The legislators questioned BCG’s Rich Lesser and McKinsey’s Bob Sternfels — as well as Teneo Strategy CEO Paul Keary and veteran investment banker Michael Klein, one of the top advisers to Saudi Arabia’s Public Investment Fund — about their relationship with the kingdom’s government and lack of compliance with the inquiry. 

They accused the firms of putting a priority on Saudi demands over a congressional subpoena for documents related to their work for the PIF. The firms have only provided a fraction of those documents, senators said, many of which are heavily redacted, after the PIF sued its own advisers to prevent them from handing over evidence.

Rich Lesser, from left, Bob Sternfels, Michael Klein and Paul Keary during a Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations hearing in Washington, DC on 6 February.

The investigations panel on the Senate Homeland Security Committee has never conceded a claim of foreign sovereign immunity over commercial documents, said Senator Richard Blumenthal, warning that it sets a dangerous precedent that could inhibit legislators’ ability to do their job. 

“It’s simply staggering to me that American companies are not only willing to accept this claim, allowing the Saudi government to determine what is permitted to provide this subcommittee — but also that they would use it to justify their refusal to comply with a duly issued congressional subpoena,” said Blumenthal, a Connecticut Democrat. 

The executives said that they are actively fighting the PIF’s lawsuit and working to reduce the redactions. Asked whether they normally maintain relationships with clients who sue them, Keary described the situation as “unprecedented,” while Klein said it “represents abhorrent behaviour for a client.” 

“It’s not common practice, but I would say over even the last several weeks, we’ve made a lot of progress here in continuing to get this subcommittee what it needs,” Sternfels said. “I’m hopeful we’re not done on that dimension.” 

Each of the four witnesses committed to appearing before the Senate panel again when asked by Blumenthal. 

The Public Investment Fund said in a statement on Tuesday night that “we have made, and are continuing to make, significant efforts to facilitate the production of requested information from our advisers consistent with the laws of Saudi Arabia, which should be recognised like those of any other country”. 

The PIF added that the panel’s “requests are sweeping and unprecedented in seeking to compel the production of confidential and classified information of a foreign sovereign instrumentality, but we hope to work with the Subcommittee to resolve these issues”.