It was 3 a.m. and Matthew, an American working for a Saudi prince and living in Saudi Arabia, wanted to go home.
Not to the palace, the place Matthew called “home,” over there.
Home, home. California. Away from princes, million-dollar sports cars, and guns.
Away from Prince Alwaleed.
The problem, Matthew now says, was that every time he got up to leave, a guard – Prince Alwaleed’s guard – put a hand over the gun holstered under his left shoulder and told Matthew to stay put.
So Matthew stayed put.
If you’ve heard of Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud it’s probably because you’ve seen him on CNBC or read about his vast wealth and investments.
Alwaleed, one of Saudi Arabia’s thousands of princes (literally), likes to be called the “Warren Buffett of The Middle East.”
With a reported net worth approaching $20 billion, Alwaleed is number 26 on Forbes’s list of the world’s billionaires.
Alwaleed has that much money in part because, back in 1991, he invested $590 million in a struggling American bank, then called Citibank.
The bet paid off insanely well, turning the nephew of Saudi Arabia’s king into a billionaire many times over.
Then Alwaleed invested in Apple, just before Steve Jobs turned it around. He’s now the second largest shareholder in News Corporation and owns a big stake in Time Warner, too. Just last month, he took a $300 million stake in Twitter, one of the hottest American tech companies.
Prince Alwaleed calls himself the largest foreign individual investor in the United States. And he may well be.
With ownership comes power.
During the banking crisis of 2008, CNBC set up a remote on Alwaleed’s compound in Saudi Arabia, asking him – still Citi’s top shareholder – whether he would support the company’s hated CEO and board. Even at night, Alwaleed appeared in his trademark tinted glasses. He sat in a recliner. The camera lights lit up camels and horses behind him as he announced his continued support for what was then one of the most loathed management teams in America.
In Saudi Arabia and around the globe, Alwaleed is a high-profile philanthropist – an activist even. He donated millions of dollars to the victims of 2004’s Tsunami in Indonesia, and he’s a vocal proponent of women’s rights in the Middle East. His spokesperson says he has donated over $2.4 billion to charities in 70 countries during the last 30 years. In the Western press, at least, he is considered a contender for the Saudi crown.
And yet, Alwaleed is a controversial figure.
After a group of Saudis flew aeroplanes into the World Trade centre towers in New York on September 11, 2001, Alwaleed donated $10 million toward the city’s relief. But then Mayor Rudy Giuliani returned the gift after Alwaleed said in a press release that the U.S. might want to reconsider its stance toward Palestine.
And there have long been stories about Alwaleed’s bizarre eccentricities and behaviour.
So who is this mysterious international billionaire who is buying up stakes in America’s most-important companies? What’s he actually like in person? What’s he like to work for?
To get a sense of this, we spoke to a handful of Alwaleed’s former employees as well as a source who worked for Alwaleed’s son, Prince Khaled.
Prince Khaled’s former employee, a ~30 year-old American we’re calling Matthew, asked us to use a pseudonym. None of the other sources would allow us to use their names, either.
One said: “I fear for my life and the safety of my family.”
Matthew had just graduated high school in the summer of 2000 when he met Prince Alwaleed’s only son, Khaled, in San Francisco. Matthew and Khaled met because they had a friend in common; a popular musician. Matthew had known the musician growing up. Khaled knew him, Matthew says, because when Khaled was a kid he’d gotten into a bad jet-ski accident, and while he recovered his father flew in musicians from around the world to entertain him.
Matthew and his musician friend met Khaled at the Fairmont Hotel in San Francisco – which, at the time, was part-owned by Prince Alwaleed. Matthew hung out with Khaled’s entourage for days. Thanks to a shared interest in big, flashy American muscle cars, Matthew and Khaled hit it off.
“I had no clue how a young kid like him was staying in such a nice hotel room. I didn’t understand that. But I wasn’t thinking about that. We both loved cars,” Matthew says now.
