In response to pending legislation that would make an exception to the Foreign Service Immunities Act of 1976, which essentially supports the international standards of immunity that all sovereign states enjoy, including ours, against legal action brought about by citizens or governments of other countries. (link below)
Right now, if I understand it correctly, Congress appears ready to send legislation to President Obama that would make an exception to this rule so that families of the victims of the attacks on 9/11 could sue the Saudi government in federal court. There would most likely be a flood of civil litigation, which would be an embarrassing spectacle without end. In response, Saudi Arabia has threatened to sell off a significant portion (all, actually) of the US treasury notes and other assets that it holds – upwards of $750 billion.
A big question for the moment is whether Obama would actually sign it to begin with. This would be a “live one,” politically speaking. If he doesn’t sign it, then he’d almost surely receive bipartisan condemnation for taking sides with terrorists, which would also play into some of the most extreme (untrue) narratives by the right that Obama is a closet Muslim radical. On the other hand, signing this bill into law has the potential to seriously damage US-Saudi relations. Regardless of how one feels about the House of Saud, the potential for economic harm can’t be ignored.
Assuming Obama does end up caving into pressure and signing the law, what would happen? Would Saudi Arabia threaten to hurt both our and their economies by engaging in a massive sell-off? How badly would the US economy be harmed? Is it a bluff? Do we find ways to work something out in the end – like negotiating a package class action suit in which the government gives a lump sum to all the families? Would a sell-off push us closer to Iran?
I’m not sure there is a good answer on this. Saudi Arabia is one of the most evil and corrupt states on Earth, and they have been state sponsors of terrorism for years. Much of the horror going on in the Muslim world today can be laid at their doorstep for exporting their specific brand of Salafist extremism. In a perfectly just world, we would nuke the entire fucking Middle East and be done with it.
However, this is not a perfect world. Saudi Arabia is one of the most stable states in a very unstable region, even if they maintain that stability through brutality. They are also US allies in a region where we have very few. If we abandoned our Saudi alliance we would lose the ability to project power in the Middle East, and they would immediately look for a new patron like Russia or China. As much as I feel contempt for the Saudis, and for our leaders who tolerate them, I honestly can’t come up with a better option.
They may, however, negotiate a compromise to prevent the bill from going forward. Putting money into some sort of settlement fund for the victims and their families. That would give everyone the cover they need to let the bill quietly die.
Level headed people never will, because it sets a precedent. Would the U.S like having other countries remove sovereign immunity for a hosts of U.S ill behaviour over the past few years.
Even if you agree with the specific issue, you have to admit it would set a sobering precedent which could and would be employed for deletarious purposes.
First, we won’t “lose” our ability to project power in the middle east if our shameful alliance with Saudi Arabia falls apart. We’ll still have plenty of money, air craft carriers and other partners. Perhaps it would reduce our ability to project power, but why exactly does that ability justify striking deals with one of the most oppressive regimes on Earth? Would you favor striking deals with Islamic State if it enhanced our ability to project power? Finally, how much power are we really projecting if part of the tradeoff is that we have to shelter some of the perpetrators of the worst terrorist attack in our nation’s history?
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The precedent that foreign citizens can attack our country without consequence so long as they’re connected to oil producers seems like a bad one also. I’d err on the side of seeking justice for our citizens over keeping gas prices low, but that’s just me.
Pretty stupid of the Saudi’s to make a threat that a) isn’t that threatening (US treasuries real yields are well below 1% right now, we aren’t exactly having trouble finding people to buy the things), b) they’re unlikely to actually go through with and c) makes it look like they’re trying to strong-arm the US into a position that the current administration already agreed with.
They’d be a lot better off if they just shut-up about it instead of this weak attempt at sabre-rattling.
I don’t really understand why they say they would sell them. The article says its because the bonds are in the US, and the Saudi gov’t is afraid a law-suit might cause a US court to freeze them. But US bonds don’t have to actually be held in the US, do they? Couldn’t the Saudi’s just move them to a bank outside the US.
It wouldn’t be a foolish moral principle. It would be an economic decision to protect its assets.
If the Saudi government can be sued in an American court and have its American assets seized, it’s going to want to sell off those assets so it’s no longer vulnerable to seizure. Other countries can safely buy the assets because they don’t have to worry about losing them in a court decision. The Saudi government can buy assets in other countries because they won’t be subject to seizure by an American court decision.
It is not a moral principal, it is a severe and an unbounded financial risk.
As writes Nemo
Yes, but it is not just the risk to the Saudis, they are drawing attention to this for other parties.
No one will believe the silly political pretension of narrowness. Once a legal breach in a immunity is opened everyone knows that the door is open - these things are always justified as the “exceptional” and the “narrow” and they never stay that way. Only the americans will believe this, since they seem to eat up so readily their own self-flattery discourse.
the American securities become less interesting for all the other Sovereigns in the world if the Americans decide that for weak rationale they are going to start to make political exceptions to the sovereign immunity. Once passed once, the history says the door will open again.
The rationale sovereigns with any potential opening to the political peircing then will want to protect itself in reducing its exposure to the Americans. The Chinese, the Russians and many other states should rationally take action.
the Saudis are making a statement not just for you Americans to pay attention to, but to draw the attention of others.
It is to be hoped that the idea that because citizens and not the actual state has done something that the state should be punished will not gain the traction.
Or you can look forward to your government’s claims to immunity over the actions of the Exxons or even the private citizens to be discarded.
The Americans always they think only of the application on others, but they are Exceptional…
Suppose it’s not just our alliance that falls apart, but the Saudi state itself. We might not like Saudi Arabia, and we really ought to be pressuring them to rein in extremism. But like it or not, as we’ve seen in multiple examples over the past decade, the sonofabitch we know is most likely better than the ones we don’t know.
The Saudi sponsorship of 9/11 may well have direct links to members of the House of Saud itself. It’s hard to be certain since that part of the 9/11 report is redacted. In fact the fact that it’s so redacted seems to imply high-level involvement, meaning that these acts could be attributed to the Saudi government itself since it’s a monarchy. But even setting that point aside, if Exxon or private American citizens commit acts of terrorism against other countries and the US refuses to hold them accountable I’m perfectly fine with other nations being able to take legal actions directly against those people and the US itself.
the State of the Saudi Arabia is not the family members (even if this is true, which is a great speculation) any more than the Bin Laden Group was equal to one son among many of the Bin Laden.
so this is not relevant.
you are fine with it I am sure because you do not understand that the risks nor the diplomacy in the typically naive fashion of the CowBoys White Hat Black hats movies.
( I have deleted your sent from because its annoying).
So you would be okay with some country arresting Rumsfeld over Abu Ghraib. Or Sanchez and Bremer? Or the U.S being sued over drone strikes, extraordinary rendition, surveillance, torture or anything else?