Category: Mohammed bin Salman

• Ali Shihabi set up the Arabia Foundation to promote MBS to the Washington, DC, elite.
• He weathered claims of official Saudi funding, an employee lawsuit, and Khashoggi’s murder.
• But he abruptly closed the foundation with no warning. Here’s the story of what – and who – got in his way.
• See more stories on Insider’s business page.

Seated at a large table at Le Tsé Fung, a Michelin-starred restaurant at La Réserve – a secluded five-star hotel overlooking Switzerland’s Lake Geneva – Ali Shihabi was feeling elated, if a little apprehensive.

It was August 27, 2018, and Shihabi – the founder of the Arabia Foundation, a new Washington DC-based Saudi-advocacy nonprofit – had flown thirty VIPs 4,000 miles by business class for the foundation’s second annual summit, an invite-only affair conducted under strict Chatham House rules (pass on what you learn, but don’t name names).

His reputation, newly built in Washington, was on the line.

At dinner, dignitaries like Prince Khalid bin Bandar al-Saud, the Saudi ambassador to the UK, rubbed shoulders with journalists and leading political analysts. Shihabi – tall, stubbly, and bespectacled – steered the discussions.

Shihabi, a former banker, had opened the foundation in March 2017 to fill what he believed was a gaping hole. To him, Saudi Arabia was woefully misunderstood, and Crown Prince Mohammed bin Salman’s reforms were real, not just bread and circuses. Shihabi believed his government was failing to sell itself.

Shihabi quickly made his mark on Washington, hosting dinners with the city’s elite and making cable-news rounds. But when the foundation shuttered abruptly, 11 months after the La Réserve summit, the city was nonplussed. What happened?

The closure was intriguing, not least because Shihabi had made as many adversaries as friends advancing the Saudi cause, especially in his defense of Crown Prince Mohammed, also known as MBS, in the wake of Jamal Khashoggi’s murder.

This is the story of how the Arabia Foundation rose and vanished, according to hundreds of pages of leaked court filings from an ongoing employee lawsuit, and interviews with ten people connected to Shihabi or his foundation.

Shihabi was tight-lipped about the closure at the time, attributing it to differences among donors. “Nothing more exciting than that I’m afraid,” he tweeted. Others were unconvinced.

“They knew that he had official Saudi support.”

In its debut dispatch, the Arabia Foundation promised to fill what it called “a critical gap in the understanding and coverage of Saudi Arabia.” Among friends, Shihabi often grumbled that it was absurd that US academics who had never stepped foot on Saudi soil, or learned Arabic, appeared in US media to demystify the kingdom’s affairs.

Shihabi hired Firas Maksad, a top Middle East-focused think-tank operative, as CEO. “Firas was basically Ali’s facilitator,” Geneive Abdo, a foundation employee, said in a September 2020 court deposition. “He introduced him to people around town.” Shihabi also enlisted Bernard Haykel, a leading US scholar of Saudi Arabia and his friend of 20 years, as one of several unpaid advisors.

Shihabi inculcated Washingtonians about Saudi Arabia, attending book parties and hosting off-the-record dinners in Georgetown, Politico reported. He racked up scores of newspaper and cable-news appearances discussing Saudi affairs.

Money flowed in. The foundation received $6 million in 2017 and 2018, according to Internal Revenue Service filings. Shihabi told employees and acquaintances that his donors were wealthy businessmen in Riyadh, but questions over the source of these funds dogged him.

Shihabi never pretended to be nonpartisan, however, and in private deliberations was upfront about his links to the Saudi elite. He often flew between Riyadh and Washington, had met MBS several times, and had cordial relations with figures like Prince Faisal bin Farhan, the Saudi foreign minister. Before Washington, Shihabi worked at banks on the Arabian peninsula, including the Saudi Central Bank.

“People weren’t lapping up milk like uncritical kittens,” J. Adam Ereli, a director at the Arabia Foundation, told Insider. “They knew that Ali was Saudi, they knew that he had official Saudi support.”

Shihabi’s father, Samir, was a Palestinian refugee naturalized by Saudi Arabia in the 1940s, who later served as Saudi ambassador to the United Nations, Pakistan, and Turkey.

Ali, who spent much of his youth living outside Saudi Arabia due to his father’s postings, felt a strong sense of belonging regardless. “It’s a region that has been good to him and his family,” Haykel said.

