Trump Blocks Broadcom’s Bid for Qualcomm
March 13, 2018 by admin
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“There is a perception within the administration that China does not economically engage fairly with the United States and this action shows it will exercise various remedies to adjust the playing field to even the Sino-U.S. economic relationship,” said Tony Balloon, the head of the China corporate consulting practice at the law firm Alston Bird.
Mr. Trump was given an opening to block Broadcom’s bid for San Diego-based Qualcomm earlier this month. That was when the Committee on Foreign Investment in the United States, or Cfius, a government panel that typically works behind closed doors and reviews deals only after they are announced, said it would stall Broadcom’s bid because of national security concerns while it examined the deal.
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Broadcom said it was reviewing Mr. Trump’s order, and disputed the notion that the bid posed a security threat.
“Broadcom strongly disagrees that its proposed acquisition of Qualcomm raises any national security concerns,” a company spokesman said in a statement.
While Broadcom is based in Singapore, China was the main concern that drove Mr. Trump’s decision over the Qualcomm deal, because allowing an American technology company to be acquired would cede its primacy in the semiconductor and wireless industry.
Steven Mnuchin, the Treasury Secretary, said in a statement that the decision was part of the administration’s “commitment to take all actions necessary to protect the national security of the United States.”
He said the order was based “on the facts and national security sensitivities related to this particular transaction only and is not intended to make any other statement about Broadcom or its employees, including its thousands of hard working and highly skilled U.S. employees.”
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Yet the order will undoubtedly raise questions about the extent to which the Trump administration is willing to intervene in private-sector decisions. While Qualcomm opposed Broadcom’s bid and had reached out to the foreign investment committee for a review, the proposal was nonetheless headed to the company’s shareholders for a vote. The foreign investment committee intervened before that could happen, refusing to let the shareholder meeting take place until after it had a chance to investigate.
John P. Kabealo, an attorney who specializes in foreign investment matters, said it was “extraordinary” that Mr. Trump would intervene in the transaction before a full investigation by the government panel was complete.
“It certainly aligns with the administration’s willingness to be more active in trade and implementing protectionist policies,” he said. “It is definitely a much more activist policy than the previous administration.”
Mr. Kabealo said the president’s order could dramatically change the world of mergers and acquisitions and open the door to the possibility that more bankers and lawyers would use reviews by the foreign investment committee to block hostile takeovers on national security grounds.
The president said his decision to block Broadcom’s bid had been based on the review by the foreign investment committee. The panel had said that the leadership of Qualcomm, which makes wireless chips and also licenses key wireless patents, was too important to let go of. The committee argued that economic leadership in next-generation high-speed mobile networks known as 5G, in which Qualcomm is a key player, was also a national security interest.
“China would likely compete robustly to fill any void left by Qualcomm as a result of this hostile takeover,” a United States Treasury official wrote in a letter to the companies last week.
As part of the presidential order, the United States also barred the 15 individuals who Broadcom had proposed for Qualcomm’s board from running, saying they were “disqualified from standing for election as directors of Qualcomm.”
Qualcomm acknowledged receiving the presidential order and said it had been told to reconvene its shareholder meeting at the earliest possible date, March 23.
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A presidential action against foreign investment in an American company is rare and has only taken place four times in the past 30 years, according to the law firm Ropes Gray. Scrutiny of foreign companies buying United States assets ramped up under President Barack Obama, including a presidential order barring a Chinese company from purchasing Aixtron, a German company with American assets, on national security grounds in 2016.
Under Mr. Trump, several deals involving foreign buyers have been squelched after a review by the foreign investment committee, including Moneygram’s sale to an affiliate of the Alibaba Group and Lattice Semiconductor’s sale to an investment firm with reported ties to the Chinese government. But the action against Broadcom was unusual because mergers are rarely killed before a publicly traded company’s shareholders are given the chance to decide on the offer for themselves.
The decision was a blow to Broadcom, which under its chief executive, Hock Tan, has built itself up through several acquisitions. Mr. Tan had gone to great lengths to deflect concerns by American regulators and the Trump administration, including appearing in a televised speech at the White House with Mr. Trump last November, during which Mr. Tan promised to redomicile Broadcom in the United States.
Broadcom had at one point in its negotiations with Qualcomm also offered to up its offer to acquire the company. After the foreign investment committee announced its investigation into the Qualcomm bid this month, Broadcom hastened plans to move its headquarters to the United States and sent a letter to lawmakers promising it would not slow research and development in 5G networking technology if the merger were approved.
