Arabia Saudi Arabia Bailed Out A Cruise Ship Company With...

Saudi Arabia Bailed Out A Cruise Ship Company With Close Ties To Trump

-

- Advertisment -

President Donald Trump has spent weeks promising to protect cruise lines from the economic pain of the coronavirus pandemic. Now a fund that Trump ally Saudi Crown Prince Mohammed bin Salman controls has revealed a big new stake in Carnival Corporation, the world’s largest cruise operator. 

The sudden change of fortunes for a company run by Micky Arison, a longtime Trump associate, could be as much about personal relationships and geopolitics as about business.

A Monday filing with the Securities and Exchange Commission shows that Saudi Arabia’s Public Investment Fund (PIF) now owns more than 8% of Carnival. It held no stock in the firm at the start of 2020. The news prompted Carnival’s share price to climb 20% ― the company’s biggest percentage increase on record, The Wall Street Journal reported.

As of Thursday afternoon, the kingdom’s 43.5 million shares were worth more than $500 million.

Carnival’s Diamond Princess cruise ship was the site of a large, early outbreak of COVID-19, the illness caused by the novel coronavirus. More than 800 deaths due to the disease are linked to the Diamond Princess and another cruise liner, the Grand Princess. The cruise line’s stock price has tumbled in the last month, sending it desperately seeking finances to cover refunds and future orders as its operations are suspended.

The windfall from the Saudis boosted investor confidence that the company and the broader cruise ship industry could rebound. But its timing has alarmed good government advocates.

“It’s a little too convenient to be a coincidence,” Derek Martin, a spokesman for the watchdog Accountable.US, said via email. “We know the president has been desperate to secure bailout funds for his friends at the cruise lines from Congress, because he won’t stop talking about it.” 

“If Trump turned to Saudi Arabia to close this deal, it wouldn’t be the first time he asked a foreign country to do him a favor,” Martin added. “With the president’s help, industry may have secured funding to keep them afloat, but now the American people need to know — at what cost?”

U.S. President Donald Trump speaks with Saudi Crown Prince Mohammad Bin Salman on the first day of the G20 summit in Osaka, J



U.S. President Donald Trump speaks with Saudi Crown Prince Mohammad Bin Salman on the first day of the G20 summit in Osaka, Japan, in June 2019.

By addressing one of Trump’s big current fixations, the Saudis may have secured undue influence on the president and U.S. foreign policy ― another quid pro quo for a president who’s proven transactional in his approach to global affairs.

Trump said at a March 19 briefing that he’d discussed the coronavirus crisis with Arison, Carnival’s chairman and founder, who helped sponsor the president’s old television show “The Apprentice” and is also the owner of the Miami Heat. The president praised Arison ― and the company’s share price rose by 7.5% that day.

On March 6, Trump privately told donors gathered at his Mar-a-Lago resort that he wanted to protect cruise companies, The Washington Post reported. And at a press conference on March 26, he applauded cruise lines as “big,” “great” and “very important” ― adding the following week, “we have to get those cruise ships moving along.”

The president and his team have also been in frequent contact with Riyadh in recent weeks, primarily over a Saudi plan to secure oil contracts that lowered prices and hurt U.S. fossil fuel producers. Secretary of State Mike Pompeo called the crown prince, known colloquially as MBS, on March 24, and Trump talked to him on April 2.

Arison and Trump did not discuss Carnival’s financial situation or potential investors, a company representative told HuffPost.

“It’s very unlikely that the president and MBS discussed” Carnival, a source familiar with the Trump administration’s Middle East policy-making said.

Still, the president’s interest in the company was public knowledge, and he’s previously celebrated Saudi money flowing into the U.S., citing that revenue in a statement supporting the kingdom days after the CIA concluded that MBS ordered Saudi agents to murder Washington Post journalist Jamal Khashoggi.

Micky and Madeleine Arison with Donald and Melania Trump at a Miami Heat basketball game in December 2005. Arison is both the



Micky and Madeleine Arison with Donald and Melania Trump at a Miami Heat basketball game in December 2005. Arison is both the Miami Heat team owner and founder of cruise giant Carnival Corporation.

It’s unclear when the Saudis began picking up Carnival stock. The fund did not purchase its stake during an offering the cash-strapped company made last week, multiple sources told the Financial Times, and the firm’s troubles ― which cheapened its shares ― began earlier in the year.

For MBS and his aides, economic reasons alone could be a good justification for the investment, said Robert Mogielnecki, a resident scholar at the Arab Gulf States Institute in Washington.

Calling the Public Investment Fund’s decision an example of “high-risk, high-reward behavior,” he added: “The PIF’s investment strategy under the leadership of crown prince Mohammed bin Salman has been anything but conservative and safe.”

Saudi interest in Carnival could also be connected to the country’s plan to establish itself as a travel destination in the future, Mogielnecki suggested in an email.

“It is highly unlikely that the PIF is being utilized as a foreign policy tool to appease the Trump administration,” the analyst wrote. “Saudi policy-makers have many other levers at their disposal – such as Saudi Arabia’s role in global energy markets – for strengthening ties with the U.S.”

The kingdom is considering reining in its oil production to boost prices, an outcome Trump has sought.

Competition between the U.S. and Saudi Arabia in fossil fuel sales will likely persist for years to come, however, and there’s a raft of looming potential problems in the relationship ― from congressional pressure over Khashoggi and the Saudis’ bloody campaign in Yemen to lawsuits over the kingdom’s alleged role in the 9/11 attacks ― that make it important for Riyadh to have built up goodwill with Trump. 

“The pressing economic challenges confronting Saudi Arabia mean that its sovereign wealth fund officials have more incentive than ever to capitalize on crises,” Mogielnicki wrote.

Despite Trump’s pledge to help cruise operators, the industry ultimately did not receive stimulus money in the $2.2 trillion coronavirus relief package he signed into law late last month. That’s in large part because they are foreign corporations. Carnival is headquartered in Miami but is registered in Panama, a move that allows the company, like so many other cruise lines, to largely avoid paying federal income taxes. 

“We did not ask nor expect a cash bailout from the U.S. government,” Carnival told NBC News last week.

Fortunately for the cruise line, another government was ready to help.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Q&A about dead suspects in California mass shooting | Latest News

WHAT PROMPTED THE GUNFIRE?Police do not have a motive for the shootings, which ended with a gun battle...

Madcap James Bond ideas that didn’t make the cut — from 007 dressing as Jesus to a David Bowie villain – Bukipress

JAMES BOND is famed for squeezing out of tight spots in pretty miraculous ways. But an eccentric idea by film...

We need to end lockdown quickly & there can be no turning back this time – Bukipress

BORIS Johnson stands on the cusp of another critical moment in his epic battle with Covid. Last April, of course,...

Kelly vs Avanesyan LIVE RESULTS: Stream, TV channel, undercard for big night of boxing at Wembley Arena – latest updates – Bukipress

JOSH KELLY faces the biggest night of his career this evening as he fights David Avanesyan for the European...
- Advertisement -

Liverpool eye Lucas Ocampos transfer but £56m release fee for Sevilla winger could be potential stumbling block – Bukipress

LIVERPOOL are reportedly interested in signing Sevilla winger Lucas Ocampos this summer. But the 26-year-old’s £56m release fee could scupper...

Ant & Dec name Saturday Night Takeaway’s angriest prank victims saying Gordon Ramsay still sends ‘chilling’ texts – Bukipress

ANT McPartlin and Dec Donnelly have revealed the stars they left shaking with rage after their elaborate wind-ups. The pair...

Must read

- Advertisement -

You might also likeRELATED
Recommended to you