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Why are American Companies Still Taking Money from a Known Human Rights Violator?

Foreign investment is nothing new in our country. In fact, in many cases, it has played an instrumental role in helping American companies reach unprecedented heights.

But foreign investment is also something to be wary of and raises many key questions – such as, do we want a foreign company or country who doesn’t share our values to have influence over American businesses and politics? And could their investments be harmful to our national security? This is exactly why the Committee on Foreign Investment in the United States (CFIUS) exists, who just this week was in the news for looking into investments from SoftBank.

Sovereign wealth funds are becoming increasingly relevant due to the exorbitant dollar amounts they hold and the power they wield.

The idea for these funds dates back over a century but they really took hold in the 1950s as a way to grow a countries wealth by investing excess capital into global markets.

The valuations for sovereign wealth funds is skyrocketing and their influence is growing right here in America, which should cause some concern. Since 2005, over 40 wealth funds have been created, and from 2008-2012, their total assets grew more than 59 percent. In fact, one of the largest sovereign wealth funds in the world is the Public Investment Fund (PIF), owned by Saudi Arabia. Their wealth fund has significant interests in the United States, holding investments in companies like Compass Real Estate, Uber, Doordash, Slack, and others.

Why should this concern us? Well, as you probably know, Saudi Arabia often does not share many of the values that Americans hold dear.

Recently, for example, Saudi Arabia has made international news for a multitude of human rights abuses, including their arrest of women’s rights activists and alleged torturing of an American citizen.

With a record like that, you would think American companies would steer clear of money from Saudi Arabia, right?

But they haven’t.

Compass Real Estate took in $450 million from SoftBank in 2017, then proceeded to take even more from them in 2018. You can probably guess who Softbank’s largest investor is – that’s right, it’s PIF, the sovereign wealth fund of Saudi Arabia.

What’s particularly bizarre about the situation with Compass is that Compass promotes itself as a modern, diverse company. In fact, they recently championed their diverse culture and inclusivity in their online quarterly publication, begging the question – why does Compass continue to take money from a country that participates in human rights violations on a consistent basis?

In addition to Compass, what about the great American success story – Uber – who recently filed to go public? They also took significant funding from SoftBank, $3.5 billion to be exact. Uber’s new CEO laid out his new values for the company in 2017 on his LinkedIn, highlighting the “celebration of differences” as a “new norm.” His post also said “We do the right thing. Period.” Doing the right thing would be giving back money from a country that violates your company’s values, right?

American companies should be standing up for our values on the world stage and shouldn’t be taking money from foreign countries who don’t align with our values. But at the very least, they shouldn’t be accepting funds from a country that blatantly violates their own corporate standards.

As American citizens, we should be wary of large investments from foreign powers that wield considerable financial power and demand that our companies deal with reputable nations.

It’s time that companies like Compass, Uber, and others give back the money and stop taking investments from countries like Saudi Arabia.

They’ll be better off for it – and so will we.

Matt Mackowiak is president of Austin, Texas, and Washington, D.C.-based Potomac Strategy Group. He’s a Republican consultant, a Bush administration and Bush-Cheney re-election campaign veteran and former press secretary to two U.S. senators.

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