May 17, 2006
US official wary of long probes of foreign deals
By Susan Cornwell
WASHINGTON (Reuters) - Congress should not require the U.S.
government to do an extended investigation whenever a foreign
state-owned company wants to buy American assets, a Bush
administration official said on Wednesday.
security concerns are present would divert resources, thereby
diminishing the committee's ability to protect national
security," Assistant Treasury Secretary Clay Lowery told a
House Financial Services subcommittee hearing.
Legislation is pending in the U.S. Senate and House that
would force the government to spend an extra 45 days -- beyond
an already-standard 30-day review -- investigating proposed
takeovers when a foreign purchaser is state-owned.
The bills resulted from a furor earlier this year when
Dubai Ports World, owned by the United Arab Emirates, acquired
operations at several major U.S. ports.
Lowery said an automatic time extension would be
counterproductive and could result in "scores" of extra
investigations by the panel that does them.
The inter-agency Committee on Foreign Investment in the
United States (CFIUS) already vets all foreign takeovers for 30
days. The panel moves to a 45-day probe if any national
security concerns are raised, Lowery said.
In the Dubai Ports World case, lawmakers were outraged that
an extra 45 days were not taken by the government to examine
the deal, and that the Bush administration had not notified
Congress of a deal involving a foreign state-owned company and
critical U.S. infrastructure.
Their protests pressured Dubai Ports World into announcing
it would sell the U.S. assets.
Lowery said the Treasury Department was now promptly
notifying Congress of every CFIUS review upon its completion.
He also said the administration was preparing a report to
Congress on possible foreign efforts to conduct economic
espionage or acquire critical technologies in the United
States. Such a report had not been done since 1994, Lowery
Under the Bush administration, 281 notices of foreign
takeovers were filed with CFIUS, and nine of those deals were
subject to 45-day investigations, Lowery said. Only two were
sent to the president for a final determination.
Last month, Bush approved a $1.24 billion purchase by
state-owned Dubai International Capital of British engineering
company Doncasters Group, which operates U.S. plants making
parts for defense contractors.
Earlier this month, CFIUS began reviewing a $5.4 billion
agreement by Toshiba Corp to buy Westinghouse, the U.S. power
plant arm of British Nuclear Fuels. It is also expected to
review the $14.1 billion acquisition by France's Alcatel of New
Jersey-based Lucent Technologies Inc., a telecommunications