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Executives at major companies including Ford, JP Morgan, and Uber have pulled out of a big investment conference in Saudi Arabia next week in the wake of Jamal Khashoggi’s disappearance. Others, including Treasury Secretary Steven Mnuchin, still plan to go. William Brangham discusses how U.S. companies are responding and what’s at stake with Andrew Ross Sorkin of the New York Times.
As we reported earlier, journalist Jamal Khashoggi's disappearance is leading to an array of difficult questions for the president and about the United States' political relationship with Saudi Arabia.
Many U.S. companies have long had business ties with the Saudis.
And, as William Brangham explains, those corporations now have to answer their own questions about whether they will continue to conduct business as usual with the kingdom.
There's a big investment conference in Saudi Arabia next week. It's been dubbed the Davos in the Desert conference.
And, initially, a number of prominent U.S. executives planned to attend. But then Jamal Khashoggi disappeared, and the Saudis claim no knowledge of what happened to him.
Now a number of those executives have pulled out. They include J.P. Morgan CEO Jamie Dimon, Ford Motors Chairman Bill Ford, and Uber CEO Dara Khosrowshahi.
But a number of business leaders will still attend the big event, and so will U.S. Treasury Secretary Steve Mnuchin.
Today, when President Trump was again asked about Khashoggi, he emphasized America's economic ties with Saudi Arabia.
President Donald Trump:
And they're a tremendous purchaser of not only military equipment, but other things. When I went there, they committed to purchase $450 billion worth of things, and $110 billion worth of military. Those are the biggest orders in the history of this country, probably in the history of the world.
I don't think there's ever been any order for $450 billion. And you remember that day in Saudi Arabia where that commitment was made.
To help go a little deeper into those economic ties and how corporations are responding to this crisis, I'm joined now by Andrew Ross Sorkin. He's an editor and columnist for The New York Times and also the co-host of CNBC's "Squawk Box."
He himself was scheduled to go to the Saudi Arabia conference, but recently pulled out.
Andrew, thank you very much for being here.
I know you have been reporting a great deal about these decisions made by CEOs to pull out. Can you just tell me, what was their calculus?
Andrew Ross Sorkin:
Well, this has turned out to be a remarkable crucible for business executives in the United States and really around the world in terms of not only going to Riyadh next week, but what going to Riyadh would represent, an endorsement, if you will, of the kingdom.
And so many of these executives, whether it's J.P. Morgan or Blackstone or BlackRock or Uber, have real business interests in Saudi Arabia. So there is something meaningful for all of them at risk, real money, real profits, and real questions about their ability in the future to be able to continue to do business in some of these — in Saudi Arabia.
J.P. Morgan, for example, has done business in that country since 1930. And this is a country that has historically held grudges.
Was it your sense that this was a principled decision their part, or was it just terrible optics, and that they will be right back in business with Saudi Arabia the minute this storm passes?
It's a very complicated questions.
It's a similarly complicated question for those in Washington right now. Clearly, the optics in the very immediate term weighed on them, the phone calls from journalists like myself and others, asking, are you going, the reporting around that, but not just from this side of the aisle.
But their employees, their customers were calling them, saying, are you really going to go to an event sponsored by the crown prince in the midst of these headlines that they have murdered a journalist?
And so I think that has weighed on all of them by default. I like to think that some of them do have a principled stand on this, but I think they're also wrestling with the long-term economics and economic ties to this country and what that means for their businesses.
And, as you report in a recent column you did in The New York Times, it's not like Saudi Arabia is the only country that American businesses do business with that have a troubled human rights record.
Well, and that's why this is so complicated.
U.S. businesses have long done business — our biggest trading partner is China. Human rights in China, there is no great record there. There are U.S. businesses that have long done business in Russia. As we know, there have been atrocities.
I mean, I think that if you really look, I hate to say the morality here is gray, but it is, across the world, both in terms of the businesses that have done business with these types of countries, and that our country itself has done businesses — has done business, effectively, with these countries.
And so it's a very complicated place for all of these people to be right now.
We heard the president earlier say — in a way emphasize how important these arms sales are with Saudi Arabia.
But a lot of critics have also pointed out that the president himself and his own company has had a long history of financial dealings with Saudi Arabia. And those critics are arguing that, in essence, the president's financial ties to the kingdom have tainted our foreign policy.
And I wonder what you make of that criticism.
There are those in Washington and there are a number of senators and others that are calling now on the — making public those relationships, those financial ties, similarly to the speculation perhaps around whether President Trump had or has financial ties to Russia.
I think, in this instance, there's probably less of a financial tie and more of just a very complicated situation, which is to say the United States has considered Saudi Arabia an ally, leverages that ally in many ways, financial being one of them, whether it's weapon sales or, perhaps more importantly, oil and oil prices, and lots of other things, in some cases even related to our antiterrorism efforts.
And so the question is, do you push that away, or how do you push that away while dealing with what is clearly and plainly a moral decision here, which is to say that if, in fact, somebody was responsible for this murder, which at least in my mind, as a journalist, it very much looks that way, do you cut the country off entirely?
Effectively, is there a way to censure the country, and somehow maintain a relationship with them at the same time? That's a very tricky balance to pull off.
All right, Andrew Ross Sorkin, thank you very much.
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