Goldman quietly sending representatives to controversial Saudi conference despite CEO's rebuke

Goldman Sachs is still planning to send company representatives from its Middle East offices to a controversial investment conference sponsored by the Saudi royal family, despite comments made by its chief executive David Solomon suggesting the big investment bank was boycotting the event as a protest to the apparent murder of journalist Jamal Khashoggi, the FOX Business Network has learned.

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An official from Goldman told FOX Business that as of Friday afternoon, the firm still planned on sending representatives from offices in Riyadh and the United Arab Emirates to next week’s Future Investment Initiative conference.

The decision by Goldman came after Solomon issued what appeared to be a strong public rebuke of the royal family’s response to the likely murder of Khashoggi, and claims that Goldman wouldn’t send officials to the conference in an interview with CNBC.

The conference was dubbed "Davos in the Desert" because of the high-profile business executives and economic leaders who were slated to attend: JPMorgan Chase CEO Jamie Dimon, Blackrock chief Larry Fink and Christine Lagarde, the chairwoman of the International Monetary Fund.

Those officials and a slew of journalistic outfits have now pulled out of the conference as evidence builds that Khashoggi was murdered by individuals with ties to the Saudi royal family and the Crown Prince Mohammed bin Salman. Khashoggi, a Saudi citizen living in the U.S., served as a columnist for the Washington Post and was a frequent critic of the Saudi regime.

On Thursday, Treasury Secretary Steven Mnuchin said he wouldn’t attend. The FOX Business Network on Thursday also pulled out of the conference.

Goldman appeared to boycott the event as well—a controversial move since other banks were slated to send junior executives as a way to maintain ties with the kingdom despite the international outrage over Khashoggi’s likely murder. Solomon, in a Thursday interview with business network CNBC, said he was adamantly opposed to sending Goldman officials to the conference, including one of its top investment banking officials: Dina Powell, a former national security adviser to President Trump.

Solomon also expressed outrage at the Saudi response to Khashoggi’s disappearance and likely murder since the regime has yet to say what happened to the journalist, who was last seen alive on Oct. 2, entering the Saudi embassy in Istanbul.

“We had not planned… I had not planned on going… we had no senior executives, executive office people, going to the conference. We had not planned that,” Solomon told CNBC. “Dina Powell had been planning on going to the conference but she will not be attending the conference now.”

Solomon added: “This incident is unacceptable, and clearly they have to answer questions… how they answer those questions and how more information becomes apparent around this will have an impact on how we all interact.”

But officials inside Goldman concede the firm is sending regional representatives as a way to preserve a valuable client relationship with the Saudi government. The company could ultimately decide to boycott the event entirely, but as of Friday afternoon, it was still scheduled to send representatives.

The reason? Money, and lots of it for Wall Street firms like Goldman. Besides its massive riches, the royal family is planning an initial public offering of its state-owned oil and gas company, Saudi Aramco —a move designed to diversify the kingdom’s economy.

TickerSecurityLastChangeChange %
GSGOLDMAN SACHS GROUP INC.224.61+7.47+3.44%
MSMORGAN STANLEY49.80+0.73+1.49%
JPMJP MORGAN CHASE & CO.135.04+1.98+1.49%

The IPO has been delayed, though Saudi officials say they still plan on issuing some $100 billion in stock – one of the biggest paydays for Wall Street firms like Goldman. The $100 billion will be used to seed a new sovereign wealth fund to allow the kingdom to remake its economy. The IPO would also value Saudi Aramco at $2 trillion.

A Goldman spokesperson had no further comment.

To be sure, other big banks that have said they are not sending senior officials to the conference have conceded that they will send junior representatives of the bank as a way to remain in the good graces of the royal family despite the controversy over Khashoggi.

But executives at the other banks have so far not attempted to spin a story that they are completely boycotting the event. After Solomon’s comments on CNBC, wire services began reporting that Goldman wouldn’t send executives to the conference as did The New York Times and The Hill.

It’s unclear why Solomon took such a tough public line with regards to the conference while privately deciding to send Goldman people to the event. Some Wall Street executives speculated that Solomon was looking for good publicity in the U.S. while maintaining a key business relationship in the Middle East.

Dick Bove of Rafferty Capital Markets said the reason Goldman is sending representatives from Riyadh is because of “the biggest IPO, if it's ever done, is taking Aramco public. The fees from the Aramco deal are going to be mind-blowing for investment banking companies, so there’s a limit for how far any investment banking company will go to upsetting” Saudi Arabia.

FOX Business has learned that JPMorgan Chase and Morgan Stanley -- both competitors to Goldman for the Aramco offering -- also plan, as of Friday, to be sending regional representatives to the conference. Citigroup and Bank of America are also weighing sending representatives, Wall Street sources say.

Companies that are totally boycotting the event include private equity powerhouse Blackstone, financial services company Wells Fargo, and Blackrock, the world’s largest money management firm, people at the firm tell FOX Business.

A spokeswoman for Citigroup had no comment. Press officials for Blackstone, Blackrock, JPMorgan Chase and Morgan Stanley had no further comment.