February 24, 2006- Introduction of Bill to Increase Scrutiny of Foreign Takeovers of U.S. Critical Infrastructure
WASHINGTON, DC - Representative Edward J. Markey (D-MA), a senior member of the House Committee on Homeland Security, today announced that he will introduce legislation when Congress reconvenes next week to require more thorough investigations into proposed foreign takeovers of U.S. critical infrastructure such as ports. The need for the legislation became evident following the Bush Administration’s approval of the purchase by a United Arab Emirate (UAE)-owned company of a firm currently operating at six U.S. ports. Despite a legal requirement that transactions involving foreign government-owned companies must be subjected to a 45-day investigation to determine whether they could affect U.S. national security, the Treasury Department has revealed that the UAE port transaction was not subjected to this 45-day investigation.
“The Bush Administration continues to put commerce over commonsense homeland security concerns,” Rep. Markey said.
“It is absolutely outrageous that the Bush Administration did not thoroughly examine the national security consequences of a foreign government buying its way into our nation’s ports. The 9/11 Commission identified the UAE as a ‘persistent counterterrorism problem.’ The UAE was one of only three nations to recognize the Taliban regime, two of the 9/11 hijackers had ties to the UAE, and the UAE financial system was used to help fund the September 11th attacks. More recently, it has been determined that the UAE also was used by Pakistani nuclear scientist A.Q. Khan as a midway point for the illegal sale of nuclear technology to North Korea, Iran and Libya,” Rep. Markey added.
Rep. Markey’s legislation would:
• Limit Takeovers of Critical Homeland Infrastructure:
o In cases where the purchaser is a government-owned company based in a foreign country, the transaction must be approved not only by CFIUS, but also by the President and be subject to congressional review.
o If the purchaser is a foreign company, but not government-controlled, the transaction must undergo a 45-day investigation and be found to not undermine national security before it can be approved.
• Increase the 30-day Evaluation Period: According to the Government Accountability Office (GAO), “Several officials [participating in the CFIUS process] commented that, in complex cases, it is difficult to complete analyses…within 23 days.” CFIUS’s guidance requires member agencies to determine if they are likely to object to the transaction by the 23rd day of the 30-day review period. The legislation would double this initial evaluation period to 60 days and permit any participant to be granted an automatic 10-day extension, separate from CFIUS’s 45-day investigatory period.
• Require Reports to Congress: According to Treasury Department regulations, CFIUS reviews of any proposed transactions are confidential, and there is no congressional oversight of CFIUS decisions. The legislation would require CFIUS to report annually to Congress on the number of notifications it received during the year and the action taken after each notification.
“To justify warrantless wiretaps of American citizens, President Bush explained that 9/11 changed his thinking about the measures needed to secure our country. Lessons learned from the 9/11 attacks should have triggered a comprehensive review of the UAE port deal by the Bush Administration. When Congress reconvenes next week, I will introduce legislation to strengthen this review process. Homeland security, not merely hoped-for economic benefits, should drive our decisions about who owns the critical infrastructure that could be used by terrorists to smuggle a nuclear weapon into our country and inflict severe damage on our nation,” Rep. Markey concluded.
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CONTACT: Tara McGuiness