Geopolitics

Khashoggi Murder And The Miscalculations Of MBS And Trump

For Westerners, particularly the United States, Mohammed bin Salman had represented the hope of a kingdom finally prepared to open to the world. The murder of Jamal Khashoggi demonstrates the contrary. Donald Trump will not escape this unscathed.

Protestors at the entrance of Saudi Arabia consulate in Istanbul
Protestors at the entrance of Saudi Arabia consulate in Istanbul
Dominique Moisi

RIYADH — Values or interests, ethics or realpolitik? The murder of journalist Jamal Khashoggi by a Saudi commando is the perfect illustration of the dilemma that's at the heart of any reflection on international politics.

Not only is Saudi Arabia a country that the Western world sells arms to and buys oil from — it is also a key to the regional balance of power in the face of Iran. It is also a crucial element for anyone concerned about the evolution of Islam in the world. It is a country that looked to finally be on the path of reform.

For the first time, a young, modern and energetic prince, Mohammed bin Salman (MBS), seemed determined to tackle the corrupt shackles that have long paralyzed Saudi Arabia. Western countries, first and foremost the United States, were eagerly awaiting this change in the political trajectory of Riyadh. How not to be seduced by this prince who is so different, so convincing and who is, by his considerable purchases of arms, a contributor to the reduction of the American debt?

The Sunni world had found a leader, while Shia Iran has become a rival worthy of the title. Egypt was out of the picture. Recep Tayyip Erdogan's (non-Arab) Turkey — despite its NATO membership — was a very thorny partner. For Donald Trump, who intended to break the political balance between Saudi Arabia and Obama's Iran, MBS was a "gift from the gods."

salman_saudi_khashoggi_turkey

Prince Mohammed bin Salman — Photo: The White House

Admittedly, MBS took serious political risks in Yemen, not hesitating to shed the blood of innocent civilians, as if to compensate for the weaknesses of his army. Admittedly, the "kidnapping" of the Lebanese prime minister, as well as the episode of the hostage-taking of the "princes' inside Saudi Arabia, had struck a minor chord in the world for their (relative) brutality and radicalism. But by going after other wealthy Saudis, the young prince wanted to send a clear message: the fight against corruption had become one of the priorities of the regime.

In the Khashoggi case, the message could not be clearer: if you are a dissident or mere critic of the regime, you now know the fate that awaits you. You dream of a "democratic revolution" in the Arab world? I will leave no room for you to pursue such a notion. We must not confuse changes from above with revolution from below. As for me, MBS, I am the absolute master of the tempo of reform.

"The tact in audacity is to know how far you can go, and when it's too far." The Saudi Crown Prince is impulsive, perhaps lacking maturity, and certainly encouraged by his special relationship with Donald Trump and his son-in-law, Jared Kushner, but until now he's been too far away. But now the distance that allowed the world to turn a blind eye has vanished, as one cannot abduct with impunity a prominent journalist, not simply a Saudi journalist, but a columnist at The Washington Post — and have it carried out in a rival country like Turkey.

The murder of Jamal Khashoggi produced two collateral victims.

The crime, barbaric in its extreme brutality, was as shocking as the choice of the target. Also naive: it was easy to foresee that the consulate of Saudi Arabia in Istanbul was well-monitored, allowing the Turkish authorities to follow a live murder, with the details skilfully and gradually revealed, step by step afterward. Erdogan has had the good luck to be able to isolate his Saudi rival, while passing along the following indirect message: "In Turkey, we can put journalists in prison, but we do not massacre them and we do not dismember their bodies as the Saudis do. "

Moreover, 17 years after the 9/11 attacks, the world is not ready to passively accept the arrival on a foreign territory of a Saudi "death squad." The Crown Prince, confident in the strength of his special and "familial" ties to Donald Trump's America, believed himself not only above the law but also strategically and economically invulnerable. Who would take — as Canada has courageously done — the risk of Saudi sanctions?

"Do not provoke me with your human rights, otherwise you will not do business with me." But the Saudis need America more than America needs them. Washington now has energy independence, thanks to its oil and shale gas. Riyadh's army is totally dependent on the U.S. The balance between the two partners no longer exists, as long as it has ever existed.

One can think that the murder of Jamal Khashoggi produced two collateral victims: a principal, MBS, a secondary, Donald Trump. Will the Saudi prince, who does not lack enemies in the royal family, have the means to resist the pressure of all those who want his departure? Is MBS not driving Saudi Arabia to isolation, then chaos? The Saudi Crown Prince now appears to many investors as too risky. What might he do next?

Trump does not come out unscathed. "You do not put all your eggs in one basket," says popular wisdom. But that's what Washington did with Saudi Arabia. In trying to create privileged, personal ties with "problematic despots', was the American president taking unnecessary risks?

Diplomacy is not a science, it is an art that presupposes a mixture of vision, prudence and experience. One cannot improvise Talleyrand or Bismarck. And finally, it is never realistic to be too cynical.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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