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Syria - Corruption and Government Transparency

Corruption continued to be a pervasive problem in police forces, security services, migration management agencies, and throughout the regime. There were no reports the regime sought to combat the widespread corruption it helped perpetuate. Freedom House reported foreign allies benefited from opaque government contracts and trade deals. Basic state services and humanitarian aid reportedly were extended or withheld based on a community’s demonstrated political loyalty to the regime, providing additional leverage for bribe-seeking officials. Individuals in government-held territory who sought to expose or criticize official corruption faced reprisals including dismissal from employment and detention, according to Freedom House.

Human rights lawyers and family members of detainees stated regime officials in courts and prisons solicited bribes for favorable decisions and provision of basic services. Numerous NGOs reported families of arbitrarily detained or forcibly disappeared persons faced requests for bribes for information on the whereabouts and fate of their loved ones or to secure their release, assaults and blackmail by individuals claiming to have information on or be able to influence the fate of the missing person, and a black market in fraudulent documentation. In July, after leaks revealed widespread corruption in the Military Intelligence division – including bribery and financial exploitation of individuals seeking information from the regime or detainees seeking their release – the regime replaced at least eight heads of intelligence branches, according to local media.

There were multiple reports regarding corruption in Latakia Governorate during 2023. In March, regime-linked media stated preliminary investigations into forgery in the Latakia Customs Secretariat included more than 20 cases valued over 20 billion SYP ($2.7 million). In September, local media reported the head of the Latakia City Council disclosed five corruption cases involving the misappropriation of billions of SYP in service and local project funds.

Citizens sometimes had to pay bribes to brokers to secure passport appointments. On July 26, local media reported the regime’s 40-day lead time for appointments led to passport brokers in Damascus charging high fees for expedited service. Although the regime claimed the reason for the wait was a shortage of passport printing paper, one broker opined the regime implemented the delay to ensure persons applied for an expedited passport, which cost more.

The regime sought to control production and distribution of narcotics, while selectively enforcing relevant laws, to enrich regime officials. Entities with known or suspected links to regime officials and the terrorist organization Lebanese Hizballah reportedly produced and trafficked illicit narcotics in the country, particularly the stimulant known widely as captagon. Media outlets and NGOs reported the Fourth Armored Division of the Syrian Army, headed by President Assad’s brother Maher, oversaw much of the production and distribution of captagon. Al Jazeera reported in May the production and smuggling of captagon reportedly brought in billions of dollars for President Assad, his associates, and his allies. Throughout the year, authorities in Europe and the Middle East seized at least 250 million captagon pills originating from regime-controlled areas of the country.

The law provides criminal penalties for official corruption; however, the government did not implement the law effectively. There are no laws providing for public access to government information, and the government granted no access in practice. There were reports of government corruption during 2010, and the World Bank's Worldwide Governance Indicators reflected that corruption was a problem. Notwithstanding the investigation and dismissal of scores of mid- and low-level officials for corruption during the second half of 2010, many other officials continued to engage in corrupt practices with impunity.

Industry experts reported that 60 percent of all business transitions are conducted in cash and that nearly 80 percent of all Syrians did not use formal banking services. Despite Syrian legislation that required money-changers to be licensed by the end of 2007, many money-changers in 2010 continued to operate illegally in Syria’s vast black market, estimated to be as large as Syria’s formal economy. Regional “hawala” networks remained intertwined with smuggling and trade-based money laundering, facilitated by notoriously corrupt customs and immigration officials, raising significant concerns that some members of the Syrian government and the business elite were complicit in terrorist financing schemes.

Syria is well known for its corrupt business environment, which denies the Syrian people economic prosperity and other freedoms. The considerable role the Asad family, their inner circle, and the Syrian security services exert over the economy, coupled with the absence of a free judicial system and the lack of transparency, concentrates wealth in the hands of certain classes and individuals. In turn, these classes and individuals depend upon this corrupt system for their success and fortune. Syrians without these connections are unable to improve their economic standing, and suffer as a result of policies implemented by an unaccountable regime.

The corrupt classes have a symbiotic relationship with the Asad regime - both profit from their relationship and neither could function without the other. members of Syria's Sunni community are quick to point out, the corrupt classes are preventing more progressive elements, including many businessmen who have received their college and post-graduate training in the US and Europe, from fully participating in the economy. The Asads run Syria as a family business, and the corrupt classes are the ones that make the business function. Identifying where the family ends and the corrupt classes begin can be difficult.

