June 13, 2024

Saudi investment fund fights Senate subcommittee subpoena 

The Saudi Arabian Public Investment Fund (PIF) urged the leaders of a Senate subcommittee to back off on subpoenas issued to four of its U.S.-based consultants, according to a new letter disclosed Tuesday by the Senate Permanent Subcommittee on Investigations. 

The letter, dated Jan. 12, was included as an attachment to a Monday letter from subcommittee chairman Richard Blumenthal (D-Conn.) and ranking member Ron Johnson (R-Wisc.) to PIF Governor Yasir Al-Rumayyan. 

The lawmakers, who have been investigating the PIF activities and investments in the U.S. as a tool of foreign influence, accused the PIF of trying to “hamper” their inquiry into PIF’s “proposed takeover of professional golf in the United States” in the Monday letter.  

The announcement last June that LIV Golf, which is funded by the PIF, and the PGA Tour were in talks to create a new golf monolith spurred uproar in the golf world and congressional scrutiny. 

As part of its investigation, the subcommittee has subpoenaed documents from McKinsey & Company, M. Klein & Co., Boston Consulting Group and Teneo Strategy related to the subcommittee’s investigation into the PIF’s activities in the U.S. 

The PIF has filed lawsuits in Saudi Arabia against each of the four contractors last fall in what the lawmakers described as an attempt to conceal the requested records. 

“The Advisors’ relevant services agreements with the PIF are governed by Saudi law. To protect its sensitive information (as is its legal right and obligation), the PIF filed, and is continuing to file, Urgent Applications with the courts of Saudi Arabia to enjoin the Advisors from producing confidential documents pursuant to the Advisor Subpoenas,” Raphael Prober, a partner at Akin Gump Strauss Hauer & Feld who serves as counsel to the PIF, wrote in the Jan. 12 letter to the lawmakers. 

But Blumenthal and Johnson refused to back off “absent any legal explanation” and argued subpoenas to U.S. businesses are a “common investigative practice” in a congressional inquiry. 

“The U.S. Constitution empowers Congress to compel the production of information as part of its lawmaking role, and persons and entities within the United States are required by law to comply with duly authorized Congressional subpoenas,” Blumenthal and Johnson wrote in the Monday letter. 

“Both the PIF’s decision to seek relief from a duly authorized U.S. Congressional subpoena in a foreign forum and the PIF’s continued insistence that the PIF Consultants only produce records that it authorizes have led to the current impasse.” 

Amid heightened scrutiny and ongoing merger discussions, both the PGA Tour and LIV Golf upped their federal lobbying efforts. 

The PGA Tour poured $820,000 into federal lobbying on issues including the golf league proposal last year, an 82 percent increase from 2022, according to the money in politics watchdog OpenSecrets.  

LIV Golf upped its federal spending to $560,000 from $230,000 as it lobbied on issues including “the game of professional golf in the United States and abroad” and “the rights of professional golfers to play when and where they choose.” 

Akin registered as a foreign agent of the Public Investment Fund with the Department of Justice Foreign Agents Registration Act (FARA) Division in September after reporting by POLITICO raised questions about their obligation to disclose their work on behalf of the oil-rich Gulf State.

But Akin registered “in case there is lobbying work in the future” and the registration has “nothing to do with the congressional investigation,” a person familiar with the matter told The Hill. Prober, as counsel to the PIF, did not register as a foreign agent as there is an exemption under FARA for “legal representation of a disclosed foreign principal before any court or law or agency of the United States government.”

Akin declined to comment. The PIF did not respond to requests for comment from The Hill. 

“Your counsel has repeatedly expressed the PIF’s willingness to engage with the Subcommittee in good faith, and reiterated this willingness in the most recent January 12, 2024 letter,” the senators wrote. “You yourself offered Chairman Blumenthal similar assurances when you met in Saudi Arabia in October 2023. The PIF’s actions to date are inconsistent with these assurances. If your desire for constructive engagement with this Subcommittee is sincere, we ask that the PIF’s future actions honor the stated desire to engage in good faith.” 

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