On Friday, the Biden administration released a report from the Director of National Intelligence (DNI) regarding the murder of US-based journalist Jamal Khashoggi in 2018 at the Saudi consulate in Istanbul. The DNI report concluded that the operation that killed Khashoggi, who wrote columns critical of the Saudi regime, was ordered by Saudi Arabia’s Crown Prince Mohammad bin Salman (MBS). 

We assess that Saudi Arabia’s Crown Prince [Mohammad] bin Salman approved an operation in Istanbul, Turkey to capture or kill Saudi journalist Jamal Khashoggi.

We base this assessment on the Crown Prince’s control of decisionmaking in the Kingdom, the direct involvement of a key adviser and members of [Mohammad] bin Salman’s protective detail in the operation, and the Crown Prince’s support for using violent measures to silence dissidents abroad, including Khashoggi.

This was an assessment made years ago, but kept secret by the Trump administration. In a January 2020 interview with journalist Bob Woodward, Trump bragged that he was able to protect MBS from any fallout. "I saved his ass… I was able to get Congress to leave him alone. I was able to get them to stop," Trump said. 

MBS has denied any involvement, but the evidence against him is overwhelming. Among other things, the Saudis involved with capturing and ultimately killing Khashoggi included numerous members of MBS' personal security detail, according to the DNI report.

The team...included seven members of Muhammad bin Salman’s elite personal protective detail, known as the Rapid Intervention Force (RIF). The RIF - a subset of the Saudi Royal Guard - exists to defend the Crown Prince, answers only to him, and had directly participated in earlier dissident suppression operations in the Kingdom and abroad at the Crown Prince’s direction. We judge that members of the RIF would not have participated in the operation against Khashoggi without Muhammad bin Salman’s approval.

Shortly after the release of the intelligence report, Secretary of State Anthony Blinken issued a press release called "Accountability for the Murder of Jamal Khashoggi." The release announced a new policy called the "Khashoggi Ban," which allows the State Department to deny visas to individuals acting on behalf of a foreign government that "have been directly engaged in serious, extraterritorial counter-dissident activities, including those that suppress, harass, surveil, threaten, or harm journalists." Blinken announced that the United States will immediately "impose visa restrictions on 76 Saudi individuals believed to have been engaged in threatening dissidents overseas, including but not limited to the Khashoggi killing." 

But the visa restriction would not be imposed on the individual who ordered the operation against Khashoggi — MBS. Nor would MBS, who effectively rules the country since the Saudi King is in poor health, be subject to any other sanction.

At a press conference, Blinken was asked why MBS was let off the hook:

Q: Hello, Mr. Secretary… You talked about future – preventing future actions, and you have unveiled a new ban, Khashoggi Ban. But you have fallen short of punishing the very person that DNI has said is responsible for this. So how are you – because of this lack of accountability, how is that not counter to your actions to ensure accountability elsewhere in the future? Isn’t this counterproductive?

BLINKEN: ...As to accountability, again, I think this report speaks for itself. And the fact that we have provided the transparency necessary to shine a bright light on what happened through the assessment, not just of the media, as important as you are, but the United States Government is, in and of itself, I think significant action. 

A Washington Post editorial sharply criticized the Biden administration's approach, saying they were giving "a pass" to MBS. 

On Saturday, Biden himself was asked if MBS would receive any sanction. "There will be an announcement on Monday as to what we are going to be doing with Saudi Arabia generally," Biden responded. This created some speculation that the administration would take additional steps. But a White House official told Reuters that nothing new would be announced. "The administration took a wide range of new actions on Friday. The president is referring to the fact that on Monday, the State Department will provide more details and elaborate on those announcements, not new announcements," the official said. 

Why is the Biden administration so reticent to punish MBS? There are a variety of potential explanations but the answer could come down to money.  

The economic influence of MBS

MBS presides over a repressive regime and, according to the DNI, ordered an operation that resulted in the gruesome murder of a US-based journalist. But he still has lots of high-powered friends in the United States and elsewhere. They are willing to overlook MBS' human rights record and focus on the tens of billions in international investments that MBS makes through the Saudi sovereign wealth fund and other vehicles. 

