RIYADH, Saudi Arabia – The rich and powerful of the financial world descended on the Ritz-Carlton in Riyadh last week for Saudi Arabia’s annual investment conference, a reminder that money is reliable even in the face of changing policies, diplomatic burdens and pandemic restrictions. magnet.
Executives hugged and punched each other in the hotel lobby, where four years ago the kingdom’s heir to the throne, Mohammed bin Salman, limited hundreds of his country’s elites to anti-corruption crackdown. Coffee and mineral water were sipped in the hotel cafes.
For dinners with customers and colleagues around Riyadh, they gathered in a series of black limousines. They happily talked even at the makeshift Ritz clinic, where the queue for Covid-19 tests needed to return home to other countries sometimes stretched to an hour or more.
But world politics has sometimes broken through.
In side conversations, some U.S. business leaders on stage whispered about the drugging and dismemberment of dissident journalist Jamal Khashoggi in 2018 – a murder that a U.S. intelligence report found approved by the heir to the throne known for his initials, MBS. However, when the heir to the throne briefly appeared at the conference on Tuesday, he was received with standing ovations.
There was also a message on the list of participants.
Steven Mnuchin, the finance minister under President Donald J. Trump, walked the halls during a fireside chat with the Bahraini finance minister and a series of meetings. Private Capital Executive Director Stephen Schwarzman, a loyal adviser to Mr. Trump until his late presidency, accused of embarrassing fossil fuel companies from the conference. Longtime chemical director Andrew Liveris, who advised Mr. Trump on production, praised plans for Saudi Arabia’s economic expansion on the sidelines of the meeting.
There were far fewer guests associated with the Biden administration, which took a colder stance towards the Saudis than Mr. Trump. Finance Minister Janet Yellen did not attend. Neither are White House or State Department officials. The only Biden official to speak at the conference was Don Graves, deputy trade minister. Mr. Graves met privately with the Saudi Minister of Trade and participated in a fifteen-minute panel discussion on the topic of world trade. Immediately afterwards, he was taken away by a group of assistants and refused to answer questions about the incident.
For many in attendance, the grand draw was a $ 450 billion state-owned property fund of Saudi Arabia, the Public Investment Fund, whose governor Yasir al-Rumayyan usually hosts the event.
Allocating money to foreign investment funds has always been part of Saudi Arabia’s strategic tool. This is a tactic that the kingdom has relied heavily on in recent years as the heir to the throne sought to encourage overseas investment in his homeland to fund the Vision 2030, his plan for economic growth and diversification. His philosophy seems to be to invite these countries to reciprocity by sharing Saudi wealth in markets such as the US, UK, Japan and Russia.
In Trump’s time, this approach was welcome. Mr. Trump chose Riyadh as the site of his first state visit in 2017; with his encouragement, he invaded U.S.-Saudi business deals – including a package of arms sales to the kingdom that was supposed to create $ 110 billion over a ten-year period – were published during the trip.
Under Mr. Biden, however, business relations were much less stressed, and relations with the Saudis and the heir to the throne much more complicated. “I don’t think anything is so badly damaged that it can’t be fixed, but there are problems with perception,” said Liveris, who also advised the Obama administration when Mr. Biden was vice president.
This does not seem to have hampered the warmer ties between Mr Trump’s team and the Saudis.
Mr Mnuchin, who set up a $ 2.5 billion investment fund in July, has already raised money from the Saudi State Property Fund. Jared Kushner, Mr. Trump’s son-in-law and former senior adviser, is opening an investment firm called Affinity Partners, which, according to someone familiar with Mr. Kushner’s plans, has indicated interest in a potential investment by a public investment fund. (Recent report has estimated the potential volume of this investment at as much as $ 2 billion.)
Mr Kushner, who was recently in the Middle East due to events related to his charity, the Abraham Accords Institute for Peace, did not attend the conference. However, he is actively assembling an investment team for his new fund, and there is no indication that the close collaboration he developed with Prince Mohammed during his father-in-law’s administration has waned since Mr. Trump left office.
A Middle East-based financier who attended the conference but spoke on condition of anonymity over a sensitive topic said Saudi funding for Mr Kushner’s new initiative would be in line with the embrace of “soft power” in his region. In doing so, he meant the leverage that comes from providing financial assistance to people who are in the sphere of influence of current and former politicians and their parties.
There is no law in the U.S. that restricts or prohibits former executive officials from receiving investment money from foreign counterparts after leaving their government offices. But ethics experts say that for deals like Mr. Mnuchin, which happened just months after he left the Treasury, the same mandatory cooling-off periods would work well, preventing members of Congress and executive officials from doing so. lobbying with his former colleagues. after they leave the government.
“People are temporarily in government as civil servants and do business and a lot of services to people, including abroad. Then they go into the private sector and find that they’ve made a lot of friends in government, and now they’re rewarded, ”said Richard Painter, a former chief ethical adviser to President George W. Bush. “It’s very worrying.”
Mr Mnuchin declined to comment on whether he feared the perception of a conflict of interest at the conference. Mr Kushner did not respond to a request for comment.
One of the important unreported was Mr. al-Rumayyan, a Saudi official who oversees the kingdom’s state property fund. He had no introductory remarks or chaired scheduled panel discussions with Wall Street executives.
A wealth fund spokesman did not answer questions about Mr al-Rumayyan’s absence, but four participants closely associated with him said he tested positive for Covid-19. He was even absent from this week’s typical evening get-together: a rich dinner for many event speakers at his home in Riyadh, the capital.
Mr Schwarzman of Blackstone attended the conference for the third time and paid tribute to his existing relations with Saudi Arabia. As an informal adviser to the Trump administration for the economy and trade, he attended Mr. Trump’s state visit to Riyadh in 2017 and during that time announced a groundbreaking investment deal of up to $ 20 billion with the Saudis. After the riots at the Capitol, he broke up with Mr. Trump. But his business relationship with the Saudis, who have long been investors in various Blackstone funds, continues.
During his Tuesday morning panel in front of a packed full ballroom, Mr. Schwarzman appeared in a good mood. He promoted a book by money manager Ray Dali, who was sitting next to him on stage and joking, “I don’t even get a commission for that.”
He referred to the financial burdens posed by the environmental movement to oil and gas companies, and argued that the difficulties they face in borrowing money could ultimately reduce energy supplies, leading to social and political unrest. He talked to fellow interlocutors about whether they would rather invest in gold, dollars, euros or Bitcoin.
Another participant, Anthony Scaramucci, an investment fund manager who held a short-term job as Trump’s director of communications at the White House to later break up with him, said he was actively trying to raise money from Saudi investors.
“I’m raising money,” he said at the conference. “All day and all night.”
Mr Scaramucci warned that no one should be punished for raising capital through former government contacts when they leave politics. Despite numerous public attacks on Mr Trump in recent years, he praised both Mr Mnuchin and Mr Kushner, calling them “very smart guys”.
“For me, it’s a free market,” Mr Scaramucci said. “I’m not like those guys throwing eggs and tomatoes at these things.”