Senate subpoenas docs from PIF consultants

The U.S. Senate Permanent Subcommittee on Investigations has subpoenaed documents from four U.S.-based consultants working for Saudi Arabia’s Public Investment Fund, a move the country’s sovereign wealth fund is attempting to block in lawsuits filed in a Saudi Arabian court.

In a letter to Public Investment Fund governor Yasir Al-Rumayyan on Monday, Senate subcommittee chairman Richard Blumenthal, a senator from Connecticut, and ranking member Ron Johnson, a senator from Wisconsin, accused PIF of “unprecedented” attempts to hamper the subcommittee’s inquiry into PIF’s “proposed takeover of professional golf” in the U.S. The PIF is funding the LIV Golf League as a PGA Tour rival.

“The subpoenas to the PIF Consultants were issued after months during which you, the PIF, and the PIF Consultants repeatedly declined to voluntarily testify or provide any substantive, responsive information or records to the Subcommittee,” the senators wrote in the letter to Al-Rumayyan.

The senators’ action comes at a time when the PGA Tour is hammering out the final details of a framework agreement to form an alliance with the PIF and DP World Tour, which would combine their commercial assets into a new for-profit entity, PGA Tour Enterprises.

The PGA Tour is close to finalizing a deal with Strategic Sports Group — a consortium of billionaire team owners that includes Tom Werner and John Henry (Boston Red Sox), Arthur Blank (Atlanta Falcons) and Wyc Grousbeck (Boston Celtics) — that would infuse at least $3 billion into PGA Tour Enterprises. The PGA Tour would then focus on finalizing its deal with the PIF and DP World Tour, according to sources.

Blumenthal and Johnson accused Al-Rumayyan of declining to testify in the subcommittee’s July 11 hearing into the PGA Tour’s proposed alliance, first citing scheduling conflicts and then declaring himself an “inappropriate witness” for a public hearing. The senators said the PIF rejected the subcommittee’s requests for additional information on July 27 and Aug. 16.

After the subcommittee issued subpoenas Nov. 2 for records from four U.S.-based consultants — Boston Consulting Group, McKinsey & Co., M. Klein & Co. and Teneo — the PIF sued each of the four consultants in Saudi Administrative Court on Nov. 30.

The Senate subcommittee is also seeking records from the PIF’s U.S. subsidiary, USSA International LLC. Among other issues, the subcommittee is examining “the extent to which foreign powers may be using commerce within the United States as a tool of foreign influence.”

“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,” the senators’ letter said.

In a Jan. 12 letter to the subcommittee, PIF officials claimed the subpoenas to their consultants violate various principles of law. In response, the senators asked the PIF to provide a legal memorandum “explaining the legal bases for its assertions with appropriate citations to U.S. law and relevant, established precepts of international law” by Feb. 2.

“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’ letter said. “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.”