You would think doing business with Saudi Arabia has always been a dicey proposition for many of America’s biggest and best-known corporations, what with, among other human rights violations, the Saudis’ penchant for impromptu incarcerations, random killings, and the second-class treatment afforded most women in the oil-rich nation. But it really wasn’t. Most American corporations did business with Saudi Arabia despite it all.
That calculus finally became much more challenging in the wake of the brutal murder, in October 2018, of journalist Jamal Khashoggi at the Saudi consulate in Istanbul by agents of the Saudi government. (A CIA report directly linking the Saudi government to the Khashoggi killing was released Friday by the Biden administration.) That’s when Wall Street found itself in the crosshairs of the calculus about whether to coddle the Saudi royalty, now led, in practice, by the ruthless Mohammed bin Salman, the crown prince of Saudi Arabia, or MBS as he is known, or to stand up for what is right by rejecting doing business with the Saudis and avoiding participating in their media events. For Wall Street, these apparently became tough calls. There is so much money to be made from underwriting IPOs of Saudi companies or from taking investments from Saudi Arabia’s massive sovereign wealth fund that highfalutin ideals often are the first to be compromised.
In the more than two years since Khashoggi’s killing there have been some litmus tests for Wall Street. One came with the gargantuan IPO of Saudi Aramco, the state-owned oil company, in December 2019, which has raised more than $29 billion, one of the largest IPOs ever. The five biggest Wall Street banks—JPMorgan Chase, Morgan Stanley, Goldman Sachs, Bank of America, and Citigroup—all participated in the underwriting as joint global coordinators. The payday for the underwriters was not nearly as big as they anticipated but none could risk being left out, for bragging rights if nothing else.
Another test came with what has become known as “Davos in the Desert,” a Davos–like investment conference held in Riyadh with the official title of Future Investment Initiative. Many business leaders, including Wall Street executives, bailed on the 2018 Davos in the Desert, which took place weeks after Khashoggi’s killing. Stephen Schwarzman, the CEO of Blackstone, and Jamie Dimon, the CEO of JPMorgan Chase, declined to attend the 2018 event. Many bankers that did attend kept a low profile, avoiding speaking with the media. A year later, in October 2019, many of the Wall Street executives, or their top surrogates, reversed course and decided to attend Davos in the Desert, in a tacit acknowledgement that MBS was forgiven, or that with the Aramco IPO in the offing, they could not risk offending the hosts.
The October 2020 installment of Davos in the Desert was postponed because of the COVID-19 pandemic until last month, and was held for two days starting January 27. As The New York Times put it, once again Wall Street executives were faced with the question, “Is there a statute of limitations in associating with a country accused of human rights abuses?” Apparently, there is, if participation in the event—either virtual or in person—is any indication. David Rubenstein, the cofounder of the Carlyle Group, moderated a panel that included Ray Dalio, the founder of Bridgewater Associates, one of the world’s largest hedge funds. Other attendees at the 2021 edition of Davos in the Desert included David Solomon, the CEO of Goldman Sachs; Larry Fink, the CEO of BlackRock; Thomas Gottstein, the CEO of Credit Suisse; and James Gorman, the CEO of Morgan Stanley. Blackstone’s Schwarzman also attended.
The participation of these top Wall Street executives in the latest edition of Davos in the Desert infuriated two filmmakers behind the documentary The Dissident, a shocking and revealing portrait of the life and death of Jamal Khashoggi that leaves little doubt that MBS and other top Saudi leaders were behind Khashoggi’s execution. Bryan Fogel, the director of The Dissident, and Thor Halvorssen, the head of the Human Rights Foundation and one of the film’s producers, believe the ongoing support from American business executives for MBS and the Saudi regime stems from greed. “It’s rather simple,” Fogel tells me. “You have a country that arguably might have the most liquid amount of cash for investment on planet Earth.” He says Saudi Arabia controls one of the world’s largest sovereign wealth funds, has the biggest investment in SoftBank’s Vision Fund, one of the world’s largest venture-capital funds, and it has shown “time and time again” it is willing to take big risks with its investment dollars.