WASHINGTON—Two key Senate lawmakers introduced legislation to overhaul the secret government panel responsible for scrutinizing foreign investment in U.S. companies—including those in the wireless, telecom and high tech sectors—and transferring jurisdiction from the Treasury Department to the Department of Homeland Security.
The bill, sponsored by Senate Homeland Security Committee Chairwoman Susan Collins (R-Maine) and ranking committee member Joseph Lieberman (D-Conn.), could make telecom deals between U.S. and foreign companies more difficult to pull off because of the strict scrutiny homeland security officials are apt to subject to such transactions.
“Foreign investment is important to our nation’s economic prosperity and should be encouraged. Yet, the national security and homeland security implications of those investments must be scrutinized by the departments with responsibility for those critical matters. To be blunt, the current process is hopelessly broken,” said Collins. “The so-called Committee on Foreign Investment [in the United States] does not work and it needs to be scrapped. Congress needs to start over.”
Collins said CFIUS is supposed to identify transactions with national security implications, but complained the Treasury-led panel has little input from the Department of Homeland Security, State Department, Department of Defense and Justice Department. In addition, she said the committee does not have representation from the intelligence community.
Congressional Republicans and Democrats have sharply criticized CFIUS’ handling of a now-scrambled, controversial deal that was to have a state-owned firm in the United Arab Emirates gain ownership of six major U.S. port operations through the acquisition of a London-based port company.
“National security must be the first consideration in the sale of U.S. property to foreign investors, especially at this period in our history, when the threat of terrorist attack is always present,” said Lieberman. “Our legislation would ensure that foreign investments are scrutinized by the agencies most directly responsible for protecting this nation.”
Last week, House Armed Services Chairman Duncan Hunter (R-Calif.) unveiled a bill to require majority U.S. ownership of critical infrastructure and a five-year divestiture of critical infrastructure currently majority owned by foreign companies. Whether wireless and other telecom networks—currently defined as critical infrastructure by the Bush administration—would be subject to ownership restrictions would be decided at a later date if the bill is approved.
T-Mobile USA Inc., one of four national mobile phone carriers in the U.S., is controlled by German telecom giant Deutsche Telekom AG.
