Why Is the Saudi Investment Fund’s CEO Declining to Appear Before Congress?

American entities are calling for the cancellation of the “historic deal” between the American PGA Tour and the Saudi-funded LIV Golf League amid discussions that Riyadh’s objective is to enhance its reputation through “sportswashing.”

Senator Richard Blumenthal (Democratic Party, Connecticut) reiterated in a message dated August 16, 2023, that he expects Yasir al-Rumayyan, the head of Saudi Arabia’s Sovereign Wealth Fund, to appear before the United States Congress and answer questions regarding his partnership with the PGA.

Al-Rumayyan has repeatedly declined to testify before the Senate Subcommittee on Permanent Investigations regarding that deal.

Blumenthal, the head of the subcommittee, warned that he will have to consider other legal avenues to compel the Public Investment Fund’s compliance if al-Rumayyan refuses to attend the proposed questioning session on September 13, 2023, in Congress.

Blumenthal stated, as reported by The Washington Post, that the Public Investment Fund can’t have it both ways. If it wants to deal with the United States commercially, it has to be subject to U.S. law and oversight, adding that oversight includes this subcommittee’s investigation.

 

A Stirring Deal

After a two-year dispute, the American PGA Tour announced a surprise merger with the Saudi-backed LIV Golf League on June 7, 2023.

The PGA Tour is the organizing body for professional golf events, tournaments, competitions, and tours in the United States and North America.

The PGA Tour, along with the European DP World Tour, entered an agreement with the Saudi-backed LIV Golf League, which is set to lead to the creation of a “new collectively owned profitable entity.”

The new name of the merged entity and the tournament structure has not been announced yet, but the PGA Tour indicated that the parties agreed to initiate a fair and objective process for any player interested in rejoining the PGA Tour and DP World Tour after the conclusion of the 2023 season.

Yasir al-Rumayyan, the Governor of Saudi Arabia’s Public Investment Fund, will serve as the Chairman of the Board of the new commercial entity, and Jay Monahan, the commissioner of the PGA Tour, will be appointed as the CEO.

At that time, al-Rumayyan stated that this is an exciting day for this distinguished sport and its enthusiasts around the world, believing that there are opportunities to develop the game while also preserving its history and traditions.

Led by the Saudi Golf Federation, al-Rumayyan promised the most comprehensive development program ever witnessed in the world of golf.

LIV Golf was launched in October 2021 and attracted top PGA players with substantial financial guarantees from the Saudi Public Investment Fund, directly linked to Saudi Crown Prince Mohammed bin Salman.

Criticism quickly arose, labeling the emerging tournament an attempt at sportswashing, designed to whitewash Saudi Arabia’s image following the 2018 killing of Saudi journalist Jamal Khashoggi in his country’s consulate in Istanbul. This incident became a pivotal event in the Crown Prince’s history, shedding light on how his regime dealt with opposition to his new policies.

The PGA responded by banning LIV Golf players and imposing substantial fines through the European DP World Tour.

This dispute led to a series of lawsuits and disputes among players, including stars like Phil Mickelson and Brooks Koepka, who signed lucrative contracts with LIV, as opposed to Northern Irishman Rory McIlroy and Tiger Woods, who declined offers ranging from $700 to $800 million to join LIV and remained with the PGA.

However, the secret formulation of the deal put an end to all disputes between the conflicting parties despite not disclosing many of its details.

 

Political Dimensions

The merger received swift praise from Mickelson, a holder of six major championships and a prominent defector to LIV, who wrote on social media that it was a “great day.”

Yet PGA players appeared more reserved, accusing PGA Tour Commissioner Jay Monahan of hypocrisy for merging with LIV after spending most of 2022 urging them to resist enticing Saudi offers.

Reports suggested that disgruntled players confronted Monahan in a meeting in Toronto before the 2023 Canadian Open.

Monahan acknowledged during a press conference that he knows people will call him a hypocrite, but circumstances change.

The crux of the matter is that all players recognize that the deal carries political dimensions, encompassing a mission to cleanse the stain of journalist Jamal Khashoggi’s blood from the record of the Saudi Crown Prince, according to observers.

