Sen. Richard Blumenthal launches probe into PGA Tour-Saudi alliance

The chair of a powerful Senate subcommittee launched a probe into the partnership between the PGA Tour and its Saudi-funded rival, requesting documents and communications that led to the alliance that rocked the golf world last week.

The PGA Tour and the Saudi Public Investment Fund, which had funded and operated LIV Golf, last week announced the creation of a new for-profit commercial entity meant to unify the sport. In separate letters Monday to PGA Tour Commissioner Jay Monahan and Greg Norman, the chief executive of LIV Golf, Sen. Richard Blumenthal (D-Conn.) said there are “serious questions regarding the reasons for and terms behind the announced agreement.”

Blumenthal, the chair of the Senate Permanent Subcommittee on Investigations, demanded a broad array of documents, including communications that led to the alliance, records related to the dispute between the competing tours that fractured the sport over the past 1½ years and records related to the PGA Tour’s tax-exempt status. Blumenthal told the organizations he wants to see the documents by June 26.

A LIV spokesman declined to comment and the PGA Tour did not immediately respond to a request for comment Monday. News of Blumenthal’s probe lands as the world’s top players are converging on the Los Angeles Country Club for the U.S. Open, one of golf’s four major championships, which will feature stars from both the PGA Tour and LIV Golf.

While the deal was announced last Tuesday, there are still unanswered questions and unsettled issues surrounding the agreement, and the surprising partnership could face hurdles, including obtrusion from Congress. The PGA Tour’s policy board will need to approve the final framework of the agreement and it also might need to pass muster with the Justice Department, which had launched an investigation last year into the PGA Tour over potential antitrust violations.

While a congressional inquiry isn’t likely to quash the deal on its own, it could subject the parties to mounting public pressure they’d rather avoid and potentially produce records, including financial statements and emails, that could draw increased scrutiny on the alliance.

Blumenthal was among several lawmakers to express surprise and voice concerns last week when the alliance was announced. In his role as chair of the investigations subcommittee, he has broad authority to scrutinize the deal and issue subpoenas on a range of matters, from corporate and financial crimes to terrorism.

In the letters, Blumenthal said he wants to know how a jointly operated commercial entity will be structured and governed and how the PGA Tour intends to preserve its tax-exempt status. He described Saudi Arabia’s human rights record as “deeply disturbing” and said he has “concerns about the Saudi government’s role in influencing this effort and the risks posed by a foreign government entity assuming control over a cherished American institution.”

Nearly one week after the sides announced the basic framework of the deal, which also includes the DP World Tour, the terms and details of the partnership are still largely unknown. The organizations agreed to drop their lawsuits against each other, which could happen as early as this week, according to a person with knowledge of the situation who spoke on the condition of anonymity because of the sensitivity of the process. The Public Investment Fund is poised to inject billions into the sport, which could help stabilize the PGA Tour but has stoked concerns from many players about the tour’s governance going forward.

The PIF governor, Yasir Al-Rumayyan, will serve as chair of the newly created commercial entity and will also have a seat on the PGA Tour’s influential policy board.

In interviews with The Washington Post last week, Blumenthal called the deal a “disgrace” and warned that congressional scrutiny could be forthcoming. He noted that the secrecy behind the deal was a concern for many stakeholders.

“If anybody had known about it beforehand, they probably never could have gotten it done because it would have been such an outcry of opposition,” he said, “and so they did it behind everyone’s back.”

While several others lawmakers expressed concerns, congressional leaders were largely subdued in their remarks last week, with Senate Majority Leader Charles E. Schumer (D-N.Y.) saying he would “leave it up to the professionals there to figure out what’s best for golf.”

Sen. Ron Johnson (R-Wis.), the ranking member of the investigations subcommittee, said in a statement Monday that “it was dismaying to watch the game being torn apart with players pitted against each other.”

“It sounds like the PGA and LIV had reached the brink of mutually assured destruction and decided to call a truce by attempting to repair the damage done. I wish them success in doing so and hope any role Congress plays will be constructive,” he said.

In the House last week, Rep. John Garamendi (D-Calif.) introduced a bill that would seek to strip the PGA Tour of its tax-exempt status.

Blumenthal said that Monahan had visited with him last June, in the early stages of the heated PGA Tour-LIV feud, imploring the senator to speak out against the tour’s Saudi-funded rival. In that meeting, which took place at the Travelers Championship in Cromwell, Conn., Blumenthal said the two discussed Saudi influence, sportswashing and the increasingly untenable economics underpinning the sport, and he said Monahan emphasized “the moral authority of the PGA and its standing in the world and in America.”

“He enlisted me to speak vehemently about the negative effects of the LIV tournament on the sport and damage it does in terms of sportswashing. And now for him to 180 degrees abandon the 9/11 families and others, I think, it speaks volumes,” he said.

Blumenthal, who also serves on Judiciary’s antitrust subcommittee, has said he thinks the Justice Department should also scrutinize the deal. The Justice Department started investigating the PGA Tour last year over antitrust concerns, and could play a crucial role if it needs to sign off on the deal, legal observers say.

“Think of it this way: Suppose Ford, GM and Tesla all decided, ‘We’re going to merge.’ The Department of Justice would be all over it,” Blumenthal said. “Granted, there was no LIV a year or two ago, but the antitrust law looks at what’s done with monopoly power in the present, not the past.”

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The Washington Post’s Paul Kane and Mariana Alfaro contributed to this report.