Elon Musk and Twitter

The Background Check is Probably Important

Late Sunday evening Twitter CEO Parag Agrawal announced that Elon Musk would not be joining the board of Twitter. In his statement, Agrawal stated that Musk declined to join the board after the current Twitter Board offered for the tech entrepreneur and billionaire after Musk purchased substantial ownership in Twitter. The statement, which appears to be an email screen grabbed from an internal team email from Agrawal, focuses on the timeline of events from Saturday, April 9th, 2022. The punditry is paying substantial attention to the mention of a background check in the middle of the statement.

Parag Agrawal @paraga

Elon has decided not to join our board. I sent a brief note to the company, sharing with you all here.

On Monday, April 4th, billionaire Elon Musk purchased a 9.2% stake in Twitter, coming on the heels of Musk criticizing the company for its censorship of speech. In the following Tweets, Musk criticized Twitter heavily. Notably, Musk asked whether Twitter is dying after noticeably low engagement of its major accounts. I wonder if low engagement has anything to do with Twitter’s noticeably awful algorithm and bot accounts.

In the statement by Twitter CEO Parag Agrawal, he states that a background check is required to join the Twitter Board. I think this is a factor for Elon Musk declining to join the board.

Currently, Elon Musk is under tremendous pressure from the SEC. While commenters are right to point out that Elon Musk has sold rockets to the United States government, it misses the more significant problem of Twitter’s background check. Firstly, the defense security clearance process is imperfect, and Elon himself doesn’t need tremendous access to sell services to the United States Government. Need to know is an additional security layer beyond the clearance process.

Secondly, unlike the US Government security clearances, Twitter would use an external vendor for Elon Musk’s background check. That vendor and Twitter would store that background check information. Who owns the check creates a complication for Elon Musk’s privacy, given his stardom. The ultra-wealthy are subject to the scrutiny of the media, the US government, and foreign espionage. Remember that hackers accessed Amazon CEO Jeff Bezos's phone in 2019. We are in living in the Pegasus software era. As recent Congressional testimony showed, the mass proliferation of hacking technology is a growing problem.

Rep. Matt Gaetz @RepMattGaetz

Imagine a computer program that can hack into your phone without requiring a single click on your end. It’s called a “zero-click” exploit. All they need is your number, and they’re in–undetectable until it’s self-destructed remotely. It’s not science fiction. It’s Pegasus.

What would that background reveal, and would Twitter hand the results to the Securities and Exchange Commission? Elon Musk's publicly known personal life is as colorful as his Twitter. A shortlist includes public drug use on Joe Rogan’s show, relationship drama with his starlet girlfriends, children out of wedlock, and a strained relationship with his father. Other complicating factors are how this affects people around Elon, from the philanthropist professional poker player who runs Musk’s charitable givings, Igor Kurganov, to his friends from PayPal. Do the Musk family mines in Zambia come up again? It is a risky amount of exposure, especially if someone hands the background check to the media.

Thus, Elon Musk is in a position where he cannot submit a background check to a hostile company for an activist investment. Musk is in an interesting predicament – he wants to continue his activism against current Twitter management and strategy, but he can’t or won’t join the board under the current policy. Does he retreat from this current position? Elon Musk isn’t foolish. He will cut losses when it is necessary. However, he can purchase more of Twitter, and it is now possible that he is not joining the board. Does this remove him from the background check requirement if he does purchase enough of the company? I do not know. Musk is currently committed to his activist investment, and I believe he will double down further and threaten a takeover of Twitter if financially feasible.

Twitter CEO Parag Agrawal foreshadows more may happen in the future by noting, “There will be distractions ahead….”