The officials in charge of Saudi Arabia’s tens of billions of dollars in American investments haven’t been shy about showing off their relationships with prominent American corporate and political people, even going so far as to play golf with former President Donald Trump while sporting MAGA hats. But many of the specifics of these interactions have gone unspoken.
A federal case in California that pits the upstart LIV golf tour, owned by Saudi Arabia, against the PGA Tour is altering that. A judge determined that Saudi officials and the Saudi government aren’t protected from U.S. courts in the same way that sovereign states often are, noting what she described as the kingdom’s hands-on administration of Businesses.
The ruling means that lawyers for the PGA Tour would be able to question top officials about business secrets that the Saudis have kept close, such as specifics of deal-making involving 2024 presidential candidate Trump and others. While Saudi Arabia is fighting the decision, it maintains that U.S. courts have no jurisdiction over its high officials.
Yasir al Rumayyan is “up to his eyeballs” in administering the golf tour, according to Labson Freeman. He was chosen by Crown Prince Mohammed bin Salman to oversee the $600 billion plus hoard of riches held by the oil-rich Saudi government.
The result is as follows. The PGA Tour asserts that al Rumayyan personally selected LIV players, approved LIV contracts, and managed the golf league in all other respects. Rumayyan’s conduct, according to Saudi Arabia’s attorneys, were those of an eager investor rather than someone who was genuinely managing a firm.
Beyond the golf industry, the case has significance. Saudi Arabia has been proactive in its business and political ties with the United States and may now be subject to court orders requiring greater responsibility and openness.
That is particularly difficult when Saudi officials declare that U.S. courts have little to no influence on their decisions. In a lawsuit over the 2018 murder of US-based journalist Jamal Khashoggi, the kingdom successfully contended last year—with support from the Biden administration—that American courts lacked the jurisdiction to try the prince. U.S. intelligence agencies have come to the conclusion that Khashoggi was assassinated by Saudi agents sent by the prince. The killing has created a long-lasting split between Prince Mohammed, Saudi Arabia’s de facto ruler, and the Biden administration.
Traditional international law generally shields a nation’s leaders and government from being brought before the courts of another nation. In 1976, Congress established business transactions as an exemption to that sovereign immunity.
The PGA Tour claimed in a filing on Friday that Saudi Arabia and its sovereign wealth fund, which is run by the prince, have a history of switching their stance on demanding sovereign immunity depending on whether doing so will benefit them in various economic agreements and legal battles.
Critics of Saudi Arabia and independent legal analysts and professionals claim that the country may be in a precarious legal situation.
When it came to running the LIV golf tour and competitions, Donald Baker, a lawyer and former chief of the Justice Department’s antitrust section who is not engaged in the case, said, “It appeared to me quite clear that it wasn’t immune” from American courts.
Baker predicted that the lawsuit might result in a request for Saudi royal depositions from California’s Northern District federal court. A case-by-case analysis would be required to determine whether additional Saudi government business transactions in the US have also lost their immunity from US courts, he said.
According to Khashoggi’s founder of the rights organisation Democracy for the Arab World Now, Sarah Leah Whitson, “if they want to have sovereign immunity from their business transactions, it means they can sue people, they can demand that the judicial system enforces contracts and the laws governing contracts, but nobody can impose that against them. They are immune from accountability.
With the tagline “Golf, but louder,” the Saudi-funded professional golf circuit, which is currently in its second season, is well-known for its loud music, record-breaking multimillion-dollar payouts, connections to Donald Trump, and hostile competition with the PGA Tour. Three LIV tournaments will be held on Trump properties this year, under agreements whose financial details have not been made public.
Saudi Arabia’s immunity issue arises in a long-running PGA Tour antitrust case that was initially launched by Four players. The litigation has already made it clear that 93% of LIV is owned by the Saudi government’s sovereign wealth fund.
An email from The Associated Press requesting comment was not answered by a lawyer representing Saudi Arabia in the dispute. The Saudi sovereign wealth fund, which was contacted by a LIV spokesman in response to inquiries, did not provide any additional information.
The sovereign wealth fund of Saudi Arabia has been a key vehicle for Saudi investment both domestically and overseas throughout the now eight-year reign of the kingdom’s king, Salman. The chairman of the fund is the prince. According to Saudi officials, the goal is to diversify the oil-dependent economy of the country.
The fund has more than $30 billion invested in Uber, Meta, Tesla rival and luxury electric car company Lucid, Paypal, Costco, and other publicly traded U.S. enterprises under the leadership of Prince Mohammed and fund governor al Rumayyan.
The fund has strengthened the ties between the Saudis and the Trump family by using their golf courses and giving $2 billion to their son-in-law Jared Kushner’s investing company.
Rumayyan is a member of Uber’s board. Trump is a golf partner of his. When Elon Musk tweeted about what he subsequently claimed was the possibility of a Saudi sovereign wealth fund agreement to take Tesla private, he started one of Musk’s largest tweet storms and court issues.
Sports are also receiving significant funding from the Saudi royal wealth fund. Besides with founding the LIV golf tour, the Saudis also own the Newcastle United soccer team in the British Premier League, host Formula One races, record-setting horse races, and a variety of other competitions and games, from snooker to football.
Saudi Arabia presents itself as having a dynamic, young, and business-friendly administration. Human rights organisations respond with the term “sportswashing,” claiming that the monarchy, influenced by Prince Mohammed, is attempting to remove itself from the murder of Khashoggi, the imprisonment of other rights activists, and the failing Yemeni war. Saudi Arabia’s financial arrangements with Trump and Kushner are portrayed by US critics as the oil kingdom supporting one side in America’s fiercely polarised politics.
They’re attempting to rebrand the kingdom, according to Kristian Ulrichsen, a fellow for the Middle East at the Baker Institute in Houston. “They’re utilising sport to reach a much bigger public audience and trying to tap into some of the passion that people have,” he said.
Although Rumayyan serves as team chairman, the Saudi Arabian sovereign wealth fund supplied what officials described as “legally binding assurances” that the country would not be engaged in running Newcastle United in order to complete the purchase. In light of the decisions made by the federal court in California, rights campaigners unsuccessfully urged for a reexamination of that agreement.
In their Friday filing, the PGA Tour lawyers and critics claim that Saudi Arabia knowingly renounced sovereign immunity when it provided court records in a case brought in the United States against a Saudi who had previously held a senior intelligence position. Because it threatened to divulge secrets of national security, the United States interfered to have the case dismissed. According to the LIV players and the Saudi sovereign wealth fund, officially known as the Public Investment Fund, the PGA is damaging LIV through its unfair business methods. The reputations of Saudi Arabia and Prince Mohammed, the PGA’s attorneys say in court documents, are driving away business.