U.S. exploring whether it has authority to review Musk’s Twitter deal

It was not immediately clear whether Treasury officials were aware of the terms granting information rights to large investors. The exploration of whether a review was warranted is fairly routine, and such preliminary examinations often do not end in a full investigation.

White House officials also previously discussed the possibility of a national security review of the acquisition, according to another person. Additionally, officials at the FBI looked into the potential counterintelligence risks posed by the deal this past spring, according to two people familiar with the inquiry — though it is not clear whether the matter has been studied by senior officials at the bureau or if those discussions are still active. All the people spoke on the condition of anonymity to discuss matters they were not authorized to disclose publicly.

A Saudi prince’s holding company and a subsidiary of the Qatari sovereign wealth fund are among the investors backing Musk’s Twitter purchase, as is Binance, a cryptocurrency exchange that was founded in China but has since moved its operations elsewhere. Tesla, where Musk serves as chief executive, has extensive ties to China, as well.

Musk and his attorney, Alex Spiro, did not immediately respond to a request for comment.

The U.S. government’s preliminary attempts to scrutinize the Twitter deal comes as the billionaire introduces new changes to the structure of one the world’s most powerful communication platforms.

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Treasury staff at the Committee on Foreign Investment in the United States (CFIUS) have not yet determined whether Musk’s purchase of the social media platform could trigger a national security review, according to one person familiar with the matter. Musk is a U.S. citizen, and CFIUS reviews are typically used to investigate investments by foreign nationals. So it is not clear whether they can initiate such a review, and policy experts are divided on whether one would be warranted. Treasury staff routinely examine whether purchases merit more in-depth investigations, often without proceeding to full-blown reviews.

A 2018 legislative update to the CFIUS rules says the body can investigate not only foreign ownership, but minority stakes in critical areas, including sensitive personal data held by businesses.

The early work on a potential inquiry has not yet reached the principals on the CFIUS committee — whose members include Treasury Secretary Janet L. Yellen, Attorney General Merrick Garland and Defense Secretary Lloyd Austin — and is in its preliminary days. The person familiar with the matter stressed that it is still possible that CFIUS concludes it does not have the authority even to begin an investigation and that the probe ends there.

“CFIUS is committed to taking all necessary actions within its authority to safeguard U.S. national security,” a Treasury spokesperson said. “Consistent with law and practice, CFIUS does not publicly comment on transactions that it may or may not be reviewing.”

Spokespeople for the FBI declined to comment. A White House spokesperson pointed to Press Secretary Karine Jean-Pierre’s comments last week that she did not know of any discussions about a national security review of the deal.

The matter could be fraught for the Biden administration. Biden aides have tried to counter Chinese influence but do not want to be accused of weaponizing a national security process to attack Musk, who says he voted for Biden in 2020 but has lately become a political foe.

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Musk has extensive ties to China through Tesla, the publicly traded electric vehicle company. Tesla’s “Gigafactory” in Shanghai has been its busiest production plant and serves as a vital export hub. Tesla is also reliant on China for production needs — the country controls the global supply of lithium, the key component in electric vehicle batteries — through its vast processing and refining apparatus.

Binance also has a stake in the new Twitter through a $500 million equity investment. While it moved out of its initial home in China, the company has partnered with a Chinese-government-owned firm on a blockchain initiative. A Binance spokesman previously told The Post that effort was defunct, that it had no presence in China and that it had never taken any investment from a Chinese…