia style. If someone moves on your territory, you hit back.”
For most of the war, Foz avoided the fate of other Syrian tycoons — being hit by international sanctions. “If I am sanctioned, the UN should be sanctioned,” he told The Wall Street Journal in 2018.
This year, his luck ran out. Aman Holdings had won contracts to build three high-rise towers and seven residential blocks for a luxury Damascus development, a contract worth $312m. The trouble was the land underneath the scheduled development had been expropriated by the government, and in January this year the European Union sanctioned its investors, including Foz.
Diplomats say these sanctions are a message to Syria’s would-be rebuilders — expect penalties for disrespecting property rights. Foz’s international position started to crumble. In June, the US also sanctioned him and his companies, freezing any assets he has in dollars.
“Samer Foz, his relatives and his business empire have leveraged the atrocities of the Syrian conflict into a profit-generating enterprise,” said US Treasury official Sigal Mandelker. “This Syrian oligarch is directly supporting the murderous Assad regime.” Foz is challenging the EU sanctions decision. His Belgium-based lawyer declined a request for comment. Aman Holdings’ PR manager said Foz was not taking interviews and declined to comment.
Yet Damascus has become an operating hub rather than a base for Foz, according to a businessman who knows him. His family live outside Syria and, according to US sanctions, he has obtained a St Kitts and Nevis passport. While sanctions restrict his travel, he can still visit Turkey and Dubai. He may have lowered his profile but it is unlikely he has stopped making money.
Some of the trickiest deals that Foz was involved with were within Syria. Among his alleged partners were Hussam and Baraa Katerji, brothers from Aleppo who have also become winners in the country’s war. Hussam, an MP, has the higher profile of the brothers. He is often pictured in fatigues and sunglasses with the pro-regime militia the brothers fund, and which businessmen say has helped him win favour with Assad.
To trade across enemy lines, the Katerjis needed to co-operate with dangerous people. “[They] had, frankly, the balls to be involved in all sorts of conversations,” said Imad, a Syrian analyst.
Syria’s main oil reserves are in the eastern territory that has changed hands during the civil war. The jihadist group Isis controlled the fields from 2014 to 2016, pumping up to 40,000 barrels a day. They sold to Syrian and Iraqi buyers.
The Katerjis, who were born in Raqqa, the city Isis would make its capital, are widely believed to have been among those traders, using their fleet of trucks. The US and EU have also sanctioned the Katerjis over this alleged trade and support to the regime.
Today the oilfields are controlled by US-backed Kurdish forces trying to carve out a semi-autonomous region in Syria’s north-east. But the only refineries are in government-held Syria, necessitating a deal with the regime. Katerji trucks transport oil pumped by the US-backed Syrian Democratic Forces to these refineries.
“Katerji has dozens of oil tanks that transfer oil every day from Rojava to the refineries of Homs and Banyas,” said Ahmed, a humanitarian worker who is responsible for his organisation’s supply chain.
According to the US Treasury, Baraa Katerji controls a Lebanese company that imported Iranian oil to Syria, and businesspeople and analysts suggest the Katerjis are the dominant force in Syria’s illicit oil trades. The Katerjis did not respond to requests for comment via messages to the Katerji Group.
Taher, an Aleppo industrialist who knows the brothers, said they also bought cotton and wheat on a large scale from the east Euphrates area, the last place Isis held territory before being chased out this year.
While the brothers have risen in part because they could trade across enemy lines, their decision to fund the pro-regime militia demonstrated their loyalty to the Assad government, he said. “They sponsor fighters, look after them and pay them more than the army could afford.”
By 2012, the regime was well into a crackdown on those calling for reform. The city of Daraya was one of the first places where protests started after the death and mutilation of teenage boys in custody.
Demonstrators handed flowers and water bottles to soldiers but the regime bombed the city. Human rights groups say pro-regime fighters and soldiers massacred some 500 people there that August.
Meanwhile, in London, the first Syrian equestrian to qualify for the Olympic Games was guiding his horse over the fences. Ahmad Saber Hamsho was a controversial competitor. The teenager’s father Muhammad, a steel and construction materials tycoon, was already under international sanctions for supporting the Assad regime.
