Monday, October 3, 2016

Americans Can Sue Saudi Arabia over 9/11 and the Saudis Accept Lower Oil Production by OPEC: The Unraveling of a Deal?

On Wednesday, September 28, 2016, the U.S. Congress voted overwhelmingly—97-1 in the Senate and 348-77 in the House of Representatives—to override President Obama’s veto of a bill that allows the families of the September 11, 2001 World Trade Center bombings.[1] As a result, American courts can seize Saudi assets to pay for any judgment obtained by the families. Saudi officials in turn warned that their government might need to sell off hundreds of billions of dollars in holdings in the United States to avoid such an outcome. In another place in the world, Saudi officials were dropping their resistance to OPEC—an oil cartel—cutting production. Even though positive correlation does not in itself indicate causation, the timing may point to the impact of political calculations by Obama. That is to say, the timing may suggest a political deal gone bad.

Generally speaking, low gas prices and the related fall in the prices of foodstuffs favor the reelection of the party in power. Such economics play well with the American electorate voting for U.S. President. So President Obama, being in favor of Hillary Clinton, another Democrat-centrist, may have told Saudi officials that he would make sure a law allowing U.S. citizens to sue the Saudi Government over 9/11 would not be enacted, and in return the Saudis would continue to pressure OPEC to keep oil supply at the high level. Keeping such a deal from falling apart may have been why the White House proffered “fierce objections” to Congress overriding the president’s veto. To be sure, the override could pose a danger in that the Saudis could sue the U.S. Government on matters related to the U.S. military presence in the kingdom, but would Obama have been so “fierce” just for that possibility when a more pressing concern was likely keeping the White House in Democratic hands to insure his legacy (e.g., Obamacare).

Sure enough, OPEC’s 14 oil-producing nations, including Saudi Arabia, agreed on Wednesday, September 28, 2016, “to modestly cut their collective oil output later this year in an effort to bolster sagging prices.”[2] Although the cuts probably would not take place until after the U.S. presidential election in early November, the “decision sent global oil prices soaring by more than 5 percent.”[3] The question for Obama might have been: How long will it take for the increase to be reflected “at the pump” and in grocery stores? Perhaps he might have considered opening up more of the U.S.’s strategic reserves, though he might have felt that the override itself was close enough to the election that any price-implications by election day would not diminish Clinton’s chances.
A major difference separates the motive of not wanting to open the U.S. Government up to being sued in Saudi Arabia on the one hand and not wanting Clinton to lose the upcoming election; whereas the former is acting in the interest of these United States, the latter desire is partisan and personal. Making a deal with a foreign government for the latter motive would essentially put the United States second, as well as having the sordid taste of trying to manipulate the American People—the popular sovereign to which the government and its elected and appointed officials are agents rather than principals.

1. Jennifer Steinhauer, Mark Mazzetti, and Julie H. Davis, ,“Congress Allows Saudis to Be Sued Over 9/11 Attacks,“ The New York Times, September 29, 2016.
2. Clifford Krauss and Stanley Reed, “Oil Prices Rise 5% on OPEC’s Tentative Deal to Cut Production,” The New York Times, September 29, 2016.
3. Ibid.