Multimillion dollar payments from LIV Golf, Reportedly 93% owned by MBS-Controlled Fund, to Trump Golf Resorts Raise Serious Questions about Conflict of Interest, Threats to National Security
(January 15, 2023 – New York): The U.S. Department of Justice and Congress should investigate the disturbing facts and circumstances surrounding payments by Saudi Arabia's sovereign Public Investment Fund (PIF), via its wholly-owned LIV Golf company, to businesses owned by former President Donald Trump, said Democracy for the Arab World Now (DAWN).
On January 13, 2023, Elliot Peters, a name partner at Keker, a prominent San Francisco law firm, who is lead counsel to the PGA in the players' lawsuit, inadvertently revealed in a court proceeding that PIF owns 93% of LIV Golf, pays for all of its events, and holds all of the entity's financial risk. PIF's chairman is Saudi Crown Prince Mohamed bin Salman (MBS), who has absolute and final decision-making control over the fund. LIV Golf is a newly established golf tournament franchise that has emerged as a rival to PGA Golf. It has paid Trump-owned golf resorts unknown millions of dollars to hold its events there, and former President Trump has publicly championed the new league, made prominent appearances at its events, and urged PGA players to sign on with LIV Golf.
"The revelation that a fund controlled by Crown Prince MBS actually owns almost all of LIV Golf means that MBS has been paying Donald Trump unknown millions for the past two years, via their mutual corporate covers," said Sarah Leah Whitson, Executive Director of DAWN. "The national security implications of payments from a grotesquely abusive foreign dictator to a president of the United States who provided extraordinary favors to him are as dangerous as they are shocking."
The information about LIV Golf was otherwise kept sealed in the secret shareholder agreement between the PIF and LIV Golf, although LIV Golf had previously disclosed that the PIF was its majority shareholder. There has been no independent verification of the ownership percentages reportedly revealed in court. It is not known who owns the other seven percent of LIV Golf. LIV Golf players and LIV Golf have sued the PGA for suspending PGA players who have signed contracts with LIV Golf, and the PGA has sued LIV Golf and the PIF for interfering with its players' contracts. MBS is the chairman of the PIF and has absolute decision-making power over its investments.
There is little doubt that MBS controls the PIF with as much absolute power as he controls the rest of the country, with final decision-making on all of PIF's investments. When PIF's advisory panel objected to PIF's $2 billion investment in Trump's son-in-law's newly established fund, Affinity Partners, MBS reportedly vetoed the objections to proceed with the controversial investment as the only investor in a start-up fund that had no track record. Following DAWN's demand for Congress to investigate this investment, as well as the $1 billion PIF investment in Trump's former Treasury Secretary Steven Mnuchin's newly established fund, Senator Warren announced she would commence an investigation into conflict of interest breaches and ethics law violations that bar solicitation of foreign government officials while in office.
"Former President Trump made no secret of the endless favors he granted MBS and Saudi Arabia during his term in office, from his first state visit to the country, to vetoing legislation that would have banned arms sales to the country, to protecting MBS by hiding the CIA's report concluding MBS ordered Jamal Khashoggi's murder," said Whitson. "It now appears that like his son-in-law and treasury secretary, Trump is cashing in his chits with MBS for all these favors."
The U.S. Department of Justice and Congress should investigate any communications by Trump, his agents, and Trump Organization staff regarding business with LIV Golf, including any and all communications they had with MBS, the PIF, LIV Golf or any of their agents as staff, and when these communications took place. The investigation should include a thorough examination of the terms of any payments, and what promises and services were and will be delivered in exchange for these payments, to determine if U.S. federal laws and ethics rules restricting conflicts of interest, lobbying disclosures, and corruption have been breached.
"If Trump or his agents discussed any deals with LIV Golf or PIF while Trump was still in office, a criminal investigation would also be in order because federal law strictly prohibits this sort of business dealing by sitting federal officials with foreign governments," said Whitson.
The U.S. Congress should also initiate efforts to pass legislation that would clearly and unequivocally prohibit all former senior government officials from working from, advising, doing business with, or soliciting foreign government officials or entities they control for at least five years from the end of their term. Such a conflict of interest and national security law should prohibit former government officials with access to sensitive national security information from turning around and selling their services, knowledge and access to foreign governments.
