Secretary of State reinforces alliance with kingdom while discussing Yemen, Khashoggi
Secretary of State Mike Pompeo met Monday with Saudi Arabia’s leaders, bearing a message of support for a close Trump administration ally at a time when the relationship is under pressure at home and abroad.
Mr. Pompeo met separately with King Salman and Crown Prince Mohammed bin Salman at the royal court in the kingdom’s capital, telling reporters afterward that he raised at least two difficult issues—the war in Yemen and the 2018 killing of Saudi journalist Jamal Khashoggi at Saudi Arabia’s consulate in Istanbul.
On those issues and on allegations of Saudi human-rights abuses, Mr. Pompeo stressed the friendly nature of ties between Washington and Riyadh.
“The Saudis are friends, and when friends have conversations, you tell them what your expectations are,” he said.
Mr. Pompeo’s stop in Riyadh came near the end of a multination Middle East trip and took place as U.S. lawmakers on both sides of the aisle are calling for a re-evaluation of the U.S. relationship with Saudi Arabia, including its support for the Saudi-led military coalition in Yemen.
But Mr. Pompeo, smiling in brief public appearances with the Saudi leaders and other officials, adhered closely to the administration’s stance regarding Saudi Arabia since the Oct. 2 killing of Mr. Khashoggi. He pressed for accountability, but avoided personally blaming Prince Mohammed, who U.S. intelligence officials have concluded likely gave the order for the killing.
Mr. Pompeo and other officials consistently have emphasized the enduring nature of the U.S.-Saudi relationship and its vital role in countering Iran, a main thrust of Mr. Pompeo’s trip, which has included stops in Jordan, Iraq, Egypt, Bahrain, the United Arab Emirates and Oman.
In Saudi Arabia, Mr. Pompeo said he broached the issue of human rights, but didn’t specifically address allegations that a Saudi crackdown on dissent has included acts of torture against jailed women’s-rights activists, including lashings and electric shocks.
On Yemen, the U.S. mission to the kingdom said on Twitter that Mr. Pompeo and the crown prince discussed the conflict and “agreed on need for continued de-escalation and adherence to Sweden agreements, especially cease-fire and redeployment in #Hudaydah,” referring to the Red Sea port city that is the gateway for the vast majority of the country’s food and aid.
The administration has accelerated its efforts to secure a peace agreement in Yemen, for a conflict that has killed tens of thousand of people and caused a humanitarian crisis.
Saudi Arabia and its allies have been battling Iran-backed Houthi rebels, who Riyadh sees as proxies of their rival Iran, and they have used U.S.-made bombs and intelligence assistance in their bid to defeat the group.
“We discussed with Pompeo the joint effort in fighting Iran’s expansionist policies that harm regional and international security,” former Saudi foreign minister Adel Al Jubeir said, according to the Saudi state-owned Ekhbariya news channel.
The officials discussed the crises in Yemen and Syria, the situation in the Red Sea region, and efforts to fight terrorism and extremism, Mr. Jubeir said, according to the channel.
Mr. Pomeo also addressed a pair of Twitter messages sent Sunday by President Trump in which he vowed to devastate Turkey’s economy if it targets Kurdish populations in northern Syria as the U.S. withdraws its forces. Mr. Trump called for a 20-mile safe zone between the Turkish border and U.S.-allied fighters, and also called upon America’s Kurdish allies not to provoke Turkey.
“The president’s aim there, I think, is the one that we’ve been talking about for some time. Which is that we want to make sure that the folks who fought with us to take down the caliphate and ISIS have security, and also that terrorists acting out of Syria aren’t able to attack Turkey,” Mr. Pompeo said, referring to Islamic State by an acronym.
The exact method of achieving these “twin aims” has yet to be determined, the secretary said. “If we can get a space—call it a buffer zone; others might have a different name for it—if we can get the space and the security arrangements right, this will be a good thing for everyone in the region.”
Mr. Pompeo planned to return to the U.S. earlier than planned to attend a family funeral, the State Department said on Monday. After departing Saudi Arabia, the secretary was traveling to Oman for meetings with leaders there, but planned to forgo a scheduled stop in Kuwait.