The two kept in touch when Matthew went off to college in Texas. At one point, Matthew says, Khaled wired him $300,000 in cash so that he could work on “projects” they’d discussed. Matthew used the money to buy and customise an Escalade and a Dodge Ram SRT-10 for Khaled. Matthew visited Khaled in Miami one summer. When he graduated, Khaled invited him to Saudi Arabia.
“I said OK, cool. I went out there. I stayed there.”
“It’s his kingdom. He can do what he likes.”
Given how rich Alwaleed is, it’s not surprising to hear that his life is insulated from the morality and sensibilities of the outside world–especially the world outside Saudi Arabia.
All you need to hear to understand that are stories about Alwaleed’s dwarfs.
Almost every source we spoke to, including Alwaleed’s official spokesperson, confirmed that, like a medieval monarch, Alwaleed keeps in his entourage a group of dancing, laughing, joking dwarfs. One source called them “jesters.”
Alwaleed owns a fleet of aircraft, including a 747 and an Airbus A380. One time, a source told us, when the Prince was trying to decide what to buy next, he decided to give the choice to his dwarfs – teaching one the word “Boeing” and the other the word “Airbus.” He called a big meeting with all his aviation advisors and had the dwarfs speak. One said “Boeing” in a funny, jesterly way. The other said “Airbus” in the same manner. The source says Alwaleed laughed and went with the Airbus.Another time, in 1995, according to a source, Alwaleed taught the dwarfs to say “my way or the highway,” and said he would pay the one who said it best some large sum of money.
Mostly the dwarfs serve to entertain Alwaleed in that kind of silly manner.
“We all had our position that we did for [Alwaleed],” says one former employee. “They were entertainers. They did do some crazy things – they’d dance, they’d chase each other around.”
Sometimes, the play turned darker.
One source, who left Alwaleed’s employ with a letter of recommendation from the Prince, says that at least once, Alwaleed set up a “midget-tossing” contest, promising money to whomever could throw the little people the farthest. There were pillows.
Another time, says this source, at one of the parties Alwaleed would throw in the desert, he tossed $100 bills into a bonfire, encouraging the dwarfs to run into the “raging fire” and pull the money out, “scorching themselves” in the process.
One former employee of Alwaleed’s – who left under good circumstances, and had very little bad to say – says that westerners might not understand but that the Prince’s behaviour toward dwarfs is actually a charitable act.
“The reason Saudis have these people [dwarfs] is that they believe they are lucky. It’s just a very traditional thing. There was lots of laughter and they were enjoying it. They were partaking in it and wanting to partake in it, to see how much enjoyment it was creating – kind of like a circus situation.”
“I was quite shocked at first to have them around,” the source continues. “I remember being like oh my gosh, but then one of the entourage explained to me that in Saudi culture, they are not seen the same way we see them in Western culture. They’re still seen as freaks or, you know, people with issues, so they would be out in the streets. They would be the people that are poor. So he’s given them a paying salary. He’s given them a job and a work ethic, and you can’t really fault that. Lots of other cultures have bizarre – in our minds – cultures and traditions and things.”
“I never saw any of them being thrown,” says this source.
Alwaleed’s chief spokesperson, Heba Fatani, explained the dwarfs this way.
“Little people (or “dwarfs” as they are called by some) are often among disadvantaged individuals who come to ask for HRH Prince Alwaleed assistance as a philanthropist.
“You need to understand that in Saudi Arabia people of small stature traditionally have been treated as outcasts and alienated by the society and they come to HRH Prince Alwaleed to ask for his help since he is renowned for his generosity. HRH Prince Alwaleed invites them to stay for whatever meal he is having together with different people asking for help, medical assistance, financial assistance, etc.”
Besides keeping dwarfs in his court as jesters, Alwaleed’s insulation and wealth sometimes leads to other types of startling behaviour.
He has a tendency to be awkward about race and ethnicity. One former employee recalls Alwaleed asking him whether Americans consider Egyptians “niggers” because they are African as well as Arab.