"The absence of strong conflict of interest laws has created a dangerous and expanding threat to U.S. national security, as former U.S. officials – even a former president – increasingly race to monetize their work for our government into lucrative contracts with foreign governments," said Whitson. "Given that Trump is also planning to run again for president, his business ties to Mohamed bin Salman are a national security emergency."
A Washington Post editorial raised serious questions about the appearance of PIF's investments in Jared Kushner and Mnuchin's funds as a reward for the Trump administration's political support and protection of MBS despite the crimes he committed in connection with the Yemen war and Khashoggi's murder, and a political bet on "the Trump family's political future — specifically, a possible White House comeback by Mr. Kushner's father-in-law if he runs again, and wins, in the 2024 presidential election." That we now know MBS's PIF Fund is also directly paying Trump's businesses only magnifies these concerns.
President Trump and Jared Kushner established a close working relationship with MBS that included MBS's visit and dinner at the Trump White House in March 2017, followed by Trump's visit to Riyadh. The Trump administration is reported to have shared confidential national security information about the identities of Saudi nationals who had held meetings with the State Department and Trump administration with MBS, prior to the murder of U.S. resident Jamal Khashoggi and the attempted murder of Saad Aljabri, a former Saudi official who had fled the country in the wake of MBS's deposing of former Crown Prince Mohamed bin Nayef (MBN). The Trump administration is also reported to have shared confidential U.S. intelligence information with MBS about a plan of MBN's to depose MBS as Crown Prince, immediately after which MBS detained MBN without charge in March 2020. MBN remains detained and has no public communications since then.
Following the murder of Jamal Khashoggi by MBS and his agents on October 3, 2018, the Trump administration reportedly advised MBS on how to handle the political and public relations fallout from the murder and Kushner continued to breach White House rules requiring that National Security Council staff participate in any meetings with foreign government officials in continued private calls with MBS. Speaking to veteran journalist Bob Woodward, President Trump bragged that he "saved his ass" referring to MBS after the murder of Khashoggi. President Trump approved a $110 billion arms sale to Saudi Arabia, and remained a strong supporter of MBS and continued arms sales to the Kingdom, vetoing two bipartisan Congressional votes to end arms sales for the Kingdom's war in Yemen.
U.S. laws restricting the solicitation of, or employment for, foreign government officials and entities after a federal government employee has left office are woefully inadequate, and there appear to be no laws restricting former officials outside of intelligence agencies from working or doing business for foreign governments. On March 15, 2022, President Biden signed the 2022 Intelligence Authorization Act with provisions prohibiting U.S. intelligence agents with knowledge of national security interests and spycraft from the Central Intelligence Agency, the National Security Agency, and the more than dozen other American intelligence agencies from selling their services to foreign governments for at least 30 months following the end of their federal employment, as well as requiring them to report any foreign government work to the U.S. intelligence community and Congress for five years after they leave service.
Members of Congress proposed the legislation in light of a crisis in intelligence and "spycraft" leaks tied to U.S. intelligence agents working for foreign governments, specifically National Security Agency officials who worked for the U.A.E. government and shared surveillance technology and techniques with them, including hacking hundreds of phones and spying on journalists, dissidents and U.S. citizens in a venture called "Project Raven". The Department of Justice also successfully prosecuted the former intelligence officials for their roles in this spying.
There are, however, strict laws pursuant to 5 C.F.R. 2635 Standards of Ethical Conduct for the Employees of the Federal Branch regarding communications and negotiations of U.S. government officials for future employment or business that require disclosure and recusal of the official while working for the U.S. government. Unfortunately, the only prohibitions on future employment pertain to narrow and limited bans on appearances and communications before the U.S. government, on behalf of the new employer.
"The Justice Department and Congress have a responsibility to investigate exactly when and to whom and under what terms Trump has obtained unknown millions from Saudi government coffers controlled by Crown Prince Mohamed bin Salman, which may well violate even our existing, weak ethics laws" said Whitson. "The real task for Congress, however, is to end the terrible incentives that the absence of robust conflict of interest laws have created, allowing rich tyrants to buy even American presidents."