July 12, 2006

Feuding in House over foreign takeover bill

By Susan Cornwell

WASHINGTON (Reuters) - A jurisdictional battle broke out in
the U.S. House of Representatives on Wednesday over which
government department -- and by extension, which lawmakers --
should oversee decisions on foreign investment.

Business lobbyists said the argument could delay progress
on reforms to the foreign takeover process that lawmakers began
drafting after the furor over Dubai Ports World gaining control
of the management of several U.S. port terminals.

The House Energy and Commerce Committee voted on Wednesday
to put the Commerce Department, which it oversees, in charge of
the inter-agency panel that does government reviews of foreign
takeovers, the Committee on Foreign Investments in the United
States (CFIUS).

But the House Financial Services Committee last month voted
to keep the Treasury Department, which it oversees, as chairman
of the CFIUS panel.

Several of the House bill's bipartisan sponsors were not
pleased by Energy and Commerce's move.

"Giving the chair position to Commerce, which has neither
enough expertise nor a national security mission, totally
defeats the purpose of the bill and invites recent history to
repeat itself," said New York Democrat Carolyn Maloney.

Legislation tightening rules on foreign investment appeared
ready to race through Congress earlier this year when lawmakers
were outraged the Bush administration had not thought the ports
management contract raised national security concerns. The
Dubai company defused the controversy by saying it would sell
the ports assets.

But the friction between the two House committees is only
the latest hurdle to congressional action.

In the Senate, a bill by Alabama Republican Richard Shelby
also stalled after objections from some senators.

Business groups tend to prefer the House bill to the
tougher Senate version -- and so were unhappy to see the House
bill stumble.

"This action by the Energy and Commerce Committee is
regrettable, because it will delay legislative progress on
positive reform to the CFIUS process," said Todd Malan,
president of the Organization for International Investment.

Usually committee disputes in the House are resolved in the
Rules Committee, which merges different committee versions into
one bill before it goes to the floor. It was unclear how soon
that could happen.

New York Rep. Joseph Crowley, another Democratic co-
sponsor, said he would work with Majority Whip Roy Blunt, a
Republican co-sponsor, for approval of the version that passed
the Financial Services Committee.

"It's a glitch in the road here, but not anything that
can't be overcome," Crowley added.