Saudis hire lobbying help to pursue US investments

One of K Street’s top firms has been tapped to represent Saudi Arabia’s sovereign wealth fund.

The Public Investment Fund, run by the Kingdom of Saudi Arabia, hired Akin Gump in a deal worth up to $535,000. The firm will help the fund work with U.S. government officials as it looks to increase its U.S. investment. 

The effort appears to be focused on the Committee on Foreign Investment in the United States (CFIUS), a body comprised of representatives from 16 federal agencies that reviews deals with U.S. companies where a foreign owner could gain a majority stake.  

The panel is tasked with protecting national security and has the power to push for changes to a deal or ask that the White House block a transaction.

Akin Gump will be working with CFUIS and other U.S. policymakers regarding the fund’s “current and anticipated investments in the United States,” according to disclosures filed by the Justice Department, in addition to providing “strategic advice.” The fees on the contract, which lasts until May 1, are capped at $535,000 — a large sum, even in the world of high-priced foreign advocacy.

The firm would not provide any additional information outside of the disclosure forms. Bloomberg first reported the disclosure.

Lawyers and lobbyists on the account include GOP fundraiser and operative Geoff Verhoff; Clinton White House alum Hal Shapiro; and attorneys specializing in investment management, Prakash Mehta and Rebekah Jones. Mehta is the leading lawyer on the account, the contract says.

Saudi Arabia has increased its focus on U.S. investment in recent years, a development it credits with its Vision 2030 program, meant to, among other things, modernize the country’s economy and reduce its dependence on oil as a revenue source. 

The kingdom has already spent billions investing in U.S. companies over the last few years.  

In 2016, the Kingdom invested $3.5 billion in Uber during one of the ride-hailing app’s financing rounds. 

Last week, Saudi Arabia’s Public Investment Fund invested $400 million in Silicon Valley-based augmented reality company Magic Leap.  

And in February, the fund reportedly paid more than $200 million in cash for a minority stake in Jay Penske’s Penske Media Corp., which owns publications including “Variety,” according to the New York Post.

Other U.S. assets in the fund’s portfolio include a partnership with private equity firm Blackstone, in which the Saudis are supplying $20 billion to $40 billion for an infrastructure investment fund.  

The Saudis are also making an effort to expand into the entertainment space, reaching an investment deal with movie theater chain AMC Entertainment Holdings, though it is unclear what business ventures they will pursue. 

“In line with the fund’s mandate to help unlock promising new sectors within the kingdom, PIF and AMC Entertainment will explore theatrical exhibition and related investment and partnership opportunities in Saudi Arabia,” read a press release from the Public Investment Fund.

Saudi Arabia, which is trying to project a more liberalized image, recently lifted a 35-year-old ban on movies; theaters are expected to be built soon. In January, makeshift theaters showed The Emoji Movie, a Sony full-length animated film. 

Now the fund is in talks with massive Hollywood media agency, Endeavor, to invest more than $500 million. Endeavor is the parent company of WME, a talent agency that represents country star and reality show host Blake Shelton, R&B artist Drake, Justin Timberlake, and actresses Emma Stone and Octavia Spencer. Endeavor also owns mixed martial arts company Ultimate Fighting Championship. 

Diversifying its government’s investment portfolio isn’t the only way Saudi Arabia is looking to decrease its dependence on oil revenue. 

It is also looking to have American companies, such as Westinghouse, build nuclear reactors in the country — a move that needs approval from the Trump administration. 

However, some are skeptical of that request because Saudi Arabia has so far refused to agree to any limitations to what they can do with the reactors, such as an agreement to not enrich uranium, an essential part of making a nuclear weapon.  

Saudi Arabia last month signed contracts with three firms to help provide legal advice associated with the desired nuclear deal. 

The country inked one 30-day contract with King & Spalding, beginning on Feb. 21, that states the firm could be paid up to $450,000. 

Pillsbury Winthrop Shaw Pittman, which appears to be subcontracted through The Law Office of David B. Kultgen, is billing a “blended” $890-per-hourly rate. It is unclear how much Kulten, a former executive at Saudi Arabia’s state-owned oil company Aramco, is earning.

All told, the government of Saudi Arabia has more than 20 U.S. law, public relations and lobbying firms on retainer.