A few days ago, investigative journalist Vicky Ward published an account which claimed to explain just why Jared Kushner was able secure that $2 billion investment from a Saudi Arabian sovereign wealth fund for his freshly hatched investment fund, Affinity Partners. Her explanation also claims to explain why Kushner was successfully prevented from receiving a top level security clearance while he was in government.
According to Ward, both stem from a critical moment in the rise of the Kingdom of Saudi Arabia’s de facto ruler Mohammed bin Salman. In 2017, then Saudi Crown Prince Mohammed bin Nayef (MBN) believed that King Salman and then-Deputy Crown Prince Mohammed bin Salman were working against him and planned to oust him from power. He also believed that Jared Kushner and others in the White House were playing some part in these plans, perhaps involving some financial agreement between the two young princelings. According to MBN’s supporters, MBN believed King Salman was mentally incompetent and that his son MBS was dangerous. Critically, MBN has a long and close relationship with the U.S. intelligence community. According to Ward’s sources, MBN was planning to oust the King and MBS by going to the country’s Council of Ministers, where he believed he had support. In other words, this would be a sort of constitutional coup d’etat. The key allegation is this: U.S. intelligence was aware of these moves. So the White House was too. Kushner brought this information to MBS allowing him to move first and eliminate MBN before he could make his move. Soon MBN was removed as Crown Prince and replaced by MBS. Later MBN was arrested and imprisoned. He hasn’t been heard from in two years.
I should add here that I think we should have at least some skepticism of the portrayal of Mohammed bin Nayef in Ward’s account. That is really, as she notes, the view of the U.S. intelligence community. He was their guy. And while I don’t think that’s a strike against him — he was probably very helpful to the U.S. — we should limit our understanding of this to that. Rather than seeing this too tightly in white-hat and black-hat terms, we should probably focus on the fact that he was their guy. Among other things they were pissed Kushner took that information not only to meddle in the Saudi line of succession but also to get their guy imprisoned and tortured. In their view, he misused U.S. intelligence to get a key U.S. ally sidelined and imprisoned to help his pal who was likely paying him off. That’s a pretty obvious way to get the U.S. intelligence world dead-set against you getting that top-level security clearance.
I have no way of independently evaluating this reporting. But it suggests that while people focus on Kushner’s successful efforts to protect MBS during the controversy and backlash surrounding the murder of Jamal Khashoggi, Kushner may have played an even more critical role for MBS in this earlier tip off which both protected him and propelled him into becoming the ruler of the country.
Here is where I want to shift to some of my own reporting.
Last week we were talking about Kushner’s absurdly large Saudi bonanza, the $2 billion investment noted above. Ex-government officials often go into business, at least indirectly touting their government era contacts and relationships. It’s also true that Kushner wasn’t new to the high dollar business world before entering government. He ran his family’s real estate firm after his father was sentenced to prison. But running the business of a big New York City real estate family isn’t the same as going into the private equity or hedge fund business. And perhaps even more importantly, Kushner’s record was mixed at best. He close to bankrupted his family with one big and (as it later proved) terrible investment. Gulf connections seemed to bail him out of that mess too.
It was clear to everyone that a $2 billion investment for a newly founded fund with a founder with limited and iffy experience was more or less absurd. As I wrote last week it is corruption on a scale I have never seen in a quarter century of reporting on American politics with a focus on public corruption and scandal. But I wanted to get more sense of just how absurd.
If you were from that world but with a limited track record, what would be plausible? A first investment of a couple hundred million? One hundred million? One comparison is provided in the New York Times article which revealed the Kushner investment. Former Treasury Secretary Steven Mnuchin also got a big investment from the Saudis for his new fund, Liberty Strategic Capital. Mnuchin got “only” $1 billion. Critically, though, Mnuchin’s bid was much more plausible. Mnuchin is a former Goldman Sachs partner. Of course he was Secretary of the Treasury for four years. Between Goldman and the Trump administration Mnuchin had already led a successful fund. So despite the inherent revolving door sleaziness, Mnuchin’s pitch was at least fairly plausible in real investment terms. Yet he got half what Kushner got and his management fee was also less.
So how to find out more? I asked around for some introductions to high-flyers in the hedge fund world. And what I found out was a bit different from what I’d expected. Needless to say, it confirmed the absurdity of Kushner’s windfall. One prominent hedge funder told me that someone with Mnuchin’s track record should get at least 4x the scale investment of someone like Kushner, not 1/2x. But what I learned moved quickly away from these multiples.
There are two broad ways to think about a MBS-to-Kushner investment. One is as a thank you for services rendered in the past — help with figuratively dispatching MBN, help with literally dispatching Khashoggi. The other is an investment in the future. After all, Donald Trump could be back in power in 2025, or, if not him, another Trump-aligned Republican. But what was described to me seemed to transcend both — less a payoff or a future investment than evidence of some relationship between the two men that was deeper than either.
One of these high flyers I spoke to described a recent visit to Saudi Arabia which brought together power players from around the world — but particularly from the investment world — for a series of dinners, confabs and meetings. My interlocutor was one of the attendees. Each evening featured a different big dinner, with different luminaries in attendance. Some gatherings were large, some smaller, some very small, including the Crown Prince and just a handful of others. As it was described to me, at each of these events, or just about every one, there was Jared Kushner, seated right next to MBS.
Now I want to be clear that my interlocutor here didn’t have a perfect visual memory of the precise seating layout in every case. I didn’t get into the nitty gritty details. It wasn’t that kind of chat. But the gist was clear. My interlocutor had never seen anything like it. Sitting next to the ruler on a single night would be a career maker even for your average billionaire. But there Jared was every night — even for the private few-attendees dinner, apparently. The message seemed crystal clear and bold: Jared is my guy. In fact, he’s my number one, number two and number three guy.
What struck my interlocutor was not just the tightness and openness of the bond but the fact that this is during Joe Biden’s presidency. In U.S. politics, Kushner equals Trump. And Trump is no ordinary ex-President. He is not only the U.S. domestic political opposition. But people in and around the White House consider him an existential threat to America’s core political institutions. MBS seemed totally unconcerned about any of that. He might as well have been holding a GOP fundraiser. You might have expected him to at least downplay his bond with Jared in the interests of managing his relationship with the White House. But apparently not even close.
We must see this in the context of other events over the last year. The United States and Joe Biden really, really need energy costs to go down. You can see this in terms of U.S. economic interests or Joe Biden’s political interests. But for now they’re perfectly aligned. The White House has repeatedly pressed the Saudis to hike production to cool down oil prices. The Saudis have repeatedly refused. They took a much more accommodating approach under Trump, agreeing to hike production in 2018 and decrease it in 2020 at the request of the Trump White House. But now that has all changed.
In each of these ways the U.S.-Saudi alliance, which goes all the way back to the 1940s, seems to have been replaced by a Saudi-Trump alliance. (The oil price bonanza is funding a manic building and spending spree in Saudi Arabia which is the backdrop to these billionaire confabs I describe above.) Or perhaps we can see it more broadly as a transnational layer of authoritarian or authoritarian-friendly billionaires and princelings running the show separate from the actions and decisions of elected governments.
The impression I got was a bracing and sobering one, a princeling/autocrat future speeding off into the distance while civic democracies remain behind mired in dysfunction and division, realities often stoked by those same princelings/autocrats. It was one of the few times when I surveyed the horizon and thought, “Maybe the good guys don’t come out on top in this?” However that may be, the Kushner investment deserves a lot more scrutiny and a lot more political attention. The impression I got was that it may be less directly transactional than some people think. But that’s only because the relationship seems to run so deep that it’s not for any one favor, of which there are many.