Where Is Rami Makhlouf's Money Really Going?

The big news out of Syria last week was Syrian businessman Rami Makhlouf 's announcement that he is quitting his business deals and becoming a philanthropist. Although Makhlouf is President al-Assad's cousin, he claims that no one in the regime forced him to step aside.

Makhlouf owns the country's leading telecom provider (SyriaTel), banks, an airline and is generally considered to "hold unrivaled economic clout." For the average Syrian he is a symbol of the regime's corruption, arrogance, and cronyism. His departure is undoubtedly a win for the protestors, but it might also be a well-calculated move by the regime.

If Makhlouf's claims can be taken at face value, they could benefit thousands of Syrians, but I'm skeptical. The other "concessions" that the regime made have been far from legitimate. In April, Assad lifted the 48-year old emergency law, but replaced it with a new terrorism law and continued to brutally suppress dissent. At the end of May the President granted amnesty to all political prisoners, only to continue arresting citizens at rate of around 300 people per day in the north alone. It is yet to be seen whether Assad's recent call for national dialogue or a second round of amnesty will bear fruit.

So what might be other reasons for Rami Makhlouf stepping down? Joshua Landis, who runs the blog Syria Comment, explored the idea that the regime is "sacrificing" Makhlouf in order to placate protestors. I am even more cynical.

One of Landis' followers estimates that $72 million of Makhlouf's fortune will be distributed as "charity," but the question is how. My worry is that a large portion of that money, if not all of it, will end up in the hands of other regime loyalists and that in the end those who need it most will get little if anything at all. It takes just one example to see that the broken system lends itself to this possibility.

The country's largest and most influential NGO is the "Syria Trust for Development," whose vision is "a Syrian society where every person fulfils their potential for the benefit of themselves, their family, their community and their country." This charming organization is not surprisingly run by the first lady Asma al-Assad. I have been told that the Trust is grossly corrupt and only a small percentage of the money actually reaches the people.

The timing of the announcement is also telling. It came a day after the U.S. State Department strongly condemned the crackdown and a day before the EU revealed plans for a new round of sanctions on Syria. With the Syrian economy weakening by the day, the regime needs to preserve whatever revenue streams it can. By shifting the focus away from Makhlouf the regime could be attempting to protect its assets from future sanctions. Filtering his money through a system of corruption, and calling it "charity" seems like a plausible guise.

Even if Makhlouf's gesture is sincere, it will not have much of an effect. The money he gives away will benefit tens of thousands of people, but that is not nearly enough to assuage the suffering of Syria's 23 million citizens.

Ultimately, protestors weren't convinced by the regime's attempt at appeasement. On Friday at least 16 were killed when demonstrators once again took to the streets.