European Commission put Saudi Arabia on ‘dirty money’ list

On the same day that the European body slapped Saudi on the list, Pompeo sat next to the Saudi foreign minister at a summit in Poland.

Secretary of State Mike Pompeo, seated next to Saudi Foreign Minister Shah Mahmood Qureshi, in Warsaw, Poland, on Feb. 13, 2019. (PHOTO CREDIT: Screen shot from U.S. State Department video)
Secretary of State Mike Pompeo, seated next to Saudi Foreign Minister Shah Mahmood Qureshi, in Warsaw, Poland, on Feb. 13, 2019. (PHOTO CREDIT: Screen shot from U.S. State Department video)

As Secretary of State Mike Pompeo was meeting with Saudi Arabian officials and others in Poland on Wednesday to discuss the war in Yemen, the European Commission added the Gulf Arab kingdom to its “dirty money” list.

Saudi Arabia joins others on the index, including Libya, Panama, Trinidad and Tobago, and the U.S. territories of American Samoa, Guam, and U.S. Virgin Islands on the list, owing to weak controls on money laundering, terrorism financing, and poor transparency on corporate ownership.

Ben Freeman, director of the Foreign Influence Transparency Initiative at the Center for International Policy, said he was very surprised to see that that Saudi Arabia had been added to the dirty money list.

“No, I was not expecting that. Especially with having this conference in Poland!” said Freeman, referring the meeting in Warsaw where Pompeo and Vice President Mike Pence sought to build Middle Eastern and European alliances against Iran.

“I think the timing from the E.U. sends a signal,” he added.

When asked what he thought the odds were that the United States would ever do the same, Freeman responded: “Oof… yeah, you can quote me on that. The probability of that is non-existent.”

The United States has an openly transactional relationship with Saudi Arabia — even more so under President Donald Trump, who responded to calls for holding the country responsible for the murder of dissident journalist Jamal Khashoggi with, essentially, “but they buy a lot of weapons from us.” He’s also benefited from Saudi largesse via real estate sales and the amount of money they spend at his hotels.


“He has significant ties to Saudi Arabia, there is a significantly close connection to his son in law, Jared Kushner, and the Crown Prince of Saudi Arabia, Mohammed bin Salman… so the president, in a variety of ways, has a vested interest in staying involved in Saudi Arabia that certainly isn’t the American interest, in this case,” said Freeman.

Saudi spending in the United States has grown under Trump. During President Barack Obama’s last year in office, Saudi Arabia spent $10 million on its lobbying in the United States. The first year of the Trump presidency saw that spending jump to $27 million, which, while eyebrow raising, was perfectly legal.

The Obama administration had a good relationship with Saudi Arabia, so why the spending spree? Well, Freeman explains that Saudi Arabia saw the blank page that was the Trump administration’s foreign policy as an opportunity — and with buckets of money, they bought influence and helped write Trump’s foreign policy.

How long will this money — which our European allies now consider dirty — last?

Saudi Arabia has been trying to diversify its economy and has created a plan called “Vision 2030.” The country is hoping that investing in, say, Silicon Valley will produce jobs in the Kingdom. And it still has hundreds of billions in foreign currency reserves.


But things have been tough: Saudi Arabia’s 2019 budget increased even as oil prices dropped (so, less money coming in), unemployment is on the rise, economic growth has been sluggish, and the country continues to pay allowances to its citizens.

Freeman explains that the last spending to go will probably be U.S. lobbying because what it buys (American investments and apparently unconditional backing on the world stage) is worth so much more than the monetary cost.

This spending isn’t sustainable under this model, especially when the kingdom runs out of oil (in an estimated 70 years, depending on rates of production).

For now, the millions and millions they spend in the United States is chump change, and shows no signs of slowing. A report on Saudi Arabia’s 2018 spending in the United States is due next month, and Freeman said there wasn’t “any sort of slowing down of the Saudi lobby, post-Khashoggi.”

After Khashoggi’s murder last year, several U.S. firms cut ties with Saudi Arabia, but some 20 firms are very much still employed by the kingdom. These firms are registered as foreign agents, said Freeman, and payments made through them do not include the millions Saudi Arabia gives to think tanks and academic institutions.


These lobbyists are very active in trying to kill things like the Yemen War Powers resolution passed by the House on Tuesday.

Not all European Union countries were on board with adding Saudi to the dirty money list. The United Kingdom (which is set to leave the E.U. on March 29), for instance, criticized the move. E.U. member states have up to two months to endorse the list, though it’s unlikely that it will be blocked.

The Saudi government, Reuters reported, issued a statement via its state press agency, saying “Saudi Arabia’s commitment to combating money laundering and the financing of terrorism is a strategic priority.”

Saudi Arabia buys a lot of goods — including weapons — from the U.K., and several major British banks operating the moneyed kingdom.

Still, while the United States is unlikely to put Saudi Arabia on a dirty-money list, what could happen, said Freeman, is that there could be reforms to the Foreign Agents Registration Act, demanding more transparency about what lobbyists do, and maybe make it easier for people to track the money and the influence.