Two North Carolina lawmakers are pressuring the Government Accountability Office to review the authorities of a U.S. Treasury Department interagency committee that decides how much control a foreign individual can have over a U.S. business.
Rep. Robert Pittenger of Charlotte and Rep. Walter Jones of Farmville are two of 16 Republican lawmakers who sent a letter to the government watchdog about their concern over whether the statutory and administrative authorities of the Committee on Foreign Investment in the United States are insufficient. Half the lawmakers who signed the letter are chairmen and vice chairmen of subcommittees with vested interests in how foreign acquisitions affect the U.S. economy and threaten national security. Pittenger spearheaded the letter. It is the second letter he has sent to the government within the past eight months regarding Chinese acquisition in the United States.
Chinese companies spent $15 billion on U.S. investments last year. That number is expected to grow to upward of $20 billion this year, according to The Wall Street Journal. In 2014, China was the largest U.S. investor out of the leading big emerging economies, a group that includes Brazil, India and Russia, according to a report from the Organization for International Investment, a nonprofit trade association based in Washington.
“I feel like it’s really critical that we evaluate the scope and the mission of CFIUS, their process and what they should be engaged in and the issues that they should be addressing and how that – how that process should occur going forward,” Pittenger said. “I mean, we’re dealing with cybersecurity today that was not an issue then. We have other counterintelligence issues. There’s a lot of concerns, trade-based money laundering, a lot of factors go into China’s role and other countries, so I think we shouldn’t turn a blind eye to this.”
The heads of the Treasury Department, Justice Department, Department of Homeland Security, State Department, Defense Department, Commerce Department, Energy Department, Office of the U.S. Trade Representative and Office of Science & Technology Policy have seats on the Committee on Foreign Investment in the United States.
Committee members have twice denied a Chinese company with foreign military ties the ability to acquire U.S. assets. In 2008, they blocked a $2.2 billion effort by Chinese company Huawei Technologies and Boston-based company Bain Capital to buy Internet router maker 3Com. The committee also intervened in a 2011 attempt by the same company to buy cloud-computing technology and hire employees from 3Leaf Systems.
The scope of the mission of CFIUS, I think, is of greater interest just because of the threats we faced today. We have threats today in the supply chain that we didn’t conceive of decades ago.
Rep. Robert Pittenger, R-N.C.
Pittenger began drawing attention to the committee’s authority limitations after Chongqing Casin Enterprise Group expressed an interest in buying the Chicago Stock Exchange, one of the oldest stock exchanges in the United States. His first letter questioned the influence the Chinese government could wield over the group and thereby wield over the stock exchange.
China previously owned the Chongqing Casin Enterprise Group’s financial assets.
The second letter highlights the food security and safety implications of ChemChina’s $43 billion acquisition of agricultural seed and chemical provider Syngenta.
“I’ve been in Congress over 20 years and each and every year there are more and more opportunities for foreign governments, especially China and Russia, to buy into existing properties in America,” Jones said. “I do share Mr. Pittenger’s concern that we are not doing the proper checks and balances.
“I realize that we’re in a global world. The market is such and that we need to have relationships, but when you see more and more Chinese companies, more so than even Russia, buying into companies and corporations in America – all we’re asking for is all the agencies that can ensure the propriety of the company that it’s buying into, because we know China is a communistic country.”
We need to make sure that we, as a country, have done all the proper vetting and checks and balances that we need to do to be sure that these companies from overseas that want to buy into America are doing this in a very proper way and not being a front for some group, within their own country, that would like to know more about the national security of America. I don’t think that’s being unfair or being an alarmist, because if we were going into their countries, they would do the same thing.
Rep. Walter Jones, R-N.C.
GAO spokesman Ned Griffith acknowledged receiving the congressional letter. The office will now determine the full scope of what it would include in a review and what methodology it would use to conduct it, he said in an email.
“GAO has a process it goes through to determine whether we begin work and when,” he said. “That process can take few weeks, and at this point no decisions have been made on the CFIUS request.”
Maggie Ybarra: 202-383-6048 @MolotovFlicker