Biden's Bogus "National Security Review" of the Elon-Twitter Deal

Last week it emerged that the Biden administration has ordered a review on national security grounds for the purchase of Twitter by Elon Musk. These reviews are conducted by an agency called the Committee on Foreign Investment in the United States, or CFIUS.

CFIUS reviews are actually standard fare for large transactions- or transactions in sensitive industries. However, something about this review is sketchy.

The scope of a CFIUS review is broad. It is designed to determine if anything about a proposed buyout transaction could be inimical to the interests of the United States or harmful to the American consumer. CFIUS reviews are not limited to buyouts in the defense industry, or other cloak-and-dagger matters. For example, the purchase of Smithfield Foods- a large pork processor- by Chinese interests in 2013 was nearly derailed by a CFIUS review that found US consumers could be harmed by resultant higher pork prices.

So far so good. What, then, is so suspicious about the Biden review of the Elon-Twitter deal?

The Biden administration has ordered a CFIUS review of the transaction based on foreign ownership interests. Overseas investors are participating in the syndicate that Elon Musk has gathered to complete the transaction. These investors are the Qatari sovereign wealth fund (Qatar Investment Authority, or QIA), Prince Alwaleed Bin Talal of Saudi Arabia, and a Chinese company named Binance.

Two of these investors are already current shareholders in Twitter. They are merely rolling over their existing stake into the new deal. The QIA owns around 2% of Twitter today. Prince Alwaleed of Saudi Arabia owns around 5% or 6% of Twitter.

Both Qatar (who owns QIA) and Prince Alwaleed are well known figures in Washington corridors of power. They are viewed as allies of the United States. They did not materialize out of nowhere, but are known actors with many decades of experience in investing in the USA. Both currently have significant ownership interests in American enterprises across the spectrum: hotels, real estate, and publicly traded companies.

If the ownership of a stake in Twitter by QIA and Prince Alwaleed did not trigger a CFIUS review before, why is it being triggered now?

The third investor, Binance, is a bit more questionable. The USA is still unsure about its relationship with China, and CFIUS has blocked Chinese acquisitions before (although it permitted Binance to purchase a large stake in Forbes magazine.) However, the proposed Binance investment in Twitter is quite small- just $500 million in a $44 billion deal. If CFIUS were to prohibit the Binance investment in Twitter, it would probably be viewed as prudent and also not as an overreach. The $500 million Binance investment could be easily replaced by another investor (or Elon himself) and the deal would proceed apace.

The real problem with the CFIUS review of Twitter is this: the Biden administration appears to be using the CFIUS review process not as a legitimate tool to protect US interests, but as a blunt instrument to protect the Biden administration itself.

The Biden regime appears to be deeply hostile to free speech. This administration has aggressively used the instruments of State to chill free speech in America. The Biden DOJ has investigated school board meetings: soccer moms who hold opinions contrary to the Administration. The Biden FBI has shown up on countless doorsteps to intimidate Americans over lawfully protected speech on a host of subjects such as vaccine safety, election integrity, and transgender education of schoolchildren.

Perhaps the most startling abuse of power was the FBI and DOJ aggressively censoring the story of Hunter Biden's laptop, and labeling it Russian disinformation- a narrative that has proven wholly dishonest.

The Biden administration has quite a cozy relationship with social media companies- including Twitter- and regularly "advises" them on what speech is permitted. They even maintain FBI agents embedded in the company offices to police online speech in real time (under the guise of "preventing misinformation.")

The criteria of a CFIUS review is "What is best for the USA?" not "What is best for my administration?" Ironically, the Biden regime appears to be more hostile to free speech than any foreign investor in Twitter. For these reasons, any CFIUS review by the Biden administration is suspect. On the topic of free speech, their hands are not clean and their motives are not pure.