[US Oil Fund ETF via Google Finance]

The Curious Timing of Kushner’s visit to KSA and the U.S.’ EITI Exit

Trump’s son-in-law Jared Kushner — he of the shaky memory and a massive debt in need of refinancing — met with Crown Prince Mohammed bin Salman within the same week the U.S. withdrew from an anti-corruption effort and Saudi Arabia cracked down on corruption. What curious timing.

Let’s look at a short timeline of key events:

Tuesday 24-OCT-2017 — Saudi Arabia’s Crown Prince Mohammed bin Salman helms a three-day business development conference at the Ritz-Carlton in Riyadh, referred to as “Davos in the desert.” Attendees include large investment banks as well as fund representatives; one of the key topics is the impending IPO for Saudi Aramco.

Wednesday 25-OCT-2017 — Jared Kushner departed for an unpublicized meeting with government officials in Saudi Arabia.

Wednesday 25-OCT-2017 — Treasury Secretary Steve Mnuchin and Undersecretary for Terrorism and Financial Intelligence Sigal Mandelker traveled separately from Kushner to participate in bilateral discussions, which included the memorandum of understanding with the Terrorist Financing Targeting Center (TFTC). The U.S. and Saudi Arabia chair the TFTC while Gulf States form its membership.

Friday 27-OCT-2017 — Reports emerged that at least one Trump campaign team will be indicted on Monday.

Monday 30-OCT-2017 — Jared Kushner met with Crown Prince Mohammed bin Salman, discussing strategy until 4:00 am. News reports didn’t indicate when exactly Kushner arrived or when discussions began. (Paul Manafort, Rick Gates, George Papadopolous were indicted this day, but not Kushner; good thing “excellent guy” Papadopolous as a former Trump campaign “energy and oil consultant” wasn’t involved in Kushner’s work with Saudi Arabia, that we know of.)

Thursday 02-NOV-2017 — U.S. Office of Natural Resources Revenue sent a letter to the Extractive Industries Transparency Initiative (EITI), a multinational effort to reduce corruption by increasing transparency around payments made by fossil fuel companies to foreign governments. The U.S. had been an implementing member since 2014.

Saturday 04-NOV-2017 — At 7:49 am EDT, Trump tweets,

“Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!”

Saturday 04-NOV-2017 — (approximately 5:00 pm EDT, midnight Riyadh local time) At least 10 Saudi princes and dozens of government ministers were arrested and detained under what has been reported as an anti-corruption initiative. Prince Alwaleed Bin Talal, a critic of Trump and a tech industry investor of note, was among those arrested this weekend.

Saturday 04-NOV-2017 — At 11:12 pm EDT Reuters reported Trump said he had spoken with King Salman bin Abdulaziz about listing Saudi Aramco on the NYSE. The IPO is expected to be the largest offering ever.

But wait…there are some much earlier events which should be inserted in this timeline:

Friday 03-FEB-2017 — Using the Congressional Review Act to fast track their effort, Senate passes a joint resolution already approved by the house, disproving the Securities and Exchange Commission’s Rule 13q-1, which implemented Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 1504, the bipartisan product of former senator Richard Lugar and Sen. Ben Cardin (now ranking Democrat on the Foreign Relations Committee),

“…a public company that qualified as a “resource extraction issuer” would have been required to publicly disclose in an annual report on Form SD information relating to any single “payment” or series of related “payments” made by the issuer, its subsidiaries or controlled entities of $100,000 or more during the fiscal year covered by the Form SD to a “foreign government” or the U.S. Federal government for the “commercial development of oil, natural gas, or minerals” on a “project”-by-“project” basis. Resource extraction issuers were not required to comply with the rule until their first fiscal year ending on or after September 30, 2018 and their first report on Form SD was not due until 150 days after such fiscal year end.” (source: National Law Review)

Section 1504 and SEC rule 13q-1 enacted the U.S.’ participation in the EITI’s anti-corruption effort.

Monday 13-FEB-2017 — Trump signed the disproving resolution. (Probably just another coincidence that Michael Flynn resigned this day as National Security Adviser.)

