including charter communications. >> charter is proud to be recognized as one of the best internet providers, and we are just getting started, building 100,000 miles of new infrastructure to reach those who need it most. >> charter communications supports c-span as a public service. along with these other television providers. giving you a front row seat to democracy. >> be up-to-date in the latest in publishing with book tvs podcast, about books, but current non-fiction book releases, as well as industry news and trends through insider interviews. you can find about books on c- span now, our free mobile app, or wherever you get your podcasts. >> consulting executives testified on their work for saudi arabia and other foreign clients, before a senate

subcommittee. the four companies represent -- in sports and on its larger strategic vision for engagement with the united states. >> this hearing will come to order apologies for beginning a little bit late. we had a vote going, about 5:30, but i want to thank the

foreign -- for individuals for being with us today and thank, as well, my friend, senator johnson, as ranking member for his cooperation and his support in moving forward with this hearing. a lot going on. of historic magnitude, before the united states senate, but the issue before us today is truly of historic consequence in presidential and practical import. the issue is, in fact, whether for companies sitting here today represented by barry able leadership accepted their obligation to respond to congressional subpoenas. their apparent refusal to do so in

full is not only unprecedented but it threatens opening the door to other united states companies cloaking themselves from scrutiny whenever they work for a foreign government or even a foreign state owned enterprise. this potential shield invoked by these four consultants risk blocking not only this subcommittee, but all of congress from obtaining information needed to do our job. this subcommittee has long engaged in investigations into united states companies and foreign entities. it has engaged in negotiations over the scope of responsive materials. it has received documents and ensure their confidentiality, but it has never, ever conceded to a blanket, sweeping claim of

foreign sovereign immunity over commercial documents in the possession of an american company. it may seem like a technical issue to you, but it is of critical historic consequence to the united states congress in doing its job. it's simply staggering to me that american companies are not only willing to accept this claim, allowing this saudi government to determine what is permitted to provide this subcommittee, but also that they would use it to justify the refusal to comply with a duly issued congressional subpoena. congressional subpoena is not a request. it carries the full weight of the law, a failure to respond to it carries with it serious consequences. it's even more staggering that saudi arabia is threatening employees of your company's

with imprisonment, if the documents we are seeking are not produced. staggering to me. outrageous. perhaps we should be surprised. we began this inquiry last summer because of our concerns that saudi arabia, a country with an important human rights record was trying to take over american golf and use that institution to sports wash its own public image. saudi arabia and its advocates argue that we should believe that they are turning over a new leaf, beginning a new chapter. but we are presented with another example of extreme and defeasible -- deceitful conduct. to united states public and united states government, saudi

arabia claims that these are just innocuous, commercial investments, including investments in sports, but in its own court's , it argues that it's classified material pertaining to state, national security and it simply can't have it both ways. we are seeking the united states documents from united states companies about united states investments, u.s. focused strategies, and united states institutions, allowing these companies to ignore their obligation to respond to u.s. law is not just a front to this subcommittee, it risks making a dangerous precedent that would allow companies to effectively contract away their obligations to other countries all around the world, where you do business, where you perform services to comply with united states law. although the subcommittees inquiry began last summer with questions about the saudi arabian public investment fund or the pif investment.

it's become much bigger and more consequential. after mckinsey, bcg, teneo, and m. klein, we issued subpoenas to -- we want to determine what work these companies have done and are doing that allows a foreign authoritarian government to use instruments of commerce in the united states to increase its influence within our shores and rebrand its tarnished image after years of horrific human rights abuses. our subpoenas seek documents that will illustrate how these four companies have assisted the pif in increasing investments and exerting its influence in the united states. our purpose is to understand the scope of services that have

been provided, included but not limited to, how they intend to use these investments in the united states as entities and institutions. like the pga tour and other sports, to increase their access. we intend to use the findings of today's inquiry to consider whether our laws surrounding the disclosure of foreign entanglements need to be strengthened. our preliminary findings certainly suggest that we need stronger protections of american interest when it comes to foreign entities. just days before the original deadline to produce documents under the subpoenas, we learned from each of the secundum -- consultants that the pif had filed lawsuits in saudi administrative court to block them from producing these documents to us. we were surprised to learn that pif had taken the unprecedented step of asserting that the records requested by this subcommittee are, quote, classified as confidential and

quote. they could allegedly "harm the national security interest policies or rights of saudi arabia and pose a quote thread to that kingdom sovereignty," the saudi court ordered raised our alarm and added to the urgency of this investigation. how is it that consulting work performed by american companies , including records about investment in the united states golf, could harm saudi arabia's national security? how can allegedly commercial investments directed at the united states be out of the reach of subpoenaed issued by the united states government?

the fact that we have to ask these questions heightens our concern about their work, not only for saudi arabia, but for other regimes around the world, many of them authoritarian. the company sitting before us today have told us that they are concerned that they or their saudi based employees will be imprisoned in saudi arabia if they comply with our subpoenas and to this, i would say, and i say to saudi arabia, i know you are watching no one anywhere in the world should be arrested, imprisoned, or otherwise harm because an american company has complied with american law. we will be watching what the reaction is, assuming that you decide to do the right thing and comply with

american law. our nation has long history of welcoming foreign investment and i want the saudi investments in the united states to continue. we also have a long history of transparency and compliance and adherence to the rule of law. doing business in america requires compliance with american law and we are not about to sell our legal system to the highest bidder or the biggest bully. i know that saudi arabia wants to be a serious player on the world stage. i believe it can have a constructive role. i truly believe it can have a very positive impact in the widening crisis in the middle east, and i hope it will and i have visited saudi arabia and i'm convinced of its good faith determination to play that role but threats to u.s. companies

and interference with congressional oversight are simply not consistent with those goals. the pif is not here today, but it is -- its u.s.-based consultants are. while the pif conduct is troubling, the consultants bear responsibility, too. you have opted to sign contracts governed by foreign laws. you have chosen to put offices in saudi arabia where your employees may be imprisoned under its supposed legal system , you have chosen to accept what i suspect amounts to millions, if not billions of dollars in the face of a harrowing record of human rights abuses by your business partners in saudi arabia, and at least one instance, accused of being, of playing a role in

those abuses. even though you have documents that we are seeking, you continue to refuse to comply with our subpoenas unless explicitly authorized by the pif . let me be clear. a series of choices got you to this point and you have decisions to make. the ramifications for today's hearing have the potential to echo far outside this chamber. this subcommittee will consider all of your valid, legal defenses. i respect your right to make them, but contracting with a foreign entity is not one of them. we are not about to allow a precedent that would make a foreign contract a defense to complying with a duly authorized subpoena. saudi arabia is welcome and we do welcome the investment in

the united states, if they invest in our enterprises and they take advantage of our economic system and they have the protection of our rule of law, the rights under the united states law. they simply can't pick and choose the law as they are going to obey. with that, i turned to the ranking members. >> thank you, mr. chairman. since the start of this subcommittee's investigation into the framework agreement between the pga tour in the saudi arabian public investment fund, the pif, i've been concerned that our intrusion into delicate negotiations could make it even more difficult for professional golf to create a structure that would allow the best players to regularly compete against each other at the highest level. fortunately, we have not had a public hearing on the subject since last september allowing the pga tour to pursue these

