March 19, 2024
Liz Hoffman, Semafor Business
Sen. Ron Wyden, the chair of the powerful Senate Finance Committee, sharply criticized former Treasury Secretary Steven Mnuchin, and his ties to money from the Middle East, in his effort to buy TikTok from its Chinese owner.
Mnuchin told CNBC last week that he’s assembling a group of investors to buy the platform after the House overwhelmingly passed a bill forcing it to either be sold within six months or banned from app stores. The White House has urged the Senate, where the bill has powerful backers and opponents in both parties, to move quickly.
Mnuchin gave few details on who might be part of his bidding group except to say he was working with a “combination of U.S. investors.” But much of the $2.5 billion investment fund he raised after leaving office came from governments in Saudi Arabia and other Gulf states, where Mnuchin was a frequent visitor during his time in government.
“I don’t see how America will be any more secure if the next owner of TikTok is a MAGA Trump crony backed by Saudi Arabia’s sovereign wealth fund,” Wyden told Semafor.
“I’m absolutely concerned about the Chinese government’s access to Americans’ personal data,” he said. “But every concern that has been voiced about Chinese influence is equally valid when it comes to a Saudi government that murdered a Washington Post journalist after planting spyware on his wife’s phone.”
The New York Times reported that Saudi Arabia had committed $1 billion to Mnuchin’s Liberty Strategic Capital fund, and that the governments of Qatar, Kuwait, and the United Arab Emirates were in for $500 million each. (Mnuchin has acknowledged that his investors include foreign governments, as well as wealthy families and insurance companies.)
In a 2022 letter to Mnuchin’s successor, Janet Yellen, Wyden suggested that Mnuchin may have used a swing through the Gulf in the final days of the Trump administration to fundraise on the taxpayer’s dime. He filed paperwork for his investment firm the day after he left office.
A Liberty spokesperson said: “As Secretary Mnuchin said on CNBC last week, TikTok should be controlled by U.S. investors and no single investor should own more than 10%.”
• This story has been updated to include a comment from Liberty.
• There’s no guarantee that the Senate will pass the bill or, if it does, what a sales process might actually look like. Chinese officials have publicly criticized the effort and privately told ByteDance, which owns TikTok, that it would rather see the app banned in the U.S. than sold — a sign that its value to Beijing has more to do with politics than with profits.
• Blue-chip U.S. companies including Microsoft, Oracle, and Walmart were interested back in 2020, when then-President Donald Trump tried to force a sale of TikTok. But Mnuchin’s recent rescue of a troubled New York bank, for which he put together $1 billion in a matter of days, has quickly burnished his image as a credible buyer in sticky situations. And his status as a former federal official may give him the inside track.
• So, too, would the perception that he has Trump’s ear. Any seasoned watcher of either corporate dealmaking or geopolitics knows that a sale this complicated is unlikely to happen in as short as six months, which could push it close to or past November’s presidential election.
Gary Reber Comments:
The issue is ownership and thus control, which in this case is effectively the same. The control and thus the effective ownership is with the Communist Party of China (CPC). America should stay away from the CPC entirely. Unfortunately, the controlling owners of major and minor corporations based in the United States have already abandon our country and shut down manufacturing here and moved it to China, including major investments in the building of factories in China. This was all to gain more profits for their owners who are largely if not completely Americans.
if TikTok is force to sell to new owners in order to continue its presence in the United States then it should be broadly owned. The structure of ownership should be a Consumer Stock Ownership Plan (CSOP). This is a plan designed to build capital ownership into classes of consumers. The CSOP does for consumers or members of marketing cooperatives what an ESOP (Employee Stock Ownership Plan) does for corporate employees. It links capital growth and future investment opportunities in the corporate structure (in this case TikTok) to an expanding base of citizens through access to productive self-liquidating capital credit.
A CSOP can be used to buy out existing owners of a corporation through an equity transfer sold to the CSOP and a corporate ESOP with interest-free credit provided from commercial lenders and repayable with future pretax profits.
TikTok should be structured as a combination of worker ownership and consumer ownership. A Justice-Based Management ESOP would own worker shares. A separate CSOPs trust or Shareholders Association would own consumer shares. American citizens would be both worker-owners and consumer-owners.
When TikTok needs to expand, new shares would be issued and sold to the JBM ESOP and the CSOP. The JBM ESOP and the CSOP woiuld obtain loans to purchase the shares. TikTok would guanantee the losns. If the lender requires more security, capital credit insurance would be purchased.
To read more about the Consumer Stock Ownership Plan see the Center for Economic and Social Justice Web Site (www.cesj.org).
For an in-depth read of the Own The Future Or Be Owned concept see my new book Own; Turning Every Citizen Into A Productive Capital Owner, available through my Web site www.foreconomicjustice.org or Amazon and Barnes & Noble.
