BEIRUT (Reuters) - The Hariri family’s pre-eminent role in Lebanese politics is being shaken by a financial crisis at its Saudi construction firm, a development that could dilute Sunni influence in the country and leave Iran’s allies even more firmly in control.
The troubles at Saudi Oger have led to a cash crunch and layoffs in Lebanon’s Future Movement, the political party built with Saudi backing by the late statesman Rafik al-Hariri and now led by his son, Saad.
The party’s woes have led many analysts in Lebanon to ask whether Riyadh may be cutting its losses in a country increasingly dominated by the Iran-backed Shi‘ite Hezbollah despite enormous Saudi efforts to counter it over the years.
“We can’t deny the existence of a financial crisis, which is a reflection of another one that has nothing to do with the organization. It has an indirect link to the crisis of Saudi Oger,” said Rashed Fayed, a Future Movement official who is a member of its policy-making office.
The financial engine behind the Hariri family’s political network, Saudi Oger has been hit hard recently by a slowdown in the Saudi construction sector linked to the drop in oil prices and resulting state spending cuts.
Wage payments to thousands of its workers have been delayed for months, according to Saudi media and the workers themselves. The company has declined to speak publicly about its finances.
Many employees of Hariri-owned organizations in Lebanon also say they have not been paid in months. Sources in the Future Movement said some staff were laid off last week. One source, who declined to be named, said the layoffs aimed to cut costs across the movement to safeguard continued operations.
The situation may reflect a bigger shift in Saudi policy as other countries become more important in its titanic struggle with Iran, notably Syria, Yemen, and Bahrain, analysts say.
Lebanon is one of the places where that conflict first flared: with Saudi support, Hariri spearheaded a political confrontation with Hezbollah following his father’s assassination in 2005.
“Is Hariri part of the past in Saudi, the present, or the future? This is the biggest question surrounding him,” said commentator Jihad el-Zein. Although his party has deep roots in Lebanon’s Sunni community built over decades, “we can’t imagine a political history or presence for it without Saudi Arabia”.
Despite Saudi efforts, Hezbollah’s influence in Lebanon has grown only stronger. Riyadh canceled a $4 billion aid package to the Lebanese army and security forces in February over perceived Hezbollah influence on Lebanese foreign policy.
The Saudi foreign minister said in March the group had “hijacked” government decisions.
While Hezbollah built its legitimacy in the Shi‘ite community on the fight to drive Israel from southern Lebanon, Rafik al-Hariri was building his by rebuilding Lebanon from its civil war. He became more powerful than any of a number of Sunni families that had historically led the community.
An international tribunal has indicted five members of Hezbollah over his assassination. The group denies any role.
Saad followed in his father’s footsteps, becoming prime minister in 2009 until his unity government was toppled in 2011 by the resignation of Hezbollah and its allies. He then spent years outside the country, making only short visits until earlier this year when he returned permanently.
The Hariri family’s network includes media outlets and charitable foundations as well as the Future Movement’s party bureaucracy, a large staff of advisors and regional offices.
Future Movement MP Ahmad Fatfat said financial difficulties were first felt in 2009 “but in the last year it has become more acute”. Public services including health support offered by the party have been cut back, he told Reuters.
“Nothing has been halted completely, but nothing is at the previous level,” he said.
Fatfat was confident the Future Movement would remain politically dominant, however, “because people realize that we defend their real interests, the state, Sunni moderation and coexistence”.
Hariri’s opponents see his financial problems as a harbinger of his political demise. The pro-Hezbollah al-Akhbar newspaper declared on the frontpage of its Friday edition that a “massacre” of Future Movement employees was underway.
The big test will be parliamentary elections expected to be held next year for the first time since 2009, in which Hariri will face a growing challenge from Ashraf Rifi, a former ally who beat established Sunni politicians in local elections in the predominantly Sunni city of Tripoli in May.
Rifi’s tough rhetoric has struck a chord with Sunnis who are hostile to Iran and Hezbollah. Hariri is equally scathing in his public remarks, but his party’s continued participation in government alongside Hezbollah has exposed him to criticism from hawks in the Sunni community.
Rifi resigned from his post as justice minister in February in protest at what he saw as Hezbollah’s domination in the unity government, which is widely seen as a guarantor of political stability. He also criticized Hariri for nominating a Hezbollah ally, Suleiman Franjieh, for the vacant presidency last year.
For its part, Hezbollah is deeply suspicious of Rifi. Its refusal to consent to the extension of his term as chief of police contributed to the collapse of the government in 2013.
While Rifi’s politics have won him admirers in Saudi Arabia, where some see him as a potentially more effective ally than Hariri, he does not have the kind of countrywide presence built by the Hariris over nearly two decades.
The Future Movement is due to convene a conference in October. Fayed, the Future Movement official, said the financial crisis was an opportunity for reform.
A Future activist, who declined to be identified, said Hariri faced a struggle to redefine the movement, forecasting that his dominance would steadily diminish as other Sunni politicians gain ground.
“Harirism was built on pillars -- financial capabilities and Arab Gulf backing. In 2016, political Harirism has neither of these,” the activist said.
Nabil Boumonsef, a commentator in An-Nahar newspaper, said it was too early to say how the crisis would play out for Hariri, who remains the strongest Sunni leader for now. But he warned against him being weakened.
“Hariri is the main moderate Sunni force in Lebanon, and if this political track is damaged, you are damaging Sunni moderation,” Boumonsef told Reuters. “This is very dangerous for Lebanon.”
Writing by Tom Perry; Editing by Sonya Hepinstall