with minimal interference. last wednesday, the bga announced it was -- pga announced it will be touring -- are out of the pga tour's control. but divisions between the pga tour and li b golf remain and discussion between the two are ongoing. while other reports indicate that a deal is currently on life support. until a formal decision is received between the two parties, i remain skeptical that it may do more harm than good. as ranking member, i not only knowledge -- acknowledge but defend the constitutional authority to investigate a broad range of issues and entities. using that authority, chairman blumenthal continued to -- and it's u.s. business dealings. information across to the pif subpoena that u.s. subsidiary,

u.s. essay international llc following the subcommittee offense -- efforts to in saudi court rulings, the consultants have been constrained with documents they believe they can provide. it's my understanding that all four firms here today are facing -- by producing certain records, their employees will be in violation of saudi law, and could face severe consequences. is a very serious reality, the subcommittee must consider as it proceeds with this inquiry. i do have sympathy for the position the consultants find themselves in but i have no sympathy for the saudi claims of sovereign immunity. any foreign entity wishing to do business in the u.s. must comply with u.s. law and be responsive to congressional subpoenas.

that is why i chose to join chairman blumenthal in follow- up letters to the consultants calling for full compliance with the subcommittee subpoenas. to be clear, conducting oversight of the pif is not my top priority, but i am supportive of preserving psi's oversight prerogatives and responsibilities. it's the chief investigating body which white is armed with the ability to compel records. if it's ability to access records weakens, then it will be reduced and congressional oversight will atrophy further. as a result, mr. chairman, i join you on your follow-up letters to these consultants and the pif because i believe in defending psi's authorities and access to records. i hope you will similarly support my efforts to obtain records that psi is authorized to receive.

failure to respond to my oversight request on the origins of covid 19 and the development distribution and safety of the coven 19 vaccines. i asked to subpoena hhs records and information containing by more than 50 outside -- outstanding requests, including 50 specific pages of dr. felty's records and the empirical analysis of hhs uses to assess the safety of code 19 vaccines. some of these outstanding requests are nearly three years old. let me pause and just let that sink in. prior to getting the authorization for the vaccine in december, the cdc and fda held a video conference where they were touting the benefits of the vaccine. they were saying they were going to take adverse event so seriously, they found somebody that reported a couple days lost were, they were going to follow up. that was total and complete bs.

early in the year, 2021, those agencies produced a standard operating procedure where they describe the analysis, the proportional reporting ratios or empirical basing analysis on that system. they then denied that they produced those analyses later, we said, in fact, they did. i have been requesting now for well over a year that analysis. we pay for the salaries of these individuals working these agencies. we pay for these agencies. they publish these standing operating procedures. they're going to do these analyses. they do the analysis and they will not turn them over to my oversight request, which means they are keeping them hidden from the american public. this subcommittee could not allow -- intended to obtain

information that every american has the right to see. i hope you join me as i join you in defending the prerogatives with the subcommittee request. i think that witnesses for -- i think the witnesses for complying for the bipartisan request to appear here. >> thank you. i totally respect the kind of oversight needed. i'm prepared to take steps, beginning with strong communication to hhs that it has to comply with your oversight request and i am committed to work with you on moving forward. >> we will draft some letters. thank you. appreciate that. >> let me introduce the witnesses. the global chair of boston consulting group , a consulting company based in boston, massachusetts, employing more

than 30,000 people in offices around the globe. bob is the global managing partner of mckinsey, and consulting firm in new york city, has offices in more than 60 countries and employs more than 30,000 people. michael klein is the leader of m. klein and company , which is based in new york. paul cleary of teneo is the chief executive officer of teneo strategy, and advisory firm, which is headquartered in new york city. as is our custom, i asked the witnesses to stand and be sworn in. do you swear that the testimony you are about to give is the truth, the whole truth, and nothing but the truth, so help you god? thank you. we will begin with your testimony, mr. lesser. >> chairman blumenthal, ranking

member johnson, and distinguished members of this subcommittee, my name is rich lesser, i'm the global chair of boston consulting group, or as we refer to it, bcg. i joined bcg in 1928 of these 1988 , and ceo from 2013 to 2021. i have. before you today, proud to represent bcg. all 33,000 colleagues and more than 100 offices, including 25 in the united states. we strive to take on the hardest problems and take on an enormous value for our clients, while living our purpose and value every day. bcg work in the public sector is guided by a mission to

improve the financial, economic, and societal well- being of the countries in which we operate and further citizens. in all our work, we apply consistent standards that dictate who we will work with and on what topics. bcg opened its first office in the kingdom of saudi arabia when i was ceo in 2015. our office there is now home to 260 bcg members of 28 nationalities, including american citizens. women make up nearly 40% of our consulting team and approximately 50% of our overall staff. saudi arabia is a long-standing u.s. ally. it is undertaking important efforts to diversify its economy and is pursuing social and cultural reforms, improving education, developing infrastructure, and more. saudi arabia's public investment fund, or the pif, has been important part of the

kingdom's economic development and diversification. over the years, bcg has contributed to these efforts. for example, helping on saudi arabia furthermore, we supported -- unemployment and training programs and upscale young saudi arabians. we've also worked on advancing the education system, and infrastructure development. bcg is now caught between two sovereigns. the subcommittee requested that we provide information related to work we have done for the pif. the pif has told us that it considers that information to be protected government information. like other countries, saudi arabia has laws protecting that type of information and applies serious criminal penalties on those who disclose it without permission. we risk criminal and financial penalties for the

firm and for individuals working or living in saudi arabia. in support of its position, the pif initiated litigation against bcg in saudi court and we have challenged the pif's position. bcg is complying with the subpoena and making productions to the subcommittee within the legal constraints that we are subject to. we've engaged with leaders at all levels of the pif and our continued efforts to make a robust production as possible to make a robust production as possible to the subcommittee. i also want to reassure you that our work for the pif is consistent with the work we do for commercial investors and other sovereign wealth funds. we advise a fun -- and value creation opportunities. we also advise clients on how to accelerate the success of their portfolio companies. i also want to be clear on the

work we have not done. we have not worked for the pif on liv golf, we have not worked on its investments in sports in the united states. we have not worked for the pif on its direct investments, other than a magic leap and uber, as we shared with the subcommittee last week and we have not supported them on any u.s. law efforts. we are committed to finding a solution to this challenging situation that satisfies all parties involved and does not put our firm or our people at risk at serious criminal prosecution. we are hopeful that this subcommittee and the pif continue their dialogue and resolve these issues as much as possible desires to cooperate with your inquiry. thank you, and i look forward to answering your questions. >> thank you, mr. lesser.

