Saudi Arabia’s $700bn sovereign wealth fund – which has been used as a lever of global influence by Crown Prince Mohammed bin Salman – has been subpoenaed by a powerful Senate committee after it refused to voluntarily comply with information requests about its US dealings.
The subpoena, which was issued by the Senate’s permanent subcommittee on investigations, is targeting the Public Investment Fund’s wholly-owned US subsidiaries in connection to the group’s proposed golf deal and “related investments throughout the United States”.
The PIF is also the majority owner of Newcastle United football club.
The subpoena was announced on Wednesday at a committee hearing led by its chairman, the Democratic senator Richard Blumenthal of Connecticut. On its face, the hearing was meant to focus on Saudi’s controversial proposed golf merger.
But the hearing – and lengthy remarks by both Democrats and Republicans – delved instead into Saudi’s record human rights abuses, the kingdom’s alleged role in the 9/11 terrorist attacks, and fundamental objections to attempts by the oil rich nation to takeover assets of national interest.
Senators were visibly agitated by the PIF’s lack of compliance with voluntary requests for disclosure, which is seen by the lawmakers as part of a troubling posture by Saudi officials to put themselves out of reach of US law.
“The Saudi Public Investment Fund cannot have it both ways: if it wants to engage with the United States commercially, it must be subject to United States law and oversight,” Blumenthal said.
Expert witnesses described the PIF as “inextricably intertwined” with the Saudi state and Prince Mohammed, who the Human Rights Watch researcher Joey Shea said wields “unilateral decision-making” over the fund, with little transparency or accountability”.
In her testimony, Shea also pointed to internal Saudi government documents, which have been submitted to a Canadian court in connection to a legal claim, which show how the crown prince’s advisers ordered Yasir al-Rumayyan, the governor of the fund, to transfer 20 companies that were captured as part of a so-called anti-corruption campaign directly into the fund.
The transfers in at least one case involved a deed that was stamped by the Saudi ministry of justice but never signed by the individuals who were said to have agreed the transfer to the government’s coffers, Shea said.
“There is a risk that these companies were “transferred” from their owners without due process,” she added.
Blumenthal, one of the Senate’s biggest critics of Saudi Arabia, pointed to PIF’s ownership of a company whose jets were later used to transport the killers of Jamal Khashoggi from Saudi Arabia to Turkey, where the Washington Post journalist was murdered in 2018.
“Saudi Arabia’s use of foreign of sovereign wealth fund resources to attempt to gain influence in the United States should provoke us all. Under Crown Prince bin Salman Saudi Arabia remains a brutal regime, utterly resistant to criticism, devoid of any right of free speech,” Blumenthal said. “The PIF has been implicated in some of Saudi Arabia’s most abhorrent atrocities.”
He also pointed to the PIF’s role in financing the development of Neom, a desert city that is a critical element of Prince Mohammed’s Vision 2030, an economic plan he has put forward to diversity Saudi’s wealth away from oil revenue. Members of a tribe who have resisted the Neom project have been sentenced to death.
It is far from clear whether the PIF will comply with the subpoena. The fund has in the past described itself in contradictory terms. In the UK, the fund’s bid to take over Newcastle was approved in part because the investors denied that the Saudi government would have a direct say over the football club’s management. But in the US, where the fund has faced its most serious legal and political scrutiny, the fund has sought protection under diplomatic protocols such as sovereign immunity.
The hearing on Wednesday was noteworthy for one other fact: it provided a rare glimpse of agreement between Democrats and Republicans, including its senior Republican senator Ron Johnson, who centered his remarks on remaining questions about Saudi’s role in 9/11.
“This inquiry started with an event that interested in me – the PGA trying to come to an agreement with the PIF – but it is certainly expanding well beyond that,” Johnson said. He also suggested that he believed Blumenthal had “higher goals” in pursuing an investigation into Saudi’s PIF.
“It’ll be interesting to see where this progresses,” he said.
