Guests entered the Future Investment Initiative conference in Riyadh, Saudi Arabia, last week. Photo / Iman Al-Dabbagh, The New York Times
But the Biden administration sent only a deputy commerce secretary to the high-profile gathering, amid shifts in global politics and diplomatic strains.
The wealthy and the powerful of 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 politics, diplomatic strains and pandemic constraints, money is a surefire magnet.
Executives hugged and fist-bumped in the lobby of the hotel, where four years ago the kingdom's crown prince, Mohammed bin Salman, confined hundreds of his nation's elites in an anti-corruption crackdown. They sipped coffee and mineral water in the hotel's cafes.
They piled into a string of black sedans for dinners with clients and colleagues around Riyadh. They even made jovial conversation in the Ritz's makeshift clinic, where the queue for the Covid-19 tests required to return home to other countries stretched at times to an hour or more.
But global politics poked through at times.
In sideline conversations, some American business leaders spoke in stage whispers of the drugging and dismemberment of dissident journalist Jamal Khashoggi in 2018 — a killing that a US intelligence report concluded had been approved by the crown prince, known by his initials, MBS. Yet when the crown prince made a brief appearance at the conference Tuesday, he was welcomed with a standing ovation.
There was also a message in the list of attendees.
Steven Mnuchin, Treasury secretary under President Donald Trump, walked the halls between a fireside chat with the Bahraini finance minister and a series of meetings. Private-equity executive Stephen Schwarzman, a loyal adviser to Trump until late in his presidency, bemoaned the vilification of fossil fuel companies from the conference dais. Longtime chemical executive Andrew Liveris, who had been an adviser to Trump on manufacturing, praised Saudi Arabia's economic expansion plans on the sidelines of the gathering.
Guests affiliated with the Biden administration, which has adopted a chillier posture toward the Saudis than did Trump, were in far shorter supply. Treasury Secretary Janet Yellen did not attend. Nor did officials from the White House or the State Department. The sole Biden official who spoke at the conference was Don Graves, deputy secretary of commerce. Graves met privately with the Saudi commerce minister and participated in a 15-minute panel discussion on the topic of global trade. He was whisked away by a coterie of aides immediately after that and declined to answer questions about the event.
For many of those in attendance, the big draw was Saudi Arabia's US$450 billion sovereign wealth fund, the Public Investment Fund, whose governor, Yasir al-Rumayyan, typically hosts the event.
Allocating money into foreign investment funds has always been a part of Saudi Arabia's strategic toolkit. It's a tactic the kingdom has relied on heavily in recent years, as the crown prince has sought to encourage overseas investment into his home country to fund Vision 2030, his blueprint for economic growth and diversification. His philosophy appears to be that by sharing Saudi wealth in markets such as the U.S., Britain, Japan and Russia, he is inviting those countries to reciprocate.
During the Trump era, that approach was welcomed. Trump selected Riyadh as the location of his first state visit in 2017; with his encouragement, a flurry of US-Saudi business deals — including a package of arms sales to the kingdom that was predicted to generate US$110 billion over a 10-year period — were announced during the trip.
Under President Joe Biden, however, business relationships have been far less of an emphasis, and relations with the Saudis and the crown prince far more complicated. "I don't think anything's broken that badly that it can't be repaired, but there's perception issues," said Liveris, who also advised the Obama administration when Biden was vice president.
That has not appeared to have impeded the warmer connections between Trump's team and the Saudis.
Mnuchin, who started a US$2.5 billion investment fund in July, has already raised money from the Saudi sovereign wealth fund. Jared Kushner, Trump's son-in-law and former senior adviser, is launching an investment firm called Affinity Partners, which has signalled interest in a potential investment from the Public Investment Fund, according to someone familiar with Kushner's plans. (A recent report pegged the potential size of that investment at as much as US$2 billion.)
Kushner, who was recently in the Middle East for events related to his charitable entity, the Abraham Accords Institute for Peace, did not attend the conference. But he is actively assembling an investment team for his new fund, and there is no indication that the close rapport he developed with Crown Prince Mohammed during his father-in-law's administration has diminished since Trump left office.
One Middle East-based financier, who attended the conference but spoke on condition of anonymity because of the sensitive topic, said the Saudi funding of Kushner's new initiative would be in line with his region's embrace of "soft power." He was referring to the leverage that comes from providing financial assistance to people who are in the sphere of influence with current and former politicians and their parties.
In the US, there is no law to restrict or prohibit former executive-branch officials from receiving investment money from foreign counterparts after leaving their government jobs. But ethics experts say that deals such as Mnuchin's, which occurred just months after he left the Treasury Department, would be well served by the same sort of mandatory cooling-off periods that prevent members of Congress and executive branch officials from lobbying their former colleagues after they leave government.
"People are in government temporarily as public employees, and they're doing deals and lots of favors for people, including foreign countries. Then they go out into the private sector and are finding they made a lot of friends in government, and now they're being rewarded," said Richard Painter, former chief ethics counsel to President George W. Bush. "It's very worrisome."
Mnuchin declined to comment on whether he feared the perception of a conflict of interest at the conference. Kushner did not respond to a request for comment.
One notable no-show was al-Rumayyan, the Saudi official who oversees the kingdom's sovereign wealth fund. He did not deliver his opening remarks or preside over scheduled panel discussions with Wall Street CEOs.
A spokesperson for the wealth fund did not respond to questions about al-Rumayyan's absence, but four attendees with close ties to him said he had tested positive for Covid-19. He was even absent from the week's signature evening get-together: an opulent dinner for scores of event speakers at his home in Riyadh, the capital.
Blackstone's Schwarzman was attending the conference for the third time, paying his respects to his existing Saudi relationships. As an informal adviser to the Trump administration on the economy and on trade deals, he was present for Trump's 2017 state visit to Riyadh and announced a landmark investment deal of up to US$20 billion with the Saudis during it. He broke ranks with Trump after the riot at the US Capitol. 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 ballroom, Schwarzman appeared in high spirits. He promoted a book by money manager Ray Dalio, who was sitting next to him on the stage, joking, "I don't even get a commission for this."
He invoked the financial strains that the environmental movement has put on oil and gas companies, arguing that the difficulty they are having borrowing money could ultimately crimp energy supplies, leading to social and political unrest. He traded quips with his fellow panelists over whether they'd prefer to invest in gold, dollars, euros or Bitcoin.
Another conference attendee, Anthony Scaramucci, the investment fund manager who served briefly as Trump's communications director at the White House only to break with him later, 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."
Scaramucci noted that no one should be penalised for raising capital with former government contacts once they leave politics. Despite his many public attacks in recent years on Trump, he praised both Mnuchin and Kushner, whom he called "a very smart guy."
"To me, it's a free market," Scaramucci said. "I'm not like these guys throwing eggs and tomatoes at this stuff."
This article originally appeared in The New York Times.
Written by: Kate Kelly
Photographs by: Iman Al-Dabbagh
© 2021 THE NEW YORK TIMES
A2 Milk shares surge to help lift local market higher.