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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 
respond with.

   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 
David Hamod.

   "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 
reciprocal cases.

   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.


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