HomeBusinessWhite House denies talk of national security review of Elon Musk ventures
White House denies talk of national security review of Elon Musk ventures
October 22, 2022
US officials are considering whether to subject some of Elon Musk’s business ventures to national security reviews, including his proposed acquisition of Twitter and his satellite internet company Starlink, according to a report.
The report said US officials were concerned by Musk’s plans to buy Twitter with the financial support of non-US investors, including: the Saudi Arabian investor Prince Alwaleed bin Talal Al Saud; Qatar Holding, which is part of the Qatar Investment Authority; and Binance, the world’s largest cryptocurrency exchange, whose holding company is registered in the Cayman Islands. At the time, the financial support of Musk’s co-investors was worth about $7bn.
The White House however, denied talk of a security review. The national security spokesperson, Adrienne Watson, said: “We don’t know of any such discussions.”
Musk is working to complete a proposed $44bn acquisition of Twitter ahead of a court-imposed deadline of 28 October, after which he faces the threat of legal action from the social media platform to force him to close the deal.
Bloomberg wrote that one avenue available to the Biden administration to investigate Musk’s ventures was the Committee on Foreign Investment in the United State (CFIUS), which can review business deals and recommend that the president suspend or block a transaction.
In response, Elon Musk flagged a tweet on Friday that cited the Bloomberg report and said it would be “hysterical if the government stopped Elon from over-paying for Twitter”. Musk responded with a laughing emoji and the 100 emoji, indicating support for the post.
It is not clear on what basis Starlink, part of Musk’s Space X rocket business, would be scrutinised by the committee.
On Saturday, Elon Musk announced SpaceX would continue to pay for Starlink’s internet service in Ukraine, a day after suggesting he could not keep funding the project, which he said was losing about $20m a month. Starlink, which operates via a constellation of 3,000 small satellites in low-Earth orbit, has become a key communications link for the Ukrainian army in its fight to repel the Russian invasion. There are now about 25,000 Starlink ground terminals in Ukraine, according to Musk.
Musk alarmed the government in Kyiv this month when he published a Twitter poll on the future of the country, with options including formalising Russia’s annexation of Crimea. In response, Ukraine’s president, Volodymyr Zelenskiy, tweeted: “Which @elonmusk do you like more?” and offered two responses: the Musk who supports Ukraine, or who supports Russia.
The US Treasury said: “CFIUS is committed to taking all necessary actions within its authority to safeguard U.S. national security. Consistent with law and practice, CFIUS does not publicly comment on transactions that it may or may not be reviewing.”
Howard Fischer, a partner at New York law firm Moses & Singer, said he did not expect a CFIUS investigation to hamper the Twitter deal.
“I am sceptical that CFIUS review is going to be employed to stop or significantly pause the deal,” he said. “Musk would argue that he is being punished for his speech, not the presence of foreign investors in the deal, especially given the relatively smaller size of that reported foreign investment.”