Pete Huang


Dirty(?) money and responsibility

In late October of 2018, Saudi officials confirmed that Jamal Khashoggi, a Saudi dissident, died in the Saudi consulate in Istanbul.

In the weeks following, the tech world saw conversations related to Saudi Arabia - both around the prominence of Saudi funds injected into high-flying startups and the scramble to figure out whether or not certain funds or startups had taken money from Saudi investors - blossom into November.

SoftBank got heat given that $45 billion of its $100 billion Vision Fund is Saudi money. The New York Times covered startups that went digging to see whether or not its venture funding could have come from Saudi Arabia. Quartz documented the startups that had taken hundreds of millions, and sometimes billions in the case of Uber and Lyft, of investment dollars from Saudi sources.

This is how Vanity Fair had described the reaction: “After years of ignoring Saudi misdeeds, the brazen abduction of the Washington Post columnist appears to have turned elite opinion decisively against Riyadh.”

Among the many questions that arise for me from the Khashoggi assassination and the associated response, I think of two in particular: What does a business relationship imply about what either business believes? How much risk do you take on by entering into a business relationship with a new person or business?

In the case of Saudi investors and tech companies, it would appear that tech companies believe that by acting as a vehicle to generate investment returns for Saudi investors, these tech companies are providing resources to the Saudi regime which can then deploy those resources into sustaining or even expanding harmful or immoral practices.

This is essentially a boycott, much like consumers would boycott a brand or product: some people stopped eating at Chick-fil-A because some of Chick-fil-A’s executives opposed same-sex marriage.

The goal of a boycott is usually to drive change in the target organization’s practices by creating economic loss.

Boycotts and other actions against an organization because you disagree with something the organization does is completely fine with me. Where it gets interesting for me is whether or not people believe that not boycotting implies that you support everything the organization does.

Before a couple weeks ago, I probably wouldn’t have believed that anyone could overlook the vast gray area called “not opposing, but also not completely supporting” that pretty much everyone and every business lives in.

The Saudi case is an easy look: rejecting Saudi money after Khashoggi’s assassination is a clear rebuke, but not rejecting Saudi money prior to that doesn’t amount to outright support for its actions to-date (see: Yemeni civil war).

Yet, today, we have 50 women suing Salesforce. The argument? Essentially, Salesforce is in part responsible for Backpage’s facilitation of sex trafficking because it provided custom tools and services to Backpage.

If anything comes out of this case (I don’t expect anything to, for what it’s worth), we could be in a huge tizzy. Imagine how much AWS, which powers one-third of the cloud market and is the default option for cloud infrastructure, would be exposed - any of its customers that did bad things could cause AWS to be in trouble, too.

Now, maybe the line is specifically in providing “custom tools and services” to a customer that does bad things.

But that still doesn’t solve the core issue that you’re now responsible for everything your customer does. As if you’re outright supporting them versus a simpler “we haven’t found any reason to object”.

This is one of those explorations that leads to more questions, so in keeping with that, here’s the second question from earlier: How much risk do you take on by entering into a business relationship with a new person or business?

If anything results from this case, it would seem to be the start of a new (and probably unrealistic) pressure on business to carefully vet every single thing about a business it enters into any sort of relationship with - potential crimes that the business is committing, who the officers are, what the officers believe, etc.

And in fact, it would dovetail with a growing pattern of pressure to vet every single thing about any powerful person - we are now regularly holding people to their words and actions from dozens of years ago.

If the momentum behind this social and political pressure holds, we’ll be in entirely new and wholly unsustainable territory.

First, we’d have to deal with a very, very big problem up front: what do we consider bad? In the case of Saudi money, who decided when Saudis were suddenly bad enough to reject money from? It’s a very US-centric view that got us here, but we have to accept that US-centric views will lead us to uncomfortable situations.

Then, we’d have to decide who is liable. If you take investment dollars that, without your knowing, somehow originated 5 degrees up the chain from Saudi investment funds, do you have an obligation to reject that money? More importantly, did you make a mistake by not doing that diligence up front?

Finally, we’d have to figure out how this is all even practical. Even after deciding what turns of phrase or comments we consider bad or insensitive, and even after we decide if being friends with someone who regularly said those things is just as bad as saying them yourself, we’d have to find a way to essentially vet every detail of every single person over the course of their lifetime.

There is new responsibility somewhere in all of this. Figuring it out is going to be really complicated, though.

I’ll write a separate post on this later, but I believe that it’s more than possible for the views that a community or a state holds to evolve too quickly. This is one of the reasons why. We don’t have the time to flesh out the impact of these evolutions.