Senator Richard Blumenthal, D-CT, speaks during a Senate Judiciary Committee hearing on the January 6 insurrection, at the Hart Senate Office Building on Capitol Hill in Washington, DC, March 2, 2021.
Graeme Jennings | Pool via Reuters
WASHINGTON — Bipartisan members of a Senate subcommittee on homeland security on Wednesday demanded transparency from a Saudi Arabian investment fund during the second hearing on the controversial deal to merge the PGA Tour and Saudi-backed LIV Golf.
“Saudi Arabia’s bid to buy professional golf equipment in America is not just an investment in a vacuum,” said Sen. Richard Blumenthal, D-Conn., chairman of the Permanent Subcommittee on Investigations, on Capitol Hill. “It is instead part of a web of growing investment in this country. They are largely unknown and almost entirely unsupervised.”
Blumenthal announced that he had issued a subpoena on Wednesday to USSA International LLC, PIF’s wholly owned U.S. subsidiary, for documents related to the PGA Tour-LIV Golf deal and other U.S. investments.
Blumenthal and witnesses at the hearing accused Saudi Arabia of mirroring other authoritarian regimes such as China and Russia by exploiting loopholes in certain investment platforms to spread their influence and exert soft power within the United States.
“So at its core, this is not a business deal,” Benjamin Freeman, director of the Democratizing Foreign Policy Program at the Quincy Institute for Responsible Statecraft, said of the PGA-LIV deal. “This is an influence operation. It is intended to shape American public opinion and American foreign policy.”
According to Joey Shea, a Saudi Arabia and United Arab Emirates expert at the nonprofit Human Rights Watch, who testified Wednesday, the PIF “is ranked as one of the least transparent, least accountable and with the least credible governance structures in the world .”
PIF and LIV did not immediately respond to a request for comment. A PGA Tour representative declined to comment.
The assets of the Saudi Public Investment Fund – an entity controlled by Crown Prince Mohammed bin Salman that backs LIV Golf – in entertainment, electronic vehicles, US gaming and more have grown from about $2.5 billion in 2018 to more than $35 billion today , according to the committee.
The Saudi government has invested heavily in sports worldwide in recent years.
PIF recruits top footballers from Europe to Saudi Arabia with loads of money. Brazilian soccer star Neymar accepted an offer worth $175 million this summer, according to NBC Sports. He followed football legends Cristiano Ronaldo and Karim Benzema, who have also secured contracts reportedly worth hundreds of millions of dollars to play in Saudi Arabia’s professional league.
The fund also tried to woo Lionel Messi, but he ultimately accepted an offer from Major League Soccer in the United States.
Blumenthal said the administration’s current laws on foreign investment review ignore commercial assets of foreign governments.
“As I wrote to (Yasir Al-Rumayyan) the PIF governor last month, it cannot go both ways,” Blumenthal said. “If it wants to cooperate commercially with the United States, it must be subject to U.S. law and oversight.”
In June, the PGA Tour and LIV announced a deal to combine the two golf leagues, shocking the sports media world. Many critics, including those on Capitol Hill, have accused LIV of “sportswashing,” or spreading influence through sports in an attempt to distract from human rights abuses.
A month after the deal was announced, PGA Tour officials went before the Senate subcommittee to defend the deal with LIV, insisting that the Tour, not the Saudis, would be the primary beneficiary of the deal. Representatives of LIV and PIF were also invited to testify, but they disagreed.
The proposed deal – which so far only has a framework agreement that would create a for-profit subsidiary of the Tour that would manage the competitions – ended the ongoing lawsuit between the two entities.
While the PGA Tour has said it would be in control if the deal were to materialize, PIF has said it is prepared to invest billions in new capital in the new entity.
Prior to the proposed deal, the two organizations had filed a series of antitrust claims against each other. LIV had sued the Tour for anti-competitive practices for banning its players, while the Tour had filed a counterclaim, claiming LIV was suppressing competition.
