Apparent killing of journalist causes chaos for defense contractors dealing with Saudis

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Major defense contractors are freaking out over the chance that lawmakers could cancel deals with the Saudis over accusations that they murdered a US-based journalist — a move that could cost them billions.

Panicked industry reps have told Team Trump they’re worried that reports that journalist Jamal Khashoggi was lured to the kingdom’s consulate in Istanbul and killed would put their lucrative deals in peril, Reuters reported Friday.

Turkish reports that Khashoggi, a Saudi who lives in the US who wrote for The Washington Post among others, was murdered have increased resistance in Congress to selling weapons to Saudi Arabia, already a concern for many lawmakers outraged over the Saudi role in Yemen’s civil war, which has left thousands of civilians dead.

President Trump said Thursday he was wary of halting arms sales to the Saudis over the case as the key US ally would just shift its weapons purchases to Russia and China.
“That would be hurting us,” Trump said when asked about cancelling the $100 billion deal.

“We have jobs. We have a lot of things happening in this country. We have a country that’s doing probably better economically than it’s ever done before. Part of that is what we are doing with our defense systems and everybody is wanting them, and frankly, I think that would be a very, very tough pill to swallow for our country,” Trump told Fox News.

But in Congress, Democrats and some Republicans have said the Khashoggi case had heightened resistance to moving ahead with Saudi weapons sales.

Even before that, Democratic lawmakers had placed “holds” on at least four military equipment deals, largely because of Saudi attacks that killed Yemeni civilians.

“They’ve had holds on major systems for months for Yemen issues,” a senior administration official told the news service.

“This makes it more likely they’ll expand holds to include systems that aren’t necessarily controversial by themselves. It’s a major concern.”

The official declined to name the companies that had contacted the administration over their Saudi deals.

Defense contractors did not immediately respond to a request for comment.

Lockheed Martin Corp and Raytheon Co have been the most active US defense companies with potential sales to Saudi Arabia since Trump announced a $110 billion package of arms deals with the country last year as part of his “Buy American” agenda to create jobs at home.

Since then, about $19 billion in deals have been officially reported to Congress, according to government records, making it unlikely that they can be halted.

These include training packages for Saudi troops and pilots as well as the THAAD anti-missile system that could cost as much as $15 billion.

One lobbyist for a defense company who spoke on condition of anonymity said worries about a potential across-the-board blockage of Saudi sales by Congress had surfaced in recent days, a development that would hurt a range of contractors.

Tennessee Sen. Bob Corker, the Republican Foreign Relations Committee chair, told reporters Thursday he had told a defense contractor not to push for a deal with the Saudis, even before the Khashoggi case.

“I shared with him before this happened, please do not push to have any arms sales brought up right now because they will not pass. It will not happen. With this, I can assure it won’t happen for a while,” Corker said.

Jersey Sen. Robert Menendez, the top Foreign Relations Committee Democrat, said the Trump administration had not satisfied concerns he first raised in June about the sale to members of the Saudi-led coalition of Raytheon’s precision-guided munitions, or PGMs.

An informal review process lets the top Republicans and Democrats on the Senate Foreign Relations and House Foreign Affairs Committees stall major foreign arms deals if they have concerns such as whether weapons would be used to kill civilians.

Khashoggi, entered the Saudi consulate in Istanbul on Oct. 2 to get documents for his forthcoming marriage.

Saudi officials say he left shortly afterwards but Turkish officials and his fiancee, who was waiting outside, said he never came out.

Turkish sources have told Reuters the initial assessment of the police was that Khashoggi, an outspoken critic of the Saudi government, was deliberately killed inside the consulate.

Riyadh has dismissed the allegations as baseless.

Trump, on Fox News, said the US was concerned about the case.

“And we’re being very tough, and we have investigators over there, and we’re working with Turkey, and frankly, we’re working with Saudi Arabia,” he said.

“We want to find out what happened. He went in and doesn’t look like he came out. It certainly doesn’t look like he’s around.”

With Reuters

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