Alwaleed, according to several sources and reports, has emails sent to him printed out so he can write replies directly onto the paper in green ink.In one such email obtained by Business Insider, Alwaleed, in handwriting several sources confirm to be his, writes to German firm Lufthansa Technik: “The Nazis blinked big time. My final offer on [a] take or leave it basis will need the so-called discount to be 750,000 Euros not 450,000 Euros.” In the same green ink, there is a little swastika drawn between the words “Nazis” and “blinked.”
The Prince’s employees quickly get used to a world where normal rules do not always apply.
“It’s his kingdom,” says one former employee, who left on bad terms. “He’s a royal. He can do what he likes in that country.”
Sometimes, sources say, Alwaleed does what he wants outside of Saudi Arabia, as well.
Alwaleed is a big time hunter. Accompanying Kerry Dolan’s excellent 2009 Forbes profile of Alwaleed, “I Just Can’t Wait to Be King,” there’s a photo of several women who work for the Prince. In it, they’re all standing in high heels and smart business attire in a giant atrium surrounded by stuffed animals. A source tells us these animals were shot by the Prince on hunting expeditions. There’s a giraffe, a lion, a zebra, and even an elephant, which are typically illegal to hunt.
According to a former employee who left Alwaleed’s employ on good terms, Alwaleed is a poor hunter who does little to comfort the animals he maims, but does not kill, with badly aimed shots.
This source says that, during a hunting trip to South Africa in November 2010, Alwaleed shot one animal and let it suffer for so long – 15 minutes or more – that the safari’s official “professional hunter” finally demanded that the Prince put the animal down “now.” Alwaleed allegedly refused, telling the professional hunter “No, no. Leave it.” Then, this source says, Alwaleed asked the dwarfs in his entourage to hang from the dying animal’s horns so a photograph could be taken.Former employees describe Alwaleed as narcissistic boss – one that demands loyalty from his workers, but can, at times, show little in return. They told stories about employees who, when they had to quit their work for Alwaleed for whatever reason – pregnancies, weddings, family illness – were promptly dismissed and refused owed pay. Some of these employees were themselves treated this way. Others, who still shared these stories, say they ended their employ with Alwaleed amicably and profitably.
Here’s a typical story, similar to many we heard:
“Previous to my start at Kingdom [Holdings, Prince Alwaleed’s company], there was a chef and his wife. They went to Alwaleed, and said ‘Your Highness, we have an announcement to make. My wife is pregnant.’ There was a long pause. Then Alwaleed said, ‘Well, who is going to serve me my food?’ The chef said, ‘Your Highness we thought you’d be happy.’ ‘No,’ he says. ‘I will pay you if you want to get an abortion.”
Former employees said Alwaleed also has a bent for theatrics. One said that during a contract negotiation, Alwaleed pulled a gun out of his drawer, pointed it at his own head, and said “You’re holding a gun to my head!”
One former employee told us that Alwaleed also has high standards for his employees. This employee also agreed that Alwaleed has a “narcissistic streak.” But she said this trait is common among the powerful and the wealthy, and she speculates it’s part of the reason they reach that position. She says Alwaleed’s narcissism in particular fuels his “around the clock” work ethic. She says she never found him to be an unfair employer, and that the one time she screwed up, he was harsh, but reasonable.
“I really enjoyed working for him. He expects a certain level [of competence] and we all know that. There were times when we were pushed harder than normal. If you don’t like it, you can leave. But you know, it’s his train set.”
In September 2011, a Spanish court announced that it would reopen a rape case against Alwaleed, in which he was accused of having drugged and forced himself onto a 20-year-old model on his yacht off the coast of Ibiza.
None of our sources – even those with the worst things to say about him – believe those allegations to be true. One source says he or she has firsthand knowledge that Alwaleed was not even in Spain during the time the attack supposedly took place.
Matthew loved cars, and for his first few months in Saudi, they were enough to keep him happy and busy. Khaled’s father, Prince Alwaleed, gave him his inheritance early, and Khaled spent millions of it on very expensive cars: Bugattis, Lamborghinis, Ferarris, Aston Martins, and dozens more. Matthew and Khaled would take each of them to the track and drive them – fast.
