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Biden Admin May Freeze Musk's Twitter Acquisition, Citing 'National Security'

Elon Musk Responded on Twitter With a 'Laughing Emoji' to News of the New Federal Investigation

Biden Admin May Freeze Musk's Twitter Acquisition, Citing 'National Security'

As Twitter and billionaire Elon Musk race to close their acquisition deal by the Oct. 28 deadline, officials within the Biden administration are now considering freezing the deal, citing potential “national security” risks.

Federal officials have “grown uncomfortable over Musk’s recent threat to stop supplying the Starlink satellite service to Ukraine” and what they consider to be an “increasingly Russia-friendly” posture following recent tweets outlining a pathway to peace in Ukraine, according to a report from Bloomberg.

Additional concerns about the purchase are tied to several foreign investors helping to finance Musk’s Twitter takeover bid: Saudi Prince Alwaleed bin Talal, Qatar’s Sovereign Wealth Fund, and the crypto exchange Binance — which is owned by Chinese-born billionaire Changpeng Zhao.

Members of the U.S. intelligence community are considering what tools federal officials may be able to use to review Musk’s deals for national security risks, Bloomberg reports.

Shortly after disclosure of the investigation was published, many people reacted on social media to express suspicion of eleventh hour involvement by federal officials in a deal that has been known about since April, when Musk first offered to purchase Twitter.

One potential pathway for the government to hamper Musk is the interagency Committee on Foreign Investment in the United States (CFIUS).

CFIUS, which is overseen by the U.S. Department of the Treasury, is authorized to review certain transactions involving foreign investment in the U.S. to determine the effect those transactions may have on national security.

In 2018, the Foreign Investment Risk Review Modernization Act (FIRRMA) was signed, which broadened the authority of the President and CFIUS to take action to address national security concerns arising from acquisitions involving foreign investors.

At the top of the CFIUS website, the Committee recently posted a link to an executive order from President Joe Biden.

Executive Order 14083—Ensuring Robust Consideration of Evolving National Security Risks by the Committee on Foreign Investment in the United States” reaffirms the foreign investment review process, specifically for deals that involve a “declared strategic goal of acquiring a tie of critical technology or critical infrastructure that would affect United States leadership in areas related to national security.”

The language in the 2,980 word executive order is broad enough to potentially include review of Musk’s bid for Twitter, and it was signed by Biden on Sept. 15 — just a month-and-a-half prior to the finalization of Musk’s acquisition bid.

Between 2009 and 2019, about 52 percent of CFIUS filings moved on to full investigation, and 15 percent of those deals failed to close.

At the time of this publication, Musk has not issued a statement on news that federal officials may subject his deals to national security reviews. He did, however, respond on Twitter with a laughing emoji to a user who wrote: “It would be hysterical if the government stopped Elon from over paying for Twitter”

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