Biden Admin. Considering CFIUS Review of Musk's Twitter Deal, Report Says
The Biden administration is weighing whether it should subject billionaire Elon Musk’s deal to buy Twitter and his SpaceX’s Starlink satellite network venture to national security investment reviews, Bloomberg reported Oct. 20. U.S. officials have “grown uncomfortable over Musk’s recent threat to stop supplying the Starlink satellite service to Ukraine” and what they view as his “increasingly Russia-friendly stance following a series of tweets,” the report said. Musk’s plans to buy Twitter could involve foreign investors, and the administration is reviewing whether the Committee on Foreign Investment in the U.S. could scrutinize the deal for national security risks, the report said. A White House spokesperson didn’t comment.
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Martin Chorzempa, a senior fellow with the Peterson Institute for International Economics and a CFIUS expert, said a CFIUS review may be possible. “If Elon is buying Twitter by himself as US citizen, no cfius jurisdiction, but if his foreign investor partners are non-passive (eg board seats, access to non public technical info), then could trip cfius review due to twitter’s data thanks to” the Foreign Investment Risk Review Modernization Act, Chorzempa said in an Oct. 20 tweet. FIRRMA, which became law in 2018 (see 2001140060), expanded the scope of transactions subject to CFIUS review to include certain noncontrolling but nonpassive foreign investments in certain U.S. firms.