Rep. John Garamendi is demanding the Justice Department investigate the merger of the PGA Tour with Saudi-backed LIV Golf, while proposing legislation to strip the organization of its tax-exempt status.
Garamendi, D-Calif., rolled out legislation this week called the "No Corporate Tax Exemption for Professional Sports Act," after what the congressman called the Saudi Sovereign Wealth Fund’s "surprise takeover" of the PGA.
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That legislation would end the tax loophole that the PGA Tour benefits from to avoid paying any federal corporate income tax.
Garamendi, during an interview with Fox News Digital, said the PGA’s exemption, if left untouched, "will now flow to the Saudi Arabian Sovereign Wealth Fund through their acquisition of LIV."
"The Saudi Sovereign Wealth Fund and MBS is going to get a tax break—an American tax break," Garamendi told Fox News Digital, adding that the PGA pays "no taxes, because under the tax code, it is a charity."
Garamendi explained that a number of professional sports leagues had tax-exempt status for years, but have since relinquished that status.
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"PGA Tour Commissioner Jay Monahan should be ashamed of the blatant hypocrisy and about-face he and the rest of the PGA Tour’s leadership demonstrated by allowing the sovereign wealth fund of a foreign government with an unconscionable human rights record to take over an iconic American sports league and avoid paying a penny in federal corporate income tax," Garamendi said, adding that the merger "flies in the face of the PGA Tour players who turned down hundred-million-dollar paydays from the Saudi-backed LIV to align themselves with the right side of history and human decency."
Garamendi said "the notion that the Saudi Sovereign Wealth Fund would pay zero dollars in taxes on their blood money and potentially billions of dollars in profits while countless American families pay their fair share while struggling to make ends meet is ludicrous."
Garamendi described his new legislation as "commonsense" that would "right this wrong and bring some much-needed accountability to this matter."
Meanwhile, Garamendi said the PGA-LIV merger "creates an international monopoly in which they effectively control all professional golf, or nearly all professional golf."
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"And when put it this way, it appears that the deal is such that Saudi Arabia controls a monopoly that controls professional golf," Garamendi said. "And so from the viewpoint of a wannabe professional golfer, they basically are going to have to bend their knee to Saudi Arabia and say, Well, what can I join? Can I be part of this? And Saudi Arabia can say yes or no. And so and so it goes."
Garamendi said Congress and even the European Union should "seriously look into this."
"I would hope that the Justice Department takes it up. I would hope the European Union does and I would certainly call upon my congressional committees, for example, the House Judiciary Committee," Garamendi said.
Garamendi pointed to the Foreign Corrupt Practices Act, in which a foreign government "uses a bribe to achieve a goal could be a financial goal, it could be a political goal."
"So what is this deal— right? What are the financial guts of this deal? Where's the money flowing?" Garamendi asked. "Follow the money."