In December 2019, for example, MBS spearheaded the IPO of Aramco, Saudi's state-owned oil company. The offering raised $29 billion for less than 2% of the company, valuing it at $1.7 trillion — "the world’s biggest-ever IPO." (MBS had been hoping for a $2 trillion valuation.) The largest Wall Street banks "JPMorgan Chase, Morgan Stanley, Goldman Sachs, Bank of America, and Citigroup—all participated in the underwriting as joint global coordinators," Vanity Fair reported. 

The massive IPO was part of MBS' broader initiative to diversify Saudi Arabia's economy beyond oil, a project he calls Saudi Vision 2030. The IPO injected more cash into Saudi's sovereign wealth fund, Public Investment Fund (PIF), which is a key investor in enterprises around the world. Since 2017, the PIF has hosted an annual conference called the Future Investment Initiative — better known as "Davos in the Desert." 

In 2018, in the immediate wake of Khashoggi's murder, many corporate executives pulled out of the conference. But by 2019, many corporate executives quietly returned. The 2020 event was postponed until January 2021 due to COVID-19. Top executives from Goldman Sachs, Morgan Stanley, Black Rock, Nasdaq, Carlyle, and other US financial giants were in attendance. The companies told the New York Times they participated in the event because of "the important business relationships they have with cash-rich Saudi Arabia."

The PIF is a significant player in US business. According to a recent filing with the SEC, the fund "increased its holding of US stocks to nearly $12.8 billion in the fourth quarter [of 2020] from $7 billion in the third quarter." The PIF, for example, currently owns $3.7 billion worth of Uber stock. The Saudi fund invested billions in Uber in 2016, years before the company went public. 

Overall, the PIF controls $400 billion in assets and MBS plans to increase its holdings to over $1 trillion by 2025 as part of Saudi Vision 2030. 

Senator Ron Wyden (D-OR) and others have urged the Biden administration, in response to Khashoggi's murder, to implement "financial" penalties against MBS and the Saudi government. But that could jeopardize the ability of powerful US companies to access PIF funds, which MBS effectively controls. 

Blinken's perspective

Blinken has been the most outspoken opponent of taking more aggressive measures against MBS. "[T]he actions that we’ve taken is really not to rupture the relationship, but to recalibrate it to be more in line with our interests and our values. And I think that we have to understand as well that this is bigger than any one person," Blinken said on Friday. 

Prior to his confirmation as Secretary of State on January 26, Blinken was the co-founder and Managing Partner in WestExec Advisors. In this role, Blinken advised prominent corporations on how to navigate the international world. He earned about $1.2 million in 2020 performing this work. 

Among Blinken's clients at WestExec Advisors were numerous corporations with deep ties to Saudi Arabia and PIF. For example, in a financial disclosure released on New Year's Eve, Blinken revealed that Uber — which counts the PIF as a major, long-term investor — was a client. Blinken also represented SoftBank. The PIF is the largest investor in SoftBank's Vision Fund 1, a $98 billion technology-focused venture capital fund, contributing nearly half of the capital. SoftBank is currently seeking the PIF's investment in a follow-up vehicle, Vision Fund 2. Microsoft, another of Blinken's former clients, has deep ties with Saudi Arabia and MBS' Vision 2030. Microsoft's CEO, Satya Nadella, signed an agreement with MBS in 2016, "to speed up the pace of the digital transformation in the Kingdom, as well as expand its systems support [center] at Saudi Arabia's royal court." In a statement, Nadella pledged to "come out with technology to translate the Vision 2030 into a reality, with a focus on human capital and innovation."

Blinken resigned from WestExec Advisors upon his confirmation and will not directly profit from the firm's future success. He sold his ownership stake in the firm and it will be paid out, with interest "over two years." 

But more importantly, having immersed himself for years in the world of international corporate consulting, Blinken is acutely sensitive to the economic impact of imposing economic or other sanctions directly on MBS. It is, of course, possible that MBS is not being sanctioned for other reasons. But, at present, the economic interests of powerful corporations are being protected and issues of human rights are being subordinated.