The secretary’s swing through the Middle East was aimed at reassuring partners and promoting a new regional alliance. Mr. Pompeo arrived in Riyadh from Doha, where the U.S. and Qatar held their second strategic dialogue.
During his remarks in Doha, the secretary pledged to continue trying to broker an agreement between Qatar and the four states—Saudi Arabia, the United Arab Emirates, Bahrain and Egypt—that have isolated the country over allegations of support for terrorism.
The schism threatens to derail U.S. plans to form a Middle East Strategic Alliance envisioned as a counterpart to the North Atlantic Treaty Organization.
Asked about his hosts’ reaction to his comments in Doha, Mr. Pompeo said the Saudis also hope to heal the rift with Qatar.
“We can certainly provide assistance and support, but at the end of the day those countries have to get it back together,” Mr. Pompeo said.
Virgin founder Richard Branson announced he was pulling out of talks on a $1 billion deal with Saudi Arabia over the killing of a Washington Post columnist. State involvement in the killing, “if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government,” Mr. Branson said.
Days later in a text message, Mr. Branson counseled the Saudi crown prince, Mohammed bin Salman, to release female activists his country had imprisoned.
“If you were to pardon these women and a number of men too, it would show the world the Government is truly moving into the 21stCentury,” Mr. Branson texted the crown prince. “It won’t change what happened in Turkey but it would go a long way to start and change people’s view.”
Mr. Branson was one of the first in a parade of CEOs, fund managers and bankers who scrambled to figure out how to preserve their relationships with Prince Mohammed after the murder of the journalist Jamal Khashoggi in Saudi Arabia’s Istanbul embassy in the fall.
Mr. Branson urged Prince Mohammed to change his ways. Others adopted a dual strategy of public condemnation while trying to continue to do business as usual. Some shunned the formality of Saudi Arabia’s high-profile investment conference but pursued informal gatherings instead.
The reason: Many have tied their companies’ future to Saudi money and Crown Prince Mohammed’s wide-ranging economic overhauls.
“This whole Khashoggi thing doesn’t mean anything,” said hedge-fund manager John Burbank, who has been one of the U.S.’s most prominent investors in Saudi stocks. “It means much less than the big, sweeping liberalization that’s happening in the kingdom.”
MBS, as Prince Mohammed is known, politely thanked Mr. Branson for his input. A few days later, the crown prince publicly denied involvement in the murder, calling it a heinous crime. The U.S. Central Intelligence Agency has since concluded that he likely ordered the killing.
American investors in Saudi stocks, besides Mr. Burbank, include Peter Thiel and hedge fund Bienville Capital Management, among others. Roughly 4% of the total Saudi market is held by foreigners.
“One person’s life doesn’t matter unless it’s MBS’s,” Mr. Burbank says. “Khashoggi doesn’t matter.” He adds that investors who have steered away from Saudi Arabia are hypocrites, because some of them also invest in Russia and Turkey.
Mr. Burbank was among the dozens of Western executives and investors who showed up at the home of Yasir al Rumayyan—chairman of Saudi Arabia’s sovereign Public Investment Fund, which the crown prince oversees—on the eve of the investor conference in October. Over platters piled high with roast lamb, towers of sweets in golden birdcages and champagne flutes of fruit juice, they toasted their relationship beneath palm trees tinted by purple spotlights, attendees said.
SoftBank CEO Masayoshi Son backed out of the conference, but he still showed up at the lamb feast. Uber CEO Dara Khosrowshahi also pulled out of the conference, but Uber co-founder and board member Travis Kalanick was at the party, along with former congressman and current banker Eric Cantor and his boss, banker Ken Moelis, and venture capitalist Jim Breyer. Thiel Capital portfolio manager John MacMahon also appeared at the dinner, and the chief executive of Silicon Valley construction startup Katerra, Michael Marks, attended the investment conference.
Matt Barnard, the CEO of Plenty—an indoor-farming startup with $200 million in backing from a Saudi-backed SoftBank fund—flew to Saudi Arabia for the conference. But he returned home without attending, a Plenty spokeswoman says.
The cost of shunning Saudi Arabia could be high. Some business partners fear losing access to the kingdom in the future if they pull out of Saudi deals now.