The corruption which starts at the top filters down through all levels of business. Members of Damascus' Sunni business elite, many of whom have an axe to grind with the regime because of their class's continued dimished role, complain that a predominantly Allawite "corrupt class" has become entrenched over the past 30 years and is using the corrupt system to dominate all levels of business. They contend that the members of the corrupt classes are well-known and that any Syrian could develop a list of the 50 most corrupt. They state that the corrupt classes have varying levels of influence and power in the government, and that the most powerful are in President Asad's inner circle. They further state that all levels of the corrupt classes are connected to Syrian security and military intelligence, which they use to gain monopolistic and extra-legal control of domestic markets.

The business ethos in Syria has deteriorated over the past 30 years due in large part to the influence of the corrupt classes. It is becoming difficult to compete unless one is willing to adopt their methods. Many aspiring businessmen who lack wealth and influence feel compelled to get their start by becoming vassals to the corrupt classes, often begining as foot soldiers in their patrons' illicit operations and then, after proving their worth, are allowed to spin off their own business enterprises. The strong link between the corrupt classes and the regime, particularly with the Syrian security services, acts as a barrier to entry for those who are not similarly connected.

The security services provide these businessmen with protection and cover to engage in fraudulent import schemes, lucrative smuggling operations and "muscle" to take over businesses and intimidate potential competitors. In return for these services, the officials in the security services receive kickbacks all along the business chain. Individuals related to the heads of the security services attempt to control businesses through blackmail.

Saleem Altoun, aka Abu Sahker, was a Christian from Lattakia who began his career in the 1960's as the bodyguard of former Syrian Prime Minister Yousef Za'en. During the 1980's he became head of imports for the Military Housing Establishment, a position much saught after because of the lucrative kickbacks associated with it. As such, Altoun was responsible for procuring the material needed to construct barracks for the soldier as well as houses and factories for Ba'ath Party members and military brass, realizing spectacular profits for his trouble. Under the protection of the security services, Altoun was also allegedly heavily involved in smuggling, bringing millions of Syrian Pounds (SYP) across the border into Lebanon where he exchanged it for hard currency.

In the mid- to late-1980's, the Syrian government arrested Altoun for allegedly forging import documents after contacts contend that his patronage ran out and he was in a position to be held liable under one of the Syrian government's periodic anti-corruption campaigns. He served his sentence in a posh cell with full access to the outside world. Proof of his continued influence was his son, Sahker Altoun, General Manager of the Zeina and Altoun Trading companies and a leading Damascus businessman. Sahker built on his father's business base and now is the exclusive agent for Hyundai and Jaguar in Syria's lucrative automobile import sector.

The maternal and paternal cousins of President Bashar Asad, Rami Makhlouf and General Dhu al Himma as-Shaleesh, respectively, have developed significant economic power bases that are increasingly political as well. Headed by Mohammad Makhlouf, the Makhlouf family rose from humble beginnings to become the financial advisor to Hafez al-Asad after the former President married Makhlouf's sister. The family has established a vast financial empire in the telecommunication, retail, banking, power generation, and oil and gas sectors. Though Mohammad Makhlouf played a clearly subservient role to the elder Asad, he and members of his family have become more assertive politically since his nephew Bashar has ascended to the Presidency. Rami is the caretaker of the family's investments and is widely considered to be the poster boy of corruption in Syria. Syrians used to whisper "Makhlouf, Makhleef," playing on the Arabic word "khaleef," which in English means "heir," to indicate the extent of Rami's influence. Many business contacts have relayed to Post how Makhlouf has used the Syrian security services and his personal relationship to President Asad to intimidate and steal promising business ventures from them.

Members of the Shaleesh family, specifically Zuhayr, aka Dhu al-Himma, who as of 2005 was the head of Presidential Security, and his nephew Asif Issa, were comparatively as powerful but possibly more corrupt than the Makhloufs. Unlike the Makhloufs, who attempted to burnish their reputation among average Syrians with their investments in Syria's cellular phone network and the chain of duty free stores along Syria's borders, the Shaleeshes made no effor to create a friendlier image. As well as being active in the automobile and construction sectors, the Shaleesh family had engaged in a wide range of illicit activities including smuggling and money laundering.

In June 2005, the US Government formally established the family's involvement in Syrian government policies to undermine US interests in Iraq when it designated the uncle and nephew and their company, SES International Corporation, under E.O. 13315 for procuring defense-related goods for Sadaam Hussein in violation of international sanctions. According to the US Treasury, SES helped the former Iraqi regime access weapons systems by issuing false end-user certificates to foreign suppliers that listed Syria as the final countr of destination. SES International then transshipped the goods to Iraq.

