Davos in the Desert Impacts a Trump Crony in Court

The U.S.-Saudi Politics in the Barrack Trial Are a Mirror Image of the Larger Geopolitical Ones

There’s heavy irony in the fact that the trial of Trump crony billionaire businessman Tom Barrack—focused on allegations that he and a young aide acted as foreign agents for the United Arab Emirates, a country that has generally been considered a US ally for decades—continues apace while over in Saudi Arabia—a kingdom that is 500 miles from the UAE and is their closest ally—the Saudis are hosting Wall Street’s brightest and best at the annual conference nicknamed “Davos in the Desert.”

After the jury left Monday’s proceedings, there was chat among the lawyers about Stephen Schwarzman, the chairman of the private equity giant Blackstone. Barrack’s defense team wanted to show a video of Schwarzman essentially saying the same flattering things about the Saudi Crown Prince Mohammed Bin Salman that Barrack has. (This flattery is along the lines of his reforms and efforts to transition Saudi Arabia away from an oil-based economy.)

The government objected. The prosecution, in particular Sam Nitze, has repeatedly made it clear—especially during his cross-examination of Princeton Professor of Near Eastern Studies Bernard Haykel—that they will not tolerate images of either MBS or his mentor MBZ, the leader of the UAE, being depicted as some kind of fuzzy, Teva-wearing philanthropists without offering an alternative view of their autocratic regimes.

If the judge allowed a video of Schwarzman talking up MBS to be played, Nitze said he’d want a video of somebody else saying something less flattering: “Just like they have a video clip, we'll look for other video clips. Jamal Khashoggi might be a name that surfaces again in terms of people saying different things than Mr. Barrack.”

(In the end, the judge did not allow the video into testimony, not wanting to go down a rabbit hole.)

But the conversation in the courtroom could not be happening at a thornier, more fragile moment in relations between the U.S. and Saudi Arabia—one that reflects on a vast international stage exactly the political battle going on inside the Barrack trial, even though the UAE and not Saudi Arabia is the country that Barrack is accused of spying for. Unfairly perhaps for the UAE, they’ve become almost indistinguishable.

Here's a snippet from a sidebar:

Nitze (to the judge): We had article after article and photograph after photograph… I would like, in addition -- for the jury to have in addition to the pictures of MBS with Mr. Bloomberg, and MBZ with the Rock, and -- I don't know, I could do the whole list -- I'm asking to put one photograph in to rebut and impeach the idea that the only people they're seen with – and many of those photographs that were put in the defense case are also just corroborative of things that were stated orally.

Nitze then asked for the photograph of Joe Biden awkwardly fist-bumping MBS to be shown for the government.

You can understand why. The Wall Street Journal reported earlier this week that relations between MBS and Joe Biden are so bad in the wake of what the Biden administration perceives as a broken promise over the reduction of oil production ahead of the mid-term elections—a gesture interpreted as helping Russia in the Ukraine conflict—that the U.S. is threatening to revisit its promises regarding national security and Saudi Arabia is threatening to sell its U.S. Treasury bonds.

At the heart of the friction between the two leaders is the fact that Joe Biden refuses to let the subject of the murder of Jamal Khashoggi die, bringing it up in his visit to Saudi Arabia this summer when MBS had reportedly let it be known he just wants to move on. According to what we’ve heard in this trial, prosecutor Sam Nitze is most definitely in the Biden camp. Again and again, he wants the jury to hear exactly what type of people, in his opinion, Barrack was proselytizing for. Here he is quizzing Princeton professor Haykel about Khashoggi:

NITZE: Are you aware that the DNI, the intelligence community of the United States, in a public forum has concluded that, in fact, MBS was responsible for that murder?

HAYKEL: Yes, I've read the document.

NITZE: To your knowledge, he hasn't taken responsibility for that, has he?

HAYKEL: He says he takes responsibility .

NITZE: Where did he say that?

HAYKEL: In public. I can find it for you, if you like.

NITZE: No, you don't need to find it. So what were the repercussions of him taking that responsibility?

HAYKEL: Politically, so far none.

