(Beirut) – The United States should investigate and regulate sovereign wealth funds such as Saudi Arabia’s Public Investment Fund (PIF) that may be involved in human rights abuses, Human Rights Watch said in testimony today before the U.S. Senate Permanent Subcommittee on Investigations. Are connected.
The hearing examined the fund’s substantial holdings in the United States. This follows the announced merger of the Professional Golf Association (PGA) and LIV Golf, which is owned by Saudi funds, in June 2023. Under Crown Prince Mohammed bin Salman, the fund has facilitated and profited from human rights abuses. The Crown Prince chairs the US$700 billion fund, which is built on the kingdom’s oil wealth.
“Mohammed bin Salman has shown a clear interest in expanding his influence beyond Saudi borders, often through high-profile business deals with sports teams and leagues,” said Joy Shea, Saudi Arabia researcher at Human Rights Watch. “American businesses considering joining forces with Saudi PIF should work extremely hard to ensure that sovereign wealth funds investing in American companies are not promoting human rights abuses.”
Human Rights Watch has reported extensively over the past few years on the Crown Prince’s strengthening of political and security power in Saudi Arabia, and the serious implications for human rights. Together, MBS has consolidated economic power in the state, particularly through the PIF.
The fund has been directly involved in human rights abuses involving the Crown Prince. They include a 2017 “anti-corruption” crackdown that involved arbitrary detention, abusive treatment and extortion of assets from former and current government officials, prominent businessmen and rivals of the royal family, as well as the 2018 murder of a Saudi journalist. Was. Jamal Khashoggi.
This raises serious concerns for US businesses associated with PIFs, and could lead to any potential links between them and abuses in Saudi Arabia and abroad, especially when the funds have their investments in key sectors of the US economy, including technology, sports, entertainment, and technology. Expands investment. , and finance. Human Rights Watch said it should also be of concern to US regulators and Congress.
Some sovereign wealth funds are structurally separate and distinct from the chief executive of the government. But the Crown Prince has significant control over the PIF, one of the largest funds in the world, and makes unilateral decisions with little transparency or accountability over the fund’s decisions. While Saudi Arabia’s state finances have long been characterized by a lack of transparency and oversight, the restructuring and dramatic expansion of the fund has consolidated – to an unprecedented degree – immense economic power in Saudi Arabia under the Crown Prince alone.
Human Rights Watch wrote to the fund’s governor, Yasser al-Rumayyan, who was managing director of the fund between 2015 and 2019, and again on December 21, 2021, according to al-Rumayyan’s LinkedIn page and various media reports. Their response to allegations of serious human rights violations involving the fund was requested on March 15, 2022. He has not given any reaction.
As a result of the crackdown on corruption, about 20 companies were seized and transferred directly into the fund on the instructions of the Crown Prince, according to Canadian trial documents reviewed by Human Rights Watch. Some of those detained in 2017 remain in custody without charge, and others have not been heard from since.
There is no transparency regarding the property confiscation process. According to The Guardian, some of the assets seized during the operation have been revealed, It was transferred to a holding company, apparently on the orders of Mohammed bin Salman, which is wholly owned by PIF. Other assets were reportedly transferred to a separate government-controlled holding company managed by the Finance Ministry. It is unclear who ultimately took ownership of the other properties.
The documents also indicate that one of the transferred companies was Sky Prime Aviation, a charter jet company that owned two planes used by Saudi agents in 2018 to travel to Istanbul, where they arrested Khashoggi. Was murdered. In February 2021, the CIA released a report assessing that Mohammed bin Salman had approved the operation.
Over the past several years, the Saudi government, particularly under the de facto leadership of Crown Prince Mohammed bin Salman, has launched a massive campaign to rehabilitate its image and divert attention from the global perception of the Saudi kingdom as a serious and persistent human rights violator. Have done. , The PIF, although a branch of the Saudi government and controlled by the country’s de facto leader, has tried to portray itself as an investor acting based on financial interests rather than at the direction of the Crown Prince.
Saudi Arabia has hosted or sponsored events celebrating humanitarian achievements, such as major sporting events, in an effort to improve its image. The fund is a central component of the country’s Vision 2030, which clearly sets out the role of sport in enhancing Saudi Arabia’s image abroad.
On June 6, the PGA Tour announced an agreement with the PGA Tour and DP World Tour to combine the fund’s golf-related commercial businesses and rights, including LIV Golf, into “a new, collectively owned, for-profit entity.” . Unlike sponsorship of an event or ownership of a team, control over the entire field of professional sports increases the potential for pressure on players, sponsors, and media to remain silent about Saudi Arabia’s abuses, raising concerns that What measures will be taken within it. League that undermines human rights.
Human Rights Watch wrote a letter to the PGA Tour’s policy board on June 22 detailing concerns about the implications of the fund effectively gaining a monopoly on professional golf, while also engaging in human rights abuses. As of September 13, Human Rights Watch had received no response, nor are there indications that the tour sought to develop a human rights strategy.
“It is important that the US Congress look into the influence of Saudi funds in American business,” Shea said. “The Biden administration should exercise similar caution in its further engagement with the Saudi government, given its rights record and how it is using its billions to tarnish its image.”