A company with ties to Venezuela on Friday blamed Washington’s increasing scrutiny of foreign acquisitions of US assets for its decision to sell a California-based voting-machine company it acquired last year.
The move by Smartmatic comes months after the Committee on Foreign Investment in the US opened an investigation into the national security implications of the company’s ownership of Sequoia, a supplier of voting machines used in US elections.
The interagency committee, known as Cfius, took the unusual step of investigating the deal months after it was completed, when a New York congresswoman, Carolyn Maloney, wrote to the then Treasury secretary, John Snow, with questions about the deal and whether the company had ties to the government of Venezuelan President Hugo Chávez.
The company’s announcement underscores how influential Congress can be in forcing executive branch agencies, which have primary oversight over such deals, to investigate transactions on national security grounds.
The Smartmatic chief executive, Antonio Mugica, on Friday denied that any foreign government had ever held an ownership stake in the group, saying the company was “owned primarily by four young entrepreneurs and their families”.
“Sequoia and Smartmatic are two great companies with very bright futures and we do not want the companies’ ownership to be a distraction,” Mr Mugica, a dual Spanish/Venezuelan citizen, said.
The agencies that comprise Cfius, including the Treasury, Justice Department, and Department of Homeland Security, have markedly increased their scrutiny of foreign acquisitions this year, after the inter-agency panel was criticised by lawmakers for failing to block the takeover of five US port terminals by a Dubai-owned company.
Non-US companies that acquire sensitive US assets, particularly in the fields of defence and technology, have traditionally applied voluntarily for Cfius review. Smartmatic did not apply for one until the government began to take an interest in the deal after it was completed.