US, Lobbyists and Arm Dealers Scramble to Reposition Amid Impending Saudi Defeat in Yemen

WASHINGTON —
In his last months in office, former President Donald Trump gave American defense contractors like Lockheed Martin and Reaper drone manufacturer General Atomics Aeronautical Systems billions in projected earnings through a controversial $23 billion arms deal with the United Arab Emirates (UAE), a deal now “under review” by the Biden administration.

President Joe Biden’s temporary halt to the U.S. arms deal and his decision to remove the Yemeni Houthi rebels from the state department’s list of global terrorist organizations have been touted as a harbinger of peace in Yemen, where a civil war that erupted during Barack Obama’s second term in office has persisted and expanded to include regional powers.

A Yemeni boy offers prayers at the grave of his relative who was killed during recent fighting, at a cemetery in Sanaa, Yemen, Mar. 2, 2021. Despite horrendous losses to bombardment and Western supported Saudi blockade, the Houthis are actually winning the war.

The Saudi-led coalition of Arab states has dropped more than 22,000 bombs in Yemen since its intervention in 2015 and has contributed to the death of nearly a quarter of a million peoplesince the conflict began. American weapons systems have played a key role in the genocidal war that has produced millions of war refugees in what can only be characterized as the greatest human tragedy of the 21st century.

As the American arms industry rides a wave of record sales to the Saudi regime and the Middle East in general, a pause to the relentless advance of the biggest war economy on the planet strikes one as a political strategy, widely telegraphed by Biden even before he became the Democratic nominee. As soon as the former vice president was projected as the winner of the 2020 election, Saudi Arabia went on a lobbyist hiring spree to prepare for what the regime led by Crown Prince Mohammed bin Salman knew was coming.

Nevertheless, a bleaker reality may be conspiring to quash the designs of American arms dealers. Recent developments in the war are increasingly pointing to the possibility that Biden’s ostensible moves towards peace may simply be an attempt to control the narrative and save face around what is looking like yet another defeat in the long-running American-sponsored global “war on terror” and, more awkwardly, an attempt to protect the defense industry from a spectacular debacle.

The high stakes of defeat

Major advances by Houthi forces on the strategically vital oil and gas hub of Marib last week have forced Saudi Arabia to offer a ceasefire agreement to the rebels. The offer came on Monday, after the rebel army seized Mount Hilan, threatening the Yemeni military’s first line of defense and causing a disruption in global energy prices.

The ceasefire proposal includes collecting “taxes, customs and other fees generated” by oil imports in the Red Sea port of Hodeida in a joint account that would be accessible to the Houthis. Further evidence that the Saudi-led coalition finds itself with their backs against the wall is the partial loosening of the oil blockade, as four fuel ships were given the go-ahead to dock at Hodeida on Wednesday.

The bid for a truce came two days after Saudi Coalition-manned American warplanes carried out airstrikes against Houthi targets in Marib, with Saudi media claiming heavy losses on the side of the rebel forces. But the partial lifting of the blockade by the Saudi Coalition and the UN-backed Yemeni government indicates that it is the Houthis who are making headway.

The fall of Marib would mean Houthi control of one of the key production centers of natural gas in Yemen — one that supplies the entire country — as well as oil fields owned by Saudi Arabia’s Aramco. Given that the Houthis already control most of Yemen’s urban centers, taking Marib would likely tilt the momentum irreversibly in the Houthis’ favor.

Houthis holding images of relatives killed n recent fighting.

Houthis rebels hold posters of their relatives during a funeral procession for Houthis who who were killed in recent fighting with forces of Yemen's Saudi-backed internationally recognized government, in Sanaa, Yemen, Tuesday, Feb. 16, 2021. (AP Photo/Hani Mohammed)

In light of the Houthis’ bolstered position in the conflict, Biden’s decision to remove them from the list of global terrorist organizations, while overtly maintaining continued U.S. support for Saudi Arabia’s “security” needs could very well be a signal that Washington has tacitly admitted that their proxy war in Yemen is not yielding the desired results. Meanwhile, in a joint statement, last week as preparations for Friday’s major attack on Marib were in the offing, Western governments attempted to make a show of strength in the press in lieu of actual results on the battlefield.

“We, the governments of France, Germany, Italy, the United Kingdom, and the United States of America,” said the statement, “condemn the sustained Houthi offensive on the Yemeni city of Marib and the major escalation of attacks the Houthis have conducted and claimed against Saudi Arabia.”