From the earliest days of this administration, both the Trump White House and the GOP-led Congress have been ensuring that extractive industries including oil companies will not be accountable for taxes, fees, and other miscellaneous payments (read: dark money donations and bribes, the latter being a bone of contention to Trump) paid to foreign governments.

Some of the immediate beneficiaries are Exxon Mobil, for which Secretary of State Rex Tillerson used to work, and the Koch brothers, among U.S. oil companies which claimed additional reporting requirements under Rule 13q-1 would make them less competitive with overseas oil producers.

What’s not yet clear: How is this reduced openness supposed to help track financing of terrorism, which Treasury was supposed to be working on?

What of transparency related to arms deals involving Saudi money or Aramco? What of transactions between U.S. oil companies and other foreign companies involved in deals with Russian fossil fuel firms like Gazprom?

Can Trump, Jared Kushner, their family and minions, and members of Congress profit from this increased lack of transparency?

What happens to the U.S. and global economy when oil prices rise without adequate transparency to the market to explain price increases?

Also not yet clear: what happened to the 19.5% stake in Rosneft sold last year, allegedly bought by Qatar’s sovereign wealth fund and Glencore (the same Glencore now embroiled in Paradise Papers scandal)? This massive chunk of Russia’s largest oil company has increased in value in tandem with crude oil’s rise, especially since the Saudi crackdown on Saturday. What’s to keep this massive amount of Rosneft shares from being laundered through stock markets as Deutsche Bank did between 2011 and 2015?

It’s all just so curious, the unanswered questions, the odd timing: Aided and abetted by GOP-led Congress, Trump pulls out of an anti-corruption initiative while Treasury Department appears to work on anti-corruption, and Kushner meets on the sly with the Saudi crown prince just days before an anti-corruption crackdown.

Hmm.

Blogger since 2002, political activist since 2003, geek since birth. Opinions informed by mixed-race, multi-ethnic, cis-female condition, further shaped by kind friends of all persuasions. Sci-tech frenemy, wannabe artist, decent cook, determined author, successful troublemaker. Mother of invention and two excessively smart-assed young adult kids. Attended School of Hard Knocks; Rather Unfortunate Smallish Private Business School in Midwest; Affordable Mid-State Community College w/evening classes. Self-employed at Tiny Consulting Business; previously at Large-ish Chemical Company with HQ in Midwest in multiple marginalizing corporate drone roles, and at Rather Big IT Service Provider as a project manager, preceded by a motley assortment of gigs before the gig economy was a thing. Blogging experience includes a personal blog at the original blogs.salon.com, managing editor for a state-based news site, and a stint at Firedoglake before landing here at emptywheel as technology’s less-virginal-but-still-accursed Cassandra.

19 replies
  1. Pete says:

    MAGA: Make American Graft Absolute

    I wish I had 10% the insight of Marcy and many others on this site have.  But I can punch somebody if that will help.

    Rat fuckers all.

  2. K says:

    Now the Saudi’s can continue with culture of bakeesh (bribery) without having to reveal it once they become a “public” company.
    A straight up bribe to get the saudi’s to list on the NYSE.
    Wonder if Jared took his customery under the table commission in return for this?
    Or is that bribe going to be the refinanceing of his albatross 666 Fifth Ave?
    Regretably it would seem that they have just sown the seeds of another civil war in the Middle East and further instability.

  3. jo6pac says:

    Well the house saud is a fine mess and I can’t find the link but the cia isn’t happy with the leader.

    http://www.mintpressnews.com/in-stunning-reversal-saudi-arabia-order-arrest-of-syrian-opposition-leaders/234136/
     
    http://www.moonofalabama.org/2017/11/lebanon-hariris-resignation-the-opening-shot-of-the-saudi-war-on-hizbullah.html
     

    Just read somewhere that another prince has died in a shot out when the arrest didn’t go well. Everything the new leader has touched hasn’t gone well and has helped make Iran even stronger.

  4. Rugger9 says:

    The thing to keep in mind as well is that it is probable that the arrested ones will be dead within a month.  The prince whose helo went down provides the indicator of the seriousness of this coup.

    The KSA doesn’t waste time when dispensing “justice” and Prince MBS cannot allow them to become a focus for dissenters.

