Twitter Takeover

EMEL AKAN is a senior reporter for The Epoch Times in Washington. Previously, she worked in the financial sector as an investment banker at JPMorgan. Emel Akan

Is Twitter a National Security Risk?

Musk’s deal may face probe over foreign partner access to user data

Democrats have been debating whether Twitter’s new ownership poses a national security threat and warrants an investigation since billionaire Elon Musk’s acquisition of the social media platform late last month.

Because Musk is a U.S. citizen, his purchase of Twitter isn’t normally subject to investigation. However, some argue that the Committee on Foreign Investment in the United States (CFIUS) should look into Twitter’s international investors and whether they have any influence over the company’s operations.

About $3.7 billion, or 8 percent of the funding for the acquisition, came from foreign investors, according to a report by Brookings. Saudi Prince Alwaleed bin Talal is one of the investors, along with the sovereign wealth fund of Qatar.

The Treasury Department has the authority to investigate certain acquisitions involving foreign investment in the United States. However, Treasury Secretary Janet Yellen, who chairs the CFIUS, said there’s “no basis” for a probe into Musk’s $44 billion acquisition of Twitter.

Yellen’s comments come after President Joe Biden indicated that the Twitter acquisition was “worth being looked at” from a national security standpoint because foreign financing was involved.

“Well, I’m not sure precisely what [the president] had in mind, but we are—we have really no basis—to the best of my knowledge—to examine [Musk’s] finances of his company,” Yellen told CBS News on Nov. 15. “I’m not aware of concerns that would cause us to [investigate].”

In 2018, Congress passed the Foreign Investment Risk Review Modernization Act, which broadened the oversight of CFIUS to include minority investments by foreigners.

Because of this change, Twitter may face government scrutiny over the concerns that foreign partners may gain access to user data.

Saudi Prince Alwaleed bin Talal, an influential investor, has long been a shareholder in Twitter. He announced his intention to maintain his stake in the private company after Musk launched his takeover bid.

The Saudi prince invested $1.89 billion in the private company, while another $375 million came from the Kingdom of Qatar. Together, they account for less than 5 percent of all financing commitments.

While some legal experts say CFIUS has no jurisdiction over the Twitter acquisition, others feel that the company might still be investigated.

“Even 3 percent ownership can be subject to CFIUS review if there’s a potential that the foreign owners can exert influence over the company through board seats, management positions, other types of involvement,” a CFIUS expert at a large law firm who prefers to remain anonymous told The Epoch Times.

However, many believe that a probe is still unlikely to reverse the acquisition.

Sen. Chris Murphy (D-Conn.), who had previously expressed concern about potential Saudi influence over Twitter’s operations, reacted to Yellen’s statement.

“I don’t understand this decision. CFIUS is designed to review transactions like this,” Murphy wrote on Twitter on Nov. 16.

Murphy, a member of the Senate Foreign Relations Committee, has been one of the most vocal supporters of an investigation into Musk’s Twitter deal.

Murphy asked Yellen in a letter dated Oct. 31 to perform an immediate review of the recent changes in Twitter’s ownership and governance.

“Setting aside the vast stores of data that Twitter has collected on American citizens, any potential that Twitter’s foreign ownership will result in increased censorship, misinformation, or political violence is a grave national security concern,” he wrote in the letter. “Saudi Arabia is one of the most repressive countries in the world, with little to no tolerance for free expression.”

A Bloomberg article citing anonymous sources stated that U.S. authorities are still looking for information on confidential agreements Musk signed with foreign partners and whether such agreements allow them to access users’ personal data.

Biden told reporters on Nov. 9 that the billionaire’s “cooperation and/or technical relationships with other countries is worthy of being looked at.”

When asked how the administration would look into Musk’s foreign ties, Biden said there are a “lot of ways” this could be done, but didn’t elaborate.

In 2018, Congress passed the Foreign Investment Risk Review Modernization Act (FIRRMA), which broadened the oversight of CFIUS to include minority investments by foreigners.