National Security Foreign Investment Reform and Strengthened Transparency Act of 2006
It has been more than 4 months since we were made aware of the Committee of Foreign Investment's (CFIUS) activities related to Dubai World Ports and the implications of the proposed deal for national security. I can genuinely say that the Members of the Committee on Financial Services have been deeply involved in this issue since the deal was analyzed by Congress. H.R. 5337 is designed to reform the CFIUS process based on the information gleaned from hearings on the subject. I am the first to say that no one is interested in cutting off foreign direct investment in the U.S., but we do expect such investments to be prudently made and that they are in the best interest of the country. As the leader of the world economy, it would be foolish to assume that we could take such steps to prohibit foreign direct investment. What we really need are safeguards to ensure that the CFIUS process is consistent with the original Congressional intent about national security and investments.
This bill will guarantee that CFIUS operates within the law, and it makes clear who is responsible for what, since it was revealed that no one was sure who was responsible for the Ports decision. Another critical issue is how decisions are actually made and what entity is principally responsible for protecting the national security interests of the nation as they pertain to foreign direct investment. The bill enables CFIUS to unilaterally initiate a review where an national security issue is raised; any foreign government backed deal would be subject to review; both the Secretaries of Treasury and Homeland Security must sign off on reviews, while the Homeland Security Secretary would be vice-chair of the Committee; and all reviews are subject to review by the Director of National intelligence.
Most importantly, everyone knows that transparency and accountability were, in part, at the heart of Congress' uproar over the Dubai World Ports deal. H.R. 5337 requires that CFIUS report bi-annually to Congress on its activities, which should prevent Congress from being alerted to such deals after the fact. I would submit that this is strong legislation that will only make Congress' job less difficult on the issue of national security and foreign direct investment. Therefore, I urge my Colleagues to support this major reform bill.