Criticism of the PGA Tour has not ceased, with a group representing victims of the September 11, 2001 attacks accusing Commissioner Monahan and the PGA of “hypocrisy and greed.”

9/11 Families United Chair Terry Strada, who lost her husband Tom in the attacks, said that the entire 9/11 community has been betrayed by Commissioner Monahan and the PGA after it became clear that his concern for the families’ loved ones was merely a strategy in his quest for money.

LIV Golf attracted stars from the PGA Tour, especially as its substantial financial prizes reached $25 million per tournament.

Interestingly, the American PGA Golf deal with Riyadh coincided with a series of consecutive contracts between Saudi football clubs and high-profile stars, in deals reaching astronomical sums.

The trend began with Portuguese football star Cristiano Ronaldo joining al-Nassr in late December 2022.

French striker Karim Benzema joined al-Ittihad in June 2023, and Brazilian Neymar da Silva announced his move to al-Hilal in August 2023 in a deal worth more than $98 million.

The subcommittee is examining this partnership, as this alliance could reshape the power structure in professional golf due to the billions of dollars injected by the Saudi Investment Fund.

 

American Investigation

The proposed merger between the golf league and the company organizing golf tournaments in America and around the world received a lukewarm reception in the Senate. Yasir al-Rumayyan will face numerous questions from American lawmakers and even from the Senate Finance Committee.

As a result, Yasir al-Rumayyan was invited to testify on July 11, 2023, by the Senate Subcommittee on Permanent Investigations, chaired by Democratic Senator Richard Blumenthal, one of the fiercest Saudi critics in Congress. However, al-Rumayyan did not attend due to scheduling conflicts.

Individual invitations were also sent to Jay Monahan, the Commissioner of the PGA Tour, and Greg Norman, the CEO of LIV Golf, requesting their preparedness to discuss the expected role of the Saudi Public Investment Fund in professional golf in the United States.

This session comes after an investigation announced by U.S. Senator Richard Blumenthal, which also involves Senator Ron Johnson.

Blumenthal stated that the purpose of the hearing is to examine the agreement, adding in a public statement that the goal is to uncover the facts about what was reached in the PGA deal with the Saudi Public Investment Fund and what the acquisition means for the future of this cherished American institution and U.S. national interest.

Americans deserve to know how the structure and governance of this new entity will be, he added.

PGA Tour officials managed to meet only with American lawmakers to discuss the controversial alliance. Blumenthal sent another invitation on July 27, 2023, requesting al-Rumayyan’s appearance again in Washington.

However, in a response dated August 4, 2023, a lawyer for the Saudi Public Investment Fund stated that al-Rumayyan is an inappropriate witness for such a session since he is a government minister committed to Saudi laws concerning specific information confidentiality.

Lawyer Raphael Prober stated in the message that this participation must be in compliance with relevant laws in Saudi Arabia, considering principles of sovereignty, international courtesy, and care.

Blumenthal responded on August 16, 2023, saying that al-Rumayyan’s clear hesitation to voluntarily appear raises questions about the accuracy of the previously mentioned scheduling conflicts.

He added that al-Rumayyan has made claims of sovereign immunity to avoid testifying in federal lawsuits, which were recently dismissed between the PGA Tour and LIV Golf.

In February 2023, a federal judge rejected these claims, stating that the Foreign Sovereign Immunities Act does not apply due to the Saudi Public Investment Fund’s commercial activities in the United States.

Blumenthal noted in his message that the Saudi Public Investment Fund is a commercial entity with extensive business transactions in the United States.

Recent dealings of the Saudi Public Investment Fund with the PGA demonstrate that it intends to be much more than a passive investor in American companies housing its substantial wealth.

Democratic Senator Blumenthal has long been known for his critical stance toward Saudi Arabia. He previously proposed a one-year freeze on arms sales to the kingdom in response to OPEC+ oil production cuts before the fall 2022 midterm elections.

 

Embarrassing Questions for Saudi Arabia

According to a report published by The Guardian on June 21, 2023, Yasir al-Rumayyan’s attendance at the Congressional session could raise the possibility of the Saudi official being asked, under oath, about various issues like the future of golf and the killing of journalist Jamal Khashoggi.