Ari Emanuel, the CEO of Hollywood talent agency Endeavor, is negotiating to return a $400 million investment that the Saudi sovereign-wealth fund made in his company earlier this year, people familiar with the company’s plan say.
In the wake of Mr. Khashoggi’s disappearance, Mr. Emanuel said he was “really concerned about it.”
.. “Were there mistakes made? Absolutely there were mistakes made,” said Matt Michelsen, an associate of John Burbank and a Silicon Valley investor. “But this place is changing. I saw Starbucks opening on multiple corners. There are women walking around without abayas. It’s a fundamental shift that’s occurred.”
Even as evidence mounted last week that a Saudi Arabian hit squad had murdered and dismembered his friend, Jamal Khashoggi, Washington operative Ali Shihabi took to Twitter to do what he does best: defend the Kingdom of Saudi Arabia.
“Leaders and governments make mistakes, sometimes horrible ones,” the suave 59-year-old wrote in a 13-part Twitter thread on Oct. 20. “At present, the Saudi government has been humbled and chastened … But one horrible murder cannot and will not be allowed to put the country further at risk.”
One of the roughly 10 lobbying firms that represent the Saudi government, the Harbour Group, has dropped it as a client, and others are considering following suit, according to people familiar with discussions, as Saudi Arabia struggles with a backlash over allegations that it murdered the journalist, Jamal Khashoggi.
The lobbying firms are privately discussing how to proceed, these people said. But some have already decided that the prospect of continued paychecks from Saudi Arabia — once a prized and profitable client — is not worth the risk to their reputations.
But for financial and technology companies, several of which have multibillion-dollar ties to Saudi Arabia, the calculus is more complicated. Few executives have backed out of the conference, which is called the Future Investment Initiative but is known colloquially as Davos in the Desert.
Uber’s chief executive, Dara Khosrowshahi, was one of the few to announce that they would back out.
.. The Public Investment Fund, a large Saudi sovereign wealth fund, invested $3.5 billion for a 5.6 percent share in Uber in June 2016.
The fund’s managing director, Yasir Al-Rumayyan, took a seat on Uber’s board. Prince Mohammed is the chairman of the Public Investment Fund.
.. Blackstone’s chief executive, Stephen A. Schwarzman, remains an advisory board member and is expected to speak at the conference, which is held at the Ritz-Carlton hotel in Riyadh, where Prince Mohammed locked up hundreds of wealthy Saudis last year in what he called an anti-corruption campaign but critics said was an effort to crush dissent.
.. Jamie Dimon, the chief executive of JPMorgan Chase, is also still planning to attend
.. Peter Thiel, the technology venture capitalist who was once an ally of President Trump and is known for his independent streak, is still a member of the event’s advisory board but had never planned to attend the gathering, according to a person close to Mr. Thiel.
.. Richard Branson, the billionaire British entrepreneur, said that he had suspended his directorship at two tourism projects near the Red Sea and that his space ventures would halt their discussions over proposed investments from the Public Investment Fund... Saudi Arabia has been a coveted client, thanks to its reputation for paying above-market rates and its status as one of the United States’ most reliable allies in an unstable region, which seemed cemented by the ties between Prince Mohammed and the Trump administration... The debates about dropping the Saudi account also reflect the skittishness of the lobbying industry at a time when it has faced mounting scrutiny from federal investigators, including the special counsel Robert S. Mueller III, about how foreign interests try to shape American politics and policy... The highest-paid firms representing the Saudis in Washington are the international public affairs consultancy
- Qorvis MSLGroup, which is being paid $279,500 a month, and the
- Glover Park Group, which was started by former Clinton administration officials and is being paid $150,000 a month.. Another two firms are being paid $125,000 a month —
- Hogan Lovells, which has Norm Coleman, a former senator of Minnesota, as its point person for Saudi work, and
- Brownstein Hyatt Farber Schreck, which has a bipartisan team composed of Marc S. Lampkin, a former aide to the former House speaker John A. Boehner of Ohio, and Alfred E. Mottur, a top fund-raiser for Hillary Clinton’s presidential campaign.
.. Not all of these firms will drop the Saudis. Some are leaning toward maintaining their contracts, in part because they predict that if they were to abandon the country en masse, it could lead to reduced cooperation from the Saudi government.