In the context of the attempts of Saudi Crown Prince Mohammed bin Salman (MBS) to whitewash his reputation in front of US public opinion, the US Senate decided, through the Permanent Subcommittee on Investigations, to question the loyalty of four major American consulting firms, accusing them of withholding information subpoenaed by Congress regarding those firms’ work for Saudi Arabia.
The involved consulting companies include McKinsey & Company, Boston Consulting Group, M. Klein & Company and Teneo.
The major US consultancies are accused of consulting Saudi Arabia on its global sports spending spree, including its proposed takeover of golf’s PGA Tour.
The subcommittee subpoenaed records last August related to services the consultancies provided to Saudi Arabia’s Public Investment Fund (PIF), which is chaired by Saudi Arabia’s Crown Prince and Prime Minister Mohammed bin Salman.
The Saudi public investment fund (PIF), a sovereign wealth fund chaired by the crown prince and de facto Saudi leader, Mohammed bin Salman, and is worth an estimated $776bn, is at the heart of Blumenthal’s inquiry.
But in a more serious turn of events for three of the firms, the senator has also strongly suggested that the consultancies could be violating federal disclosure rules – known as the Foreign Agents Registration Act (Fara) – by not formally declaring to US authorities that they are acting as agents of the Saudi government.
Failure to file under Fara, which was designed to control illegal foreign influence over the US government, is considered a federal crime and can lead to hundreds of thousands of dollars in fines or imprisonment.
The PIF has routinely objected to being subjected to US laws and has rebuffed repeated requests by the Senate committee to hand over documents subpoenaed by the panel.
The Saudi government responded by issuing an injunction against the consultancies in the Saudi courts, claiming that the records sought by the committee are classified and that their release could harm Saudi national security interests.
The Saudi government’s insistence that the US consultancies working for the PIF be treated as “public employees of the government of Saudi Arabia” has put the consultancies at legal risk.
Under US law, any individual working as an agent of a foreign government must comply with Fara, which only one of the consultancies has so far done.
