Thu, 21 Sep 2023

WASHINGTON (CN) - A panel of experts warned the Senate Wednesday about the dangers of allowing Saudi Arabia's international investment firm to pour money into U.S. sporting enterprises, as lawmakers ratcheted up their scrutiny of a high-profile golfing merger.

Congress has for months sounded the alarm about the PGA Tour's June agreement to establish a brand-new golfing organization alongside LIV Golf, a newcomer golf tournament bankrolled largely by the Saudi Public Investment Fund. Lawmakers fret about the optics of such a merger considering Riyadh's dismal human rights record.

"Many Americans were outraged when we learned, quite astonishingly, that an authoritarian foreign government with a horrific human rights record entered into an agreement that would allow it to effectively take over an entire American sport," said Connecticut Senator Richard Blumenthal during a hearing Wednesday in the Senate Committee on Homeland Security and Government Affairs.

Blumenthal added that Saudi Arabia's investment in global sports is an effort to "sportswash" the country's human rights reputation and improve its perception around the world.

The Connecticut Democrat has emerged as a leader in the congressional push to get the details of Saudi Arabia's involvement in the PGA merger - and to determine what extent the Public Investment Fund plans to pour money into other American enterprises.

Blumenthal has, so far unsuccessfully, pushed PIF's U.S. lead Yasir Al-Rumayyan to testify before lawmakers on the deal. Al-Rumayyan has dodged these requests, arguing that his status as a minister of a foreign government shields him from such obligations.

The Senator responded to those claims Wednesday by issuing a subpoena to USSA International LLC, the U.S. arm of the Public Investment Fund. Blumenthal demanded that the firm turn over documents related to the LIV-PGA merger as well as its other investment ventures.

"The PIF's refusal to cooperate is an affront to our authority," Blumenthal said. "The PIF has offered none of the transparency necessary to understand its goals or the extent of its influence efforts."

The lawmaker expressed concerns that Riyadh was exploiting loopholes in U.S. foreign investment disclosure laws by operating "in the shadows, saying that those gaps "may leave room for sophisticated regimes to engage in influence campaigns without any scrutiny or public knowledge."

A panel of experts invited to testify at Wednesday's hearing largely agreed with Blumenthal's assessment.

"We'd be nave to believe that the PIF's actions related to the PGA Tour are not part of the kingdom's much larger lobbying, public relations and broader influence operations in the U.S.," said Benjamin Freeman, director of the Quincy Institute for Responsible Statecraft's Democratizing Foreign Policy program.

Freeman pointed to statements made by PGA officials, who testified at a separate hearing in July, that their deal with LIV Golf had "no business case." Representatives of the golf tournament described LIV as "an irrational threat - one not concerned with a return on investment or the true growth of the game of golf," Freeman said.

Instead, the foreign policy expert framed the Saudi-backed golf merger as an effort to "muzzle Americans critical of the regime" and a rebranding ploy. "In short, they're buying our silence," Freeman said.

Allowing the planned merger to go through could also have a knock-on effect for other countries eyeing influence campaigns in the U.S., Freeman added. "This is not happening in a vacuum," he said. "China is watching. What we do today will be seen by authoritarian regimes abroad."

Joey Shea, a Saudi Arabia and United Arab Emirates expert at Human Rights Watch, dialed in on how the PGA-LIV deal aims to put a shine on Riyadh's history of human rights abuses.

"Over the past several years, the Saudi government has embarked on an aggressive campaign to deflect from the country's image as a pervasive human rights violator by hosting high-profile celebrities and sporting and entertainment events," Shea said. The PGA merger enables this "sports-washing" by placing Riyadh "in an unprecedented position of ownership, control and influence over an entire sports league," she added.

Shea urged lawmakers to pass legislation tightening restrictions around foreign acquisition of U.S. businesses, with a particular focus on human rights abuses and corruption risk.

Meanwhile, the committee's Republican cohort said they were concerned about Saudi Arabia's human rights record but were equally critical of what some lawmakers called "hypocrisy" in Washington's own commitment to transparency.

Wisconsin Senator Ron Johnson, ranking member of the homeland security committee's oversight subpanel, expressed frustration with the limited information provided by the White House about U.S. government intelligence leading up to 9/11. Johnson suggested that securing those details could shed light on Saudi Arabia's knowledge of the terrorist attacks and that such revelations could assist Congress' review of Riyadh's investment activities.

"I would say the first step in our inquiry needs to be to continue to cooperate and use the full authority of this committee to get the government to finally come clean and be transparent about what happened on 9/11," Johnson said.

Blumenthal responded that he would be willing to work with his Republican colleagues on that goal. "We're not letting this issue go away," he said.

The PGA's surprise announcement that it would join forces with LIV Golf put to bed years of contentious litigation between the two organizations, as the PGA argued that the newcomer tournament was aiming to supplant it as host of the country's premier golfing championship. PGA Commissioner Jay Monahan has told Congress that he felt lawmakers left his company in the lurch during that legal battle, presumably thanks to Washington's political relationship with Saudi Arabia.

The Public Investment Fund backed the establishment of LIV Golf in 2021. Riyadh has in recent years also made significant investments in other global sporting enterprises such as soccer and Formula One.

Source: Courthouse News Service

Sign up for Connecticut State News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!