Biden’s Ire won’t keep U.S. executives from big Saudi summit

President Joe Biden sought to put Saudi Arabia on notice this past week for teaming up with Russia on a drastic production cut by OPEC+.

“There’s going to be some consequences for what they’ve done with Russia,” he told CNN.

But those tough words don’t appear to have dissuaded Jamie Dimon and other leaders of corporate America from attending a Saudi-sponsored business conference – popularly known as Davos in the Desert – in Riyadh, Saudi Arabia, this month.

Dimon, JPMorgan Chase’s CEO, who is listed on the conference’s website as a featured speaker, is still expected to attend. So are Steve Schwarzman of investment giant Blackstone, Ray Dalio of hedge fund Bridgewater Associates and Michael Arthur, Boeing’s top international executive.

The attendance of prominent corporate executives highlights the limits of U.S. efforts to punish Saudi Arabia for crossing American policy goals. And it is another example of multinational companies caught in the crosscurrents of global politics, where they can be exposed to harsh condemnation.

(BEGIN OPTIONAL TRIM.)Multinationals like Apple have come under fire for staying silent on human rights violations in China while drawing billions of dollars in sales there. U.S. lawmakers have criticized big financial institutions for sending top executives to Hong Kong next month for a conference that features John Lee, Hong Kong’s chief executive, who was placed under U.S. sanctions in 2020 for his role in cracking down on anti-Beijing dissent.

When droves of companies shut down operations in Russia after its invasion of Ukraine, some were criticized for not shutting down quickly enough, while others made a case that their products were basic necessities for civilians.

Corporate executives say they do not always receive guidance from government officials, leaving them to fulfill their business objectives under their interpretations of sometimes-shifting U.S. policy. President Donald Trump sought to forge closer ties with Riyadh. On the campaign trail, Biden pledged to make Saudi Arabia an international “pariah” – but visited the kingdom and fist-bumped its de facto leader, Crown Prince Mohammed bin Salman, as part of an effort to get the Saudis to pump more oil.

The role of businesses in geopolitics has been further complicated as more of them make social advocacy part of their core missions. Movements that focus on environmental, social and corporate governance goals, or ESG, have become increasingly popular, implicitly casting businesses and their executives as moral leaders.

Saudi Arabia in particular has forced companies to adopt a delicate balancing act, especially in recent years. The kingdom, the world’s largest oil producer, is awash in cash – its sovereign wealth fund, the Public Investment Fund, oversees more than $600 billion – and has invested it abroad in the likes of Uber and SoftBank of Japan.

The sovereign fund has backed the creation of LIV Golf, which is meant to challenge the PGA Tour, and led a group that bought English soccer club Newcastle United.

Crown Prince Mohammed has courted international businesses to help fulfill Vision 2030, his sweeping effort to open up Saudi society and reduce its reliance on oil. (The campaign includes the construction of Neom, a futuristic city in the desert for which Crown Prince Mohammed has pledged $500 billion.)

But the government’s role in the gruesome murder and dismemberment of dissident Jamal Khashoggi in 2018 prompted scores of businesses and executives, including Dimon and Schwarzman, to withdraw from the Saudi investment conference that year.

This time around, Biden’s efforts to tar Saudi Arabia as an ally of Russia appear, so far, to have failed to make the kingdom a pariah.

That may be in part because businesses regard Washington’s current pique with Riyadh as significantly different from the outrage over Khashoggi, according to Raad Alkadiri, a managing director at the Eurasia Group, a political risk consultancy.

Khashoggi’s death “was a heinous act by the Saudis, and companies couldn’t ignore it,” Alkadiri said. “This is a political spat.”

Several companies whose executives are listed as featured speakers this month also have deep business ties within Saudi Arabia. JPMorgan was one of the underwriters for the record-breaking initial public offering of Saudi Aramco, the kingdom’s state-owned oil giant. Blackstone counts the Saudis as a cornerstone backer for a multibillion-dollar infrastructure fund.

And Boeing has had a 77-year relationship with the kingdom, having sold the Saudis commercial jetliners and military weaponry like jet fighters and Harpoon missiles.

That said, companies whose executives are listed as featured speakers haven’t been rushing to promote their attendance at the conference. Joseph Evangelisti, a spokesperson for JPMorgan, said Dimon would attend to see clients and investors. Michael Reid, a spokesperson for Pimco, said the money management firm’s vice chair, John Studzinski, would attend but was not now scheduled as a speaker or panelist.

Boeing framed the attendance of Arthur, its president of international, as a way to contribute to geopolitical dialogue. “This conference brings together business, policy and innovation leaders from across the globe to discuss the future of international investment and the global economy,” said Paul Lewis, a company spokesperson.

Other companies whose leaders were listed as featured speakers at the conference were more circumspect. Blackstone, Bridgewater, Goldman Sachs and auction house Sotheby’s declined to comment or had no comment on their executives’ attendance.

Some did not respond to requests for comment, including electric vehicle company Canoo and venture capital firm 500 Global.

While Biden has pledged consequences for Saudi Arabia’s oil cut – and Democratic allies in Congress have urged retaliatory moves such as halting arms sales – he has so far declined to identify potential punishments and has not announced further steps.

Saudi officials have insisted that the kingdom remains a steadfast American ally, and defended the OPEC+ decision as a purely economic step.

But Alkadiri of the Eurasia Group said multinational businesses would have to take note of an increasingly skeptical attitude toward Saudi Arabia in Washington.

“What this episode has illustrated is you don’t have to scratch the surface much in Washington to discover deep anti-Saudi sentiment,” he said. “As Saudi interests diverge more from U.S. interests, companies are going to feel that pinch much more.”