Saudi Charity’s U.S. Partners Soul-Searching After Khashoggi Murder

(Bloomberg) -- The murder of journalist Jamal Khashoggi created a quandary for big U.S. banks, Washington lobbyists and management-consulting firms over their business ties to Saudi Arabia. But more than two dozen tech companies and other icons of American culture -- including Google, Microsoft and Amazon as well as Harvard University and the New York Museum of Modern Art –- have had different sorts of relationships with Saudi Crown Prince Mohammed bin Salman through his personal foundation.

So far, only a few educational and cultural institutions have severed ties with the Misk Foundation, named after musk perfume, a symbol of benevolence in Arab culture. Others are expressing concern, and barring the emergence of evidence that directs blame away from the kingdom’s leaders, pressure to disengage from the crown prince’s charity could mount, experts say -- undercutting the pillars of his reform agenda: foreign investment, entrepreneurship and diversification.

The foundation’s Western partnerships have helped foster the 33-year-old prince’s image as one of the most dynamic Arab leaders in decades -- a potentially transformative figure who seeks to emulate the disruptive achievements of tech-industry leaders such as Bill Gates, Steve Jobs and Mark Zuckerberg. U.S. companies and institutions have chipped in technology, training and cultural programs for young Saudis, aimed at supporting the Crown Prince’s Vision 2030 plan to replace oil and sinecure in Saudi Arabia with initiative, creativity and outside investment.

The prince, for his part, has donated to U.S. nonprofits and courted tech companies with venture capital investments and market opportunities in the kingdom.

Reputational Risks

Now, the reputational risks created by Khashoggi’s killing threaten some of these alliances, and possibly the Vision 2030 plan itself.

“Vision 2030 has been kneecapped,” says Robert W. Jordan, U.S. ambassador to Saudi Arabia from 2001 to 2003. “Foreign direct investment has already dropped off a cliff in the past year due to the prince’s conduct, and now his reforms will be reduced to half-measures, with many fewer outside participants.”

The Misk Foundation responded to questions with an emailed statement that said it doesn’t comment publicly on its contractual details with partners. According to the statement, the foundation is holding its annual Global Forum this month, where it looks forward to “bringing thousands of young leaders, creators and thinkers together with established global innovators to examine the attributes young people must harness and nurture.”

Khashoggi Case

Last week, Turkish prosecutors said that Khashoggi was strangled soon after entering the Saudi consulate in Istanbul on Oct. 2 and that his body was dismembered by a bone saw in a premeditated hit by men flown in from Saudi Arabia. Crown Prince Mohammed has denied any involvement in the killing, first telling Bloomberg on Oct. 3 that Khashoggi left the consulate shortly after arriving, and then, after Saudi Arabia acknowledged the death 17 days later, calling the killing a “heinous crime.” Turkish President Recep Tayyip Erdogan wrote in a Nov. 2 op-ed in the Washington Post that the order to kill Khashoggi came from “the highest levels of the Saudi government.”

The prince’s foundation partners are moving gingerly to assess their ties to a kingdom with reserves of more than $500 billion and 770 billion barrels of oil. Among Misk Foundation partners, only the Bill & Melinda Gates Foundation has announced that it would suspend collaborations due to Khashoggi’s slaying. CNN International is suspending Misk’s sponsorship of a program the network airs four days a week on Middle Eastern culture and the arts, according to a person familiar with the matter who asked not to be named because the issue is sensitive.

Reviewing Work

Others are pulling back more quietly. The Massachusetts Institute of Technology launched a university-wide ”reassessment” of its Saudi links after the killing and removed Misk, without public notice, from a published list of “consortium members” of the famous MIT Media Lab. The Lab’s membership director, Ryan McCarthy, wrote in an email that Misk’s membership was “terminated” after it missed payment of its dues. “Any new work involving Saudi Arabia will be reviewed in alignment with MIT’s reassessment of Institute-level engagements with entities of the Kingdom of Saudi Arabia,” he wrote.

New York MOMA, which hosted the launch of the Misk Art Institute in January and collaborated on other events this year with the prince’s foundation, says it has no “current projects” with Misk. In mid-October, the Brooklyn Museum and the Metropolitan Museum of Art in New York rejected Misk funding for two long-planned art exhibits, and Columbia University postponed a lecture by Misk Art Institute’s director, Saudi artist Ahmed Mater. One of the organizers of the exhibits, the Middle East Institute in Washington, withdrew its participation due to Misk’s involvement, said Jordan, the former ambassador and now vice chairman of the policy and culture institute’s board.

‘Potential Implications’

Harvard, which has a partnership with Misk to set aside 100 spots for Saudi students in an 800-student summer program for high-school kids, is “following recent events with concern” and “assessing potential implications for existing programs,” a spokeswoman wrote in an email.

Misk’s tech-company partners have generally stayed the course with the foundation, which in some ways is attuned to tech-industry culture. The prince appears to have created his foundation as the antithesis to the typical Saudi public-sector agency. “When you step foot into Misk, you feel like you’ve walked into a high tech startup. They get us,” says Sam Blatteis, who ran Google’s government relations in the Arab Gulf region from 2014 to 2017 and is now the chief executive officer of MENA Catalysts Inc., a consulting firm in Dubai. Misk employees use the same management lexicon -- “objectives” and “key results,” or OKRs -- that’s used at Google and Twitter, Blatteis says.

“On paper, what does the People’s Republic of Northern California have of interest to the petro monarchies of the Middle East?” Blatteis asks. “Technology, innovation, startup culture, R&D -– these are the things the Saudis have outlined as the beating heart of their most critical long-term plans.”

Pressure Foreseen

Public pressure is likely to build on companies to disengage with Saudi Arabia, particularly on “institutions and businesses that claim to uphold high standards of corporate ethics,” says Salil Tripathi, chair of Pen International’s Writers in Prison Committee and senior adviser at the Institute for Human Rights and Business, a London policy group. One model, he says, is the list of so-called Sullivan Principles that eventually guided corporate conduct toward apartheid-era South Africa in the 1970s and 1980s. “If profit-driven companies could do that, values-driven universities, museums, and Silicon Valley entrepreneurs should do far more,” Tripathi says.

Representatives for Microsoft, Amazon and Google declined to comment on their various agreements to train Saudi students in coding, provide internships and cloud-computing technology to Saudi companies and government agencies.

A Cisco spokesman, Vitor De Souza, wrote in an email that respect for human rights is integrated into how Cisco does business, and the company is “paying close attention” to the Khashoggi situation. Cisco’s partnership with the Crown Prince’s foundation remains unaffected, he said. “For now, we will maintain our initiatives serving Saudi youth and citizens and will reevaluate the nature of our partnership as details from the investigation emerge,” De Souza wrote.

A Twitter spokeswoman said no one from Twitter is attending this year’s Misk Global Forum in Riyadh on Nov. 14, but she declined to elaborate. Bloomberg LP, the parent company of Bloomberg News, is implementing an agreement with Misk, signed in March, on an education and financial training program for Saudi youth, a spokesman said.

To contact the reporter on this story: Peter Waldman in San Francisco at pwaldman@bloomberg.net

To contact the editors responsible for this story: John Voskuhl at jvoskuhl@bloomberg.net, Flynn McRoberts

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