Matthew became Khaled’s point man with the U.S. media. DuPont Registry came over and profiled Khaled’s car collection. MTV did an episode of “The Fabulous Life Of…” about it.
Restless to do more than live the life of a member of a billionaire’s entourage, Matthew started helping Khaled try to invest some of his fortune. He started talking to major American retailers about importing their businesses to the Saudi Arabia. He approached fast-growing Silicon Valley startups about investing.
Matthew ran into Prince Alwaleed all the time. Every morning, Matthew would go on a jog and see Alwaleed driving past in a black Range Rover.
“If you see him directly, you kind of salute him and all this weird crap. I’m not Saudi, I just felt obligated.”
“The first time I ever laid eyes on him, we were coming up into [Alwaleed’s office tower], and I was coming out of the elevator really fast to get to a meeting with Khaled and I literally almost ran right into him.”
“I’m 6’1, and he’s pretty short, so I literally almost bumped my chest into his face and was like, whoa, sorry, and I just moved on. I looked back and he looked at me like what the fuck, you don’t know who I am. So then I had to go back and say sorry and all that stuff, kiss his arse.”
There was another time, at an event out in the desert.
“We were inside of a tent and there was a huge gust of wind, and the tent started blowing down and one of the big poles was falling down and myself and two other guys were grabbing to pull it straight and Alwaleed was acting like nothing is wrong, there’s no problem, trying to act like a hardass.”
“I looked over at him and said, ‘Get out! It’s falling!’ and then finally he started running and we all ran and the whole thing collapsed. We all jumped in the same car. I ended up in the same car with him and he’s asking, are you OK, do you need stuff to get out of your eyes and I was like, no I’m cool, don’t worry about it. That was the only time I experienced him really being nice or sincere.”When he wasn’t working or driving fast cars, Matthew lived in a spare house which was about 15,000 square feet.
“It’s a fun thing,” he says now of that time. “You’re flying on private planes and doing all this stuff, but at the end of the day, I never got caught up in it, because whenever I would catch myself, I would think, ‘this shit isn’t mine man. Don’t enjoy it. It’s not yours. Let them show their toys and have fun but do not get wrapped up in this.”
A philanthropist and activist well-aware of his global image
Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud is an active and global philanthropist who gives away millions of dollars.
Unlike many powerful Saudis, Alwaleed also busily promotes the rights of women in his country. 65% of his employees are women. In a country where women are not allowed to drive cars, Alwaleed has made it very public that he employs a woman pilot.
He is an active campaigner against perceived vices like drug use, smoking, and alcohol use.
According to the Kingdom Holdings website, the Alwaleed Bin Talal Foundation also provides medical and financial relief for the poor in Saudi Arabia, Lebenon, and around the globe.One former employee says Alwaleed’s philanthropic efforts during her tenure left her floored.
She especially recalls his work after a massive tsunami struck Indonesia in 2004.
“I think that any person that’s in the public eye like that is going to get a bad rap at some point, it’s impossible not to. I think the good stuff that he does shouldn’t be forgotten. After the Tsunami, we flew around and he gave money for two weeks to all the countries that were affected by the Tsunami. He doesn’t have to do that sort of stuff.”
Some of Alwaleed’s former employees, however, allege that his charity and activism is more for show – and eventual profit – than it is altruistic.
“He’s a huge philanthropist, but it’s all for the press,” says one former employee who left Alwaleed under good circumstances.
“I was there over 5 years. I went to every African country. Cash was given out in millions of dollars. They would go for a meeting and we would give a bag man millions of dollars of cash. And then we’d return 2 or 3 years later and guess what, we’re going to build a hotel there. Anything [Alwaleed] does worldwide is for a reason.”
Publicly available news stories and press releases show that Alwaleed probably does operate this way.
In 2003, for example, Alwaleed’s foundation donated about $1 million toward Ghanian charities including an early child development centre, an education fund, a children’s preschool program, and a clinic to study AIDS, malaria and malnutrition. In 2006, Ghana’s president awarded Alwaleed a “Companion of the Order of the Volta” medal. Then, in 2011, Alwaleed opened a $120 million hotel in Accra, Ghana.
