Saudi May Fight 9/11 Lawsuit Bill 09/29 06:29
DUBAI, United Arab Emirates (AP) -- Saudi Arabia's lobbying and warnings to
Congress were not enough to blunt the passing of legislation allowing families
of Sept. 11 victims to sue the kingdom for the attacks.
The oil-rich country, which has a long but often troubled relationship with
Washington, maintains an arsenal of diplomatic and commercial tools it could
They include curtailing official contacts, pulling billions of dollars from
the U.S. economy, and persuading its close allies in the six-member Gulf
Cooperation Council it dominates to scale back counterterrorism cooperation,
investments and U.S. access to important regional air bases.
"This should be clear to America and to the rest of the world: When one GCC
state is targeted unfairly, the others stand around it," said Abdulkhaleq
Abdullah, an Emirati Gulf specialist and professor of political science at
United Arab Emirates University.
"All the states will stand by Saudi Arabia in every way possible," he said.
When Saudi Arabia wanted to pressure Qatar to limit its support for the
Muslim Brotherhood group in Egypt, it spearheaded an unprecedented withdrawal
of Gulf Arab ambassadors from Doha in 2014 and essentially isolated the tiny
gas-rich nation within the GCC.
And when Sweden's Foreign Minister Margot Wallstrom strongly criticized
Saudi Arabia's human rights record last year, the kingdom unleashed a fierce
diplomatic salvo that jolted Stockholm's standing in the Arab world and
threatened Swedish business interests in the Gulf. Sweden eventually
On Wednesday, the Senate and House voted to override Obama's veto of the
Sept. 11 legislation, with lawmakers saying their priority wasn't Saudi Arabia,
but the 9/11 victims and their families.
Chas Freeman, former U.S. assistant secretary of defense for international
security affairs and ambassador to Saudi Arabia during operation Desert Storm,
said the Saudis could respond in ways that risk U.S. strategic interests, like
permissive rules for overflight between Europe and Asia and the Qatari air base
from which U.S. military operations in Afghanistan, Iraq, and Syria are
directed and supported.
"The souring of relations and curtailing of official contacts that this
legislation would inevitably produce could also jeopardize Saudi cooperation
against anti-American terrorism," he said.
Fahad Nazer, an analyst at intelligence consultancy JTG and a former
political analyst at the Saudi Embassy in Washington, said he'd be surprised if
Saudi Arabia cut back counterterrorism cooperation since it's been beneficial
for both countries.
Still, relations with Washington had already cooled well before the 9/11
bill sailed through both chambers of Congress.
The Saudis perceived the Obama Administration's securing of a nuclear deal
with Iran as a pivot toward its regional nemesis. There was also Obama's
criticism of Gulf countries in an interview earlier this year, despite their
support for the U.S.-led fight against the Islamic State group in Iraq and
Obama had vetoed the Justice Against Sponsors of Terrorism Act, or JASTA,
arguing that allowing U.S. courts to waive foreign sovereign immunity could
lead other foreign governments to act "reciprocally" by giving their courts the
right to exercise jurisdiction over the U.S. and its employees for overseas
actions. These could include deadly U.S. drone strikes and abuses committed by
U.S.-trained police units or U.S.-backed militias.
Saudi Foreign Minister Adel al-Jubeir told reporters in June that the U.S.
has the most to lose if JASTA is enacted. Despite reports that Riyadh
threatened to pull billions of dollars from the U.S. economy if the bill
becomes law, al-Jubeir says Saudi Arabia has only warned that investor
confidence in the U.S. could decline.
Joseph Gagnon, a senior fellow at the Peterson Institute for International
Economics, said estimates put the figure of official Saudi assets in the
government at somewhere between $500 billion and $1 trillion when considering
potential foreign bank deposits and offshore accounts.
The kingdom had $96.5 billion in holdings of Treasury securities in August,
according to the most recent number released by the Treasury Department. Saudi
Arabia ranked 15th in its holdings of U.S. Treasury debt.
Gagnon, who previously worked at the U.S. Federal Reserve Board and
Treasury, said there isn't much realistically the kingdom could do to move
against the dollar or other U.S. assets "that would hurt us a tenth as much as
it would hurt them." He said the U.S. would actually welcome downward pressure
on the dollar and questioned what other markets are big enough to absorb what
they could sell.
The U.S.-Saudi Business Council's CEO and Chairman Ed Burton says business
between the two countries will continue, though potential deals could be
jeopardized by JASTA.
"No business community likes to see their sovereign nation basically
assailed by another nation," Burton said.
As one of the world's largest oil exporters with the biggest economy in the
Gulf, Saudi Arabia also has other business partners to choose from in Europe
and Asia, said President and CEO of the National U.S.-Arab Chamber of Commerce
"America is no longer the only game in town," he said. "No one knows how
Saudi Arabia might respond to an override of President Obama's veto, but what's
the point of calling the kingdom's bluff?"
The CEOs of Dow Chemical and General Electric had sent letters to Congress
warning of the bill's potentially destabilizing impact on American interests
abroad. Defense Secretary Ash Carter this week sent a letter to Congress saying
"important counterterrorism efforts abroad" could be harmed and U.S. foreign
bases and facilities could be vulnerable to monetary damage awards in
Such reactions may not come directly from Riyadh but countries connected to
Saudi Arabia, said Stephen Kinzer, a senior fellow at the Watson Institute for
International and Public Affairs at Brown University.
He said the eight-decade-long U.S.-Saudi relationship is "entering into a
new phase," in which ties will be mostly underpinned by arms sales, unlike
during the era of warm relations under President George W. Bush.
Abdullah, the Gulf analyst at UAE University, said he expects to see a GCC
that acts more assertively and independently of the U.S. in places like Yemen,
Bahrain and Egypt.
"This is not just a threat. This is a reality," he said.