>> chairman blumenthal, ranking member johnson, members of the subcommittee, i am bob sternfeld's, where i have worked for over 30 years. i want to say we take this very seriously and i'm here to provide as much information as i can. mckinsey is one of the leading providers of consulting services. we were founded in chicago in 1926 and today we have more than 45,000 employees across 65 countries with more than 14,000 employees here in the united states. for an american -- we are an american company proudly serving clients around the globe. we seek to comply with every law but we also go beyond what we believe to be the industry's most comprehensive which takes into account the content of the work and the country in which

it's performed. which this means is we do a thorough risk assessment of any client we take on. turning to the middle east, mckinsey opened its office in 2010 in recognition that the saudi economy is part of a rapidly changing and important region. given our rigorous client suggestion -- selection policy, it focuses solely on areas such as education, housing diversifying the economy, energy healthcare, and -- that work and invest in saudi arabia. it's the public investment fund. i work with a pif is just like work we do with clients every day around the world, we support them on a range of topics, organizational matters. the vast majority of our work is really to investments and activities inside saudi arabia, not the united states.

to my knowledge, none of those yielded any investment in the united states. an area expressed as a priory for us was golf. our support on the topic of golf was limited and occurred in 2021. our work look to the potential revenues for a new golf tour and what would make such a tort economically viable. we also analyzed ways to structure a new golf tour, including -- nor did we advocate or advance the interest of the tour within any external audience. our work predated the launch of liv golf, and what was before the pga tour's proposed merger with liv golf. we take this very seriously. since first learning of the subcommittee's interest, we work to provide you with documents, starting with what we understood to be your key priorities. today, we produce more than 4300 pages of documents, including your express priority

of all four of the final deliverables that we prepared on golf, as well as the relevant contracts, interim project materials, and the request for proposal from the pif. these materials demonstrate the scope and content of our work on golf, which was primarily a business case analysis. continue to do so read vigorously. this is very seriously to me because -- and penalties. so this has put us in a difficult position. frankly, we are between a rock and a hard place, on the one hand, we are contesting this on the in saudi arabia, on the other, we are in constant discussions to find a way to provide you with more information in a manner that's respectful of our clients

concerns. we are focused on the subpoena and ensure that are more than 400 collies, nine of whom are americans. we fully recognize that this has been frustrating for the committee and it's also been difficult for us. we make progress and providing documents and removing redactions, including as recently as yesterday. i give you my commitment that we were not done with this effort. we will continue to work with the subcommittee after today's hearing. thank you for the invitation to be here and i look forward to answering your questions. >> thank you, mr. sternfels. >> ranking member johnson, members of the committee, i appreciate the opportunity to be here today. >> i think your microphone may not be on. do you want to push that button right in front of -- yes. >> it says talk. there we go. >> pulley closer. >> i have immense respect for

the united states senate and for this committee, and i am committed to answering your questions to the best of my ability. my name is michael klein and i worked as an investment banker for approximately 35 years. i lead m. klein & company, a financial advisory and investment banking firm based in new york city. i am proud of the work our team has done to support some of the most respected american companies, and investors in the american economy. i am also proud of the work we do for the communities that we serve. because of our small size, we focus on -- for a limited number of clients and consequential transactions.ours highest professional standards in all of our engagements both in regard to our home u.s. market and where our clients reside. you've invited me here today to discuss our response to a subpoena about the u.s.

investments made by the public investment fund. we have sought to comply with the committee's request, and we will continue to do so. i believe there is a great deal that we will agree on today, and i'm hopeful that we could discuss that in full. one of the issues that i understand has been central to the committee is the potential investment partnership between the pga tour and the pif. as you know, the pga tour has recently announced a transaction, establishing a commercial entity, controlled by the tour with the stated goal to grow the tour through an investment of in excess of $1.5 billion from a group of american sports investors, not affiliated with the pif. the tour has stated publicly that negotiations with the pif are ongoing and that any investment by the pif will be subject to appropriate regulatory approvals.

this is consistent with the framework agreement struck in june of 2023 to unify and grow the game of golf between the pif and the pga. one of the things i believe we agree on is that markets should be fair and transparent to all participants. the united states as the most advanced market in the world has robust regulatory processes to ensure just this. our firm believes in these processes, and we fully participate in them. we have provided a substantial collection of materials, reflecting a good faith effort to produce responsive information. we understand that you would like more, and we are working to provide even more documents through ongoing reviews with the pif and through our own specific direct application to the courts. but as the committee is aware, i am appearing today under

significant legal constraints outside our direct control. last november our companies and the others here today were sued by the pif and saudi arabia to prevent us from submitting certain information to the committee. we have formally been enjoyed by the court. we have challenged this injunction to comply fully with the committee. although we hope the case will be resolved in the future and there are hearings scheduled for just next month, the outstanding court orders expose me and my employees to not just civil liability, but criminal penalties including potential imprisonment. as i hope the committee can understand that it is simply not a risk i could take for myself or for my employees. our ability to respond today it in full does not reflect any lack of willingness. nor does it reflect any concern regarding the work we've done.

we are proud of the work we have done. we are simply limited by the ongoing litigation. despite the lawsuit, our intention remains to comply and comply fully. and in fact we cleared substantial additional materials for the committee late last week. we expect ongoing additional productions in the near future. the reality of being caught between two legal orders from two sovereign nations is challenging, and it is not one that i have faced before. but please know that i sit here in front of you as a proud american. i'm a new yorker, and someone who has built a business, attracted capital to the united states, and helped create u.s. jobs. i have been able to do this because of what is possible in this country. i'm grateful for that opportunity, and i'm grateful for the opportunity to be here with you today. thank you, and i look forward to your questions. >> thanks, mr. klein.

mr. cary? >> reporter: chairman, ranking member johnson, and members of the subcommittee. thank you for the opportunity to testify today. my name is paul klary, and i'm a co-founder and ceo of teneo. we understand that it is vital to the legislative process. and towards that end, i would like to address three areas today, first i want to explain the type of work that we do for our clients. and the public investment fund or pif. and finally i want to provide some important details about our ongoing good faith efforts, including information and documents of this subcommittee. we have been and we remain committed to cooperating, and we fully intend to comply with

the subcommittee's subpoena. i'll start by introducing teneo. we are a global advisory firm based in the u.s., headquartered in new york city. we have nearly 1,700 employees and more than 40 offices around the world, and we are very fortunate to advise many of the world's largest companies across nearly every industry. we operate at the highest level of ethics and integrity and a deep commitment to doing right by our clients, our employees, and our stakeholders. our firm operates across five business segments. our strategies and communications business advises companies on engagement strategies to help companies build relationships with their stakeholders. we have a leading financial advisory business engaged in restructuring matters. and management consulting business that will help companies develop and execute growth strategies, risk advisory business that will help companies navigate cyber,

and other security challenges, and an executive recruitment business. all of these services focus on helping our clients achieve their strategic operation and financial objectives. at next, i would like to particularly address teneo's work with our 1,200 clients. over the course of the last several years, we have worked with pif on strategic communications efforts, helping them convey their investment philosophy and business approach both in the u.s. and globally. pif is an economic engine driving saudi arabia's transformation. moving the country forward, and modernizing its society as part of the country's vision 2030 strategy. we are proud to play a small constructive role in promoting those efforts. since our work for pif began, we have been open and transparent about our engagements. we registered for pif. and have disclosed the details

