WASHINGTON — The participants nicknamed it “Davos in the Desert,” which captures the lofty ambitions of the annual investor conference scheduled to convene in Riyadh, Saudi Arabia, this month.
Initially planned as an intimate gathering, it grew quickly in size and scope, and the inaugural meeting last year reflected the determination of its host, Crown Prince Mohammed bin Salman, to be a player on the world stage.
In keeping with Muslim practice, no alcohol was served. Waiters roamed the vast, opulent Ritz-Carlton Hotel, offering pale Saudi coffee and exotic fruit drinks. Outside the hotel, female executives kept their arms and legs covered. But the gathering was an extravagant embodiment of Crown Prince Mohammed’s dream to modernize Saudi Arabia and wean it off its reliance on oil by 2030.
Speaking on stage to the Fox Business Network anchor Maria Bartiromo, the prince said Saudi Arabia “and all of its projects and programs can reach new horizons in the world.” Then he presented his blueprint for Neom, a $500 billion planned city that would rise from the sands — a futuristic Xanadu of high-tech jobs and robot workers.
Last week, that vision collided with the brutal realities of the Middle East — a swirl of allegations that Crown Prince Mohammed’s family ordered the murder of a Saudi journalist in Turkey. The ensuing furor has tarnished the future king’s reputation and left his conference in tatters, as foreign investors confront the dark side of his Arabian dreams.
If last year’s conference served as a grand coming-out party for Crown Prince Mohammed, this year’s gathering is a symbol of the West’s deepening disillusionment with the young leader. No longer the bold reformer bent on modernizing his kingdom — a favorite of President Trump and his son-in-law, Jared Kushner — he is now regarded as an impulsive, unreliable autocrat who falls back on crude tactics to crush dissent.
The grisly, if unconfirmed, reports about the journalist, Jamal Khashoggi, have prompted a growing list of attendees and sponsors to bail out of the Riyadh meeting. By week’s end, The New York Times and every other major Western news media organization, except Fox Business Network, had canceled its participation.
The chief executive of Uber, Dara Khosrowshahi, was the most dramatic withdrawal. In an anguished phone call late last week with the conference’s sponsor, Yasir Al Rumayyan, Mr. Khosrowshahi, who is Iranian-American, told him that the allegations about Mr. Khashoggi were “terrible,” and that he would not go to Riyadh unless the questions about his fate were cleared up, according to two people briefed on the conversation.
Mr. Al Rumayyan, whose Saudi fund has invested more than $3.5 billion in Uber and who holds a seat on the company’s board, tried to assure him that the reports were not true, these people said, in keeping with the Saudi government’s denial of any involvement in Mr. Khashoggi’s disappearance. But it did not change his decision.
Other institutions with ties to Saudi Arabia, like the lobbying firm Harbour Group and the Brookings Institution, have also terminated their relationships.
“Mohammed bin Salman tried very hard over more than three and a half years to fashion an image of himself as a reformer and even a revolutionary,” said Bruce O. Riedel, an expert on Saudi Arabia at Brookings. “Now that veil has been torn apart.”
That leaves many financiers and technology executives in a deeply awkward position. Some have made multibillion-dollar investments in Saudi Arabia; others are managing billions of dollars of Saudi money. They want to keep the money flowing, even if they cringe at lending their names or prestige to Crown Prince Mohammed’s gathering.
Several of the investors with the biggest stakes in Saudi Arabia — including Stephen A. Schwarzman, the chief executive of the Blackstone Group; Jamie Dimon, the chief executive of JPMorgan Chase; and Masayoshi Son, the founder and chief executive of SoftBank — have yet to cancel their plans to attend.
“There will still be a lot of serious people in Riyadh,” said Jon B. Alterman, director of the Middle East Program at the Center for Strategic and International Studies. “Investors are going to be interested in Saudi Arabia for a long time to come,” he said, pointing to its extraordinary wealth and the fact that oil prices are above $80 a barrel.
Treasury Secretary Steven Mnuchin is also still scheduled to represent the Trump administration, though on Friday, Mr. Trump told reporters that he might reconsider that decision. He said he planned to call King Salman to press him for answers about Mr. Khashoggi.
“A lot of people are going over to the investment conference,” the president said. “Maybe some won’t be going.”
Asked in an interview with “60 Minutes” whether Crown Prince Mohammed gave an order to kill Mr. Khashoggi, Mr. Trump said, “Nobody knows yet, but we’ll probably be able to find out.”
He promised “severe punishment” for Saudi Arabia if it turns out that Mr. Khashoggi was killed by a Saudi hit squad in its consulate in Istanbul, as Turkish officials have said, according to excerpts from an interview that will be aired Sunday.
