| schema:text
| - “I have just returned from a trip overseas where we concluded nearly $350 billion of military and economic development for the United States, creating hundreds of thousands of jobs.”
— President Trump, remarks in the Rose Garden, June 1, 2017
The Fact Checker often is wary when an administration touts the potential benefits from an overseas deal, as there is a natural instinct to count chickens before they hatch. Given the Trump administration’s proclivity for exaggeration, we were especially skeptical of the numbers tossed around after the president’s trip to Saudi Arabia.
During Trump’s trip, reporters traveling with the White House repeatedly pleaded for details of the agreements. Adding to the confusion, the State Department held a briefing May 30 in which Stuart Jones, the acting assistant secretary for Near Eastern affairs, said the commercial agreements amounted to just $80 billion. That was much lower than the White House’s $270 billion figure.
The White House agreed to provide The Fact Checker with detailed spreadsheets of both the military and commercial agreements, and we have spent several days combing through them. We were given access to the data under the understanding that the details would not be published and that we only use information that is publicly available or confirmed by the companies involved.
The numbers add up — $109.75 billion in military deals and $266.6 billion in commercial deals — but when you dig a little deeper, there’s less than meets the eye.
The Facts
Military deals
The claimed $110 billion in military sales has aroused great skepticism among experts, with Bruce Riedel of the Brookings Institution calling the claim “fake news.” He noted that most of the publicly announced items had been previously announced by the Obama administration and that there appeared to be few, if any, signed contracts. Rather, many of the announcements were MOIs — memorandums of intent.
Indeed, the Defense Security Cooperation Agency referred to the Saudi announcements as “intended sales” and listed six specific items that add up to $28 billion. But these were all previously notified to Congress by the Obama administration.
Riedel, in an interview, noted that the $110 billion figure was not mentioned in the lengthy joint statement by Trump and Saudi King Salman, a signal that it is not etched in stone.
Another telltale sign: Congress has not been officially notified of many of the Trump-era agreements. A congressional aide said that Congress has been notified about $18 billion in letters of agreement, dating to 2015, which have not yet been signed by Saudi Arabia. Another $1.5 billion in commercial licenses and training is under a 30-day congressional review period.
With oil prices low, Riedel is doubtful that Saudi Arabia would choose to pay for this package now.
The $110 billion list indicates that the delivery dates for many items are far in future — in some cases as late as 2028. Billions of dollars in bombs are scheduled for delivery in 2022. The list also includes at least $7 billion in sustainment agreements that ordinarily are not included in such announcements. Defense expert William Hartung said that including sustainment would have increased the value of President Barack Obama’s deals. His research indicates that Obama offered Saudi Arabia $115 billion in deals, about half of which resulted in actual sales.
About 11 percent of the value of the deals claimed by the Trump administration are listed as “letter of agreement,” while the balance is listed as “memorandum of intent.”
Another oddity is that some key elements have not been officially announced. Boeing said it’s on track for as much as $50 billion in deals, including a plan to negotiate the sale of up to 16 commercial jumbo jets worth as much as $5 billion. Lockheed Martin said its deals amount to $28 billion, almost half of which are commercial items. But other big-ticket items on the list have not been announced, and few if any contracts appear to have been signed.
The spreadsheet suggests potentially huge deals for Raytheon, but a spokesman for the weapons and defense electronics manufacturer said only: “The MOU [memorandum of understanding] with Saudi Arabian Military Industries and our establishment of Raytheon Arabia are in their early days. We fully anticipate this work will enable us to expand our business in the Kingdom with new programs that will benefit both local and U.S.-based job growth.”
The State Department’s Jones said at the May 30 briefing that $6 billion to purchase 150 Blackhawk helicopters from Lockheed was “a done deal” but that other agreements are “more forward-looking and haven’t been concretized.”
Jones said the Blackhawk deal was part of the $110 billion in military sales, but it is listed as a commercial item in the White House spreadsheets (the helicopters will be manufactured and assembled in Saudi Arabia). A Lockheed spokesman said the agreement would “support” 200 jobs at the company in Connecticut and another 250 through “the supply chain” in North America, indicating these are not new jobs in the United States.
