Elon Musk’s $44 billion takeover of Twitter Inc. is still facing US government scrutiny over national-security concerns that his foreign partners may be able to access user data, people familiar with the matter said.
(Bloomberg) — Elon Musk’s $44 billion takeover of Twitter Inc. is still facing US government scrutiny over national-security concerns that his foreign partners may be able to access user data, people familiar with the matter said.
The US government continues to seek information on confidential agreements that Musk made with foreign investors who hold stakes in Twitter after he bought it, and whether those deals allow them to access users’ personal data, said one of the people, who asked not to be identified discussing sensitive deliberations.
Musk’s successful takeover and de-listing of Twitter has been in the spotlight as criticism mounts from US lawmakers over the participation of investors from Saudi Arabia and Qatar.
The Twitter deal appeared in the clear earlier this week when Treasury Secretary Janet Yellen said she saw no need for an investigation. Yellen’s Treasury Department leads the Committee on Foreign Investment in the US, or Cfius, which looks into such deals for potential national-security risks.
Her comments came only days after President Joe Biden had said Musk’s business interests and links to foreign governments warranted review.
Musk and Twitter didn’t immediately respond to requests for comment. Treasury Department spokesman Michael Gwin said Cfius doesn’t comment on transactions it may or may not be reviewing, adding that the panel is committed to safeguarding national security.
This week, Musk presented Twitter employees with an ultimatum: Either commit to the company’s new “hardcore” work environment or leave. Many more workers declined to sign on than he expected, potentially putting Twitter’s operations at risk, according to people familiar with the matter.
So many employees decided to take severance that it created a cloud of confusion over which people should still have access to company property. Twitter closed its offices until Monday, according to a memo viewed by Bloomberg.
Musk tried, in the final hours before his deadline, to convince people to stay.
Security Concerns
The potential for action by Cfius emerged amid rising concerns over how Musk’s various business interests overlap with top US national security priorities. Musk’s Starlink satellite internet network, for instance, has been used in Ukraine to maintain communications during its fight to repel Russia’s invasion, a service he briefly threatened to cut off in October.
Two Democratic senators, Mark Warner of Virginia, who leads the Senate Intelligence Committee, and Chris Murphy of Connecticut have called for greater scrutiny of the Twitter deal given the ownership stakes held by some foreigners, including Saudi Arabian billionaire Prince Alwaleed Bin Talal, who rolled over his existing stake in Twitter into Musk’s deal, and Qatar’s sovereign wealth fund. Tesla Inc.’s manufacturing site near Shanghai has also been raised as a potential leverage point by Beijing.
“I don’t understand this decision,” Murphy tweeted Tuesday after Yellen’s comments, which were reported by CBS News. “Cfius is designed to review transactions like this.”
–With assistance from Sarah Frier, Ed Ludlow, Jef Feeley, Kurt Wagner and Davey Alba.
(Updates with more details about Twitter, starting in eighth paragraph.)
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