The diplomatic fallout from the disappearance of Saudi journalist Jamal Khashoggi accelerated as three prominent U.S. business leaders withdrew from the Future Investment Initiative conference in Riyadh, also known as Davos in the Desert. Laurence Fink, the CEO of Blackrock, Jamie Dimon, the CEO of JPMorgan Chase, and Stephen Schwarzman, the founder and CEO of Blackstone, joined a growing list of heavyweights who are demonstrating corporate leadership by declining to attend this celebration of Saudi’s emerging economic power. Their withdrawal underscores that this should not be a “business as usual” moment with the Kingdom.
The clarity of their actions stands in sharp contrast to the awkward and ambivalent response of the Trump administration. This despite a series of still unconfirmed but increasingly likely reports from Turkish authorities that Khashoggi was murdered inside the Saudi Consulate in Istanbul. President Trump is setting the tone. Following a 20-minute call this morning with Saudi King Salman, the U.S. president stressed that the King firmly denied any involvement in Khashoggi’s disappearance. He went on to speculate, “I don’t want to get into his mind, but it sounded to me like maybe these could have been rogue killers,” Trump added. “Who knows? We’re going to try getting to the bottom of it very soon, but his was a flat denial.”
Meanwhile, as of today, Treasury Secretary Steven Mnuchin is still scheduled to attend the Saudi investment conference.
Even as the president dispatched Secretary of State Pompeo to Riyadh to meet with the King, he seems to be doubling down on his propensity to put business interests ahead of U.S. commitment to human rights. In this instance, the business is a multibillion-dollar military deal with the Saudis, which Trump wants to preserve, regardless of how the Khashoggi investigation plays out. Speaking to reporters in the oval office on Friday Trump made his intentions crystal clear. Asked by reporters whether the U.S. would cut arms sales if the Saudi government was found to be responsible for Khashoggi’s disappearance, the president declined to comment, but he did say that if we imposed sanctions, the U.S. could lose its share of the huge Saudi arms market to Russia or China.
At first Trump sought to justify his downplaying of the importance of the disappearance in Turkey by stressing that Khashoggi was not a U.S. citizen. When a reporter told him that Khashoggi was a U.S. permanent resident, Trump said: “We don’t like it even a little bit. But whether or not we should stop $110 billion from being spent in this country – knowing they have … two very good alternatives. That would not be acceptable to me.”
He went further, saying, “I don’t like stopping massive amounts of money that’s being poured into our country – they are spending $110 billion on military equipment and on things that create jobs for this country.”
This is a defining moment in U.S.-Saudi relations, one that will have ripple effects throughout the Middle East. The leadership demonstrated by U.S. business executives makes clear the importance of human rights, even for major investors like Blackstone and JPMorgan Chase, which have huge economic interests at stake. As the Khashoggi investigation unfolds, one hopes the president and his advisors will take a page from Wall Street’s leadership playbook.