Washington tolerated Saudi Islamism because it could be controlled from above. [causal]
Muammar Gaddafi also deployed Islamic symbols and language to legitimize his rule in Libya in the early 1970s. A vocal opponent of the West, he proclaimed that Libya was an Islamic state and that he intended to promote Islamic "radicalism" and "terrorism" around the world. The United States frowned upon Gaddafi but at the same time gave its consent to King Faisal of Saudi Arabia as he attempted to Islamize politics in the region. The logic was that the kind of top-down Islamism promoted by Saudi Arabia could be controlled from above and therefore made to work in the United States' interests, whereas Gaddafi's variant could not.
XREF: Connects to Cold War-era US strategic accommodations and the later blowback of state-sponsored Islamism.
QUESTION: Worth chasing: how consistently did the US actually control Saudi top-down Islamism, versus today's narratives of blowback?
Deepa Kumar, Islamophobia and the Politi…, loc. 233