U.S. exploring whether it has authority to review Musk’s Twitter deal

On Nov 2, 2022

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Large foreign investors would have access to confidential information about Twitter’s finances — and potentially its users — under the terms of Elon Musk’s deal to acquire the social media site, people familiar with the matter told The Washington Post.

That revelation comes as Treasury Department officials begin looking into whether they have the legal authority to start an investigation into the purchase because of Musk’s ties to foreign governments and investors, people familiar with those discussions said.

It was not immediately clear whether Treasury officials were aware of the terms granting information rights to large investors. The exploration of whether a review was warranted is fairly routine, and such preliminary examinations often do not end in a full investigation.

White House officials also previously discussed the possibility of a national security review of the acquisition, according to another person. Additionally, officials at the FBI looked into the potential counterintelligence risks posed by the deal this past spring, according to two people familiar with the inquiry — though it is not clear whether the matter has been studied by senior officials at the bureau or if those discussions are still active. All the people spoke on the condition of anonymity to discuss matters they were not authorized to disclose publicly.

A Saudi prince’s holding company and a subsidiary of the Qatari sovereign wealth fund are among the investors backing Musk’s Twitter purchase, as is Binance, a cryptocurrency exchange that was founded in China but has since moved its operations elsewhere. Tesla, where Musk serves as chief executive, has extensive ties to China, as well.

Musk and his attorney, Alex Spiro, did not immediately respond to a request for comment.

The U.S. government’s preliminary attempts to scrutinize the Twitter deal comes as the billionaire introduces new changes to the structure of one the world’s most powerful communication platforms.

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Treasury staff at the Committee on Foreign Investment in the United States (CFIUS) have not yet determined whether Musk’s purchase of the social media platform could trigger a national security review, according to one person familiar with the matter. Musk is a U.S. citizen, and CFIUS reviews are typically used to investigate investments by foreign nationals. So it is not clear whether they can initiate such a review, and policy experts are divided on whether one would be warranted. Treasury staff routinely examine whether purchases merit more in-depth investigations, often without proceeding to full-blown reviews.

A 2018 legislative update to the CFIUS rules says the body can investigate not only foreign ownership, but minority stakes in critical areas, including sensitive personal data held by businesses.

The early work on a potential inquiry has not yet reached the principals on the…