House Democrats urge Yellen to investigate PGA deal with Saudi-backed golf championship | Courthouse News Service
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House Democrats urge Yellen to investigate PGA deal with Saudi-backed golf championship

The treasury secretary has said she believes the foreign investment panel would have the authority to review the transaction that has drawn national security concerns from lawmakers.

WASHINGTON (CN) — Hours after reports emerged that the Justice Department plans to investigate a proposed partnership between the country’s preeminent golf organization and a rival group bankrolled by Saudi Arabia, congressional Democrats implored the treasury secretary Friday to conduct her own review.

The PGA Tour's revelation that it had reached a deal with two competing golf tours — the DP World Tour and LIV Golf — to form an all-new golfing organization shocked the world last week. Saudi Arabia’s Public Investment Fund, a $620 billion sovereign wealth fund out of Riyadh that also backed the establishment of LIV Golf in 2021, would bankroll the combined effort in part.

LIV Golf and the PGA had been mired in years of litigation leading up to the deal, with the U.S. tournament accusing its Saudi rival of buying off major golf stars and angling to supplant its golfing hegemony.

For lawmakers sounding the alarm about the partnership, however, they say it could cement a new monopoly over the professional golf circuit. Some members of Congress have also worried about the national security implications and optics of allowing an organization funded by Saudi Arabia, well-known as a human rights abuser, to operate in the U.S.

The federal government has already taken notice: The Wall Street Journal first reported Thursday that the Justice Department has informed the PGA Tour that it is investigating the deal amid antitrust concerns.

Now, a pair of congressional Democrats have urged Treasury Secretary Janet Yellen to step in as chair of the Committee on Foreign Investment in the United States. In a letter to the Cabinet official dated Friday, California Representative Maxine Waters and Ohio Senator Sherrod Brown argued that the interagency panel, often abbreviated to CFIUS, has the authority to investigate the PGA Tour.

“CFIUS has jurisdiction over transactions that result in foreign government control, transactions involving companies that maintain or collect sensitive personal data of U.S. citizens and certain real estate transactions, among other transactions,” the lawmakers wrote.

The investment watchdog, made up of nine representatives from federal agencies such as the Defense Department and State Department, is responsible for reviewing foreign direct investments to determine whether they impact U.S. national security.

“Saudi Arabia has a repressive government, known for chilling dissent, jailing dissidents and enacting draconian punishments,” Waters and Brown said. The lawmakers noted the involvement of Riyadh’s crown prince, Mohammad bin Salman, in the 2019 murder of Washington Post columnist and American resident Jamal Khashoggi.

Given these concerns, the Democrats said an investigation would be justified on national security grounds.

“We understand and appreciate that CFIUS is, by statute, an authority of last resort,” Waters and Brown told the treasury secretary, but contended that the body’s involvement would complement other ongoing federal investigations. “We request that CFIUS assess the nature of this merger to determine whether it has jurisdiction over the transaction, and if so, resolve any national security risks related to the transaction.”

Waters pressed Yellen on the PGA deal during a hearing of the House Financial Services Committee earlier this week, at which the treasury secretary had been invited to testify. Citing confidentiality concerns, Yellen declined to say whether the foreign investment panel was already investigating the transaction. The Cabinet official did suggest, however, that such a review would be under the committee’s purview.

“The committee is very well positioned to review transactions that involve national security concerns,” Yellen told Waters.

Meanwhile, PGA Commissioner Jay Monahan defended the transaction in a letter sent to Congress last week. Monahan held that the deal with LIV Golf was not a merger, despite reports to the contrary, and reassured lawmakers that Saudi Arabia would remain a minority investor in the new business venture.

Monahan also appeared to ding Congress for what he framed as a lack of support during the PGA’s protracted legal battle with LIV, suggesting that such abdication paved the way for the organization’s deal with Riyadh.

“While we were grateful for the written declaration of support we received from certain members, we were largely left on our own to fend off the attacks, ostensibly due to the United States’ complex geopolitical alliance with the Kingdom of Saudi Arabia,” the PGA commissioner wrote. “This left the very real prospect of another decade of expensive and distracting litigation and the PGA TOUR’s long-term existence under threat.”

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