According to the New York Times, Saudi Arabia recently told Obama administration officials and members of Congress that it could be forced to sell up to $750 billion in treasuries and other assets in the United States if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks. The message was delivered personally by Saudi Foreign Minister Adel al Jubeir in March during a visit to Washington.
Although Obama is opposed to the bill and could veto it, the Saudis may feel compelled to move quickly before their assets in the U.S. could be frozen by American courts. Ominous for the Saudis, the next president could sign such a law. The Senate version passed through the Judiciary Committee in January without dissent.
Tensions are running high on this bill. Opponents of the bill point to the 9/11 Commission that said there was “. . . no evidence that the Saudi government as an institution or senior Saudi officials individually funded. . .” the attack. However, critics of the 9/11 Commission Report note that the Commission’s narrow wording left open the possibility that less senior officials or parts of the Saudi government could have played a role. Additionally, a 2002 congressional inquiry into the attacks cited some evidence that Saudi officials living in the U.S. at the time had a hand in the plot.
Further complicating the issue is Obama’s position that Saudi Arabia should “share the neighborhood” with their bitter rivals the Iranian. Last year, the Iranian nuclear accord freed $150 billion in frozen Iranian assets and gave Iran access to the world’s oil market. That remains a controversial issue among U.S. politicians.
Some analysts think that the Saudi threat is weak and that they are unlikely to sell any significant quantity of their vast treasury holdings. If they do sell, however, it would damage the dollar and cause significant precious metals buying.