Mr. Trump played an important role in anointing Crown Prince Mohammed as an attractive investment. He backed the 33-year-old prince when he was jockeying to be his father’s heir, played host to him at a White House lunch, clinched a multibillion-dollar arms deal with his military, and chose Riyadh for his first foreign destination as president.
In April, Crown Prince Mohammed took a three-week tour of the United States that doubled as a road show for Saudi Arabia. After conferring with Mr. Trump in the Oval Office, he met with Bill Gates and Jeff Bezos in Seattle, Morgan Freeman and Dwayne Johnson in Hollywood, and Richard Branson in the California desert, where the two discussed space travel.
Last week, Mr. Branson suspended his directorship at two tourism projects near the Red Sea and halted discussions about an investment in his space ventures by Saudi’s sovereign wealth fund, the Public Investment Fund, which sponsors the conference.
For all the differences between Davos and Riyadh, the Saudi conference, officially known as the Future Investment Initiative, was first proposed through an invitation delivered to participants in the 2017 Davos meeting, held by the World Economic Forum.
“The FII offers a significant opportunity to engage with what will soon be the world’s largest sovereign wealth fund, and a monumental force in the world of global investment,” said a follow-up email sent by the organizers in April 2017 to one of the invitees.
“During the FII,” the email said, “there will also be abundant opportunities for meetings with Saudi officials from the Public Investment Fund and other leaders of the kingdom at the highest level.”
Given the uncertainty surrounding a new event, recipients called one another to determine who was going to attend. Many were intrigued. Eventually, the planners had lined up Mr. Mnuchin, Mr. Branson, Mr. Schwarzman and the chief executive of BlackRock, Laurence D. Fink, who was recently featured on the cover of Barron’s with the headline “The New Conscience of Wall Street?”
The Saudis recruited Richard Attias, a well-known conference organizer, who co-founded the Clinton Global Initiative and updated the look of Davos in the 1990s. Mr. Attias, a Moroccan, has also worked for media organizations like Bloomberg — organizing its forthcoming conference in Singapore — as well as The Times.
Saudi Arabia used its financial muscle without apology. Among its biggest lures was the windfall from an initial public offering of the Saudi state oil company, Saudi Aramco, which was expected to be worth more than $100 billion. Mr. Trump, in particular, was eager to see Aramco listed in the United States. (In August, the Saudi government delayed the deal, though Crown Prince Mohammed insists it could still happen by 2021.)
Goldman Sachs, which lacked the inroads into Saudi Arabia that other banks had, sent its co-president, Harvey M. Schwartz, along with the head of its Middle East and North Africa business.
Endeavor, the Beverly Hills holding company for entertainment agencies, sent its co-chief executive, Ariel Emanuel, to help push along negotiations for a Saudi investment.
Unlike Davos, the conference in Switzerland that draws a roster of the world’s wealthy and prominent, the Saudi event has struggled to attract heads of state. This year, the organizers hoped to lure President Emmanuel Macron of France and Prime Minister Shinzo Abe of Japan; neither was available. Last year, Tony Blair, the former prime minister of Britain, and Nicolas Sarkozy, the former president of France, attended.
The Ritz-Carlton, originally built as a palace for guests of the royal family and foreign dignitaries, is a fitting venue. Visitors walk on a red carpet into a vast, cathedral-like lobby, with frescoed ceilings and glittering chandeliers.
Inside the hotel, female guests are encouraged to wear business attire. But outside, they stick to the more typical Saudi dress, known as an abaya, keeping their arms and legs covered. Last year, some women were redirected to side entrances of the hotel’s conference center, rather than the main entrance to the building.
Much of the conference was a familiar mix of speeches and panel discussions. But some recalled the hallway chatter after Crown Prince Mohammed’s presentation on Neom: They joked that it was a giant sand castle. Even stranger were the large robots that the organizers placed in the lobby, where they engaged in conversations with the bemused guests.
In retrospect, clouds were gathering on the horizon. A few days after the foreigners checked out of the Ritz-Carlton, Crown Prince Mohammed converted it into a high-end prison for hundreds of wealthy Saudis. For weeks, guards kept them locked up — roughing up some — until they handed over billions of dollars in what the prince insisted were ill-gotten gains.
Steven A. Cook, an expert on Saudi Arabia at the Council on Foreign Relations, said the conference, like Crown Prince Mohammed’s decision to allow women to drive, was calculated to put an appealing face on what is a ruthless attempt to transform his society.
“These were ways of building constituencies that would be a cushion against opposition from vested interests in the royal family,” Mr. Cook said. “This was all a way of signaling to this small elite that he’s got the support of all these people around the world.”
“Now,” he said, “we’re coming to grips with the fact that he’s the big dog.”
Edmund Lee and Michael Grynbaum contributed reporting from New York, Mike Isaac from San Francisco, and Gardiner Harris from Washington.
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