How a former Saudi official got enough money to buy eight luxury condos in Boston to remain a national-security secret
A federal appeals court ruled yesterday that there's just too much risk of top-secret government information being released to let the current Saudi government try to wrest control of eight condos in One Dalton Place, the Mandarin Oriental and Millennium Place from a former Saudi anti-terrorism official who backed the wrong prince in a succession battle.
In 2021, a judge in US District Court in Boston dismissed a lawsuit brought by a Saudi government corporation to, at a minimum, seize the condos owned by Saad Khalid Aljabri and his two sons pending the outcome of a separate suit in Ontario over the $3.5 billion the family allegedly pilfered from the Saudi government before Aljabri was booted from his government anti-terrorism post by the government of Mohammed bin Salman because he had backed bin Salman's main rival, Crown Prince Muhammad bin Nayef.
The suit was brought by the Sakab Saudi Holding Co., which despite its anodyne name, was a Saudi government agency with the goal of "funding and undertaking clandestine and sensitive operations in partnership with the United States Government," according to Aljabri, who helped set up and run before bin Salman cemented his control in 2017 and 2018 by rounded up other princelings who opposed him (after which he ordered a American newspaper columnist killed and dismembered and turned a civil war in Yemen into a genocidal war).
In response to the suit, originally filed in Suffolk Superior Court, Aljabri argued that he legitimately bought the condos - including two neighboring units on the 52nd floor of One Dalton currently assessed at a total of $13.3 million - as part of his anti-terrorism work, along with everything else he did with the billions the Saudis want back, which meant he would have to produce evidence of his work with American intelligence officials to make his case.
But the federal government then stepped in, urging Judge Nathaniel Gorton to block any such evidence or pre-trial "discovery" based on national-security grounds, or in legal terms, the government's "state-secrets privilege" to intervene in cases. Gorton agreed, in a ruling in which he said he could not even disclose how he reached his conclusion for fear of inadvertently releasing some bit of information that could harm national security.
The Saudis appealed, but in its ruling yesterday, the US Court of Appeals for the First Circuit said Gorton was right - not only was the evidence that the government did show Gorton in private too sensitive to release, it was too intertwined with the Aljabris's purchase to risk it getting out.
[I]t is apparent to us that the privileged information is so central to this case that any attempt to proceed with litigation of the suit would unduly risk
disclosure and thereby compromise our national security.
The court added that because of Aljabri's formerly prominent position:
[T]he privilege assertion here covered "information concerning sources, methods, capabilities, activities, or interests of the [U.S. Intelligence Community],"
plus "information that might tend to reveal or disclose the identities of U.S. Government employees, affiliates, or offices with whom one or more of the parties or the [KSA] may have had certain interactions and the disclosure of which would be damaging to U.S. national security interests." This is not a narrow interposition of privilege.
[The Aljabris] say the allegedly fraudulent transactions were actually legitimate, directed by the then-leadership of the KSA and made in connection with Aljabri's work on sensitive operations with, or at least alongside, the U.S. Intelligence Community. So, if the case were to proceed, the facts critical to its litigation and adjudication would center on getting to the bottom of those transactions and their nature. To that end, the parties would be seeking, inter alia, evidence about Aljabri's role and relationships with U.S. agencies, the degree of Aljabri's authority, how he participated in the programs and operations, who else was involved, the existence and execution of the operations themselves, who authorized and paid for them, and who then directed payment to or through Aljabri -- not to mention the whens, wheres, whys, and inverses of any of these things.
In addition to refusing to revive the case, the court also rejected a Saudi attempt to legally freeze the units so they could not be sold and to file a notification in the Suffolk County Registry of Deeds that ownership of the condos had a legal cloud over them because of the pending case in Ontario.
The court said that the Ontario lawsuit is now mired in a Canadian version of the same argument over national security, and such "lis pendens" registry notices under Massachusetts law are supposed to be for some set period of time, not to cover a case that has no definable end point. And, the court continued, it was going to make its decision based on American law, not Canadian law, so no registry notices.
Like the job UHub is doing? Consider a contribution. Thanks!
We should probably
Start limiting the amount of property foreign nationals can buy in the US.
I agree, but for different
I agree, but for different reasons. We have a housing crisis and the top 2% of the condos/townhouses in Boston are often held by rich foreigners simply to park their money. They don't live in it, don't pay state income tax, don't pay sales tax like residents who lived full-time in the units would. And property values in Boston have increased so much that even with expensive condo fees they're still making money on their investment.
The easiest fix I can think of is to increase property taxes but more than offset it with an increase in the residential exemption. Then full-time residents wouldn't be impacted (or could even get a slight reduction in property taxes).
They are paying property taxes and using basically zero of the services that those property taxes fund. No kids in BPS, no cars using the streets, no trash to be picked up (the big buildings don't use PWD for their trash). Yes, they're not paying state income tax or sales tax but they're not residents and they're not getting any significant services from the state. Should Barack Obama not be allowed to have his multi-million dollar estate on Martha's Vineyard because he (presumably) isn't paying Mass. income tax?
Fact is these housing units just wouldn't get built without the money that comes in from foreigners looking to park their wealth in the U.S. And the City does benefit in a number of ways -- these projects create construction jobs and generate linkage payments, not to mention the aforementioned stream of property tax. It also does take some strain off the market since some of the units in these high end buildings are occupied by folks who might have bought elsewhere in the city.
I mean, developers are not saying, well, we can't sell that 50th-floor penthouse to a Saudi prince so let's just make it affordable housing.
My argument was never about
My argument was never about who couldn't buy housing (be they foreign billionaires or former presidents), simply that they wouldn't notice the impact of their property taxes going up, since they'd likely still be close to breaking even with my proposed increase in property values. And for those owners who are bothered, they're welcome to sell and park their money elsewhere. Plenty of other mega rich people who either don't care or live in Boston & pays state income tax, as well as sales tax.
What are you trying to ‘fix’?
The city of boston already has a residential exemption for owner occupied homes. Their property values going up means they pay more in property taxes too. And as the above posted pointed out, they put a lot of money into the city of boston via property taxes and require nothing in return.
Maybe limit the buyers
Maybe limit the buyers (including LLC's) because it would start to limit money laundering--Taxes are a minor issue when we're talking about the crime that benefits from being able to do this.
Money laundering?!!! Not saying it doesn’t happen, but you need to support this accusation.
It's a little late in the
It's a little late in the game for Katy bar the door.
Of course, makes perfect sense!
If I wanted to conduct top secret clandestine anti-terrorist operations in cahoots with the US government, first thing I'd do is buy two neighboring units on the 52nd floor of One Dalton currently assessed at a total of $13.3 million.
The question is not whether he's a crook, but
whether he's *our* crook.
maybe Canada has the right idea..
They enacted a two year ban starting Jan 1 that non Canadians are banned from purchasing residential real estate, in part to combat this same scenario.
We’ll see how that shakes out
They also enacted a luxury car tax on cars over 100k, which is most luxury cars.
This would have been quickly resolved if the Saudi government had succeeded in convincing him to visit one of their embassies.