A year into Shihabi’s mission, Saudi Arabia’s stock was high in Washington. The CEOs of Apple and Google treated MBS to guided tours of their Silicon Valley campuses in April 2018 and, in June, then-President Donald Trump heaped praise on MBS for letting Saudi women drive for the first time.

But that sentiment evaporated when, in early October, Khashoggi was murdered in Saudi Arabia’s consulate in Istanbul. The Saudi embassy on Washington’s New Hampshire Avenue was mute, and Shihabi was the lone voice of opposition, appearing on PBS’ “Frontline” and CNN’s “Amanpour” to defend the kingdom’s version of events. (The CIA would later conclude that MBS likely ordered the hit.)

“Shihabi had to become the spokesperson for MBS in Washington,” a former senior State Department official, who requested anonymity to speak candidly, told Insider. It was not a coincidence that Prince Khalid bin Salman al-Saud was replaced as ambassador soon after, the official added.

Shihabi’s stance riled many, especially as he had known Khashoggi well. “Keep cashing those checks, Ali. I cannot for the life of me understand how you sleep at night,” Karen Attiah, Khashoggi’s editor, tweeted at the time.

Shihabi briefly decamped to California after Khashoggi’s death, and the furor eventually died down. From early 2019, Saudi lobbyists started picking up the pieces on Capitol Hill and US companies signed new contracts with the Saudi government.

The Saudi cause arguably needed the Arabia Foundation more than ever. But on July 30, 2019, it vanished over lunch.

“When people back in Riyadh stated fucking with him, he just said, ‘I’m done.'”

At 10 a.m. that day, Shihabi seated himself beneath his foundation’s banners for a panel discussion hosted alongside the Atlantic Council. He was typically combative throughout the event, and when it ended at 12 p.m. he stood, swiftly shook hands, and exited the stage.

Soon after, a message pinged on the Arabia Foundation’s staff WhatsApp group. Everyone was to be back at the L Street office within the hour, Shihabi wrote. The foundation was closing.

In a conference room, Shihabi told the roughly dozen people gathered around the table that his donors had stopped funding the operation. Staffers should pack their things and their email addresses would stop working, he said. Days later they would receive nondisclosure agreements to sign, which would release their severance pay.

The closure came after a monthslong effort by Saudi officials to influence or hinder Shihabi’s work, according to a person close to the foundation. The source requested anonymity out of fear for their safety but their identity is known to Insider.

According to the source, in early 2019, Saudi officials had approached Shihabi and informed him that he was to start reporting to a government committee overseeing US-Saudi affairs. Spearheading the committee were Princess Reema bint Bandar, the Saudi ambassador to the US, and Prince Khalid bin Salman, the kingdom’s deputy defense minister, the source said, adding, “That’s just like saying, ‘we’re gonna pull the strings.'”

The source also told Insider, without specifying details, that there were two Saudi officials in particular who were working to hamper Shihabi’s efforts in Washington: Adel al-Juber, the Saudi Minister of State for Foreign Affairs, and a senior civil servant who served as the head of the royal Diwan, the king’s advisory chamber.

“The Arabia Foundation was a victim of its own success,” Ereli said of the closure.

“As Ali became an increasingly powerful voice for the kingdom in the US, there were people in Riyadh who wanted to either control it or manage it.”

“Ali was just hamstrung … When he was off doing his thing and actually making a difference, it was fine. When people back in Riyadh stated fucking with him, he just said, ‘I’m done.'”

“If the back office isn’t helping you, then you can’t do your job. When I say office in this case, I mean the government bureaucracy in Riyadh.”

In a statement to Insider, Shihabi said: “I set up the Foundation to be independent of donor interference. When I saw that that was no longer going to be possible, I closed it down. Simple as that.”

The Royal Embassy of Saudi Arabia in Washington, DC, did not respond to Insider’s request for comment.

In the days after the foundation’s closure, speculation was rife in Washington.

“It couldn’t have been more abrupt,” a senior academic, who has worked at Middle East-focused think tanks for more than two decades, told Insider. “Something really weird happened because this is not what organizations do.”

One theory, as Gregory Gause, an Arabia Foundation advisor, told Insider, was that the Khashoggi murder had made it “extremely difficult to sell Saudi Arabia in the US.”