But Barrack, as Barrack himself has at been at great pains to tell the jury (he was on the stand for four days), is not a politician but a businessman. A businessman who relied heavily on the sovereign wealth funds from the Middle East for investment, just like the other 400 U.S. business leaders, including Stephen Schwarzman, who this week have been in Riyadh as guests of the Saudi Crown Prince. (I assume MBZ, the ruler of Abu Dhabi, is there too.) I watched YouTube videos of the conference, and the American business leaders are busy saying over and over that they are pragmatists, not politicians. No one, as far as I can see from the videos, has mentioned the murder of Jamal Khashoggi to their host. And Jared Kushner, natch, was quick to thank the Saudi Crown Prince for his hospitality at the opening of his interview session with the former Italian prime minister Matteo Renzi. In fact, the only sign that all is not well between the U.S. and Saudi Arabia is that there are no U.S. government representatives at the conference.

Jared Kushner on stage at the annual Future Investment Initiative (FII) conference in Riyadh on October 25, 2022. (Photo by Fayez Nureldine / AFP) (Photo by FAYEZ NURELDINE/AFP via Getty Images)

So what’s going on in the Barrack trial is really tricky and reflects a larger reality that, in my opinion, asks a profound question that hits at the heart of the problem of the Trump era: Isn’t this exactly what happens when you put a businessman—or woman—into the White House? Transactionality inevitably comes first, ahead of national security and other interests. Barrack, whose grandparents were Lebanese immigrants, had access to the Middle East rulers for decades before Trump came to power and that that access gave him a unique value in the U.S. business world. He has told the jury that he really believed that precisely because he had this unique access to the ruling families in the Middle East for business reasons, it was a good thing, not a bad thing, that he could bring some sort of understanding of the different cultures to both East and West when Trump and Kushner—who he thought incredibly smart (no comment from me on that)—entered the White House. He saw it as an opportunity to do some good in the world. Now, if the “world” was just thousands of private equity firms (and, arguably, his world was), he has a point. But of course the world is more complicated than that. And that’s the problem.

It'll be interesting to see where the jury comes out on all this.

Barrack told the jury that the year before Trump took office, he sent out a “chairman’s corner” memo to his office employees, as had been his custom for 25 years. This one was entitled “Where and When does East meet West.” It’s several pages long, but parts of the conclusion are worth reading:

The Lessons from History...

In the Arab world, at every turn of every leader, there is the footprint of the boots of a Western Power. Arabism is in its teenage years, learning how to blend its various tribes into a united front. Recently, the West has criticized the Middle East for refusing to adapt to current human rights standards, and to transition away from practices that the West finds to be abhorrent. Attitudes are changing in the region, but it takes decades to effectuate a 180-degree turn in culture and religion. It will happen in baby steps. (It is helpful to remember that the US had slavery for over 200 years, and women were not allowed to vote until the 1920s!)

While the resource curse of Middle Eastern lands has caused good fortune, it has also lead to an accompanying greed and competition from Western Powers to be unrelenting in their dominance…

Our current tumultuous circumstances can only be relieved by an intense and relentless commitment to communicate and educate at all levels. There is a dramatic difference between “imposing a point of view” and “presenting a point of view.” East and West’s mutual misunderstandings, unfulfilled expectations and “miscommunicated communications” are at the root of the problem. Tolerance is a contact sport and, along the way, the price of freedom may extract a steep toll, an unfortunate reality of finding a civilized common denominator of trust and confidence. We may also find that the price of total freedom is just too great and we are not prepared to accept the occurrences and the vagaries caused by allowing bad conduct under the moniker of freedom…

When asked by his defense lawyer why he wrote this, Barrack had the following to say:

Because it's part of my life. Confusion of these kind of issues is rampant and in business, it's the biggest problem we have is understanding each other, is communicating with each other. I happen to have an emotional connection to this because I've seen what happened firsthand from camels in the desert and these kind -- nice people without access to the West, without access to democracy, without access to understanding, with a religious point of view, no different, by the way, than the Jews in Israel or other sects. And the threads of what they're doing and we're doing are so complicated. We're sitting here in the middle of the same complication. Why? Because the only thread is commerce.

So for me to try and explain to -- you see the jargon that I have to deal with my investors. It's confusing. CDO, CLO, structured debt, we don't even know the world of finance and some of you are financial people, I know, but at the end of the day, it comes back to civilization and people and cultures and it hasn't changed for 7,000 years, this tribal disregard, the confusion, the inability to communicate, the unwillingness to communicate, because if you express your point of view, look what can happen.

Presumably, the 400 U.S. businessmen who went to Riyadh would have a lot of sympathy for this. Which is why Barrack’s team wanted to play the video of Stephen Schwarzman in court.

But in the White House, right now, they’d have no patience with it at all. And that’s the fundamental rub playing out in this trial.