Heisenberg Report

The Great Quid Pro Quo: Trump, Bin Salman, Kushner And The ‘Milk People’

No, I do not want say that. I will just have to say that unfortunately I will have to live with what was said by Obama. I will say I hate it. Look, I spoke to Putin, Merkel, Abe of Japan, to France today, and this was my most unpleasant call because I will be honest with you. I hate taking these people. I guarantee you they are bad. That is why they are in prison right now. They are not going to be wonderful people who go on to work for the local milk people.

That’s from a transcript of a call Donald Trump had with Australian Prime Minister Malcolm Turnbull on January 28 and as you’re probably aware, the “local milk people” bit became an instant internet sensation.

Well on Monday, Trump was talking about “local milk people” again, only this time, the context was a bit different. Have a look:

Just call these scoundrels (who were rounded up and carted off to the Ritz Carlton – hardly a CIA black site), local “milking” people. Or maybe “people” who were “milking” the “locals.”

On Saturday, Saudi Crown Prince Mohammed bin Salman moved to consolidate his power in a sweeping crackdown thinly disguised as an anti-corruption push. It was infinitely more brazen than his “soft” coup in June, when he replaced his elder cousin Mohammad bin Nayef as heir to the throne and interior minister.

The series of “coincidences” that accompanied that geopolitical earthquake left little doubt as to what’s going on in the Mideast. Between the sudden resignation of Lebanese Prime Minister Saad al-Hariri, the interception of a Houthi missile over Riyadh, and the dismissal of Prince Miteb bin Abdullah as head of the Saudi National Guard, the message was clear: MbS is attempting to ensure that he has both the means and the motivation to step up the kingdom’s efforts to combat the spread of Iranian influence in the region.

Obviously, there are myriad other reasons why MbS might want to consolidate power including the fact that absolute control over the levers of government paves the way for an ambitious economic and societal reform effort that, while popular among younger Saudis, is bound to be met with resistance from the old guard. And don’t forget, at the end of the day, power is an end in itself.

But don’t let it be lost on you that Jared Kushner – who has aligned himself with the Crown Prince – made an undisclosed trip to Saudi Arabia just weeks before the purge. The Trump administration has sought to shore up ties with the kingdom and Trump’s hardline stance on Iran is consistent with MbS’s hawkish lean on foreign policy.

One of the interesting aspects of this is that Prince Alwaleed bin Talal was swept up in the purge. Like MbS, he’s an advocate for reform in Saudi Arabia and was years ahead of the curve in that regard. That makes his arrest look politically motivated and as we wrote on Sunday morning, it’s probably not a coincidence that he has a long-running and at times adversarial relationship with Donald Trump. Consider this bit from a new Vanity Fair piece:

Trump and Alwaleed have been frenemies for years. In addition to helping to bail out Trump in the early 1990s by buying his yacht, he also helped him again when he bought half the Plaza Hotel, which relieved Trump of imminent debt payments. But the two men don’t seem to like each other much and, not surprisingly, have taken their disputes to Twitter. In December 2015, after then-candidate Trump called for a ban on Muslims entering the United States, Alwaleed tweeted, “You are a disgrace not only to the GOP but to all America. Withdraw from the U.S presidential race as you will never win.” Trump responded: “Dopey Prince @Alwaleed_Talal wants to control our U.S. politicians with daddy’s money. Can’t do it when I get elected. #Trump2016.” A month later, after Trump re-tweeted a doctored photo of Alwaleed with Megyn Kelly, the prince tweeted at him, “Trump: You base your statements on photoshopped pics? I bailed you out twice; a 3rd time, maybe?” After Trump was elected, Alwaleed softened his tone and tweeted his congratulations: “President elect @realDonaldTrump whatever the past differences, America has spoken, congratulations & best wishes for your presidency.” Notably, Trump’s son-in-law, Jared Kushner, is buddies with the crown prince and recently visited the country.

One thing is clear, though. Alwaleed was at the forefront of trying to push political and cultural reform in Saudi Arabia. He was a leading proponent of the right of women to drive and to pilot jets. He employs many women at Kingdom Holding as business executives. He has been an outspoken advocate of women not having to wear a veil when they go out of the house. “Some people hate me,” he told me at the Plaza. “They hate me for sure. Because they say, ‘What you’re doing is wrong. Ladies should be in the kitchen only. She should only be cooking for her children. Put her under a tent, the veil, to go out.’ That’s not right.”

The Saudi regime is looking more and more tyrannical. It all overlaps neatly, and scarily, with Trump, who demands absolute loyalty from his Cabinet and his staff, and who wishes the Justice Department were more obedient to him. He’s even taken to claiming sole responsibility for the soaring stock market, the low unemployment rate, and the slight increases in G.D.P. because you know, he’s such a good businessman and so intelligent. We can only hope that Trump’s counterparts in the inner sanctums of the American government aren’t swayed by his public displays of regression and dictatorship fever dreams.

In a new Op-Ed for the Washington Post, David Ignatius writes that MbS is undoubtedly “emboldened by strong support from President Trump and his inner circle, who see him as a kindred disrupter of the status quo — at once a wealthy tycoon and a populist insurgent.”

Ignatius goes on to note that on Kushner’s visit to Riyadh last month, “the two princes are said to have stayed up until nearly 4 a.m. several nights, swapping stories and planning strategy.”

Against this backdrop you’d be naive to think there are any coincidences here. It is no coincidence, for instance, that on Saturday, just hours before the purge, Trump tweeted this:

The Aramco IPO is a centerpiece of the Crown Prince’s “Vision 2030” plan, and Trump’s tweet – which, again, came just hours ahead of the purge – follows speculation in the media that an international listing for the company had been shelved.

This connection is not lost on FT, which originally reported that a private placement likely led by China was becoming a more realistic option. “Trump has urged Saudi Arabia’s state energy giant to list on the New York Stock Exchange, just as questions mount about the status of the international component of what has been billed as the biggest initial public offering in history,” FT wrote this week, adding that “the direct intervention of President Trump in the IPO process will probably increase pressure on Riyadh to consider a New York listing given its attempts to reinforce the wider relationship.”

There are so many quid pro quos here that it boggles the mind and they range from the momentous (a joint push against Iran), to the financial (the Aramco IPO), to the petty (the Alwaleed arrest).

At the end of the day, it’s not really clear who’s “milking” who here. While no one is going to feel sorry for any of the Saudis swept up in the purge, one can’t help but get the feeling that the Crown Prince and Trump are acting in concert.

As WaPo notes, “Saturday night’s arrests showed the iron fist inside [the Crown Prince’s] futuristic velvet glove.” I’m not sure how to translate that vis-à-vis Trump – all I know is that if we wanted to stick with the same analogy, we’d need to find a smaller glove.