of our work, our fees, and expenses and subsequent semi annual reports to the justice department. we have also filed each of our covered contracts with pif and have registered those individuals working on pif matters. all of this has been publicly disclosed. and we know that pif's potential investment in professional golf in the u.s. is a particular interest to the subcommittee. we were engaged under the initial consideration of a possible investment in golf. we hope to evaluate this opportunity and advise the potential communications strategies if an investment went forward. i would note we have never represented liv golf. teneo was reengaged by pif in the beginning of june 2023 to help manage communications with key pif stakeholders. as for the subcommittee's interest in this matter, it is important to reiterate today i was a proud american company with great respect to this

institution and the subcommittee, and u.s. law. we have been committed to cooperating with your inquiry from the start, and we have devoted extensive resources to identify and provide materials responsive to the subcommittee's request. we have made eight submissions today, consisting of over 4,600 pages, and we will keep providing further documents as quickly as possible. we've also provided thousands of addition fall relevant documents to pif for their review, as our contracts require, and we await further authorization. i do know you've been frustrated by the pace of production. i understand that frustration. i believe you also know teneo like the other consultants here is in a very challenging situation as a saudi court has issued an order directing us for now not to produce documents under review by pif. despite these legal challenges, we are firmly committed to finding a path forward, in which we continue to work

cooperatively and in good faith with the subcommittee and pif to meet your oversight interest. again, i'm very proud of the work that teneo does here in the u.s. and globally, and i look forward to your questions. >> thank you, mr. keary. just so my colleagues will understand, i -- i welcome and express gratitude in your testimony. but the position i heard expressed today is essentially that you will comply with the subpoena, but only and solely so far as saudi arabia allows you to do so, which is not compliance with this subpoena. you say that you are between a rock and a hard place, but you've chosen sides. you've chosen the saudi side, not the american side. so let me just begin with a couple of overall questions. we'll have seven-minute rounds, and we will have a second round

if we have time. let me ask each one of you, and i think it's a yes or no question. if this were a subpoena from the united states department of justice or the securities and exchange commission, would your position be the same? mr. lesser, yes or no? >> senator, we're caught between two sovereigns. >> it's a yes or a no. would your position be the same? >> we would be taking legal counsel on what to do with the situation where there are two sovereigns that have put us -- >> would it be the same? >> we would be taking counsel on how to handle the situation. we are caught between two sovereigns, and we are doing the best we can. >> i don't mean to be rude, but i have limited time. mr. sternfeld? >> thank you, senator, yes, we treat all subpoenas under the u.s. law incredibly seriously. it would be the same. mr. klein? >> thank you, chairman.

in the same way as we are here today, we would intend to comply fully and we would intend to cooperate, and we would undever. >> i'm going to take that as a yes, and mr. lesser, i'll take your response as a yes, it would be the same. mr. gary? >> senator, as i mentioned in my opening remarks, we will fully comply with the subpoena and any other experience. >> so your position would be the same? let me ask each of you also a yes or no question. if we were talking about china. china issues some court order, beijing saying you can't comply with a lawful subpoena from the united states congressional committee, would your position be the same, mr. lesser? >> our position is that we have to follow the laws in which the countries of which we operate,

and we are caught between two. >> so your position would be the same? you would comply only to the extent that the people's republic of china, prc, would permit you to do so? >> we would be looking for court guidance on the situation like that. >> an american court guidance? >> on an issue of international comedy, i believe. >> mr. sternfeld? >> senator, complying with the subpoena remains our highest. >> i will take that as a yes also. mr. klein? >> senator, thank you. solving any legal constraint that we have. >> so you would accept the order of the chinese court telling you not to comply with

the american subpoena? mr. keary? >> senator, i would as mentioned earlier, we will fully comply with the subpoena of the psi or we have asked or been given your staff with some time to work through the legal complexity. but the psi and the compliance with the subpoenas is what we will do. >> i think a lot of the american public are going to be asking me and our colleagues when we go home, what are they hiding? what are they concealing? if it were a department of justice subpoena or court order from china. their position would be the same. is that a defensible position? i want to ask each of you beginning with mr. lesser, what was your most recent amount of revenue in the last year? for your consulting service.

>> we don't disclose our revenues globally beyond our global revenues, senator. so i can't share that information. we're a private company. with great respect, sir. >> do you calculate? do you have those numbers? >> somebody probably does. i actually don't have that number, sir, senator. >> mr. sternfels? what was the amount of revenue from mckinsey? >> we operate in a regional model, so it is middle east, africa, and central asia. >> you don't break out revenue numbers? >> that region in total, i don't have the exact figure, but less than 10% of our total revenues, sir. for the entire region. >> i'm interested in saudi arabia. >> i'd be happy to come back afterwards on that. >> mr. klein? >> thank you, senator. we don't have that number here, but i'm happy to provide it for

you. it was a very small number relative to the rest of our business. >> and you'll provide that number, thank you. >> mr. keary? >> senator, as i mentioned earlier, our contracts and fees are filed. i will give you a sense in 2022 our fees with pif are just under $10 million. >> let me ask you -- mr. keary, you have filed under the foreign agent registration act, correct? >> correct, senator. >> mr. sternfels, mckinsey has not filed under fara. i have the respective filings. i'll put them on the poster board. for each of your companies. yours is totally blank. teneo has filed under fara.

what's the justification for mckinsey not doing so? >> thank you, senator. i can't comment on the page mentioned, but i can answer the question, which it relates to fara. we take fara incredibly seriously. we seek outside expert council on anything that might be fara related. we sought expert council in this case, and given there was no policy or influence of any kind determined this was not fara reportable. >> and let me just say to colleagues, i think one of the findings that we're developing here is that fara needs to be strengthened. and i'm not saying mr. sternfels that you're violating the law, but certainly if teneo thought it had an obligation to file under fara, i'm questioning why mckinsey didn't.

i'm not saying you're not doing so violates the law, but maybe the law should be strengthened, so there is a legal obligation under these circumstances that's clear and unmistakable. you have said, all of you, that you've produced thousands of documents. no question that you have as recently as last night, literally. we haven't been through all of them, but we've been through some of them. and a lot of them are press clippings, they are press releases, they are public documents. all sorts of stuff. and then a lot of them, they look like this. that's not responsive to a subpoena when you say you are making every effort to comply. that's laughable.

so, you know, we will continue this conversation with you, but again, i come back to the basic question here, what are they hiding? is that saudi arabia and national security investments in liv golf? a matter of national security to the kingdom? hard to believe. senator johnson? >> so mr. chairman, i appreciate the fact you're holding up the redacted documents. remind me an awful lot of the last 50 pages of dr. fauch's e- mail. he's not a sovereign. he doesn't work for the sovereign nation, he works for us. yet hhs is delivering, that's their responsiveness to us in terms of that kind of redaction. just trying to make that point again. writing a strong request hopefully with you signing on to shake those loose from the agencies. i'd like to go through and have

each one of you witnesses describe exactly what your attorneys are telling you the legal jeopardy is within saudi arabia for your employees that work with. i'll start with you, mr. lesser. >>thank you for that question, senators. there's been multiple litigation efforts going on, and we've received strong letters from the pif and from the saudi courts saying that our staff and our firm is critically exposed to share documents that they haven't proved. so we have contested that litigation to try to get people to produce as possible, but we feel a certificate risk criminally not just for the firm, but for our staff. we feel we have to take that incredibly seriously.