    Jared and the Kaiser probably gave them the “green light” much as GHWB’s ambassador April Glaspie gave Saddam a green light before the first Gulf War, which was “plausibly denied” later.  I would be surprised if there is anything in writing from the KSA side, but if we follow the money as time goes on the quid pro quo will become clear.

    That also goes for Qatar.

  5. Jim White says:

    Don’t forget the Saudis also claimed to “intercept” a missile from Yemen. Rebels in Yemen claimed to have fired it and the Saudis blame Iran for providing it. Don’t forget that ballistic missile interception is nearly impossible and the US has been overselling the interception rates for the Patriot Missile system and its various successors. I’d bet anything Iran did provide a missile, but it was pretty shitty and fell harmlessly in the desert, allowing the Saudis to claim a successful hit. But the timing of this stinks when put into your timeline. [I’d give a link to the event and some of the other stuff, but I’m in deranged owl mode right now with dilated pupils after an ophthalmologist visit.]

    • Rayne says:

      I didn’t forget but didn’t include this because I don’t have enough information to suggest it was anything than what it appears — a parallel event resulting from predominantly-Sunni KSA’s ongoing conflict with Shia-identifying Houthi in Yemen. We’re looking at religion-based conflict between the two major Muslim sects, amped by competition in fossil fuels at a time when demand for fossil fuels is dropping like a rock. I also didn’t forget the crash which killed at least one prince, but I don’t have enough credible information to indicate whether it was an accident, an assassination, or a crash resulting from an attack by Houthi in Yemen. KSA’s arrest of princes/ministers who are responsible for media and communications has complicated reporting. Add Hariri’s resignation this weekend as PM in Lebanon and *now* the Saudis’ claim that they are in a state of war with Lebanon — what a mess. I’ll stick to the money laundering for now because it’s what Trump has always done and it’s what has led to the indictment of at least two of his minions.

      Hope you’re sitting down someplace cool and not too bright and away from sharp objects for the rest of your deranged owl mode. ;-)

  6. SpaceLifeForm says:

    :-) Good job Rayne.

    Did you know Prince Alwaleed bin Talal and Bill Gates are connected?

    If there are not dots in PP between these two, I will be shocked, shocked I tell you! Gambling on this planet! (see Casablanca, 1942)

    http://www.telegraph.co.uk/finance/4655209/Bill-Gates-and-Prince-Alwaleed-bin-Talal-in-Four-Seasons-deal.html

    This is not the first time Mr Gates and the Saudi prince have collaborated. Following a dinner at Mr Gates’ home in Washington state in early 2004, Prince Alwaleed agreed to explore ways to assist Microsoft’s expansion in Saudi Arabia.

    • SpaceLifeForm says:

      More:

      https:/www.nytimes.com/2017/11/06/technology/unsavory-sources-money-fueling-tech.html

      [But they want to bury the Gates connection]

    • SpaceLifeForm says:

      No. Everything has to be unwound carefully and slowly. Wait until 2020-01-21 and then things hopefully will happen.

      Shorter term is the next 55 days. (702)

    • Rayne says:

      Yeah. Pretty good piece, doesn’t quite add enough tension from Lebanon/Hezbollah/Houthis/Iran but the army upheaval? That. MBS displayed his youth/lack of game theory by ignoring the splits in loyalty; have to wonder why the king didn’t caution about this, or did MBS go rogue because ‘Prince’ Kushner greenlit the purge?

  7. Rapier says:

    Saudi money and the Trump’s and by extension the GOP, the latter always having been the case, are a marriage made in heaven, or hell. Hell for Iran that’s for sure. A clear cut win for America is at hand. It’s just a matter of when now.

  8. orionATL says:

    here is a general report i found useful about what is going on in saudi arabia:

    https://www.theguardian.com/world/2017/nov/07/this-is-a-revolution-saudis-absorb-crown-princes-rush-to-reform

    this is court politics of the sort we could have watched play out in europe 300 years ago. certainly the saudis would benefit by easing up on their oppressive religious conservatism.

    my bias favors the iranians to lead that region of the world, frankly; but they are as brutally repressive, with politics grounded in religious fanaticism, as are the saudis.

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