Sources also question the sincerity of Alwaleed’s activism for women. They suggest its all part of an effort to ingratiate himself with the West, where he does lots of business.
Their case-in-point: Alwaleed and his wife, Princess Ameerah, make a big show of how the Prince uses a female pilot, even though women aren’t allowed to drive cars in Saudi Arabia.
But several sources say this pilot, Hanadi Zakariya Hindi, has hardly flown any of Alwaleed’s aircraft, certainly not his massive jets. They say that when she was hired, Alwaleed told his aviation staff that she never would.Once, according to a source, Alwaleed realised Tony Blair would be meeting him after a flight to London. He wanted to present Hindi as the pilot who flew him in, but there was a problem: She did not own a pilot’s uniform. So there was a massive scramble by Alwaleed’s staff to get her one. A uniform was found, and she descended the flight stairs in it, all dressed up for appearances.
Alwaleed’s official spokesperson says Hindi is currently “undergoing further training in Florida.”
Does it matter if Alwaleed’s charitable activism is purely altruistic?
What’s more important is that a wealthy, powerful Saudi has found a way to do something for people who need help – including women in his home country.
One former employee says she “respects a lot” of Alwaleed’s efforts, even if he is “flawed.”
“He could quite easily not do those sorts of things,” she says.
“He is flawed. He does make mistakes. But I think the good things he does often get missed because it doesn’t draw such a good story.”
Matthew says his time in Saudi ended in an explosive confrontation with Alwaleed that seemed to come out of nowhere.After a few years of living for months at a time in Saudi – working mostly in business development for Khaled’s private equity firm – Matthew began to build a social life there.
He met a girl who worked in Alwaleed’s aviation department, and they decided to get married.
On April 30, 2010, Matthew got a text message from Khaled. A screenshot of it sent to us by Matthew reads: “Hi, Just got a call from dad’s palace he wants to see me and you at 8pm tonight.”
Sources close to Alwaleed employees say Matthew was probably summoned for two reasons. One: Matthew’s engagement to a woman in Alwaleed’s aviation department meant that she would be quitting, and Alwaleed is said to get very angry when employees quit him. Two: Matthew can be abrasive, which he had been to some of his girlfriend’s female coworkers.
Alwaleed is also said to be very protective of the women who work for him. So when some of them complained to Alwaleed about their coworker’s rude boyfriend, he might have wanted to put on a show of being angry and fatherly.
Matthew says he showed up to the palace that night not knowing what to expect.
He says that what he encountered was an enraged Alwaleed.
“When I first came in, he sits down. He’s shaking. I don’t know if you’ve ever seen him, but he twitches all the time when he’s real pissed.”
“So we’re sitting there and it’s the three girls, myself, Prince Khaled, the bodyguard and a bunch of other bodyguards around.”
“He sits down, he looks at me, looks me up and down and goes, ‘don’t you know we’re terrorists?'”
“He’s yelling at me. ‘Don’t you know we cut people’s heads off?'”
“He lowers his glasses. He goes, ‘you know what that means, right?'”
“I said, ‘Yeah, I know what that means.'”
“He says, ‘You know I’ll have you beaten in a room, no one will do anything about it.'” “He picked up the phone next to him and slammed it down and said, ‘I have a room full of money to insure that. I have people that will take you out to the desert.'”
“Then he put me in a back room and locked me in. I wasn’t allowed to leave. I had to text message to use the bathroom.”
“He would come in and start yelling at me more there. I said to him, ‘I want to get out of here, I’m leaving. I don’t have to take this shit from you. I’ll march down to the embassy and I’ll find my own way home.'”
“When I would say that, he would say something in Arabic, and then one of his bodyguards would stand up and put a hand over his gun and say, ‘sit, sit, sit you’re not going anywhere, just sit.'”
Matthew says he was held that way till late the next morning. He says he wanted to leave Saudi Arabia that very day, but two things prevented him. Alwaleed’s people had his passport, and he wanted to leave only after his girlfriend and soon-to-be fiancée could safely leave, too.