Another theory was that donors bolted in light of a lawsuit filed against Shihabi by Ola Salem, the foundation’s former communications director.

In her April 2019 complaint, Salem claimed that Shihabi was discriminatory, made unwanted sexual advances, and threatened her. “If you don’t do a good job for this event I’ll behead you,” Shihabi told Salem in 2017, according to the complaint.

Salem alleges that on another occasion Shihabi told her: “Come over here – I didn’t get my morning kiss today.”

In his deposition, Shihabi said he “continuously” joked about beheading people for making trivial errors, and denied making the comment about the kiss.

“Had I felt the lawsuit had any merit, I would have settled quickly and quietly for a fraction of the legal costs, as many others do,” Shihabi told Insider. The lawsuit is still ongoing.

“I had to be loud, brash, and aggressive.”

Those Insider spoke to for this story all agreed that Shihabi, a 62-year-old graduate of Princeton and Harvard Business School and the author of two books, is intelligent, driven, and commendably well-read.

What they also agreed on was that he is aggressive, brash, and self-destructive.

“Anything can set him off,” Salem said in her deposition. “It’s even worse, actually, than [walking on] eggshells. It’s like walking on grenades.”

Abdo, the foundation employee, agreed in her deposition. “He intimidated and bullied the staff all the time,” she said, also calling him “extremely domineering.”

The senior academic told Insider: “He’s one of the most impulsive people I’ve dealt with in Washington. He’s absolutely capable of saying ‘you know what, comma, screw it.”

Shihabi told Insider that in Washington, it is a case of eat or be eaten.

“I had to be loud, brash, and aggressive since you cannot quickly make an impact in a place such as DC by being soft-spoken and timid,” he said. “After all, because I was advocating views that went directly against the dominant narrative, I had to forcefully impose these views onto the narrative, or else they never would have been heard.”

“Did that upset some people? Of course it did.”

Shihabi’s dinners were well known in Washington, and not always for the right reasons.

“He would insult people at the dinners, and they would leave in anger,” Abdo said in her deposition. At one dinner, which featured Maksad and journalists from CNN and The Atlantic, Shihabi spent the meal “essentially screaming at anyone who disagreed with him,” the journalist Hassan Hassan, Salem’s husband, said in his deposition.

When asked by Insider, Shihabi said: “My dinners were very popular in DC. I used to hold them often twice a month and if I had spent my time screaming at people I doubt they would have continued to attend.”

When asked to summarize Shihabi’s temperament, Gause told Insider: “Ali doesn’t mind a good fight.”

Shihabi’s hackles also raised when his staff went too far in criticizing MBS, according to Abdo in her deposition. Abdo said Shihabi once tried to block the publication of an article she had written for The Washington Post hours before it was set to publish because it didn’t paint MBS in a positive light.

Shihabi denied blocking the article. “We never tried to block anything our people wrote because we were sensitive about exactly this accusation,” he told Insider.

Despite being a firm believer in MBS’ vision, Shihabi’s support for Saudi Arabia wasn’t total. “He was never a crude apologist, he was always a very sophisticated interpreter, explainer,” Haykel said.

Shihabi had long had issues with how the country was run, especially when it came to the religious establishment and government bureaucracy. In 1996, after the religious authorities banned sports for women, he left Saudi Arabia so his daughter could be schooled in Dubai.

Shihabi now spends much of the year in Portugal, on the site of an avocado farm bought by his late father.

He is still widely quoted in the US and world media, demystifying Saudi developments as they emerge, even as his plan to use his foundation to sway Washington in Riyadh’s favor didn’t go as planned.

But those efforts did not go unnoticed. “There were all kinds of offers made to him to be in Riyadh if he wanted to be,” Haykel told Insider.

In March 2020, Shihabi announced that he’d been appointed to the advisory board of Neom, a futuristic mega-city under construction in Saudi Arabia’s northwest.

Neom is the prized project and central pillar of MBS’ “Vision 2030” for Saudi Arabia. Also on the board is Softbank founder Masayoshi Son. “I think that tells you that Ali’s still a valued human resource for the senior levels of the government,” Ereli said.

With the 20th anniversary of the September 11 attacks looming, Saudi Arabia remains a tricky sell in Washington. But it’s a sure bet that Shihabi will keep trying.