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