The big payback
"I saved his ass. I was able to get Congress to leave him alone. I was able to get them to stop."
That was Donald Trump bragging to Bob Woodward about the lengths he went to prevent Congress from holding Saudi Crown Prince Mohammed bin Salman (MBS) accountable for the brutal murder and dismemberment of US-based journalist Jamal Khashoggi. Although Trump is prone to exaggeration, in this case his account is completely accurate.
On October 2, 2018, Khashoggi, a columnist for the Washington Post who was critical of the Saudi regime, was assassinated at the Saudi consulate in Istanbul, Turkey. Khashoggi was at the consulate to obtain papers for an upcoming wedding. While there, he was forcibly restrained by Saudi agents and injected with a fatal dose of a drug. Following his death, Khashoggi's body was dismembered with a bonesaw.
The Saudi role in the assassination was apparent from the outset since the incident occured inside the Saudi consulate. In November 2018, the CIA concluded that MBS ordered the operation . The conclusions were supported by "intercepts of the crown prince’s calls in the days before the killing, and calls by the kill team to a senior aide to the crown prince." The Biden administration formally released a declassified version of the intelligence in February 2021.
Nevertheless, Trump was clear that he was uninterested in holding MBS or the Saudi government accountable for Khashoggi's brutal murder. On November 20, 2018, Trump issued a lengthy statement saying that the United States' priority was maintaining good relations with the Saudi government:
[I]t could very well be that the Crown Prince had knowledge of this tragic event — maybe he did and maybe he didn’t!…That being said, we may never know all of the facts surrounding the murder of Mr. Jamal Khashoggi. In any case, our relationship is with the Kingdom of Saudi Arabia…The United States intends to remain a steadfast partner of Saudi Arabia to ensure the interests of our country
Trump was serious. In May 2019, the Trump administration announced it would bypass Congress and send $8 billion in weapons to Saudi Arabia and its close ally, the UAE. A bipartisan majority in Congress passed legislation to block the sale but Trump vetoed it.
This was all quite a change for Trump, who spent years criticizing his predecessors for being too solicitous to the Saudis.
What happened? Trump placed his son-in-law, Jared Kushner, in charge of Middle East policy. Kushner had other goals for the US-Saudi relationship. And now it's paying off to the tune of $2 billion.
Kushner has pulled off one of the most brazenly corrupt — and successful — schemes in US history.
Kushner courts MBS
Shortly after Trump's inauguration, Kushner sought to create a personal relationship with MBS. In March 2017, Kushner hosted MBS in the White House’s State Dining Room. In the months that followed, Kushner and MBS "consulted with one another frequently in private calls." Kushner successfully pushed Trump to make Saudi Arabia the first country he visited as president over "objections from other senior administration officials," including former Secretary of State Rex Tillerson and Defense Secretary Jim Mattis.
Kushner traveled to Saudi Arabia again in the fall of 2017 to meet with MBS. While there, Kushner and MBS "stayed up until nearly 4 a.m. several nights, swapping stories and planning strategy." When MBS showed up in DC again in March 2018, Kushner attended several dinners with MBS and other Saudi officials.
Kushner, by that time, was communicating with MBS via WhatsApp, an encrypted messaging service owned by Facebook. According to the New York Times, "the two men were on a first-name basis, calling each other Jared and Mohammed in text messages and phone calls."
According to a Washington Post report, former Trump White House Chief of Staff John F. Kelly admitted during an intelligence briefing that "virtually all of the conversations that U.S. officials had with the Saudis" on certain sensitive matters occurred between Kushner and MBS.
Kushner's friendly conversations with MBS continued even after Khashoggi's murder and Kushner "offered the crown prince advice about how to weather the storm." Back in DC, Kushner "became the prince’s most important defender inside the White House."
MBS is "taking on big, bold objectives. We have to give him the space to try to accomplish it,” Kushner told Major Garrett in a book published in September 2018. “These places are not going to become Jeffersonian democracies overnight or maybe ever.”
