Senate Dems press Saudi investment fund chair to testify on PGA merger | Courthouse News Service
Thursday, November 30, 2023
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Senate Dems press Saudi investment fund chair to testify on PGA merger

The U.S. head of Riyadh’s Public Investment Fund declined to appear before Congress earlier this month to discuss the kingdom’s investment in the American golf tournament.

WASHINGTON (CN) — The top Democrat on the Senate’s homeland security panel signaled Wednesday that he would not be rebuffed by the U.S. chair of Saudi Arabia’s foreign investment organization as lawmakers probe a high-profile merger between the PGA Tour and the Riyadh-backed LIV golf tournament.

Congress has for months voiced concerns about the national security implications of allowing Riyadh to pour money into U.S. sporting institutions, following revelations that the PGA Tour plans to form a brand-new golfing organization in conjunction with LIV Golf, which was started thanks in large part to funding from the Saudi Public Investment Fund. Lawmakers have worried about the optics of such a deal, considering Saudi Arabia’s well-documented track record of human rights abuses.

Seeking answers from Riyadh, the Senate Homeland Security Committee’s investigations panel has twice requested that Yasir Al-Rumayyan, the head of the Public Investment Fund’s U.S. operations, testify at a committee hearing on the golf merger. Al-Rumayyan has so far declined, telling lawmakers in an Aug. 4 letter that he could not appear before Congress because he is “a minister bound by the kingdom’s laws regarding the confidentiality of certain information.”

The investment fund chair also took issue with documents requests leveled at his firm by the committee, arguing that turning over information from the state-backed fund could run afoul of Saudi Arabia’s national sovereignty.

Connecticut Senator Richard Blumenthal, who chairs the homeland security panel, was not placated by that response. In a Wednesday letter to Al-Rumayyan, the Democrat reasoned that the investment firm official’s testimony would expand lawmakers’ understanding of the scope of Saudi capital flow in the U.S.

“PIF is a commercial entity with extensive business dealings in the United States,” Blumenthal wrote. “PIF’s recent dealings with the PGA Tour demonstrate that it intends to be much more than a passive investor in the American enterprises in which it houses its considerable wealth.” He pointed to the investment fund’s roughly $3.5 billion investment in ride-sharing company Uber and its establishment of a U.S.-based subsidiary company in 2022 as examples of such an expansion.

Blumenthal also pushed back on Al-Rumayyan’s claim that testifying before Congress would violate his responsibilities as a minister of the Saudi government, calling the assertion “deeply troubling and unsupported as a legal matter.”

A federal court in February ruled that the Public Investment Fund could not use Saudi Arabia’s sovereign immunity protections to withhold documents related to the PGA-LIV merger.

“In short, PIF cannot have it both ways,” Blumenthal told the firm’s chairman. “If it wants to engage with the United States commercially, it must be subject to United States law and oversight. That oversight includes this subcommittee’s inquiry.”

The senator again demanded that Al-Rumayyan testify before his panel, setting a tentative hearing date for Sept. 13 and urging the Saudi official to make a commitment by Friday.

“Your apparent reluctance to voluntarily appear raises questions about the veracity of your previously cited scheduling conflicts,” Blumenthal said.

As of Thursday morning, a response from Al-Rumayyan or the Public Investment Fund had yet to be made public. A spokesperson for Blumenthal’s office did not immediately return a request for comment.

Lawmakers have been imploring the Biden administration to investigate the PGA-LIV merger. During a June hearing of the House Financial Services Committee, California Representative Maxine Waters pressed Treasury Secretary Janet Yellen on whether the Committee on Foreign Investment in the United States would conduct such an inquiry.

While Yellen didn’t directly say whether the foreign investment panel, which she chairs, was probing the transaction, she did tell lawmakers that the committee “is very well positioned to review transactions that involve national security concerns.”

The merger has also piqued the interest of the Justice Department — which informed the golf tournament in June that it is investigating the deal amid antitrust concerns.

The PGA’s surprise announcement that it would join hands with LIV Golf came after years of litigation between the two golfing organizations as the U.S. tournament accused its rival of aiming to usurp its dominance over American professional golf. The protracted legal battle left a bitter taste in the mouth of PGA Commissioner Jay Monahan, who told Congress in a June letter that his organization was “largely left on our own” by Washington, “ostensibly due to the United States’ complex geopolitical alliance with the Kingdom of Saudi Arabia.”

Since announcing the deal with LIV — which he has insisted is not a merger — Monahan has defended PGA’s newfound alliance, arguing that Saudi Arabia would remain a minority investor in the new golfing tournament.

The Public Investment Fund, a sovereign wealth fund based out of Riyadh and worth around $620 billion, bankrolled the establishment of LIV Golf in 2021. The one-time rival of the PGA Tour attracted major names in golf to play under its banner, perhaps most notably two-time PGA champion Phil Mickelson.

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