>> have they specifically pointed out specific employees who would be found legally liable? and maybe that would be the top manager or would it be individuals that would literally go into the files to make file copies and all of the above? >> senator, i genuinely don't know. i don't think specific individuals have been singled out, but the fact that individuals would be at legal risk has been clearly stated to us. >> mr. s is ternfels? >> thank you, senator. i would start with i'm not a lawyer, and i'm certainly not an expert in saudi law. but i'll tell you what i understand. an injunction has been filed by the pif against us. we're vigorously opposing that, that injunction. and from what i understand, the penalties for that injunction are significant, civil, and criminal penalties. we have 400 folks in saudi,

including nine americans. >> would the citizens be under a higher level of scrutiny than the american citizens? would they be higher risks? because they are potentially more subject to the court dictates? >> senator, i don't know from what i understand. this has implications for potentially all of our folks. >> mr. klein, what are you aware of in terms of what your council might be telling you in terms of the jeopardy of your employees in terms of saudi arabia? >> thank you. the pif has expressed to our firm and to others what they believe is their right as a sovereign to go to court, to preserve their interest, and that they have a right, not simply based upon the contracts that we have signed, but a right to certain protections under sovereign law as saudis. what the court order that we received states is that if we

are to provide either in a written form or in this form, information that were to breach the specific injunction, we could be held criminally liable, and that criminal liability as i understand it is as much as 20 years imprisonment as well as monetary fines. it is not defined to which individuals. it is addressed directly to the firm. >> what did your council tell you? >> first point principle, i don't think we get there. i think we work through and fully satisfy the sub schmidt tee in terms of the subpoena. and being accelerated to show the good faith efforts are delivering the returns. secondly from a legal perspective, u.s. council has shared it is just a very

complex, almost unprecedented situation. our saudi council suggest there's a range of potential challenges. but it is really hard to predict at this juncture senator. >> so when you go to court and you challenge what i guess you're challenging the pif or you are actually challenging the saudi government? again, you say you were fighting off these injunctions. who are you fighting in this case? the saudi government or the public investment fund? i'll start with you. >> not an expert in saudi law, senator. my understanding is that it is against the pif. >> mr. klein? >> senator, thank you. we have expressed to pif and to the court the full intentions to comply and we have sought relief to which to comply fully with the subpoena. >> is this just basically in response to the lawsuit they

have initiated against you? you have initiated your own counterlawsuit, responding to the court proceeding. >> thank you, senator. we are both seeking specific document relief and seeking to end this litigation. >> who initiates the litigation against you? the saudi government or the pif? >> as i understand it, senator, it is the pif and they have invoked again as i understand it without full expertise, certain of their laws regarding information that they have as a government. >> the chairman put up a graphic there talking about the disclosure of this information that might impact national security. have they made that claim? is there any justification for that claim as far as you're aware of?

have you pushed back against that? >> senator, as i had said, we are objecting to the injunction, and i actually can today talk about the work that we did do with the pif as it relates to this matter if that is of interest. >> okay. my time is running out here, describe what you have done pushing back against this injunction. >> sure, senator. the pif has sued us in saudi court, and cleared us if we were to share unapproved information, we would be violating saudi law, and we have litigated this matter in saudi court, seeking permission. and that litigation is ongoing and we've been continuing to pursue that vigorously in order to produce materials for you. >> so if i just may, you are obviously producing some documents. you've been producing documents even after this injunction has been granted.

is it a general type of injunction? is it about specific information? i mean what is the injunction covering? we'll start with you, mr. lesser. >> we've asked to produce fully to comply with the subpoena and only a portion of what we've asked to produce has been approved to produce, so the litigation is related to the remaining information that we would like to produce that we have been unable to do. >> it's a general injunction and you're pushing back on a case-by-case basis, can we produce this and that? is that common with all four of you? okay. i have no further questions. thanks. >> senator butler? >> thank you, chair. and thank you gentlemen for coming. i genuinely have a couple of yes or no questions, and just some short answer ones.

we can start with you to work our way down. how long has pif been a client of yours and are they still a client of yours? >> they are still a client. i know they were a client as of 2016 because that was one of the documents that we would comply with. >> mr. sternfels? >> yes, similarly they are still inclined. i don't know when we started working with them. >> senator, thank you for the question. the pif remains a client of ours, i believe our first engagement was in 2017. >> senator, engagements with pif started in 2021 and they are still a client? >> and let's work our way back the other way. just again, i think a legitimate or a yes or no. do you normally retain clients

who sue you? >> it is a different scenario, i agree. >> mr. klein? >> senator, thank you for the very fair question. this represents behavior for our client and quite frankly for the pif who has historically been a client that has operated with best practices of governance with us. >> no, senator, 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 committee, subcommittee what it needs. and hopefully we're not done on that dimension. >> senator, many aspects of this are unprecedented for us in this situation. i would also say we have made some progress and we are continuing to do our best efforts to be able to make more progress.

>> i got to say, i can't say that i'm surprised necessarily about the responses of any of the corporations or companies represented here. but it does take me back to senator blumenthal's point. if you have a client, you've chosen to have a client in the pif, they have displayed not normal, out-of-character behavior, and aggressive behavior towards you. threatened your company, your livelihood, the security of your employees. and you remain in business with them sounds incredibly curious to me. again, i associated myself with the comments of the chair. i wonder what is actually going on here. because i have not seen a u.s. business choose a foreign any client, foreign or otherwise

that would behave so aggressively towards your overall bottom line. and just a last bucket of questions, mr. chair, if i could. maybe they will go as quickly. mr. sternfels feels directed towards you. and i have some curiosity about your work, not yours, but the work on a project, i think, self-described futuristic city in northwestern saudi arabia. are you familiar with that? >> i'm not, senator. but if it is of interest, i'm happy to come back then. >> what are of interest are the human rights violations that are targeted towards the indigenous community or the tribe, the displacement of 20,000 individuals in the reported death sentence by the

saudi arabia and government of three tribe members who resisted displacement. i am concerned about, well, i want to know how that, those types of human rights violations will rest with the sink with the intentions of mckinsey, and how you can sort of choose to retain a client who has been, who may not share your value set and has been aggressive towards your overall business bottom line. i would love to have a followup with you, specifically on those alleged violations. those are all my questions, chair. >> thank you for being here.

