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”.

A BIGGER SHIFT

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”.

AN OPPORTUNITY FOR REFORM?

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)