In June 2019, Kushner refused to acknowledge MBS' role in the Khashoggi's assissination. "Look, it's a horrific thing that happened…Once we have all the facts, then we'll make a policy determination," Kushner said. Kushner would have been well-aware that the CIA had determined with "high confidence" that MBS was involved. In 2020, Kushner dismissed the murder of Khashoggi as one of "a couple of missteps" by MBS, praising Saudi as "a very good ally."
What was in it for Kushner? The world found out on Sunday.
Nine zeros
Since leaving the White House, Kushner has been seeking investment for a $7 billion private equity fund. Kushner has no prior experience managing private equity. Prior to entering the White House, his most significant business experience was nearly bankrupting his family real estate company by purchasing an aging office building in New York for $1.8 billion.
Who would be willing to provide billions to someone with no experience in private equity? So far, according to his most recent filings with the SEC, Kushner has attracted just two investors. The largest, by far, is the Saudi Public Investment Fund (PIF), which is controlled by MBS.
The PIF agreed to invest in Kushner's private equity fund, Affinity Partners, according to a report in the New York Times. Does this investment make any sense from an economic perspective? The committee in charge of vetting potential investments for PIF didn't think so. Here is a summary of their objections from internal documents:
[O]bjections included: “the inexperience of the Affinity Fund management”; the possibility that the kingdom would be responsible for “the bulk of the investment and risk”; due diligence on the fledgling firm’s operations that found them “unsatisfactory in all aspects”; a proposed asset management fee that “seems excessive”; and “public relations risks” from Mr. Kushner’s prior role as a senior adviser to his father-in-law, former President Donald J. Trump, according to minutes of the panel’s meeting last June 30.
But the full board of PIF, led by MBS, overruled the committee's recommendation and decided to invest $2 billion. Kushner's new firm will receive an annual commission of 1.25% on this investment — about $25 million. It will also receive a percentage of any profits.
PIF rejected a proposal to reduce the size of the investment because the "investment aims to form a strategic relationship with the Affinity Partners Fund and its founder, Jared Kushner" and reducing its size "may negatively or fundamentally affect the framework of the agreed strategic and commercial relationship."
While he was in the White House, Kushner did everything he could to advance the interests of MBS and the Saudi government. Now he has his payback. And it comes with 9 zeros.
This is maddening yet not at all surprising. People like Kushner and Trump don't know how to create wealth, only how to extract it. Then, when they screw up their (parent's) money, they let shady people who expect something in return swoop in and save the day. Nothing to see here!! Just a couple billion dollars...
I was almost a teenager when Trump's Art of the Deal book came out. My grandfather was at his table on the back patio, chain smoking cigarettes in silence as my dad gushed about the book. As calm as he looked, his right eye was starting to twitch, a clear sign his stress levels were off the chart.
After my dad left, my grandpa fumed about Trump. A former CEO himself, he thought Trump was the worst kind of business man -- a corrupt and dishonest one who lacked integrity and operated from a place of extreme self-interest and greed. He feared what we would become as a people if that became the day's model for business. He envisioned con artists and scamsters flourishing in a Trump-styled world, and honest people driven to obscurity. He said that model of business is unsustainable and would destroy America as we know it. That was over 30 years ago...
My grandpa died in the late 90's. He would've been horrified to see how life has unfolded over the last 6 years. This is exactly what he feared -- power falling into truly corrupt hands.
Despite his soft, waxen appearance, Kushner has emerged as one of the most craven, amoral players in global politics. 1.25% mgmt fees for this fund is a ridiculous amount, which he'll leverage for who knows what. Quite probably Jared will become a future kingmaker of the GOP a la the Mercers and Koch's, who are ageing and appear to be losing their touch. This may be payback by MBS, but he is likely seeing this as a long term investment in US political influence for many years to come.