Down to just $9 billion isn’t broke
According to his official biography, Prince Alwaleed scored his first big money when he helped Korean developers build an $8 million “bachelor’s club” at a Riyadh military academy. His fortune bloomed into hundreds of millions of dollars as he began working with other foreign developers looking to invest in Saudi Arabia.
Next, according to the official recounting, Alwaleed started investing in Saudi banks.
Then, in 1991, Alwaleed scored big. He invested $590 million in Citibank, a failing American bank. Citibank turned around, became Citigroup, and turned Alwaleed into a billionaire many times over.
To this day, he remains Citi’s largest shareholder…and that is why, after the banking crisis of 2008, so many are sceptical that he remains as wealthy as he claims.
Citigroup shares have collapsed 90% in the past few years.
The Forbes billionaires list estimates Alwaleed assets are worth almost $20 billion.
But in 2010, Vernon Silver of Bloomberg wrote that some auditors suggest Alwaleed’s firm, Kingdom Holdings, might have a true market capitalisation smaller than the $9 billion it claims, thanks mostly to unrealized and unreported equity losses.
In 2009, Forbes reported that Alwaleed’s stake in Citi may be worth as little as $650 million – down from its peak of $7.5 billion in 2000. Citi stock hasn’t recovered much since 2009.
Alwaleed’s people say he’s just as wealthy as ever, thanks to a diversified portfolio of assets beyond American equities.
But former employees for Alwaleed tell us it’s clear that the Prince has, at the very least, been cash-strapped in recent years.
One source, who left Alwaleed’s employ on good terms, says employees went through a two year period where they were paid late. This person paid large bills for Alwaleed and says that there was a time when he or she had to go to “different banks” to withdraw enough money to pay large bills.
“Bills were late. Bills were not being paid. We were working on extended credit. Cash flow was a problem. I was having to answer to the creditors.”
This source estimates Alwaleed’s net worth shrank from $22 billion to $9 billion thanks to the banking crisis.
Another source says that Alwaleed didn’t help himself by mismanaging purchases and sales of big expensive aeroplanes. One example: This source says the Prince bought an Airbus in 2006 for $34 million, spent $11 million getting it refurbished, and then sold it a year ago for just $12 million.
Briefed on some of these claims, an Alwaleed spokesperson said: “HRH Prince Alwaleed owns a Boeing 747-400, an Airbus A-380 and a Hawker Sidley aircraft.”
Alwaleed is obviously still very rich.
“Down to $9 billion is definitely not broke,” says one former employee, “but when you go from $22 billion to $9 billion – that’s traumatic.”
Matthew left Saudi Arabia for good in August, 2010.
Later that fall, he got an email from Khaled, asking for the contact information of some of the partners Matthew had set him up with. Matthew replied, complaining that Khaled had not stood up for him when Prince Alwaleed made his threats. In an emailed reply, obtained by Business Insider, Khaled did not deny the events of that evening.
At the beginning of 2011, Matthew and his lawyer reached out to Alwaleed and his people, threatening a lawsuit over the way he’d been treated.
An American lawyer for Alwaleed, Ty Cobb, responded to Matthew’s attorney, as follow: “We promptly investigated the story apparently presented to you by [Matthew], and it is without merit and actively disputed by multiple witnesses familiar with [Matthew].”
The letter from Cobb finishes with a promise to sue Matthew if he continued “this unsavory process.”
Briefed on Matthew’s allegations quoted in this story, Prince Alwaleed’s official spokesperson said:
“[Matthew] approached HRH Prince Alwaleed a few years ago with a fanciful tale containing wild allegations and threatening a lawsuit. His alleged claim proved baseless. Nothing ever came of it. Any person in Prince Alwaleed’s position becomes subject to claims from all sorts of people who presumably have their own motivations.”
Earlier this week, after addressing some topics in this story in detail, a spokesperson for the Prince replied to a request for responses to other claims by dismissing them as “outrageous,” “salacious,” and “false allegations.”
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