Biden Admin Looking For Legal Loophole To Perform National Security Review On Elon Musk

• White House and U.S. intelligence officials are weighing whether and how to conduct a national security review of Elon Musk’s Twitter and Starlink ventures, Bloomberg reported.
• One vector could be to investigate Twitter’s foreign backers, but the legal argument is weak, experts told the Daily Caller News Foundation.
• “Unless the committee can produce evidence of a conspiracy, there is no reason the CFIUS’ scrutiny should apply to Elon Musk, an American citizen, buying a social media platform,” Will Thibeau, policy analyst at the Heritage Foundation, told the DCNF.

The Biden administration is considering ways to conduct a national security review on Elon Musk’s Twitter and Starlink ventures, officials familiar told Bloomberg on Thursday.

White House officials have grown concerned about Musk’s threats to withdraw Starlink satellite communications services from Ukraine and his public comments that appear favorable to Russia, Bloomberg reported. While discussions remain at an early stage, intelligence community and administration officials are scouring the law to determine whether any legal pathway exists, however unlikely, to examine the implications of Musk’s multi-billion dollar enterprises.

One possibility for investigating Musk’s imminent Twitter buy is through the Committee on Foreign Investment in the United States (CFIUS), the sources familiar told Bloomberg.

CFIUS was initially established in 1975 to review investment proposals from foreign buyers that could have a direct impact on national security.

However, a Biden administration executive order from September expanded CFIUS’ mandate to include reviews of foreign investors with third party ties to foreign governments, as well as to address cybersecurity risks and risks to U.S. persons’ sensitive data.

“If that sounds vague, it is,” Arthur Herman, a senior fellow and director of the Hudson Institute’s Quantum Alliance Initiative, told the DCNF.

CFIUS can now block foreign acquisition of firms that might give adversarial countries, especially China, insight into “microelectronics, artificial intelligence, biotechnology and biomanufacturing, quantum computing, advanced clean energy, and climate adaptation technologies,” according to the order.

However, the legality of a CFIUS review, which would involve representatives from the State Department, Department of Defense and Department of Homeland Security, remained unclear, the sources told Bloomberg.

“You can make an argument — not a very strong one — that Biden’s Executive Order re: CFIUS issued last month could bring Elon Musk and his investors under the committee’s scrutiny,” said Herman. CIFUS “could allow the administration to lasso Musk’s business ventures into the CFIUS corral, on the grounds that having Saudi or Qatari or Chinese native investors might conceivably pose such a threat.”

Foreign investors in Elon Musk’s Twitter account include Prince Al Waleed bin Talal of Saudi Arabia, Qatar’s sovereign wealth fund and Binance Holdings, which is owned by a Chinese native but does not currently reside in any country, according to Slate. However, Al Waleed currently owns roughly a 5.2% stake in Twitter.

“Unless the committee can produce evidence of a conspiracy, there is no reason the CFIUS’ scrutiny should apply to Elon Musk, an American citizen, buying a social media platform,” Will Thibeau, policy analyst in the Heritage Foundation’s Tech Policy Center, told the DCNF. “The mere act of foreign investment does not cross the threshold for scrutiny, for that would subject nearly every other internet platform to an investigation.”

CFIUS can review deals that have been completed, according to Bloomberg.

Musk invited resistance from the Biden administration and Ukraine for his threat, since withdrawn, to discontinue Starlink services over Ukraine over claims the funds are drying up. He also proposed a plan to resolve the Taiwan crisis many saw as a capitulation to China.

However, the administration is likely more concerned about its own reputation and survivability than any national security threat Musk may pose, Herman told the DCNF.

“This is really about pushback against Musk’s real threat to this administration: his threat to Twitter as a reliably liberal social media filter,” said Herman. In addition, a power vacuum in the White House has opened up space for Musk to make “pronouncements on policy that shape the debate and provide leadership where no leadership exists, for good or ill.”

“The Biden White House is bound to resent this and look for ways to hit back,” Herman added.

The National Security Council was not aware of any such discussions as of Friday morning, a spokesperson told Bloomberg.

The Treasury Department and Starlink did not immediately respond to the DCNF’s requests for comment.

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