So, this deal will go back to the same committee that approved of it unanimously. Does anyone really believe that their conclusion will differ at all? More importantly, will the process of investigation be any better? In 2005, the non-partisan Government Accountability Office conducted a review of the Exon-Florio process and how CFIUS evaluates national security issues. (Hat tip to Kossack DC Pol Sci for the tip and pdf link.)
[The] Treasury, in its role as Chair, and some others narrowly define what constitutes a threat to national security--that is, they have limited the definition to export-controlled technologies or items and classified contracts, or specific derogatory intelligence on the foreign company. Other members have argued that this definition is not sufficiently flexible to provide for safeguards in areas such as protection of critical infrastructure, security of defense supply, and preservation of technological superiority in the defense arena. In one case, some member agencies would not agree with the Departments of Defense's and Homeland Security's using the authority of Exon-Florio and the Committee as a basis for an agreement that Defense officials believed necessary to mitigate national security concerns because the concerns did not, in the opinions of these Committee members, fit this narrow definition.
DOJ, Defense, and Homeland Security have argued for a broader definition of national security, but the Treasury and others have resisted. This may explain why Homeland Security was the only Department to object to the deal, though it was probably persuaded that its national security standard was not acceptable. Under the prevailing approach then, basically, unless the company has a rap sheet, then the deal can go through.
Meanwhile, today Senators Chuck Schumer (D-NY), Norm Coleman (R-MN), Bob Menendez (D-NJ), Olympia Snowe (R-ME), Hillary Clinton (D-NY), Susan Collins (R-ME), Tom Coburn (R-OK), and Jack Reed (D-RI) introduced emergency legislation concerning the Dubai deal. The legislation will:
- Require the President to place a stay on DP World's takeover of P&O ports.
- Require the Committee on Foreign Investment in the United States commence an immediate 45-day investigation on the takeover's effects on national security. The bill also requires CFIUS to coordinate with other agencies, such as the Coast Guard, and to take in to consideration past security assessments of ports operated by DP World.
- Require the Secretaries of Homeland Security and the Treasury to prepare a full report and brief members of Congress on their findings.
- Upon receiving the report, Congress would have the authority to disapprove the sale within thirty days.
Notice how this legislation gives Congress--and not the President--the authority to kill the Dubai deal. The 45-day CFIUS "investigation" is a sham. The President has already said he won't stop the deal. So it is up to Congress now to exercise its own judgment and decide whether the deal should go through. With Republicans once again stepping back into line, it will be interesting to see how the vote on this bipartisan legislation will play out.