Federal authorities have no plans to open an investigation into Elon Musk’s purchase of Twitter with help from foreign investors, according to two people aware of the matter, despite concerns from President Biden and the demands of a top Democratic senator worried about the social network’s international financial backers.
The committee’s mandate is to examine acquisitions of U.S. companies by foreign owners; Musk is an American citizen. Though the $44 billion deal relied on $2.5 billion from foreign backers and granted some of them unusual privileges, including special access to Twitter user data, investigators do not appear to think the circumstances meet the criteria for federal intervention, the people said.
“They have not fully closed the door on it, but they are pretty sure they don’t have jurisdiction in this case,” one of the people briefed on the matter said.
Treasury Secretary Janet L. Yellen chairs the committee. A Treasury spokeswoman declined to comment.
Twitter officials did not respond to a request for comment, nor did Musk.
Late last month, Musk met with top lawmakers on Capitol Hill and White House aides. The billionaire met in the Capitol with House Speaker Kevin McCarthy (R-Calif.) and other top GOP lawmakers, as the new Republican majority in the chamber considers pressing social media companies more thoroughly over claims of bias against conservatives. The House Oversight and Accountability Committee will hold a hearing Wednesday on whether Twitter’s previous management improperly suppressed stories about a laptop belonging to Hunter Biden before the 2020 election. While he was in Washington, Musk also met with John D. Podesta and Mitch Landrieu, the two White House officials overseeing implementation of President Biden’s infrastructure and clean energy bills.
Musk did not discuss Twitter with the White House officials, according to a third person familiar with that meeting who also spoke on the condition of anonymity to describe private talks.
The financing of Musk’s acquisition of Twitter had provoked major concerns among some Democratic policymakers as the deal was going through last fall. Those fears were deepened by the revelation that people who invested $250 million or more into Musk’s purchase of Twitter would have access to information beyond what a lower-level investor would receive. Funds run by the Saudis and a Qatari sovereign wealth fund, as well as the originally Chinese crypto firm Binance, had invested above that amount.
Biden had said in November that Musk’s ties to foreign investors were “worthy of being looked at.”
“I think that Elon Musk’s cooperation and/or technical relationships with other countries is worthy of being looked at,” he said at a news conference after the November elections, weeks after Musk’s purchase closed. “Whether or not he is doing anything inappropriate, I’m not suggesting that. I’m suggesting that it’s worth being looked at.”
Earlier, in an October letter to Yellen, Sen. Chris Murphy (D-Conn.) said federal officials should probe whether Saudi influence over Twitter’s operations could “foreseeable be used to silence government critics and human rights activists, or to further state-sponsored disinformation campaigns.”
“CFIUS has the responsibility to review transactions that could result in an American business being controlled by a foreign person,” wrote Murphy, who is a member of the Senate Foreign Relations Committee. “I call on CFIUS to immediately conduct a review of the recent changes in Twitter’s ownership and governance. It is essential to our national security that public officials and citizens alike can continue to rely on this platform to be a neutral platform, free of foreign influence.”
For now, at least, CFIUS does not appear to have found the grounds for doing so. Larry Ward, a partner in the national security law group at the law firm Dorsey & Whitney, said the committee can only probe potential data vulnerabilities from an acquisition if the foreign investors acquire a big enough stake in the firm, or to otherwise necessitate a government filing.
“The size of shareholder investment has to be quite significant,” Ward said. “As I understand it, the share the Saudis have likely would not rise to the level to the give the committee jurisdiction.”
Sarah Bauerle Danzman, an associate professor at Indiana University and a former CFIUS staffer through her work with the State Department, added that another likely hurdle to the investigation is if the foreign investors did not seem to have gained special rights, such as a kind of board seat or access to nonpublic user data, in the acquisition.
“I thought it was a very tenuous case that probably would not have been looked at had it not been requested by Congress,” she said. “To the extent there are concerns about the deal, most of them have more to do with Elon Musk himself than with the Saudis.”