Van Hollen, Cardin Call on CFIUS to Investigate ByteGrid
U.S.
Senators Chris Van Hollen and Ben Cardin (both D-Md.) today sent a letter to
Treasury Secretary Steve Mnuchin, who also serves as Chairman of the Committee
on Foreign Investment in the United States (CFIUS), requesting that the
Committee review the transaction between AltPoint Capital, a venture fund whose
largest investor is Russian oligarch Vladimir Potanin, and ByteGrid LLC, a U.S.
web hosting and data center company that is deeply involved in Maryland’s
election infrastructure.
The
Senators write, “ByteGrid
hosts Maryland’s voter registration system, candidacy and election management
system, online ballot delivery system, and unofficial election night results
website. Access to these systems could provide a foreign person with ties to a
foreign government with information that could be used for intelligence or
other purposes adverse to U.S. interests. For that reason, AltPoint Capital’s
relationship with ByteGrid must be carefully scrutinized, and if the
administration determines that it poses a threat to national security,
appropriate remedies must be pursued.”
Additionally,
they note, “We
know that our elections are under threat from foreign cyberattacks and
disinformation efforts. Our democratic process can also be manipulated through
foreign investment in elections infrastructure.”
The
Senators close by stating, “Based on existing authorities and new authorities
recently given to CFIUS by Congress, we respectfully request that CFIUS provide
assurance that it has already conducted full and rigorous investigation into
AltPoint Capital’s investment in ByteGrid LLC, that it is in the process of
conducting an investigation, or that it will review the transaction in order to
address concerns that Mr. Potanin’s relationship with the Russian Government
may threaten Maryland’s and America’s elections infrastructure and undermine
the integrity of our elections.”
The
full text of the letter is available here
and below.
Dear
Secretary Mnuchin:
We
write to ask that the Committee on Foreign Investment in the United States
(CFIUS), which you chair, review the transaction between AltPoint Capital, a
venture fund whose largest investor is Russian oligarch Vladimir Potanin, and
ByteGrid LLC, a U.S. web hosting and data center company.
ByteGrid
hosts Maryland’s voter registration system, candidacy and election management
system, online ballot delivery system, and unofficial election night results
website. Access to these systems could provide a foreign person with ties to a
foreign government with information that could be used for intelligence or
other purposes adverse to U.S. interests. For that reason, AltPoint Capital’s
relationship with ByteGrid must be carefully scrutinized, and if the
administration determines that it poses a threat to national security,
appropriate remedies must be pursued.
We
know that our elections are under threat from foreign cyberattacks and
disinformation efforts. Our democratic process can also be manipulated through
foreign investment in elections infrastructure. In July, the Federal Bureau of
Investigation notified Maryland officials that Mr. Potanin had made a
substantial investment in a firm used by the Maryland State Board of Elections
to register voters and deliver online ballots.
In
response to this notification, Maryland Governor Larry Hogan, Senate President
Thomas V. Mike Miller, Jr., and House Speaker Michael Busch wrote to the
Department of Homeland Security (DHS) Secretary Kirstjen Nielsen to request
that the DHS Office of Cybersecurity and Communications furnish technical
assistance to evaluate the network used by the State Board of Elections,
including auditing its integrity.
Currently,
CFIUS is authorized to review foreign investments in U.S. companies that result
in foreign control of the company. If an investment poses a threat to national
security, it can be blocked. If either AltPoint Capital or ByteGrid did
not file a notice with CFIUS, the Committee has the ability to look back at any
completed transaction that results in control and threatens national security
and take steps to address the national security threat, including requiring
divestment.
In
addition, last week, Congress approved the National Defense Authorization Act
which includes the Foreign Investment Risk Review Modernization Act (FIRRMA).
This legislation enhances our national security by strengthening the CFIUS
review process. Specifically, once enacted, the new law would allow CFIUS to
review transactions beyond just those that could result in foreign control of a
U.S. business, to include “other investments” by a foreign person in a U.S.
business involved in U.S. critical infrastructure. Critical infrastructure, as
defined by DHS, includes election infrastructure – such as voter registration
databases and associated systems, systems used to manage elections, voting
systems, storage facilities for election and voting systems, and polling
places, including early voting locations. To that end, on July 31, 2018,
Senator Van Chris Van Hollen, along with Banking Committee Chairman Mike Crapo
and Ranking Member Sherrod Brown engaged in a colloquy affirming that Congress
intended FIRMMA to cover elections infrastructure. Secretary Mnuchin, you
played a critical role in advancing this legislation, and it is expected that
President Trump will sign it into law in short order.
Based
on existing authorities and new authorities recently given to CFIUS by
Congress, we respectfully request that CFIUS provide assurance that it has
already conducted full and rigorous investigation into AltPoint Capital’s
investment in ByteGrid LLC, that it is in the process of conducting an
investigation, or that it will review the transaction in order to address
concerns that Mr. Potanin’s relationship with the Russian Government may
threaten Maryland’s and America’s elections infrastructure and undermine the
integrity of our elections.
Sincerely,
###