By: Regina Wright ~Staff Writer~
Saudi Arabia has warned the U.S. government it will sell up to $750 billion worth of treasury securities and other American assets if Congress passes a bipartisan bill that would allow the families of victims of terrorists attacks on U.S. soil to sue foreign governments.
Saudi Foreign Minister Adel al-Jubeir made the announcement while visiting Washington in March. The bill is co-sponsored by Sen. Chuck Schumer, (D-New York) and John Cornyn (R-Texas).
The Obama administration applied pressure to Congress to block the bill from passing after weeks of discussing the consequences that could arise. Top officials from the State Department and the Pentagon warned senators the bill could cause diplomatic and economic backlash.
Economists are skeptical if Saudi Arabia would stay true to its threat since selling billions of dollars of American assets would be difficult and would likely cause global turmoil for which they would be held responsible. It could also destabilize the American dollar, to which the Saudi riyal is pegged.
“The impact of the sale of the treasuries is not clear. It is possible that the sale decreases the price of the treasuries and pushes up the interest rate, which could impact interest rate sensitive investment and consumption spending,” Economics Professor Dr. Ellen Hurst said. “It is also possible that the impact of the sale has an imperceptible impact on the treasury market. We do not have enough information to say anything with certainty.”
In the past, families of 9/11 victims have tried to hold Saudi royal family members, Saudi banks and charities responsible for financial support of terrorism through U.S. courts, but were blocked due to the 1976 Foreign Sovereign Immunities Act.
The act raises the questions of whether a foreign sovereign nation can be sued in U.S. courts.
Saudi officials have denied any connections with Sept. 11 plots, and the 9/11 Commissions found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded the organization.”
However, the narrow wording of the commissions’ report left skeptics questioning if less senior officials or other parts of the Saudi government could have had parts in the attacks.
Fifteen of the 19 hijackers were also Saudi nationals, and in February, the “20th hijacker” Zacarias Moussaoui pleaded guilty to participating in an al-Qaeda conspiracy connected to 9/11 and claimed members of the Saudi royal family supported al-Qaeda.
A 2002 Congressional inquiry into the 9/11 attacks produced a 28-page report, including conclusions about evidence of Saudi officials living in the U.S. at the time and participating in plots. The report remains classified despite Saudi requests in 2003 to publish it to the public.
“I think it’s a great idea, but realistically and politically it won’t pass because it could jeopardize international policy and relationships,” sophomore economics major Tess Sommer said.
Passage of the bill would eliminate a nation’s sovereign immunity from being sued if they are found responsible for terrorist attacks that kill Americans on U.S. soil. If the bill passes both Congress houses and is signed by President Obama, then it would allow the Saudi government to be examined in the 9/11 lawsuits that would follow.
“Foreign governments need to be cognizant of what their residents are doing,” sophomore Tyler Bates said. “If those people attack me, I think that country’s government is partially responsible.”