While the session will undoubtedly focus on golf, al-Rumayyan might also face questions about his role in the Saudi Public Investment Fund and his relationship with Saudi Crown Prince Mohammed bin Salman.

This is especially significant since al-Rumayyan holds governmental positions in Saudi Arabia, serving as the Chairman of the Board of Aramco and the Chairman of the Board of Newcastle United Football Club.

The Guardian stated in a report on October 16, 2021, that the executive authority was involved in a controversial anti-corruption purge in the kingdom that included transferring assets on behalf of the Crown Prince.

Internal Saudi documents submitted to a civil court in Canada in 2017 reportedly ordered a close assistant to the Crown Prince, al-Rumayyan, to transfer 20 companies to the Sovereign Wealth Fund as part of what was termed the anti-corruption campaign.

The documents indicate that one of the twenty companies seized was a leased aircraft company that was later alleged to have been used in the Saudi conspiracy to kill journalist Jamal Khashoggi.

In a declassified intelligence report from 2021, the U.S. intelligence agency concluded that the Crown Prince had approved the gruesome killing of Khashoggi.

The Guardian noted that there is no indication of al-Rumayyan’s involvement or knowledge of the alleged use of private jets in the operation that killed Washington Post journalist Jamal Khashoggi. However, this matter could be raised in the upcoming hearing, as well as questions about the Saudi Public Investment Fund’s acquisition of Newcastle.

People familiar with the previous litigation between PGA and LIV Golf - which was dropped after the announcement of the deal - told The Guardian that Saudi officials involved in the lawsuit steadfastly asserted their insulation in this matter, claiming sovereign immunity.

 

Enabling an Authoritarian Regime

Al-Rumayyan could also be questioned about his financial relationship with former U.S. President Donald Trump. In late July 2022, Trump defended hosting a Saudi-funded golf championship at his golf course in Bedminster, New Jersey, attended by al-Rumayyan, by casting doubt on any connection between the Kingdom and the 9/11 attacks.

Responding to calls from 9/11 victim families urging Americans to protest the Saudi-backed’ LIV Golf’ championship, Trump pointed out that there is still uncertainty surrounding the attacks.

Since the event marked the first competition of the championship on U.S. soil and Trump declined calls to cancel it, the 9/11 Justice group released a 30-second ad in July 2022 condemning the championship’s timing during the former president’s term and accused participating golfers of accepting “blood money.”

Especially in the period leading up to the championship’s launch, Trump actively promoted the event in interviews and public statements, encouraging golfers to join LIV Golf.

A series of photos showed Trump playing golf alongside his son Eric, Yasir al-Rumayyan, the head of the Saudi Public Investment Fund, and several professional golfers.

A report by The Washington Post published on June 15, 2023, indicates that the investigation into the deal is the latest in a series of congressional actions that could threaten the controversial deal and jeopardize the status of the PGA Tour as a tax-exempt non-profit organization in the United States.

The newspaper noted that Ron Wyden, the Chairman of the Senate Finance Committee, sent a message to officials of the PGA Tour informing them that the deal raises important questions about whether any organization should continue to affiliate itself with an authoritarian regime that consistently works to undermine the rule of law and enjoy tax-exempt status in the United States.

It is widely understood that the Saudis turn their oil profits into various efforts to whitewash the reputation of their repressive and violent regime, according to Wyden.

The latter called on the Department of Justice’s Antitrust Division to review the deal, saying that it would have a significant negative impact on competition.

In turn, Representative John Garamendi (Democrat from California) told The Washington Post that he wants to deprive the Saudi Sovereign Wealth Fund of the opportunity to benefit from the tax exemption reserved for charitable organizations.

According to the golf-focused magazine Golf Digest, this merger could be subject to review by the Committee on Foreign Investment in the United States, a government agency that assesses the national security risks posed by foreign investments.

At present, Saudis are focusing on learning golf skills as part of a national project aimed at transforming the Kingdom into an unexpected powerhouse in the sport.

Saudi officials plan to add at least 10 golf courses over the next decade, increasing the total number of golf courses in the desert kingdom to 24.