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House ends Russia probe, says no Trump-Kremlin collusion
March 13, 2018 by admin
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It appears GOP Rep. Mike Conaway (pictured) ended the investigation without meeting with the ranking Democrat on his panel, Rep. Adam Schiff, or Democratic senators leading their panel‘s probe into Russian interference. | Andrew Harnik/AP Photo
President Donald Trump immediately claimed vindication in the report, which Democrats blasted as premature and misleading.
House Intelligence Committee Republicans closed their investigation of Russian election interference Monday, declaring they found no evidence that President Donald Trump’s 2016 campaign cooperated with the Kremlin, a conclusion Trump quickly celebrated — but which Democrats called premature and even misleading.
Soon after the Republican announcement, Trump triumphantly claimed vindication on Twitter. “THE HOUSE INTELLIGENCE COMMITTEE HAS, AFTER A 14 MONTH LONG IN-DEPTH INVESTIGATION, FOUND NO EVIDENCE OF COLLUSION OR COORDINATION BETWEEN THE TRUMP CAMPAIGN AND RUSSIA TO INFLUENCE THE 2016 PRESIDENTIAL ELECTION,” he wrote.
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The House Republicans also said that a 150-page report they prepared — without consulting their Democratic colleagues — contradicts the U.S. intelligence community’s firm conclusion that the goal of the Russian government effort was to boost Trump’s campaign.
“We don’t think that’s supported by the underlying data,” Texas Rep. Mike Conaway, the Republican leading the probe, said in a phone interview. Conaway told reporters Monday that some Trump campaign figures may have shown bad judgment in meeting with Kremlin-linked figures but that the meetings had not amounted to collusion.
Conaway said dozens of interview and an exhaustive review of the intelligence agencies’ findings suggests the Russian goal was to sow confusion and discord, not to help Trump. He added that a second report on that specific issue would be forthcoming.
Trump is sure to welcome that opinion as well. He is said to resent suggestions that Russian meddling might undermine the legitimacy of his election. And he has insisted the Kremlin would have no reason to root for his victory, despite the fact that Trump repeatedly spoke of befriending Russian President Vladimir Putin and repairing fractured U.S.-Russia relations.
Russia’s embassy in Washington celebrated the House GOP findings on Twitter by directly quoting Conaway: “All ‘Russia investigations’ (not only in the US) are destined to end as [Conaway] brilliantly concluded: ‘only Tom Clancy could take this series of inadvertent contacts, meetings, whatever, and weave that into some sort of a spy thriller that could go out there.’”
Democrats said Monday that the House GOP’s conclusion adds new urgency to the ongoing investigation of special counsel Robert Mueller. But the Republican conclusion could provide Trump with more ammunition to attack Mueller’s probe, which the president has called a “witch hunt.”
Mueller’s last set of indictments, filed last month against 13 Russian nationals accused of manipulating U.S. social media and staging political rallies during the 2016 campaign, asserted that the Russians sought not only to disparage Hillary Clinton but to assist Trump. The Russians worked for an internet “troll factory” funded by a well-known ally of Russian President Vladimir Putin.
Democrats erupted in anger after they were blindsided by a summary report released by committee Republicans. They said it confirmed their long-standing view — bolstered by a recent secret Republican memo alleging anti-Trump bias on the part of Justice Department and FBI officials — that House Republicans were more interested in covering for the president than in an exhaustive public account of Russia’s political meddling.
“By ending its oversight role in the only authorized investigation in the House, the majority has placed the interests of protecting the president over protecting the country, and history will judge its actions harshly,” said California Rep. Adam Schiff, the top Democrat on the committee.
In an interview on MSNBC’s “The Rachel Maddow Show”, Schiff said that Democrats on the committee would continue to conduct research independently, though they lack the power to compel witnesses through subpoena.
The Senate Intelligence Committee, which has operated in a far more bipartisan fashion than its House counterpart, is still conducting its own investigation of Russian election interference. So is the Senate Judiciary Committee, which has been riven by partisan disputes.
House Republicans say they want to move past the divisive subject of collusion and focus their efforts on blocking Russian interference in future elections.
“After more than a year investigating Russia’s actions in the 2016 election, we are well into the primary season for the 2018 elections and experts are warning that we need to safeguard against further interference,” said AshLee Strong, a spokeswoman for Speaker Paul Ryan. “That’s what this next phase is about and we hope Democrats will join us in seeing this through.”