“Muhammad Hamsho earned his fortune through his connections to regime insiders,” said David Cohen, a US Treasury official in 2011. “[He] has cast his lot with Bashar al-Assad, Maher al-Assad [Bashar’s younger brother] and others responsible for the Syrian government’s violence.”
Hamsho saw the possibility of extracting value from the war’s destruction. “[Muhammad] Hamsho is not evil,” said Mazen. “He’s an opportunist.” An MP and a prominent business figure inside and outside Syria, Hamsho is head of Hamsho International Group whose business interests range from metals to horse breeding and ice cream production. Neither Hamsho nor his company responded to the FT’s request for comment.
US officials and Syrian businesspeople alike say his success comes courtesy of a longstanding relationship with Maher, a major-general in the Syrian Arab Army. After his brother, Maher is thought to be Syria’s most powerful man.
“Hamsho is not simply a rich businessman, he is the shadow of Maher al-Assad,” said Yussef, who used to work for Hamsho. “Without Maher, Hamsho is nobody.”
Hamsho heads Syria’s outreach to the Gulf with the hope of attracting investment in reconstruction. He welcomed Gulf businessmen at the Damascus International Fair this August — an event the US warned investors to avoid.
His son Ahmad, now in his mid-twenties, was with him at the fair, wearing a suit and clutching orange prayer beads. Ahmad is based in Dubai, where he and his siblings continue to amass horseriding trophies. The Arab British Chamber of Commerce would not confirm if the new member of their board of directors, Ahmad Hamsho, was the same individual. Ahmad Hamsho did not respond to a request for comment.
The family’s wholesome appearance contrasts with a key source of their wartime revenue — the scrap metal ripped from Syria’s ravaged cities by soldiers and militia, some of whom call themselves “men of Hamsho”.
Daraya was captured by the regime in August 2016. But according to Iyad, a local official now exiled in Turkey, regime-affiliated militias and Maher’s Fourth Armoured Division had started scavenging long before. The reconciliation deal struck that August led to a total evacuation of the city. Its metal was there for the taking.
“The Fourth [Division] allowed in modern technologies and big machines that started a meticulous process of extracting every last bit of steel,” said Iyad. “They even split the steel from concrete and took it away. Only one businessman has such equipment in Syria: Muhammad Hamsho.”
Syrian businesspeople say Hamsho and Maher al-Assad struck a deal that sees scrap metal looted by the Fourth Division ending up in Hamsho’s factory. “The labour is free, the material is free — he gets everything without paying a penny,” said Mazen. Maher and Hamsho “use soldiers and militias to control the scrap metal trade”.
Iyad said: “Three years later, they haven’t yet finished siphoning off the steel from the city. The old part of Daraya . . . remains inaccessible to its former residents. Hamsho’s men are still at work there.” Rights groups warn that the financial incentive for looting has worsened Syria’s destruction.
The Assads’ control over the Syrian economy curtails space for neutral businesspeople, according to a report prepared this year for western diplomats and seen by the FT. “The regime operates a system of corporate facades managed by its frontmen and facilitated by the legal system,” wrote the Etana research service, “which ensures that no significant business activity occurs without the close partnership of the regime’s main patrons.”
Frontmen can easily be changed and all are dependent on the ruthless Machiavellian court of Assad. For years, Rami Makhlouf was the exception that proved the rule, a member of the inner circle and the best-protected tycoon.
His sons’ public excess was “sort of the Marie Antoinette . . . let them eat cake moment,” said Steven Heydemann, an academic who focuses on Syria. As they partied at $5,000 tables in Dubai clubs, nearly 12 million Syrians — more than half the population before the war exodus — were relying on aid to survive.
While the sons’ showy lifestyle may have dented the reputation of a ruling family that maintains an austere public appearance, Damascus gossips that Rami Makhlouf had not been kicking enough of his profits back to the palace. “Everyone is dispensable,” said Imad, the analyst. “Even family.” War profiteers can be replaced or reined in but one figure remains seemingly unshakeable — Bashar al-Assad.
Chloe Cornish is the FT’s Middle East correspondent. Additional reporting from Beirut by Asser Khattab. Some names have been changed for people’s safety
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