K Street Firms Bailing on Saudi Over Khashoggi—but Replacements Will ‘Line Up’
Three firms have cut ties with the kingdom at a time when it needs the best lobbyists it can get. But a K Street denizen says there are plenty ready to take their place.
Saudi Arabia’s cozy relationship with Washington lobbyists just took a body blow. Within hours of CNN reporting that Saudi officials were preparing to reveal that they killed journalist Jamal Khashoggi during an interrogation, two Washington lobbying firms—BGR and Glover Park Group—cut ties with the kingdom. Harbour Group dropped the kingdom last week.
Combined, the three firms contracted with Saudi Arabia for $1.6 million—a relatively small percentage of the total amount of money that has flowed from Saudi Arabia to K Street over the last two years.
Over the last few decades, the kingdom has poured countless sums into Washington, handsomely compensating scores of law firms, lobbying shops, and public relations experts. Representing Saudi always brought risks; it’s been less than a year since the country started letting women drive, and the role of 15 Saudi nationals in the September 11 terror attacks made K Street’s work unusually complicated, to say the least.
Khashoggi’s disappearance has put extraordinary pressure on the Riyadh-K Street relationship. And the kingdom’s changing tune on Khashoggi didn’t help; from flat-out denials to acquiescence to a joint consulate investigation with Turkey to reported preparations to cop to a crime, the Americans working for the Saudis struggled to figure out which story to keep straight.
“Do you drop it, do you ride it out, do you suspend it, do you give some of the money to charity, or do you hold your breath and pretend nothing’s happening?” said one lobbyist familiar with the Saudis’ American agents.
Those agents had just one question for their fellow agents at different firms, according to the lobbyist: “Hey, if you’re going to bail, can you at least give us a heads-up?”
The central question for firms deciding to bail or not to bail was whether they could afford to cut ties—or afford the reputational hit that comes with being associated with Khashoggi’s alleged killers. Some of the most lucrative deals amount to more than $5 million.
“Everyone’s having the revenue conversation,” said another lobbyist who has done foreign sovereign work. “Can you afford to hack them off as a client? That’s a question you have to ask. Are your other clients going to be shamed?”
The friction comes at a time when the kingdom needs the best lobbyists it can get. Saudi is in the process of negotiating a series of massive arms deals with American defense contractors. Before it’s finalized, the top Republicans and Democrats on the House Foreign Affairs and Senate Foreign Relations committees must sign off. The Khashoggi news has roiled Capitol Hill, drawing bipartisan censure. That means the kingdom needs advocates with access to lawmakers to win back hearts and minds. Losing Harbor, BGR, and Glover Park obviously doesn’t help.
But it isn’t a deal-breaker, according to one longtime denizen of K Street.
“For every one that dropped them, 20 will line up to take them,” he said, noting K Street’s mercenary reputation. “I don’t think they’ll have trouble finding new folks.”
The firms’ announcements came just hours after President Trump deployed Secretary of State Mike Pompeo to Saudi Arabia to meet with King Salman. Over the past several days the White House has said it would wait for the investigation into Khashoggi’s disappearance to conclude before offering judgment. However, in an interview with 60 Minutes on Sunday, Trump said there would be “severe consequences” for the kingdom if the U.S. saw evidence the country had played a part in Khashoggi’s death.
Saudi still has a fleet of lobbyists in place. And for the time being, they’re waiting for clarity from Riyadh.
One of Saudi’s top regional rivals, meanwhile, is also waiting with bated breath. Lobbyists for Qatar, which spent more than $16 million on lobbying in 2017, stand to benefit from a rift between the United States and Saudi. The kingdom launched a blockade of Qatar last year. Qatar’s lobbyists are trying not to shoot themselves in the foot by appearing to capitalize on Khashoggi’s alleged brutal killing.
“My advice to them has been to do nothing,” said one lobbyist who works for Qatar.
“When your opponent is exploding, stay away from them and stay out of the splatter,” he added.
—with additional reporting by Erin Banco