The following is a reply to one of the emails I've sent regarding border control, immigration, etc........
Thank you for contacting me regarding the takeover of U.S. port operations by Dubai Ports World, a state-owned company from the United Arab Emirates . I am grateful for your thoughts and always welcome the advice of those I am honored to represent.
As you may know, the Committee on Foreign Investment in the United States ( CFIUS ) is responsible for reviewing the national security implications of foreign takeovers of domestic companies. Following a mandatory 30-day review process, CFIUS determined that Dubai Ports World's operational acquisition of six U.S. ports posed no significant national security threat. The Bush Administration subsequently accepted CFIUS's recommendation and authorized the sale.
I am deeply disturbed by this outsourcing of our homeland security. The Dubai takeover is a symptom of a much larger problem. Again and again, the current system for overseeing foreign takeovers has undermined our national security interests by rubber stamping deals like this one. I have proposed legislation that offers a comprehensive solution to the problem by ensuring that national security takes priority in all future business deals, whether they involve port security or any other homeland security concern. Among other things, my legislation will require the Director of National Intelligence to approve such sales, so that homeland security is given greater consideration before deals are approved.
It may surprise you to know that CFIUS has blocked only one purchase of a U.S. company in its twenty-year history. One example of CFIUS failing to prevent the takeover of a company with national security interests took place in 1995, when the Committee approved the sale of Magnequench , an Indiana-based company responsible for making 80 percent of the magnets used to guide U.S. smart bombs, to a Chinese consortium. It's not smart to rely on China to produce important weapons systems for this country, just like it's not smart to outsource our port security. Foreign investment can be a good thing, but in order for that to be true, we must make sure that the parts of our economy that impact national security are protected.
In 2003, I commissioned a Government Accountability Office (GAO) report that took a critical look CFIUS . In particular, the report argued that the way CFIUS interprets the legislation may limit its effectiveness. As an example, the report cited how Treasury and some other departments that make up CFIUS use such a narrow definition of what constitutes a national security threat that as a result, they allow too many questionable purchases to take place without sufficient review.
My legislation would put in place several steps to reform the process to ensure that national security is given greater consideration in the review of such acquisitions. This comprehensive approach would not only guard against future port takeovers, but also purchases involving other U.S. homeland security assets, such as defense companies and energy interests.
The legislation would require the Director of National Intelligence ( DNI ) to certify that there are no troubling national security implications before the sale is reviewed by CFIUS . It would also require CFIUS to consider the country in which the foreign investor is located, including its relationship with the United States and its expanding defense capabilities. Currently, the home country is not taken into account during the approval process, so a nation with possible ties to terrorism is given the same consideration as a long-standing ally, such as Great Britain .
Again, thank you for contacting me. I hope that the information I have provided is helpful. My website,http://bayh.senate.gov can provide additional details about legislation and state projects, and you can also sign up to receive my monthly e-newsletter, The Bayh Bulletin , by clicking on the link at the top of my homepage. I value your input and hope you will continue to keep me informed of the issues important to you.
Office of Senator Evan Bayh
Washington, D.C. 20510
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