Saudi Arabia threatens US with asset sell-off if 9/11 Bill passed

Saudi Arabia has told the Obama administration and the US Congress that it will sell off hundreds of billions of dollars' worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the 11 September 2001 attacks.

The Obama administration has lobbied Congress to block the bill's passage, according to administration officials and congressional aides from both parties. The Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon. The officials have warned senators of diplomatic and economic fallout from the legislation.

Adel al-Jubeir, the Saudi foreign minister, delivered the kingdom's message personally last month during a trip to Washington, telling lawmakers that Saudi Arabia would be forced to sell up to $750 billion in treasury securities and other assets in the United States before they could be in danger of being frozen by American courts.

Several outside economists are sceptical that the Saudis will follow through, saying that such a sell-off would be difficult to execute and would end up crippling the kingdom's economy. But the threat is another sign of the escalating tensions between Saudi Arabia and the United States.

The administration, which argues that the legislation would put Americans at legal risk overseas, has been lobbying so intently against the bill that some lawmakers and families of 11 September victims are infuriated. In their view, the Obama administration has consistently sided with the kingdom and has thwarted their efforts to learn what they believe to be the truth about the role some Saudi officials played in the terrorist plot.

 ''It's stunning to think that our government would back the Saudis over its own citizens,'' said Mindy Kleinberg, whose husband died in the World Trade Center on 11 September and who is part of a group of victims' family members pushing for the legislation.

President Obama will arrive in Riyadh on Wednesday for meetings with King Salman and other Saudi officials. It is unclear whether the dispute over the 11 September legislation will be on the agenda for the talks.

Saudi officials have long denied that the kingdom had any role in the 11 September plot, and the 9/11 Commission found ''no evidence that the Saudi government as an institution or senior Saudi officials individually funded the organization''.

But critics have noted that the commission's narrow wording left open the possibility that less senior officials or parts of the Saudi government could have played a role. Suspicions have lingered, partly because of the conclusions of a 2002 congressional inquiry into the attacks that cited some evidence that Saudi officials living in the United States at the time had a hand in the plot.

Those conclusions, contained in 28 pages of the report, still have not been released publicly.

The dispute comes as bipartisan criticism is growing in Congress about Washington's alliance with Saudi Arabia, for decades a crucial American ally in the Middle East and in a partnership that once received little scrutiny from lawmakers.

Last week, two senators introduced a resolution that would put restrictions on American arms sales to Saudi Arabia, which have expanded during the Obama administration.

Families of the 11 September victims have used the courts to try to hold members of the Saudi royal family, Saudi banks and charities liable because of what the plaintiffs charged was Saudi financial support for terrorism. These efforts have largely been stymied, in part because of a 1976 law that gives foreign nations some immunity from lawsuits in American courts.

The Senate bill is intended to make clear that the immunity given to foreign nations under the law should not apply in cases where nations are found culpable for terrorist attacks that kill Americans on United States soil. If the bill were to pass both houses of Congress and be signed by the president, it could clear a path for the role of the Saudi government to be examined in the 11 September lawsuits.

Obama administration officials counter that weakening the sovereign immunity provisions would put the American government, along with its citizens and corporations, in legal risk abroad because other nations might retaliate with their own legislation. Secretary of State John Kerry told a Senate panel in February that the bill, in its current form, would ''expose the United States of America to lawsuits and take away our sovereign immunity and create a terrible precedent.''

The bill's sponsors have said that the legislation is purposely drawn very narrowly - involving only attacks on American soil - to reduce the prospect that other nations might try to fight back.