Law Firms

Ritz-Carlton detainees were pressured to give assets to Saudis; BigLaw firm said to aid 1 transfer

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Ritz-Carlton hotel in Riyadh, Saudi Arabia/Andrew V. Marcus (

Influential businessmen who were rounded up and held at the Ritz-Carlton in an anti-corruption crackdown in Saudi Arabia last November were reportedly roughed up and pressured to give the government control of their assets to win their freedom.

Prominent international firms were tapped to aid at least one transfer, including the Clifford Chance law firm and accounting firm PwC, the New York Times reports. Both helped transfer ownership of the private media company MBC, a company Saudi Crown Prince Mohammed bin Salman had sought to buy in 2015. Salman is said to be the architect of the crackdown.

“Corruption has long been endemic in Saudi Arabia, and many of the detainees were widely assumed to have stolen from state coffers,” according to the Times. “But the government, citing privacy laws, has refused to specify the charges against individuals and, even after they were released, to clarify who was found guilty or innocent, making it impossible to know how much the process was driven by personal score settling.”

Detainees held at the Ritz-Carlton could watch television and order room service, but they weren’t allowed to make phone calls or access the internet, according to the article. The government denies the Times’ assertion that at least 17 detainees were hospitalized for physical abuse. One detainee died in custody, and his neck appeared to have been twisted, one source told the newspaper.

According to the Saudi government, the anti-corruption investigation was “conducted in full accordance to Saudi laws.”

Mohammed had initially expressed an interest in buying MBC in 2015, the Times reports, relying on unnamed associates of company leaders. The talks slowed when PwC, also known as PricewaterhouseCoopers, began to scrutinize the company books in October.

Corporate owners and many board members were detained in November. PwC then finished its report, and Clifford Chance drew up the paperwork to transfer corporate ownership, the Times says. Its report relies on anonymous professionals with knowledge of the work.

A Clifford Chance spokesperson did not comment when contacted by the New York Times. One Clifford Chance lawyer involved in the work told the Times the lawyers learned of the detentions from the news media, and the firm was retained after they began. An anonymous PwC executive said the accounting firm had not helped Saudi Arabia track the assets of detainees.

The Times contacted New York University legal ethics expert Stephen Gillers for his take on the work by Clifford Chance. He said the lawyers wouldn’t be penalized if they followed local law. “Lawyers take the position that so long as they comply with the law in the nation in which they are representing their clients, they’re acting ethically, even if the same conduct would be illegal or unethical in their home country,” he told the newspaper.

He added that “lawyers can decline to assist conduct that they find morally objectionable even if it is entirely legal.”

Hat tip @EdAdams.

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