Commercial deals
There appears to be quite a bit of double-counting, wishful thinking and fuzzy figures in the commercial list, which could explain why the White House claims $270 billion in deals and the State Department says there are just $80 billion in deals. The White House spreadsheet lists the numbers as “max value.”
For instance, a huge chunk of the total — $100 billion — refers to a technology investment fund set up by SoftBank and Saudi Arabia’s sovereign wealth fund, of which the Saudis were contributing $45 billion. But that fund was announced three weeks before the U.S. elections, when Trump was regarded as having little chance of winning. Softbank has said that $50 billion would be invested in the United States, so the $100 billion figure appears to be a double-count.
In any case, this arrangement was unrelated to Trump’s trip.
Another $40 billion comes from a Blackstone partnership with the sovereign wealth fund for infrastructure investments in the United States, though the State Department valued the Saudi investment as $20 billion in its news briefing. The official announcement made it clear the deal was still a long way from fruition: “Blackstone and the Public Investment Fund (PIF) signed a nonbinding memorandum of understanding for the project, which will depend on further negotiations.”
The headline of an Alcoa news release tells a similar story: “Memorandum of Understanding explores potential expansion of Ma’aden Joint Venture.” The news release said the companies — already working together — “will assess the feasibility of a potential expansion” of an aluminum production complex.
Ma’aden, a mining firm, announced a similar potential expansion with Mosaic in the phosphate business. The two nascent deals are pegged as being worth $18 billion, but virtually all of the jobs would be created in Saudi Arabia.
A $10 billion deal between National Oilwell Varco and Saudi Aramco to manufacture drilling rigs and other equipment in Saudi Arabia is also subject to negotiation. At least another $45 billion in deals is listed as “localizing goods and services” in Saudi Arabia, as part of the kingdom’s effort to diversify its petro economy.
Closer to home, ExxonMobil Chemical and Saudi Basic Industries. selected a site in Texas for a petrochemical project. This had already been announced in April. News reports said the project would cost $10 billion, but it is listed as being worth $22 billion in the White House document. In March, Trump had already claimed credit for ExxonMobil’s $20 billion in investments in the Gulf Coast, even though they had been announced in 2013.
The potential sale of Boeing jumbo jets adds $5 billion to the total. Also listed is another $2.5 billion in investments in the United States.
The Pinocchio Test
The administration’s numbers add up, but the numbers are inflated. The president said that we “concluded nearly $350 billion of military and economic development for the United States, creating hundreds of thousands of jobs.” Spicer described an “additional $270 billion of Saudi investment in American businesses and American jobs.”
But a review of the deals shows that many deals are not concluded and are simply aspirational. Moreover, many of the investments are in Saudi Arabia, making it difficult to argue that these will create many jobs for Americans. Other deals, such as the SoftBank fund and ExxonMobil Chemical deal in Texas, had been announced months earlier and thus are not appropriate for inclusion on a list of achievements from the president’s visit.
Given that the administration was able to show how it added up the numbers, we’d be tempted to say this was worthy of Two Pinocchios. But the administration’s consistent rhetoric suggesting the deals are completed and will mostly create American jobs tipped us to Three.
Three Pinocchios
Send us facts to check by filling out this form
Keep tabs on Trump’s promises with our Trump Promise Tracker
Sign up for The Fact Checker weekly newsletter
|
![[RDF Data]](/fct/images/sw-rdf-blue.png)
![[cxml]](/fct/images/cxml_doc.png)
![[csv]](/fct/images/csv_doc.png)
![[text]](/fct/images/ntriples_doc.png)
![[turtle]](/fct/images/n3turtle_doc.png)
![[ld+json]](/fct/images/jsonld_doc.png)
![[rdf+json]](/fct/images/json_doc.png)
![[rdf+xml]](/fct/images/xml_doc.png)
![[atom+xml]](/fct/images/atom_doc.png)
![[html]](/fct/images/html_doc.png)