and if i could just start with you, did i hear you say in your owning statement, i'm going to quote you now. we have the industry's most rigorous client selection policy? did i get that right? >> we believe that to be true, senator. >> well how is it then that you would end up with so many clients who are state-owned chinese corporations hostile to the united states? >> thank you, senator. so the basis for my answer was we have invested over $700 million for the last several years to put in place the rigorous client selection process that would look at a whole series of factors. >> well, let's talk about some of your clients. like the china communications construction company. this is a firm that is blacklisted by the united states government. this is a state owned enterprise that is responsible for building artificial islands on the south china sea. probably in direct of the international law and to the united states security

interest. you helped them develop their five-year plan. why is that a good idea? >> senator, our work in china overwhelmingly works with multi- national companies including many of those being u.s. >> actually you have advised 22 of the biggest state owned companies in china according to the new york time it is. let's talk about the chinese ocean shipping company that has played a key role. and the bid to extend the global reach. given status and forms the core of china's defense industrial base. this company has provided lo jazz mat support to the navy operations of the gulf and experts say, i'm still quoting, serves as the mirror time logistical arms for the liberation army. you're advising them. how much money did you make from that contract? >> no, senator, we're not advising them. >> did you ever advise them? >> none of the topics that you

would highlight. >> you didn't advise the chinese ocean ship company? >> not on the topics. they are engaged in activity to the security interest of this nation. >> and they are no longer a client of ours, sir. >> why did you advise on 22 of the 100 biggest chinese state owned enterprises? >> and that number i don't believe is accurate, senator. >> it doesn't have anything to do with money? >> i don't believe that number is accurate. >> how much money do you make off the united states government? >> i don't know the size of our work with the u.s. side. >> i do. in 2021 you made more than $850 million in consulting work for the federal government with the department of defense as your top client. when you bid for those government contracts, did you disclose your work for these chinese state-owned enterprises that were conducting activity adverse to our national security? did you disclose it to the department of defense? >> senator, we take oci incredibly seriously, and i have even gone beyond what is required around disclosures. >> so that's a yes? >> we take it seriously and

made all the appropriate disclosures, senator. i'm happy to come back to you on any details specific to the work that we do on the department of defense. >> that is not what news reports have found and news agencies who have looked into this. to quote nbc news again, bidding on contracts, the u.s. navy, customs, border protection, you did not disclose your work with an apparent conflict of interest. a report in 2021 showed in december of 2021 that you admitted to providing services only for local governments in china, but not for the central government in china. my question is why should you be able to get any contracts in the united states government if you're going to advise foreign nations that are hostile to us and make gobs of money off of them? why should you be getting u.s. government contracts? >> senator, we have never worked with the chinese communist party or the central government in china to the best of my knowledge. >> you're waking with state owned enterprises. china is not a democracy. they own these companies. these companies are doing the

bidding of the chinese military, and you're making money off of it, hand over fist. my question is i guess if you want to do that, i guess it doesn't violate the law. but i just wonder why is it should you then be able to turn around and make $850 million in one year alone off the american taxpayer? i mean explain that to me? >> senator, our work with the federal government, we stand behind. we bring -- >> well, i'm sure you do. it is incredibly lucrative. that's the problem. you make gobs of money off of our enemies. and then you turn around and make gobs of money off of us. it's outrageous frankly. listen, you shouldn't be doing any work with the chinese communist party and any enterprise that they own or have some share in. you shouldn't. if you were serious about ethics, you wouldn't be doing it. but it is particularly outrageous that you then make money, almost a billion dollars in a year off the united states government including the defense department. now i have introduced a law that would prohibit you from doing just this, and i will continue to push it until we

get a vote on it. now let me ask you about one of the things since i've got you here. i represent the state of missouri that has been absolutely devastated by the opioid crisis. and i know you don't know a lot about that because speaking of money, mckinsey has made an unbelievable amount of money off the opioid crisis. let me ask you about this new york times report, which found mckinsey proposed paying a $14,810 bounty to pharmacies for each opioid overdose. is mckinsey proud of that work? >> senator, our work was designed to actually reduce opioid abuse. >> really? >> let me ask you about this. i think we have a poster of this. we sell hope in a bottle, an advertising campaign you came up with. we sell hope in a bottle. that's for opioids. hope in a bottle. you helped purdue pharma market

them to children. the massachusetts attorney general has filed a lawsuit that has all of these disclosures in it describing how mckinsey recommended and pushed purdue to turbo charge oxycontin sales. mckinsey urged the shacklers, owners of purdue, to make a go, no decision to the sales engine. pushing the board of directors to turbo charge the sales engine. to drive up the sale of opioids. and that is telling people left and right. is mckinsey proud of that work? >> senator, we were too slow in seeing the epidemic around us. >> you helped cause the epidemic. >> no, senator. >> you don't think that helped the epidemic? you don't think marketing the drugs to doctors and children help caused the epidemic? you don't think you have any part in that? >> what i can say including the

state of massachusetts, we were the first to reach a settlement with all states. >> well sure. [ laughter ] sure. when you are over a barrel. what are you doing for victims right now? >> senator, we have reached agreement with the states and municipalities. >> have you set up a compensation funds, sharing some of your profits with them? >> the settlement details are public. >> i'm asking you. i mean have you set up a compensation fund to share some of your profits with the victims? >> senator, our substantial settlements go exactly to that cause. >> you know, i've sat here and listened to your responses to my colleagues, and it is the same old thing over and over. you don't want to be accountable for anything that you do. but i'll tell you what, this is unforgettable and frankly unforgivable. your work right now taking money from this government as you helped the chinese communist party is absolutely unforgivable, and i will not rest until it is illegal.

thank you, mr. chairman. >> thank you, senator holly. >> i want to thank you, chairman blumenthal and johnson for holding the hearing and for leading this inquiry into the efforts to influence u.s. policies and the imfact they have. i want to note for the record that i joined senator holly in my concern about mckinsey's role in the opioid epidemic. we passed legislation that needs to be fully implemented to require more transparency in similar situations. but let's turn to the issue at handay congress has a really well- established right to compel documents and testimony including from the united states companies. i just want to be clear for the public here, the supreme court of the united states has held

our constitution on the issues of the congressional subpoenas. in according to this country, can't interfere with congressional subpoenas. and so yes or no down the line. i want to make sure we have this on the record. is it true they refused to comply citing an injunction from an administrative court and not independent and under the direct influence of the saudi regime. so yes or no, we'll start with you, mr. lesser? >> given the situation we are placed in. >> you are taking the court's direction over this congressional direction. >> and we will continue to do so. >> but you are still letting the saudi arabian court govern how you are complying if you

are complying? mr. klein? >> senator, thank you for the question. we intend to comply fully, and we intend to press all avenues to ensure our full compliance. >> so that means i want to be clear here, if you aren't successful with the courts, you are going to comply. and that they have authority over the united states company, and that you're going to follow the law. if they don't go your way, you are going to still follow the law here and fully comply. >> and we are entirely hopeful that we will resolve all aspects of the legal issues in saudi arabia, and we have intended to comply with this subpoena from the beginning, and we intend to comply going forward. >> i will take that you will

continue to allow the administrative court to govern your response. >> senator, we will fully comply with the subpoena, and we will take -- accelerate that process every day, but we will fully comply. >> regardless of what the courts decide? >> we will fully comply. >> let me be clear for those that didn't give the last answer. by refusing to respond to this subpoena and to request for legal justification for your refusal, your firms appeared to have replaced your loyalties above your loyalty to the united states of america, our national security and transparency. i also heard your discussion about the risk assessments that you do before you decide to take on a particular client. one of the things, a good legal department does in a massive company with a lot of resources

is that they look at the law of the jurisdiction that you want to do business in and if it says that they might give you trouble with complying with the united states subpoena from this congress, you might decide not to do business there because that is a high risk. and the fact that you decided any way will seem to me to say that you don't take the authority of this it congress very seriously. so now both the consulting groups do work in china, which they do not have a judiciary. and if they were to subpoena information from mckinsey or their work in china or on behalf of the chinese government that they could also try to block compliance with that subpoena. so to the two of you if they block compliance with that, would you refuse to respond?

mr. lesser? yes or no? >> senator, we're doing everything that we can to reply to the subpoena as fully as we can and specific to china, we have very clear guidelines on the kind of work that we do and don't do. >> and if they try to block, you would ignore the court or ultimately you would comply regardless of the position of the chinese government? >> and we do our best to comply and follow the laws of all the countries in which we work. that's what we have tried to do here and we are incredibly respectful of this subcommittee and its subpoena, and we are continuing to work to meet your request. >> and again, the chinese government tells you, you may not comply with the subpoena of the united states of congress. what are you going to do?

