The Qatar Investment Authority (QIA), Qatar’s
sovereign wealth fund, made a sizable investment last month in a real estate investment trust
with assets that include the Empire State Building in New York.
The move has generated some rather mild national press, but
it is attracting scrutiny from some who have questions about this kind of
foreign investment in U.S. infrastructure.
Wall Street Journal reporting shows that the QIA bought a
9.9 percent stake in Empire State Realty Trust, with an
investment of $622 million.
The REIT owns a portfolio of properties within New York City and Westchester County and
Connecticut, but the crown jewel of this fund is the Empire State Building, the
iconic 102-story skyscraper in midtown Manhattan that was the world’s tallest
building for most of the early 20th century.
While Empire State Realty Trust President John Kessler has
called the QIA “one of the most sophisticated and reliable real estate investors
in the world” and welcomed the partnership in press statements, others have
some questions.
Bob Darvish, a cybersecurity expert and international business
risk analyst who has worked for Fortune 500 companies and sits on the advisory
board of the Muslim American Leadership Association (MALA),
has some concerns about the deal.
“It’s partly the symbolism of it.” Darvish told the Gulf
News Journal. “You might as well buy a piece of the Eiffel Tower.”
Darvish, who also has been executive director of the Council on American-Islamic Relation chapter in Columbus, Ohio, and was president of the Muslim Forum of Utah, said while the purchase is entirely legal, he has
questions about the ramifications of these types of international purchases and how sectarian interests could come into play.
“The intent is what I question.” Darvish said. “Are they
just making money out of it?”
Darvish talked about what he calls “Wahhabi groups” and
harsh versions of Shariah law that could have influence in Qatari leadership
teams. He also talked about his experience as a Muslim, knowing that the
extreme sectarian groups might force others to practice certain aspects of
Islam.
“There are different kinds of Shariah law.” Darvish said,
describing situations where American media might explain Shariah law in
simplistic ways that don’t show the whole picture.
In addition, Darvish questioned how foreign holdings in the
Empire State Building’s real estate trust might affect ongoing maintenance and
operations for the skyscraper in the future.
Darvish said it’s hard for Westerners to understand the
sectarian conflicts that are at work in many Islamic communities — but, he
said, without correct oversight, these things could have an influence on
American assets partially or totally owned by foreign investors.
Another potential problem, he said, is outsourcing contracts
for cybersecurity. Describing situations where offshore analysts might hold
sensitive data, Darvish said it makes more sense for countries to play it
closer to the vest and invest in domestic staff for sensitive cybersecurity
campaigns.
“The amount of influence does make a difference.” Darvish
said of strategic international partnerships, suggesting that Americans and
others should be deliberate, not just money-minded, about the deals that they
pursue.
