Maybe I'm just a knee-jerk protectionist or something, but the following paragraph in this
Forbes article from May 25, 2001 was eye-opening to say the least:
Rudy Baca, global strategies analyst with Washington, D.C.-based Precursor Group, says the CFIUS tends to side with business and trade interests over national security issues. Since its inception, it has blocked only one deal out of more than 1,400 reviewed, one during the first Bush administration that involved a company owned by the Chinese government.
emphasis mine
There are some more interesting links below.
The Forbes article is about the aquisition of
Lucent Technologies (a Baby Bell that "does classified research and development work for the U.S. Department of Defense and for intelligence-gathering agencies like the National Security Agency") by Alcatel (a French company), the deal of which eventually fell through later that month when the two companies did not arrive at a mutually compatible management arrangement. Unless the CFIUS was acting behind closed doors on killing the deal (which is possible) it would probably have gone through. The article highlights other mergers that did eventually go through that presented similarly compromising security risks.
So, "the Committee on Foreign Investment in the United States ("CFIUS") was originally established by Executive Order 11858 in 1975 mainly to monitor and evaluate the impact of foreign investment in the United States. In 1988, the President, pursuant to Executive Order 12661, delegated to CFIUS his responsibilities under Section 721. Specifically, E.O. 12661 designated CFIUS to receive notices of foreign acquisitions of U.S. companies, to determine whether a particular acquisition has national security issues sufficient to warrant an investigation and to undertake an investigation, if necessary, under the Exon-Florio provision. This order also provides for CFIUS to submit a report and recommendation to the President at the conclusion of an investigation." It is since 1988 that only one acquisition in about 1,400 reviewed was denied by CFIUS. The Exon-Florio provision states that the following criteria need to be met to trigger a 45 day formal investigation into the background of the foreign company:
(1) there is credible evidence that the foreign entity exercising control might take action that threatens national security, and
(2) the provisions of law, other than the International Emergency Economic Powers Act do not provide adequate and appropriate authority to protect the national security.
Senator Byrd added the following triggers in 1993 by Amendment to the 1950 Exon-Florio act Section 837(a) of the National Defense Authorization Act for Fiscal Year 1993, called the "Byrd Amendment," amended Section 721 of the Defense Production Act (the "Exon-Florio provision"). It requires an investigation in cases where:
o the acquirer is controlled by or acting on behalf of a foreign government; and
o the acquisition "could result in control of a person engaged in interstate commerce in the U.S. that could affect the national security of the U.S."
So I guess the DP World deal met Byrd's first Amended requirement. Thanks Senator, because as they previously stood, the bar for providing evidence of potential malice is a pretty high one to get over (I still don't forgive you for letting Alito on the bench).
It was the attempted acquisition of MAMCO (a privately owned, Seattle-based manufacturer of civilian airplane parts, primarily for Boeing) by CATIC (the import-export arm of the Ministry of Aerospace Industry of the People's Republic of China).
It probably was not a good idea to sell one of Boing's parts suppliers to China. It is an equally bad idea to sell our port operations so the UAE.
I don't think that the provisions that trigger an inquiry, (even after Byrd's Amendments to them) are strong enough. If anything has changed in this post 1/20/01 world, it is this: if we're going to run around the world inciting hatred of the United States by invading and occupying countries, and torturing their civilians, then we better keep our collective eye on the ball and leave the classified security information about our port operations to interests that have a vested stake in their proper implementation. But not just our port operations -- I think an independant investigation should be made by Congress that takes a look at the decisions made by CFIUS over the last 10 years as they pertain to avenues of opportunity for a potential terrorist strike on our soil.
They could look again at this one:
'Smart bomb' technology moving to China
And maybe this one too:
The Proposed Acquisition Of The Silicon Valley Group, Inc. (SVG) Of San Jose, California, By ASM Lithography Holding N.V. (ASML) Of The Netherlands
Am I just paranoid? Has the Rovian rhetoric of fear gotten the best of me?