>> thank you, senator. i start with reaffirming we don't work with the federal government in china. we have tight client policies. >> and i'm going to stop you because my time is limited. the chinese government runs the businesses in china. so let's be very clear about the line you're trying to draw just isn't there. so now again my time is limited and i have one more question for you, mr. sternfels. will you cooperate with an investigation with the subpoena from congress even if the chinese government says no? >> absolutely, senator. cooperating with this senate is our highest priority, and we will continue to do so. >> and if that is true, then you need to respond fully to this committee's subpoena. because that sets a really dangerous precedent. which again, leads me, my

colleagues, and the american public to question the loyalties of your company. and now i have one more quick question if i could, and it really is just a follow on to senator holly. i have led oversight and legislative efforts to bring greater transparency to the conflicts of interest from groups like mckinsey in the wake to disclose your work for opioid producers while simultaneously advising the food and drug administration on opioid regulations. once again, here, mckinsey is failing to be transparent in its work and in this case, it has significant implications for our national security. you talked with senator holly about your receipts from government contracts. i know that in fiscal year 2023, you had millions of dollars of procedures from our defense and from national security agencies such as the u.s. department of defense.

so i have to tell you that i'm deeply skeptical that mckinsey's work is compatible. and the reason you were all here today is because your response to these subpoenas seem to come into question. thank you, mr. chair. >> thanks. >> and thanks, just to follow up on a couple of questions that they ask, let me just make clear that you answered the question about china when i asked it essentially saying your position would be the

same. i think that answer is essentially the same as you gave to senator hassen. doing your best as you would put it or cooperating as you put it, mr. sternfels, is not complying. these distinctions really make a difference. we will see how much of a difference they make. the fact that it will be in response to the department of justice department or an scc subpoena will show the consequence, really the magnitude of the issue that concerns us here. i recognize and i sympathize with your concern for your

employees. i am concerned also. and i just have to ask each of you, don't you have second thoughts about doing business with a client? a country? it says they will throw them in jail for american law. mr. lesser? >> senator, this whole experience going back six months now has been unprecedented for us and as we understand from our lawyers, an unprecedented disagreement where the senate subpoena is in direct conflict with the laws of another country that use the information to be confidential. we are all navigating uncharted waters here, and we are doing it in the spirit of being as compliant as possible and i'm hopeful that we will get to a resolution that will work to

meet your needs, so we are -- so we can move forward in a positive way. and that's the spirit where she operated in since the beginning, but it's unprecedented. when the whole experience is over, of course, we will look at what where she learned from it and how we could avoid that in the future. it's a difficult one for the entire team to navigate. and we think quite unprecedented in the history of the relationship with the senate subpoenas and the laws of other countries. >> mr. sternfels? >> thank you, mr. chairman. we remain optimistic that we can avoid any of the outcomes that you talk about. >> but don't you have second thoughts about doing business with a country that says we'll try to arbitrate our differences, we'll try to settle our differences in court? no. it is our way or we put your

people in prison. does that give you some qualms? >> i hope we don't get to that scenario. >> and that is what they have told you, correct? >> senator, we faced an injunction, and injunction has potential penalties. no one has said that. we look at the injunction. hopefully we can avoid that. and i do come back to my commitment that i made to you personally and the entire subcommittee that we will continue to comply with the subpoena. we don't think we're done here. and we will continue to advance both in submission materials and reduction in those redactions that you pointed out. >> mr. klein? >> mr. chairman, thank you. i agree with you. this is extraordinarily troubling, troubling for us and unprecedented, and it does give great pause for thought. we have a responsibility as a transaction adviser to complete the work that we've done for

commitments we've made. and in addition, we look very carefully at the actions of the pif over the length of our relationship as i indicated and will continue to indicate this is the situation that our work has been best practices, strong data driven investment historically. we have been presented with a statement by the pif that they believe they have certain sovereign rights. and limiting their ability and they have put them in this position of this particular court case. but it is intensely troubling, and we share your concern. >> senator, our work is filed under those rights and we are confident that you would have

satisfied the subcommittee in full compliance. and i just don't think that we'll get there in terms of those consequences. >> well, i can tell you i've been a prosecutor and a private lawyer. i'm not sure that i would work for a client that said to me you comply with american law and we will throw you in prison. for work done on an american investment in america under american law with the protections of rights that america guarantees. let me ask you, mr. sternfels. we know that mckinsey advised the pif on project wedge before the launch of liv golf. what is project wedge? >> well thank you, senator. you are correct. we advise the pif on project

wedge. this was work conducted in 2021. it was about six months worth of work. there were two phases to this. it focused on the economic viability of standing up a new golf. this is before the creation of live and before any discussion between the pga and liv, and the question that we were asked, could a new league be viable? we conducted business case analysis around those set of questions, senator. >> and you also worked on the lucid motor deal? >> i'm not familiar with that, senator. >> aside from project wedge and liv golf and lucid, what other deals have you worked on? >> senator, i mentioned in my opening statement, the vast majority of work that we do with the pif relates to

investments in saudi arabia. we conducted a thorough reserge to find any work that we have done that would have any intersection with the united states. we found three. they were related to the topics of the capture and healthcare. and to the best of my knowledge, none yielded any investment in the united states. >> and let me ask you, did any of those projects including project wedge involve saudi arabian national security? >> in terms of what we were asked? not to my knowledge. we were focused on the business case analysis, sir. >> and did you work for saudi arabia or pif regarding the pga tour or liv golf involved national security? >> senator, as i had stated, our work did not involve liv golf for the pga tour. we were involved well before the creation. it was focused on could a new

golf league be economically viable? >> mr. lesser, has any of your work involved saudi arabia national security? >> senator, from the standpoint of our look at our work as we would describe. this was normal work that we would do for an asset owner, the sovereign wealth fund. >> and the national security, i mean, the weapons systems or movements or classified information? >> no, senator. that was not the nature of our work. >> mr. klein? any of your work involving national security? >> thank you, mr. chairman. we serve as investment bankers. we have not done any work on national security issues. >> mr. keary? >> senator, no, none of our work involves issues of national security. >> i have a final set of questions. i noticed senator marshall has returned. do you want to ask your questions? >> thank you, mr. chairman.