The committee interviewed its final witness in the probe, former Trump campaign manager Corey Lewandowski, last week. But the 150-page report must still go through a classification review by the intelligence agencies. It has been in the works for weeks, a process committee Republicans did not disclose to their Democratic counterparts or to the media.
The GOP report finds that Russians intended to “sow discord,” faulted a “lackluster” effort by the Obama administration to combat Russian cyber activities, and suggested that intelligence officials may have had improper contacts with the media.
The report’s contradiction of the U.S. intelligence community’s finding is likely to further inflame tensions between Trump supporters and intelligence officials accused of representing an anti-Trump “deep state.”
It includes what Conaway told POLITICO was “almost a man-year’s worth of work” in reviewing the intelligence community’s findings about Russian election interference. But he did not offer any specific details Monday about why he believes the intelligence conclusion — that the Kremlin, after initially setting out to undermine Clinton, came to work on behalf of Trump’s campaign — was mistaken.
“We assess Russian President Vladimir Putin ordered an influence campaign in 2016 aimed at the US presidential election,” stated the October 2016 report from the Office of the Director of National Intelligence, the FBI, the CIA and the NSA.
“Russia’s goals were to undermine public faith in the US democratic process, denigrate Secretary Clinton, and harm her electability and potential presidency. We further assess Putin and the Russian Government developed a clear preference for President-elect Trump. We have high confidence in these judgments,” the report stated.
At the start of the House Intelligence Committee’s probe, its chairman, Rep. Devin Nunes (R-Calif.) pursued still-unsubstantiated allegations that Obama administration officials mishandled classified surveillance of Trump associates. Democrats charged that Nunes’s real goal was to undermine the credibility of charges that Trump or his associates might have been influenced by the Kremlin.
Schiff and the panel’s other Democrats charged that Republicans seemed to rush the probe to a conclusion before the committee had developed a complete picture of how Russia intervened in the 2016 vote.
The committee has not interviewed several key Trump associates who have either been indicted or pleaded guilty in the course of Mueller’s probe. They include former Trump campaign chairman Paul Manafort and his deputy Rick Gates, former national security adviser Michael Flynn and Trump campaign foreign policy adviser George Papadopoulos.
In recent days, several Republican members of the House Intelligence Committee had been openly calling to bring the investigation to a close, claiming frustration over ceaseless tension on the panel, leaks from witness interviews and a climate of mistrust that had harmed the committee’s historical spirit of bipartisanship.
Democrats, though, have insisted that Republicans show little interest in getting straight answers from top Trump allies, like the president’s son Donald Trump Jr., White House communications director Hope Hicks and the president’s personal lawyer Michael Cohen.
Schiff and the rest of the committee Democrats have complained that committee Republicans have failed to force witnesses to answer questions, to subpoena documents or to even attempt to look into potential financial entanglements among Trump, his associates and Russia.
It also appears that Conaway ended the investigation without ever convening a meeting with Schiff and Sens. Mark Warner (D-Va.) and Richard Burr (R-N.C.), who head the Senate panel looking into Russian interference. Though Conaway had suggested in December that he hoped to align his committee’s factual findings with the Senate Intelligence Committee’s investigation, a source familiar with the inquiries said no meetings had occurred.
Conaway’s decision comes despite recent reports of Mueller’s interest in a new angle: the January 2017 trip by Blackwater founder Erik Prince to the Seychelles, where he met with the leader of a Russian-government-run investment fund.
Reports suggest that investigators believe Prince was acting as a representative of the Trump transition team, but Prince told the House Intelligence Committee that wasn’t true.
The House probe has been marred from its early days by steadily rising hostility between Republicans and Democrats, a dynamic that grew into a crippling distraction. Members accused one another of leaking sensitive information from inside committee hearings, and the panel was sidetracked for weeks as Republicans took unprecedented steps to disclose classified information impugning the integrity of FBI agents involved in the early days of the Russia investigation.
Democrats have raised alarms in recent weeks amid indications that Republicans were moving quickly to curtail the inquiry.
Schiff issued a list of Democratic subpoena requests that have been ignored by committee Republicans, including for more details from Donald Trump Jr. about the fallout from news that he’d met in 2016 with Kremlin-connected Russians in Trump Tower; travel, phone and banking records from Cohen; and testimony from Hicks, who declined to discuss her White House tenure and certain elements of the transition.
Republicans, though, have argued that Democrats are stringing along the investigation to generate harmful headlines about members of the Trump team.
Asked about criticism that Republicans were ending the investigation prematurely, Conaway said some critics would never be satisfied.
“There’s still folks who disagree with the Warren report on the assassination of Kennedy,” he said.