RIYAD, Saudi Arabia – The rich and powerful in the financial world descended on the Ritz-Carlton in Riyadh last week for Saudi Arabia’s annual investment conference, a reminder that even amid shifting policies, diplomatic tensions and pandemic constraints, money is a safe magnet.
Executives kissed and banged their fists in the hotel lobby, where four years ago the kingdom’s crown prince, Mohammed bin Salman, locked hundreds of his country’s elites in a crackdown on -corruption. They sipped coffee and mineral water in the hotel cafes.
They crowded into a line of black sedans for dinner with clients and colleagues around Riyadh. They even had a jovial chat in the makeshift clinic at the Ritz, where the queue for Covid-19 tests required to return home to other countries sometimes stretched for an hour or more.
But world politics have sometimes broken out.
In conversations on the sidelines, some US business leaders spoke in low voices about drugs and the dismemberment of dissident journalist Jamal Khashoggi in 2018 – a murder that a US intelligence report said had been approved by the Crown Prince, known by his initials, MBS. Still, when the crown prince made a brief appearance at the conference on Tuesday, he was greeted with a standing ovation.
There was also a message in the list of participants.
Steven Mnuchin, Treasury Secretary to President Donald J. Trump, walked the halls between a fireside conversation with Bahrain’s finance minister and a series of meetings. Private equity executive Stephen Schwarzman, a staunch adviser to Mr. Trump until the end of his presidency, lamented the vilification of fossil fuel companies from the conference podium. Longtime chemicals executive Andrew Liveris, who had been a manufacturing adviser to Mr Trump, praised Saudi Arabia’s economic expansion plans on the sidelines of the meeting.
There were far fewer guests affiliated with the Biden administration, which took a cooler stance towards the Saudis than Mr. Trump. Treasury Secretary Janet Yellen was not present. Neither have officials from the White House or the State Department. The only Biden official who spoke at the conference was Don Graves, assistant secretary of commerce. Mr. Graves met privately with the Saudi Minister of Commerce and participated in a fifteen-minute roundtable discussion on the topic of global trade. He was taken away by a coterie of assistants immediately after this and refused to answer questions about the event.
For many in attendance, the big draw was Saudi Arabia’s $ 450 billion sovereign wealth fund, the Public Investment Fund, whose governor, Yasir al-Rumayyan, typically hosts the event.
Allocating money to foreign investment funds has always been part of Saudi Arabia’s strategic toolbox. It’s a tactic the kingdom has relied heavily on in recent years, as the crown prince has sought to encourage foreign investment in his home country to fund Vision 2030, his plan for economic growth and diversification. His philosophy seems to be that by sharing Saudi wealth in markets like the United States, Britain, Japan and Russia, he invites those countries to reciprocate.
During Trump’s day, this approach was welcomed. Mr. Trump chose Riyadh as the location of his first state visit in 2017; with his encouragement, a wave of US-Saudi trade deals – including a package of arms sales to the kingdom that are expected to generate $ 110 billion over ten years – were announced during the trip.
Under Mr. Biden, however, trade relations were much less important and relations with the Saudis and the Crown Prince much more complicated. “I don’t think anything is broken to the point that it can’t be fixed, but there are some perception issues,” said Liveris, who also advised the Obama administration when Biden was in office. vice-president.
This does not appear to have hampered the warmer relationship between Mr. Trump’s team and the Saudis.
Mr Mnuchin, who launched a $ 2.5 billion investment fund in July, has already raised funds from the Saudi sovereign wealth fund. Jared Kushner, Mr Trump’s son-in-law and former senior adviser, is launching an investment firm called Affinity Partners, which has expressed interest in a potential investment from the Public Investment Fund, according to a person familiar with Mr Kushner’s plans . (A recent report put the potential size of this investment at as much as $ 2 billion.)
Mr. Kushner, who was recently in the Middle East for events related to his charity, the Abraham Accords Institute for Peace, did not attend the conference. But he is actively building an investment team for his new fund, and there is no indication that the close relationship he developed with Prince Mohammed during his stepfather’s administration has waned since Mr. Trump has stepped down.
A Middle East-based financier, who attended the conference but spoke on condition of anonymity due to the sensitive topic, said Saudi funding for Mr. Kushner’s new initiative would be in line with his membership. “soft power” region. He was referring to the leverage that comes with providing financial aid to people who are in the sphere of influence of current and former politicians and their parties.
In the United States, there is no law to restrict or prohibit former executive officials from receiving investment money from foreign counterparts after leaving government jobs. But ethics experts say deals like Mr Mnuchin’s, which came just months after he left the Treasury Department, would be well served by the same kind of mandatory cooling off periods that keep members of Congress and executive officials to put pressure on their former colleagues. after leaving government.
“People are temporarily in government as public employees, and they do business and do a lot of favors for people, including foreign countries. Then they go into the private sector and find out that they have made a lot of friends in government and now they are rewarded, ”said Richard Painter, former chief ethics counselor to President George W. Bush. “It’s very worrying. “
Mr Mnuchin declined to say whether he feared a perceived conflict of interest at the conference. Mr. Kushner did not respond to a request for comment.
One notable no-show was Mr. al-Rumayyan, the Saudi official who oversees the kingdom’s sovereign wealth fund. He did not deliver his opening remarks or chair scheduled roundtables with Wall Street CEOs.
A spokesperson for the heritage fund did not answer questions about Mr al-Rumayyan’s absence, but four participants with close ties to him said he had tested positive for Covid-19. He was even absent from the signature night of the week: a sumptuous dinner for dozens of speakers at his home in Riyadh, the capital.
Mr. Schwarzman of Blackstone was attending the conference for the third time, paying tribute to his existing Saudi ties. As the Trump administration’s informal adviser on the economy and trade deals, he was present during Mr. Trump’s state visit to Riyadh in 2017 and announced a landmark investment deal of up to $ 20 billion. dollars with the Saudis. He broke ranks with Mr. Trump after the Capitol riot. But his business relationship with the Saudis, who have long invested in various Blackstone funds, continues.
During his Tuesday morning panel outside a crowded ballroom, Mr. Schwarzman appeared in good spirits. He promoted a book by fund manager Ray Dalio, who was sitting next to him on the stage, joking, “I don’t even get a commission for this.”
He spoke of the financial pressures the environmental movement has placed on oil and gas companies, arguing that their difficulty in borrowing money could ultimately reduce energy supplies, leading to social and political unrest. He exchanged pleasantries with his fellow panelists about whether they would prefer to invest in gold, dollars, euros or Bitcoin.
Another attendee, Anthony Scaramucci, the investment fund manager who briefly served as Mr. Trump’s director of communications in the White House only to break up with him later, said he was actively trying to raise funds. from Saudi investors.
“I am fundraising,” he told the conference. “All day and all night.”
Mr Scaramucci noted that no one should be penalized for raising capital with former government contacts once they leave politics. Despite his numerous public attacks in recent years against Mr. Trump, he praised both Mr. Mnuchin and Mr. Kushner, whom he called a “very smart guy.”
“For me, it’s a free market,” said Mr. Scaramucci. “I’m not like those guys who throw eggs and tomatoes at this stuff.”