The CIA would conclude that Crown Prince Mohammed bin Salman, the country’s de facto ruler, had ordered the assassination. The Saudi government claims otherwise, protesting that Mohammed — while known for micromanaging far more minor affairs in the kingdom — had been totally in the dark. MBS, as the crown prince is known, was shocked (shocked!) that his thugs had not merely politely kidnapped the dissident as instructed.
However upsetting Khashoggi’s death was for his grieving fiancee, children, colleagues, friends and admirers worldwide, MBS was surely more outraged than them all. After all, the murder was super inconvenient for the crown prince, at least timing-wise.
Khashoggi’s assassination occurred just weeks before the splashy Future Investment Initiative forum, a “Davos in the Desert” designed to highlight Mohammed’s economic and social reforms. Persuading global business elites to attend a conference with this theme so soon after the state had murdered a high-profile champion of Saudi liberalization would be complicated.
And it did look as though some of these global elites had pangs of conscience — or pangs of PR concerns, anyway. At first.
International executives and public figures dropped out of “Davos in the Desert” by the dozens. Jamie Dimon, chief executive of JPMorgan Chase, boycotted the event, explaining that the bank “couldn’t be seen in any way condoning” the murder.
Goldman Sachs said its partner who had planned to attend, former White House official Dina Powell, wouldn’t go, either. The bank’s newly minted chief executive, David Solomon, proclaimed on CNBC, “This incident is unacceptable, and clearly they have to answer questions.”
Alas, even this halfhearted shunning of Saudi Arabia was brief. Whatever ties the international banking and business community pretended to sever back then have since been officially, enthusiastically double-knotted.
Because there’s just too much money to be made, as a bond sale that closed this month illustrates.
Saudi Aramco, the Saudi-government-owned oil business that happens to be the world’s most profitable company, closed its inaugural bond issuance. It appears to be part of a long-term effort to build relationships with international investors ahead of an initial public offering. Whatever the moral complications, those relationships are building fast: Initially expected to raise about $10 billion, the sale instead attracted a whopping $100 billion in orders, making it one of the most oversubscribed bond sales in history. Ultimately, Aramco decided to issue $12 billion in debt.
And guess who managed the sale. Why, some of those very same financial institutions that had ostentatiously boycotted the Saudi forum last fall, including JPMorgan Chase (which led the sale with Morgan Stanley), Goldman Sachs and HSBC. JPMorgan CEO Dimon even made a rare appearance to market the bonds personally at a luncheon in New York.
HSBC declined to comment on what changed between six months ago and today, saying it never comments on client relationships.
JPMorgan excused the turnabout by saying its work would “help” the Saudi people (apparently, the Saudi people who aren’t being murdered, tortured or imprisoned for political reasons). As spokesman Andrew Gray explained via email, “We do business all over the world and stick with companies and countries in good times and bad and ultimately, we are serving the citizens of any nation where we do business and want to engage and help bring people up.”
Meanwhile, Goldman Sachs suggested that if there’s a red line to be drawn on doing business with morally dubious countries, the entity to draw it should not be Goldman Sachs.
“We take the lead from our government,” spokesman Jake Siewert told me. “They’re in the best position to make decisions about how to deal with governments that don’t share our values at all times.”
So what lead, pray tell, has our government offered?
On the one hand, on the same day that investors worldwide were placing tens of billions of dollars of orders for Aramco bonds, the U.S. State Department announced it was barring 16 Saudis from entry to the United States because of their roles in Khashoggi’s murder. On the other hand, MBS was not named, nor has he faced any other significant consequence. Instead, President Trump has praised the crown prince, repeated Mohammed’s protestations of innocence and called the Saudis a “great ally.”
Perhaps it is naive to ask investment banks, at best amoral, to suddenly sprout a moral compass. What, then, is our government’s excuse?