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Executives testify workers may face jail in the event that they reveal Saudi work

Senators escalated their scrutiny of Saudi Arabia’s Public Funding Fund in a listening to Tuesday earlier than the Everlasting Subcommittee on Investigations that included representatives from 4 consulting corporations which have labored with the fund.

Executives from Boston Consulting Group, McKinsey & Firm, M. Klein & Firm and Teneo testified earlier than the subcommittee on their work with the PIF and the fund’s curiosity in skilled golf.

The subcommittee requested representatives from every of the corporations to look for a listening to in December and supply “paperwork and data associated to their work with the PIF,” however an legal professional representing PIF despatched a letter to Sen. Richard Blumenthal (D-Conn.) in January arguing that offering the paperwork the subcommittee requested would “violate lawful orders issued by the courts of Saudi Arabia.”

The PIF was granted momentary injunctions in a Saudi Arabian court docket to maintain the fund’s consultants from offering the data the subcommittee has requested.

“Our capacity to reply in full right now shouldn’t be a matter of lack of want nor our participation in nationwide safety issues,” stated Michael Klein from M. Klein & Firm. “We’re merely restricted by the continued litigation over our capacity to share our monetary evaluation and paperwork regarding our funding banking assignments. Exposing ourselves to a breach underneath the filed court docket case with potential felony penalties is solely not a threat I can take or impose on my staff.”

The three different consultants made comparable arguments and likewise testified to restricted connections to LIV Golf, which is owned by the PIF. Bob Sternfels, the worldwide managing accomplice of McKinsey & Firm, stated his agency consulted with the PIF in 2021 on “potential revenues for a brand new golf tour,” however that work didn’t embody LIV Golf.

All 4 corporations declined to supply the paperwork and data senators have requested underneath the momentary injunctions, which has been challenged in Saudi Arabian court docket with a listening to scheduled for subsequent month.

“The PIF has been express that the disclosure of data regarding BCG’s work for PIF is a violation of Saudi regulation, which ‘imposes felony penalties for disclosing or disseminating such info together with imprisonment for a most of 20 years,’” Wealthy Lesser, the worldwide chair of Boston Consulting Group, stated. “We threat felony and monetary penalties for the agency and for people working or dwelling in Saudi Arabia.”

“You say you’re between a rock and a tough place, however you’ve chosen sides,” Blumenthal stated. “How is it that consulting work carried out by American corporations, together with their work in golf, may hurt Saudi Arabia’s nationwide safety?”

Sen. Ron Johnson (R-Wis.), who pushed again on the senate’s inquiry into the framework settlement that was signed in June between the PGA Tour and the PIF that set the stage for a possible partnership, supported the committee’s investigative authority.

The Tour introduced final week it had reached an settlement with Strategic Sports activities Group (SSG), a non-public fairness group led by Fenway Sports activities that invested $1.5 billion into PGA Tour Enterprises, a for-profit entity.

“I remained involved that any Congressional oversight of the matter might do extra hurt than good. That stated, as rating member, I not solely acknowledge however should additionally defend the subcommittee’s constitutional authority to research a broad vary of points and entities,” Johnson stated.

Blumenthal, the subcommittee’s chair, requested the 4 executives to decide to a possible future listening to on Saudi Arabian affect in america.



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