Who will think of the arms dealer?

Curiously, most of the other members who came together to condemn the Houthis’ advance on Marib have also publicly halted their own arms trade with Saudi Arabia or its coalition forces, in one way or another. Nonetheless, sub-surface efforts continue to bolster Saudi security in the region.

France, which last week voted to end the sale of security equipment “that fuels conflict in Yemen,” was nevertheless second behind the U.S. in arms exports to Saudi Arabia, according to data from the Stockholm International Peace Research Institute (SIPRI), and reports have surfaced of French private mercenary companies training Saudi soldiers in Yemen. Meanwhile, the UK authorized a $1.9 billion arms deal after a ban imposed by a court ruling in 2019 had expired.

The arms trade report released on March 15 by SIPRI shows that, between 2016 and 2020, arms exports to the Middle East grew by a staggering 25% — an increase led by Saudi Arabia, Egypt, and Qatar.

According to an Open Secrets report, the Kingdom of Saudi Arabia is the second-biggest buyer of U.S. arms, with $26 billion in sales reported to Congress since 2017. Riyadh is also the sixth largest spender by any foreign lobbying operation in the U.S., racking up nearly $108 million in U.S. influence operations over the last five years.

In addition, the top four defense contractors that count the kingdom as one of their best clients – F-35 fighter jet-maker Lockheed Martin, Raytheon, General Dynamics and Boeing – also grace the top five defense-related companies that spend the most on wooing Washington lawmakers, with approximately $40 million spent among them in 2020 alone.

Despite the hold announced by the Biden administration, arms sales have not been entirely stopped. On February 17, Biden approved a $200 million arms sale to Egypt, which has pledged its support for the Saudi-led coalition against the Houthi rebels and has been taking in thousands of refugees from the war-torn area since 2015.

Seller beware

Since December 2020, when most of the world was confident Joe Biden would be the next president of the United States, the Kingdom of Saudi Arabia added a few new lobbying organizations to its payroll. According to CNBC, one of the most recent contracts was signed with a “full-service grassroots mobilization, public affairs and public relations consulting firm” called Arena Strategy Group through the Larson Shannahan Slifka Group, or LS2group, which signed a $1.5 million retainer agreement with the Kingdom in 2019.

Both organizations have deep ties to the Republican Party. Their services — which will revolve around “informing the public, government officials, and the media about the importance of fostering and promoting strong relations between the United States and the Kingdom of Saudi Arabia” — were mainly sought to influence the Republican-controlled Congress on behalf of Saudi interests.

The arms trade lobby, for its part, is coming off substantial victories from the previous administration — which, among other things, loosened drone export laws, directly benefiting companies like General Atomics Aeronautical Systems and its pending $3 billion drone purchase order, which is part of the $23 billion arms deal currently on hold.

Squire Patton Boggs (“a perennial K Street powerhouse,” per Open Secrets), Akin Gump, and American Defense International are three of the top defense industry lobbying firms that alternate between representing defense contractors like Raytheon, General Dynamics and Northrop Grumman, and their weapons systems manufacturers’ biggest clients in Saudi Arabia and the UAE, to push through legislation and secure government contracts their customers require. 

Yemen Houthi soldiers marching during funeral in Sanaa.

But, perhaps there is a much more mundane reason why all these multi-billion-dollar contracts are on hold and it’s that the potential buyers simply can’t – or won’t – pay for the merchandise.

Despite all the glamour and fantastical riches ascribed to the Saudi royal family, their wealth is quite literally all in one basket. If the price of oil plummets, so does the ability of the Saudi princes to close billion-dollar weapons deals. In 2017, when the colossal $110 billion arms deal was made between the Trump administration and the Kingdom of Saudi Arabia, thanks to the work of Squire Patton Boggs, only $14.5 billion had been “earned” one year later.

The reality is that such deals are hardly worth the name. They are mostly comprised of letters of intent and proposals, which prospective buyers may or may not take up. In the case of American client states, like Saudi Arabia, there are ways to make them loosen the purse strings, but when these strings are tied to resources like oil extracted out of a foreign country teeming with armed groups intent on asserting their sovereignty, deals have a tendency to fall through.

However, it would be naïve to believe that the biggest war economy in the world would turn back and leave tens of billions of dollars on the table. If Saudi Arabia or its coalition partners can’t come up with the cash, history has shown that the Military Industrial Complex would not shy away from the chance to bring others to the negotiating table and expand the war to do so.