A Senate subcommittee on Tuesday issued congressional subpoenas to executives from Boston Consulting Group, McKinsey & Company, M. Klein & Company, and Teneo in connection with their work with Saudi Arabia’s Public Investment Fund (PIF). The company rigorously investigated whether it was complying with the regulations.
Last fall, PIF filed suit in Saudi Arabia against each of the four U.S.-based contractors in what leaders of the Senate Permanent Subcommittee on Investigations described as an attempt to “obstruct” the investigation. and warned that Congress’s oversight powers could be weakened.
“Saudi Arabia has laws that protect that type of information, and there are significant criminal penalties for those who disclose it without authorization. , and risk criminal and financial penalties,” Rich Lesser, Global Chair of Boston Consulting Group, said in an opening statement.
Executives from all four companies — small businesses. Bob Sternfels, Global Managing Partner of McKinsey & Company. Michael Klein of M. Klein & Company. Teneo CEO Paul Kiely said PIF remained a customer even after it sued the company in a Saudi court.
However, the subcommittee chairman, Sen. Richard Blumenthal (D-Conn.), did not support it.
“The position that I heard expressed today is essentially that we will comply with the subpoena, but only to the extent that Saudi Arabia allows us to do so, and that is not compliance with this subpoena,” Blumenthal, a Democrat, said in a statement. , Connecticut) said.
“You chose the Saudi side over the American side.”
PIF officials have repeatedly refused to testify before the subcommittee.
In a statement released ahead of the hearing, PIF said: “We have cooperated in good faith with the subcommittee and will continue to do so, consistent with the PIF’s status and obligations as an instrument of Saudi Arabia.” We have made, and will continue to make, significant efforts to facilitate the production of the information requested by our advisors in compliance with Saudi law, which should also be recognized. ”
Blumenthal acknowledged that the two companies shared thousands of pages of documents with the subcommittee, but noted that many of them were press clippings and public documents.
At one point he almost held on fully edited document He shared it with the subcommittee, who called it “laughable.”
“At the end of the day, what the American people want to know is whether American companies will put America’s national interests above anyone else. And the reason you are here today is your response to these subpoenas. seems to really question that,” said Sen. Maggie Hassan (D.N.H.).
“Since 2017, we have invested nearly $60 billion in the United States,” PIF said in a statement.
The committee followed last spring’s surprising announcement that PIF-backed LIV Golf and the PGA Tour were moving forward with a deal to create a new golf monolith, and that Saudi Arabia’s interest in the U.S. as a tool of influence followed. I’ve been researching investments.
PIF disputes the subcommittee’s characterization of its involvement in the investigation, arguing that it is too broad.
“The need to protect these interests only increased when the sub-committee made a significant change in policy and began investigating much wider than the Framework Agreement and golf and sports investment. “The committee seeks access to all records created in connection with any interests, investments, or even planned investments that PIF has outside of Saudi Arabia.” said Rafael Prober, partner and general counsel. Speaking to PIF, he said: Unpublished letter dated February 2nd.
Prober said the committee “seeks to end the circumvention of established principles of extraterritoriality, sovereignty, and international civility by seeking access to PIF information through U.S.-based advisors and consultants.” denounced.
In a Jan. 29 letter to PIF President Yasir Al-Rumayyan, Blumenthal and ranking member Sen. Ron Johnson (R-Wis.) argued that issuing subpoenas to U.S. companies as part of a congressional investigation “is not a good idea. “This is common investigative practice,” he said.
Johnson, who is skeptical about the subcommittee’s role in investigating the proposed deal, said he had “sympathy” for the consultants but “not sympathy for the Saudi claim of sovereign immunity in this investigation.”
If PIF’s legal push is successful, Johnson said, “PSI’s ability to access records will be weakened, subcommittee powers will be diminished, and Congressional oversight will be further curtailed.”
Blumenthal stressed during the hearing that the subcommittee “has never conceded the full and broad claims of foreign sovereign immunity for commercial documents held by U.S. companies.”
Teneo, the only company present at today’s hearing, is registered to act on behalf of PIF under the Department of Justice’s Foreign Agents Registration Act (FARA).
Bluemetal told The Hill after the hearing that FARA “probably needs to be strengthened.”
“This is one of the committee’s findings that emerged from this investigation,” he said.
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