Has CFIUS become a tool for crony capitalism?

It’s not uncommon to see federal agencies rise in times of crisis: The CIA was birthed from World War II, while the Federal Reserve was formed in 1913 following a string of financial panics.

In this administration, amid a technological arms race against China and other nations, the Committee on Foreign Investments in the United States has dramatically ramped up its power. Also known as CFIUS, the organization has the ability to block acquisitions it deems detrimental to national security. It’s rarely invoked that since its creation in 1975, but in the Trump era, CFIUS has become dinner-table lingo: It blocked China’s Ant Financial from acquiring money transfer service MoneyGram in 2018, and also has a key say in the deal to sell a part of TikTok to a consortium of U.S. investors including Oracle and Walmart.

While national security as a blanket term is all well and good, CFIUS itself and its ability to stay impartial is under question. As my colleague Jeff John Roberts writes for Fortune’s November 2020 issue

“B]The TikTok saga, which could see a prominent supporter of President Trump obtain a big stake in the app (Term Sheet note: Oracle founder Larry Ellison is known to be a Trump supporter), is also stoking a backlash among critics who see CFIUS as a powerful tool for crony capitalism.”

Even those who share the President’s hawkish views on China have been disturbed by his advocacy for TikTok to be owned in part by Oracle—raising concerns that the wall between CFIUS and the executive branch is showing cracks. 

Of course, what happens post-election is certainly up in the air.

Read more.

LEE FIXEL RAISES HIS SECOND FUND IN LESS THAN FOUR MONTHS: It’s a blistering pace for any fund. Addition, the venture shop of Tiger cub Lee Fixel (known for successful bets in Peloton and Flipkart), filed to raise $1.4 billion for its second fund last week. Except, as it turns out, Addition had already raised that $1.4 billion less than four months after securing $1.3 billion for its debut vehicle, per the Financial Times. Fixel does not plan to invest out of the second fund until next year, per the report.

Addition has not been shy about dealmaking in the pandemic: It recently led a $110 million round in Lyra Health, a mental health-care benefits company, as well as a $200 million round in Snyk, a developer security company.


Fortune’s latest Reinvent podcast focuses on the reinvention of the NBA and its incredible season. From its cancellation in March due to COVID-19, to its resumption last summer in the renowned “bubble” at Disney World in Florida, the NBA accomplished this incredible logistical feat in the midst of a pandemic and tremendous social unrest. The episode features exclusive excerpts from Adam Lashinsky’s interview with NBA commissioner Adam Silver. An additional guest is Mehdi Bentanfous, managing director of Kinexon (the company that created the tracing/monitoring bands that everyone in the bubble wore). Listen here.

Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com

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