my first question is for mr. sternfels. it is my understanding that mckinsey has a significant relationship with the chinese communist party and the chinese military that you do significant work for them. what assurances can mckinsey give to this committee that mckinsey is committed to america and not the chinese communist party? >> senator, we do no work and to the best of my knowledge never have for the chinese communist party or for the central government in china. the vast majority of work that we do in china is for multi- national companies, many are u.s. companies and private sector chinese companies. >> and these companies are owned or subsidiaries or partially owned by the ccp. th >> not to my knowledge, senator. >> will all the witnesses commit to give your list of

chinese clients to your u.s. government clients? mr. rich lesser? >> senator, my understanding is the most recent legislation of the national defense authorization act sets very clear guidelines of what it means to be compliant and to ensure that all the work we have done is done in the most way and all information that needs to be shared is shared and we will be completely compliant with those completely compliant with those regulations as they are established. >> will you disclose your list to u.s. government clients of your chinese clients? >> we go well beyond in terms of disclosure. i am happy to share that with you afterwards in quite a bit of detail. >> senator marshall, yes? >> senator, yes, but in the event we had to, yes. >> i will come back to mr.

sternfels. you say you did your work with the dod, correct, the department of defense? >> yes we do work with them. >> you don't do any work with chinese owned companies? >> we don't know work with the chinese communist party or the central government in china. >> or chinese owned companies? >> the vast majority of our work in china is with multinational companies and many of those are united states private sector chinese institutions. >> i assume some of those have chinese ownership and i understand the ccp is a complex web so as taxpayers spend money on dod and they in turn hire you to do work how do you make sure that none of those chinese owned companies are infiltrating or stealing any of

your intellectual property or spying on the military? >> i do appreciate the question. as the son of a veteran who spent four years when my dad served in the navy and both were veterans and taking national security is important to me. and we have set up a dedicated capability in working with the department of defense that we have collaboratively built with the dod of both around dedicated information technology infrastructure, around how we staff and treat information that the dod has vetted and approved and if that is interesting, senator, i can take you through that in detail. >> have you noticed any cyber attacks on those systems and where do they come from? >> i can to give you the details on that but i can tell you, as you will know cyber

attacks happen all the time and we do remain vigilant on this and we continue to invest significantly to do our best to defend and we have worked collaboratively with the department of defense on architecture to seek their approval for how we have set things up. >> i yield. thank you. >> thank you. i do have a few more questions but, senator johnson? >> the senator displayed some documents and they were heavily redacted i think and i do have a from mckinsey & company as well but who made those reductions? >> i did know if you are asking me. we did not make those. we have been working to reduce those reductions and they were done by them. >> if you provided documents

were there any reductions in them. >> we did. i believe we may have redacted some partially sensitive information like names but all of the others to the best of my understanding came from the and not them. >> okay. >> thank you. the sole reductions that we provided were cell phone number >> so now the reductions made by the pif? >> no. any made delivered would've been made by the pif or other members of their review process and our firm submitted documents that were complete with the exception of personal cell phone numbers. >> okay.

mr. keary? >> no reductions today and i believe none provided or directed by the pif. >> i guess the point i want to make is i am heartened by the fact that the chairman another democratic colleagues are talking about how important it is to comply with congressional oversight and provide documents either in subpoena or in i would say request and the chairman mentioned twice it was staggering that we don't have full compliance and pretty unprecedented for the situation and i know the senator said that not getting this information would set a very dangerous precedent. i am hardened -- heartened that the democratic colleagues have oversight and the constitutional authority to demand these documents and i think it's even more staggering and dangerous, a precedent, that her own federal health agencies, again, refused to turn over the last 50 pages of those e-mails which are heavily redacted it and we can't get the analysis of that system.

i know i make the point again but we really do need to step up to the plate and demand that those documents are provided to us and if they don't do it within a strongly worded letter i hope we follow up with a subpoena. thank you. >> thank you. what you produced was 837 pages of e-mails that contained nothing but news clippings. so there was essentially nothing to redacted it was all public and your production, half of it, it was public tax returns which was available publicly and there were redaction's of the other records and 925 pages of

publicly available pga tour tax returns which were part of the production and i held up the mckenzie documents which consisted of blank pages but, an example of your production, 40 pages of calendar presentations and you're familiar with those in any one of those three dacs the names of all the meeting attendees. and not really useful. i could go on but in the interest of time i will not. but i wouldn't talk or call that compliance or cooperation. let me finish with a round of questions which i think follows up on the point i made with qualms of doing business and

about doing business with saudi arabia. so if i am not mistaken, one of your past engagements for the saudi government and i would have hoped that you would have identified it was to conduct research to identify so-called major influencers who have been critical of the saudi government on social media. is that correct? >> they did no such work for the saudi government. >> let me just show you a slide. this identifies a number of individuals, and i am sure you have seen is because it comes from this and one of these, these individuals, omar abdul aziz a friend of jamaal

khashoggi alleges his family members were not only arrested but tortured by the saudi government after mckenzie helped to identify him and of the other individuals, one of them was arrested and a third who had been anonymous disappeared from the internet after being identified. by mckinsey. mr. abdul aziz avoided arrest because he was in canada. and you are saying that this slide doesn't reflect work you did in any respect or any form for the saudi government? >> absolutely. this is no work we did from the saudi government but work done for internal purposes and we conducted a thorough investigation and found there

was no evidence of misuse of this material never left mckenzie and respect to the individual in question, both lawsuits he brought against us were dismissed and you escort. >> why did you do this kind of slide and other materials identifying dissidents in saudi arabia? >> i can't comment on why it was created but i can comment on that it never left mckenzie -- mckinsey. >> did you do that kind of work with respect to dissidents and other countries? >> i can't comment on the work o we have done and that's not a type of work we do. >> have you ever done that work in china? >> not to my knowledge, sir. >> let me just say in closing that we appreciate your being here. and as i said at the beginning of this hearing, the ramifications for this proceeding have potential to

echo outside of this chamber and whatever happens next the courts of the federal government oversights of united states companies in their dealings with foreign governments and foreign investors simply cannot and should not be did dated by a foreign power and we have heard a lot today about consultants before us feeling caught in the middle and having no choice but to bend to the will of a bully and we don't take on lightly the unprecedented and aggressive stance that they have taken and it is an arm of the saudi kingdom of the saudi government and of the saudi ministry. you do have an obligation to follow the united states law contract thing with a foreign government or entity which doesn't eliminate that responsibility in my respectful view. i would like each of the

companies before us today to commit to appear before this panel again should we have additional questions about your compliance or the information you have provided and do all of you commit to be here again? >> yes, senator. >> yes, senator. >> senator, yes i will. >> yes, senator. >> thank you. i do want to thank the ranking member for partnership and support as we seek to uphold one of the bedrock principles of the congress which is our constitutional duty to conduct vigorous oversight and fact- finding or fact based investigations and we want to commit that we will work together on other investigations that you have expressed interest in following through on. and this subcommittee will consider the testimony her today and the formal legal objections that you e filed tha

each of the consultants have filed and this record will remain open for 15 days for any additional comments or questions by any subcommittee member. with that, the hearing is adjourned. thank you very much. >> thank you.

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