By Emily DeCiccio — cnbc — The Saudi crown prince’s actions in the killing of journalist Jamal Khashoggi might have left the kingdom’s sovereign wealth fund vulnerable to consequences, according to a former leading diplomat in the Obama administration. The Biden administration on Friday released a previously classified intelligence report that assessed Mohammed bin Salman of Saudi Arabia approved the plan to assassinate Khashoggi in 2018. The Saudi sovereign wealth fund, known as the Public Investment Fund, is chaired by MBS. It appears to have played a role in purchasing the aircraft that ferried Khashoggi’s killers to Turkey, where the murder occurred. “If this is the case, it could become a target for American human rights sanctions,” according to Joel Rubin, a former deputy assistant secretary of State. That could, in turn, “create an economic earthquake,” he said. “If the United States determines that the Khashoggi killing was a targeted human rights violation, then the perpetrators and backers of that killing could be sanctioned under the Magnitsky Act,” Rubin said.

The Global Magnitsky Human Rights Accountability Act authorizes the president to impose economic sanctions, freeze any U.S. assets, and deny entry into the U.S. to any foreign person who has engaged in human rights abuse or corruption, while prohibiting Americans from doing business with him or her. The Magnitsky Act has been used against Russian President Vladimir Putin’s cronies. Putin called it, “A purely political, unfriendly act.” Shortly after the release of Friday’s intelligence report, Secretary of State Antony Blinken announced that the U.S. banned 76 people from Saudi Arabia. He called it the “Khashoggi Ban.” Blinken added that the U.S. will not tolerate individuals who threaten or assault activists, dissidents and journalists on behalf of foreign governments. There was, however, no direct action taken against MBS. The Saudi government rejected the findings of the U.S. report. Sovereign wealth funds are prevalent among oil-rich countries. They provide a haven where countries can stockpile significant wealth, and store that money in a self-controlled coffer.

Funds like the MBS-chaired Public Investment Fund help buffer countries from oil price shocks that impact its annual fiscal position while also making the country resistant to external financial pressures. The Public Investment Fund has more than $360 billion in assets, and ranks as the eighth-largest sovereign wealth fund in the world, based on total assets. “The Saudi fund, which is nearly five decades old, is massive and guarantees long term financial stability for the Kingdom,” Rubin said. “But it can also be a target for abuse, mismanagement, and corruption.” In 2018, NBC News learned that the CIA concluded that MBS ordered the hit squad that lured Khashoggi into the Saudi consulate in Istanbul, killed him, and cut his body into pieces. MBS is the heir apparent to the Saudi crown. Rubin told CNBC that his domestic political critics will see the exposure of the Public Investment Fund to potential sanction as another sign of his recklessness and willingness to both risk Saudi assets and put the country in international crosshairs for his personal agenda. “The international private sector, which initially shunned Saudi Arabia after the killing of Khashoggi, will also view this as another public relations setback for engagements with Saudi,” Rubin said. “It could also open up the fund to increased scrutiny, lawsuits, and legislative action against the fund’s activities, both from abroad and within Saudi.”

Brookings Institute senior fellow Michael O’Hanlon told CNBC’s “The News with Shepard Smith” that President Joe Biden will not make Saudi Arabia “a pariah” because it would imply cutting off the economic and military relationship that the U.S. has with the Saudis. This, despite, Biden in 2019 saying, “We were going to in fact make them pay the price, and make them in fact the pariah that they are.”

by theguardian.com — Julian Borger — Friday was the day that Joe Biden’s vaunted drive to put human rights back at the centre of US foreign policy slammed, as such drives usually do, into the brick wall of great power realpolitik. As it had promised, the new administration obeyed the law laid down by Congress and ignored by its predecessor. It published an unclassified summary of the intelligence assessment that the Saudi crown prince, Mohammed bin Salman, “approved” the murder and dismemberment of the Saudi reformer and Washington Post columnist Jamal Khashoggi. For all the claims by the Trump administration that it could not publish for fear of revealing CIA “sources and methods”, the brief assessment was a logical inference from publicly available material. The 15-member murder squad included seven drawn from the prince’s own bodyguard, in an absolutist monarchy demanding absolute obedience. It was not a great work of sleuthing.

However, the crown prince was not on the list of 76 Saudis sanctioned under the new Khashoggi ban unveiled by the secretary of state, Antony Blinken, imposing visa restrictions at foreigners “conducting serious, extraterritorial counter-dissident activities, including those that suppress, harass, surveil, threaten, or harm journalists, activists, or other persons perceived to be dissidents for their work”. Used to the full, the Khashoggi ban could lead to wholesale expulsions of diplomats and other operatives, not just from Saudi Arabia but also from dictatorships like China, which have been heavily involved in intimidation of Chinese nationals and Chinese Americans living in the US. The ban, though, is a general response to a very specific crime, in which the mastermind has gone without punishment, apart from naming and shaming. The treasury froze the assets of the former deputy head of Saudi intelligence and blocked all dealings with the Rapid Intervention Force, known as the Tiger Squad, but its royal patron and commander, the crown prince, was left unscathed.

Furthermore, as Kristin Diwan, senior resident scholar at the Gulf States Institute observed, with the ban the Biden administration “is making a distinction between domestic suppression and its pursuit abroad”, explicitly punishing only the latter. The intelligence assessment and the punitive measures were a one-two punch, in which the second punch was pulled, a compromise born of the cold reality that any dream that King Salman would somehow demote Mohammed in the line of succession for the good of the kingdom was fanciful. The crown prince is too well entrenched for that, and being in his mid-30s, has good prospects for being Saudi leader for a generation or more. US officials point out that every administration does business in the national interest with leaders with blood on their hands, starting with Vladimir Putin and Xi Jinping. What makes Prince Mohammed different is that he is supposed to be a key strategic ally in the Middle East.

The US runs five bases in Saudi Arabia. While seeking to revive the 2015 nuclear deal with Iran (known as the JCPOA), the Biden administration is seeking to show it is not a pushover in the region. Thursday night’s airstrike on Tehran-backed militiamen in Syria is demonstration of that. And like Barack Obama before him, he will need to seek Saudi acquiescence at least or risk the monarchy joining forces in the region and in Congress to sabotage any future deal. “If we’re going to get the Saudis out of Yemen, we’re going to need their cooperation, and we need to work with them on the JCPOA,” Steven Cook of the Council on Foreign Relations said. “It’s a big important country that’s just super hard to avoid.” People displaced by conflict receive food aid donated by a Kuwaiti charity organisation in the village of Hays, near the conflict zone in Yemen’s western province of Hodeida, this week. People displaced by conflict receive food aid donated by a Kuwaiti charity organisation in the village of Hays, near the conflict zone in Yemen’s western province of Hodeida, this week.

Obama bought off the Gulf monarchies with record arms sales, a tactic many US officials at the time, now in the current administration, came to regret as complicity in the mass killings of Yemeni civilians. The Biden team has sought to put that right by announcing an end to US military involvement in the Saudi-led war in Yemen, but here again there is a grey area. The US will sell defensive weapons but not offensive ones, but in reality the distinction is open to interpretation. In the same week the Khashoggi ban was unveiled, the Saudi monarchy launched this year’s Future Investment Initiative, known as “Davos in the Desert” and by all accounts, the investment bankers and private equity moguls who stayed away in the years following Khashoggi’s slaughter, are back in force. This week may be looked back on as the one in which the effort to make Prince Mohammed a pariah finally failed.