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By Echo Wang

NEW YORK (Reuters) - China's ByteDance faces an uphill struggle to convince the White House to allow it to keep majority ownership of its popular short video app TikTok in the United States, according to former national security officials and regulatory lawyers.

Trump ordered ByteDance last month to divest TikTok amid U.

S. concerns that the personal data of as many as 100 million Americans that use the app could be passed on to China's Communist Party government. He has threatened to ban TikTok in the United States as early as Sept. 20 if ByteDance does not comply.

ByteDance has submitted a plan to U.S. officials for it to keep a majority stake in TikTok's global business and create headquarters for TikTok in the United States, Reuters reported on Tuesday. The proposal is being reviewed by the Committee on Foreign Investment in the United States (CFIUS), a U.S. government panel chaired by the U.S. Treasury Department.

"Conceptually I can tell you I don't like that (ByteDance keeping a majority ownership of TikTok). That has been reported, but it has not been told to me yet. If that is the case, I'm not going to be happy with that," Trump told reporters at the White House on Wednesday. He added that would be briefed on the deal and consider it on Thursday.

Were Trump to approve the deal, he would have to amend an executive order he signed on Aug. 14 directing ByteDance to divest TikTok in the United States, something that no U.S. President has ever done in the history of national security reviews, CFIUS experts said.

"After CFIUS made a recommendation to the President and the President issued an executive order requiring divestment, it would be unprecedented for the parties to negotiate a solution short of a divestment, though it would clearly be within the authority of the President to modify his order" said Aimen Mir, who oversaw CFIUS reviews between 2014 and 2018 as Deputy Assistant Secretary for Investment Security at the U.S. Department of the Treasury, and is now a partner at law firm Freshfields Bruckhaus Deringer LLP.

ByteDance, the White House and the Treasury did not respond to requests for comment.

To be sure, CFIUS has allowed foreign firms to keep sensitive U.S. assets on several occasions, by imposing oversight and restrictions on how they are operated.

China's Lenovo acquired IBM's personal computer business in 2005 and Japan's SoftBank Group Corp acquired U.S. wireless carrier Sprint in 2013 by agreeing to CFIUS conditions such as giving the U.S. government a say on board directors and vendor relationships. ByteDance has proposed similar measures to CFIUS, sources have said.

"Even if a company's affiliate is concerning to CFIUS, as long as that affiliate is isolated to CFIUS's satisfaction, then the transaction can work. CFIUS has requested and has been satisfied with isolating mitigation measures in the past," said Nevena Simidjiyska, a regulatory lawyer at Fox Rothschild LLP.

ByteDance has also explored divesting a majority stake in the U.S. business of TikTok, and in July it signed a letter of intent with Microsoft Corp that contemplated the sale of that business to the Redmond, Washington-based company.

However, Microsoft said on Sunday that ByteDance had turned down its offer, and it remains unclear whether the Chinese firm would shed most of its ownership of TikTok to clinch a deal with the White House.


Another hurdle for ByteDance, CFIUS experts said, is that it is discussing offering a minority stake in TikTok to Oracle Corp , while also having the technology giant take over the management of its user data and ensuring it is ringfenced from China.

CFIUS typically calls for parties responsible for security arrangements to be independent of the companies they oversee. For example, when CFIUS allowed China Oceanwide Holdings Group Co Ltd to acquire of U.S. insurer Genworth Financial Inc two years ago, it negotiated installing a U.S.-based, third-party service provider to manage Genworth's U.S. policyholder data. That provider had no stake in Genworth's business.

"For CFIUS to get comfortable with a third party having both an ownership stake and a security responsibility, they would have to have a firm basis for trusting the U.S. business partner, conclude that the security measures would be technically effective, and be convinced that it is possible for the business to be commercially successful even while strictly adhering to the security measures," Mir said.

ByteDance is referring to Oracle as a "trusted technology partner". CFIUS previously rejected the use of trusted technology partners when considering whether ByteDance should divest TikTok, the video app disclosed in an Aug. 24 lawsuit against the United States challenging Trump's order to ban it.

Oracle did not respond to a request for comment.

(Reporting by Echo Wang in New York; Editing by Greg Roumeliotis and Christopher Cushing)

Copyright 2020 Thomson Reuters.

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Texas Sheriff Faces Evidence-Tampering Charge In Black Man’s Death

A Texas sheriff was arrested Monday for allegedly tampering with evidence in a 2019 case surrounding the death of a black motorist, The New York Times reported.

Prosecutors say Williamson County Sheriff Robert Chody allegedly tampered with video of the incident from a police ride-along program, where a motorist, Javier Ambler, died after police repeatedly tasered him after he said that he had a heart condition and could not breathe, according to the Times.

The altercation was captured on two videos, one by a body camera worn by a Williamson County deputy, and the other was filmed by the crew of “Live PD,” a reality show that was filming the deputies at the scene.

The show’s footage was never broadcast and was not requested by any police departments, the Times reported. After the department concluded its internal investigation, a representative from the show said that the video had been destroyed as a matter of the show’s policy, according to the Austin Statesman, but has become central to the investigation into Chody, said Margaret Moore, the district attorney in neighboring Travis County, where Ambler was tased.

“The first order of business will be the presentation of evidence regarding the tampering case that has now been indicted here in Williamson,” Moore said, adding that the “Live PD” video “would be wholly material to the investigation” her office is conducting, according to the Times.

Chody and Jason Nassour, a Williamson County assistant attorney, were charged with tampering recordings from the incident, and were indicted on a third-degree felony charge, the Times reported. The two face a maximum of 10 years in prison and a fine of up to $10,000, officials said.

Texas Sheriff Charged with Evidence Tampering in Black Man’s Death on ‘Live PD’

— TMZ (@TMZ) September 29, 2020

Early on March 28, 2019, deputies tried to pull Ambler over after he did not turn off his high beams when faced with oncoming traffic, officials said. He continued to drive for 20 minutes and crashed in downtown Austin, where deputies tased him multiple times.

Ambler repeatedly urged them to stop, mentioning his congestive heart failure and saying “I can’t breathe.” A deputy responded, “Do what we’re asking you to do,” the video shows.

Ambler was taken in an ambulance to Dell Seton Medical Center in Auston, Texas, where he was pronounced dead at approximately 2:30 a.m., the Times reported.

“As you can tell by the indictment, what we’re after are video and audio recordings, obviously based out of the television show ‘Live PD’,” Shawn Dick, the Williamson County district attorney, told reporters, according to the Times.

Chody was released on bond Monday, and said that the case against him was motivated by political reasons and to cover up their own mistakes regarding the case, the Times reported. (RELATED: Texas Sheriff Rips Anti-Police Movement As ‘Anti-America’)

“This was not my first run-in with District Attorney Shawn Dick,” he said in a news conference after he posted bail, according to the NYT.

The Williamson County Sheriff’s Office did not immediately respond to the Daily Caller News Foundation’s request for comment.

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