Saudis threaten US asset sell off if Congress passes 9/11 bill

The Saudi Arabian government has informed the administration and some members of Congress that if a bill that would allow victims of the 9/11 attack to sue The Kingdom is passed, they will sell hundreds of billions of US assets.

New York Times:

The Obama administration has lobbied Congress to block the bill’s passage, according to administration officials and congressional aides from both parties, and the Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon. The officials have warned senators of diplomatic and economic fallout from the legislation.

The Saudi Arabian government has informed the administration and some members of Congress that if a bill that would allow victims of the 9/11 attack to sue The Kingdom is passed, they will sell hundreds of billions of US assets.

New York Times:

The Obama administration has lobbied Congress to block the bill’s passage, according to administration officials and congressional aides from both parties, and the Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon. The officials have warned senators of diplomatic and economic fallout from the legislation.

Adel al-Jubeir, the Saudi foreign minister, delivered the kingdom’s message personally last month during a trip to Washington, telling lawmakers that Saudi Arabia would be forced to sell up to $750 billion in treasury securities and other assets in the United States before they could be in danger of being frozen by American courts.

Several outside economists are skeptical that the Saudis will follow through, saying that such a sell-off would be difficult to execute and would end up crippling the kingdom’s economy. But the threat is another sign of the escalating tensions between Saudi Arabia and the United States.

The administration, which argues that the legislation would put Americans at legal risk overseas, has been lobbying so intently against the bill that some lawmakers and families of Sept. 11 victims are infuriated. In their view, the Obama administration has consistently sided with the kingdom and has thwarted their efforts to learn what they believe to be the truth about the role some Saudi officials played in the terrorist plot.

“It’s stunning to think that our government would back the Saudis over its own citizens,” said Mindy Kleinberg, whose husband died in the World Trade Center on Sept. 11 and who is part of a group of victims’ family members pushing for the legislation.

There has been a renewed effort by lawmakers and the families of 9/11 victims to get the government to release 28 pages of redacted information from the report by the Senate Intelligence Committee on the 9/11 attacks. It is widely believed those documents contain some very damning information about the Saudi Arabian government's complicity in the attacks.

But even without the classified documents, the role of Saudi Arabia in the attacks is clear. The Kingdom may be afraid that their assets will be frozen or seized here in the US, but the real fear is that the grip on power by the royal family may slip if proof is offered that elements of Saudi intelligence and other individuals with close ties to the royal family were to be seen as complicit in the attacks.

With the stakes so high, I don't see how you can dismiss their threats of a sell off. Even cashing in a couple of hundred billion in Treasury bills could roil the markets worldwide. Both countries have a gun to each other's head and we should hope they don't pull the triggers.