Prior to the 2003 war in Iraq, the Syrian government awarded Shaleesh's SES International exclusive rights on contracts to supply th Iraqi market with goods from construction materials to detergent. SES then sold the contracts to Syrian and foreign companies for a substantial fee. Contacts further state that Dhu al-Himma Shaleesh received a significant amount of the $580 million USD in Iraqi assets that the Syrian government illegally paid out to Syrian claimants. (Note. The Syrian government has yet to resolve this issue with the Iraqis though it blames the stalemate on Iraqi inaction. End note.) Others assert that SES has established dominance in the construction materials sector over the las year and that it continues to expand its business interests seemingly unfettered by U.S. sanctions.

President George W. Bush issued E.O. 13460 on February 13, 2008 to take additional measures to address the threat to the national security, foreign policy, and economy of the United States posed by certain conduct of the Government of Syria. This new authority built on E.O. 13338, which was issued by President Bush in May 2004, by targeting activities that entrench and enrich the Syrian regime and its cohorts thereby enabling the regime to continue to engage in threatening behavior, including actions that undermine efforts to stabilize Iraq. Corruption by the regime also reinforces efforts that deny the people of Syria political freedoms and economic prosperity, undercut peace and stability in the region, fund terrorism and violence, and undermine the sovereignty of Lebanon.

On 21 February 2008 the U.S. Department of the Treasury designated Rami Makhluf, a powerful Syrian businessman and regime insider whom improperly benefits from and aids the public corruption of Syrian regime officials. This action was taken pursuant to Executive Order 13460, which targets individuals and entities determined to be responsible for or who have benefited from the public corruption of senior officials of the Syrian regime. "Rami Makhluf has used intimidation and his close ties to the Asad regime to obtain improper business advantages at the expense of ordinary Syrians," said Stuart Levey, Under Secretary for Terrorism and Financial Intelligence. "The Asad regime's cronyism and corruption has a corrosive effect, disadvantaging innocent Syrian businessmen and entrenching a regime that pursues oppressive and destabilizing policies, including beyond Syria's borders, in Iraq, Lebanon, and the Palestinian territories."

Rami Makhluf is a powerful Syrian businessman who amassed his commercial empire by exploiting his relationships with Syrian regime members. Makhluf has manipulated the Syrian judicial system and used Syrian intelligence officials to intimidate his business rivals. He employed these techniques when trying to acquire exclusive licenses to represent foreign companies in Syria and to obtain contract awards.

Makhluf is the brother of Syrian General Intelligence Directorate official Hafiz Makhluf, who was previously designated under E.O. 13441. Makhluf is the maternal cousin of President Bashar al-Asad and through this relationship, Makhluf has become a focal point of Syria's telecommunications, commercial, oil, gas and banking sectors. Despite President Asad's highly publicized anti-corruption campaigns, Makhluf remains one of the primary centers of corruption in Syria.

Makhluf's influence with certain Syrian government officials has led to his being able to control the issuance of certain types of profitable commodities contracts. His close business associations with some Syrian cabinet ministers have enabled him to gain access to lucrative oil exploration and power plant projects. Makhluf's preferential access to Syrian economic sectors has led to complaints about him from members of the Syrian business community.

Corruption continued to be a pervasive problem in the police forces and security services. During 2010 there were reports of prison guards demanding bribes from prisoners and their visitors. Visiting family members who paid higher bribes enjoyed visits to detainees without police surveillance. Bribes reportedly ranged from 200 to 3,300 Syrian pounds ($4 to $75). Human rights lawyers and family members of detainees also cited solicitation of bribes for favorable decisions and provision of basic services by government officials throughout the legal process in both courts and prisons. Traffic police officers regularly solicited bribes from drivers, and child laborers reported bribing police to avoid arrest.

There are no public financial disclosure laws for public officials. The prime minister's Central Commission for Control and Inspection is the main administrative body responsible for coordinating and monitoring public sector corruption. Each government body, including the ministries, has a Control and Inspection Department that reports directly to the Central Commission. There is no government body charged with monitoring private-sector corruption.

In August 2010 the government announced that the volume of official corruption during the past 19 months amounted to five billion Syrian pounds ($104 million). However, independent observers claimed the number was much higher. According to Transparency International, corruption worsened relative to the prior reporting year.