New CFIUS Order Gives More Authority to Treasury Department
Posted by Joshua Price on January 24, 2008
Well, just when we thought we were running out of ways to shoot ourselves in the foot as a country, it appears that CFIUS (Committee on Foreign Investment in the United States) has undergone some changes that will result in the Treasury Department laying a bigger role in signing off on foreign investments in the U.S.
You might be asking what difference does it make if Treasury plays a bigger more important role in CFIUS? Well, the Treasury Department is charged with “promoting economic growth and stability,” so you can better believe that if a proposed foreign investment appears to fit that mission,even if there are potential national security threats–especially if the investment is coming from one of our so-called Arab “allies”– Treasury will probably sign off on it. I mean, come on, we don’t want to offend one of these “allies” in the pursuit of national security, do we?
From today’s Washington Times:
President Bush yesterday signed a new executive order on foreign investment that gives the Treasury secretary, instead of the president, key power to authorize or reject purchases of U.S. companies by foreign buyers.
The president said the order bolsters recently passed legislation by ensuring the Treasury-led Committee on Foreign Investment in the United States (CFIUS) “will review carefully the national security concerns, if any, raised by certain foreign investments into the United States.”
At the same time, Mr. Bush said, the order recognizes “that our openness is vital to our prosperity and security.”
Homeland Security Secretary Michael Chertoff said his agency is “happy with the final order.”
“I think it creates a process that will achieve the dual objectives of promoting investment but making sure we don’t compromise our national security,” Mr. Chertoff said from Switzerland.
But not everyone is pleased with the new order:
The order outlines more clearly the role of the director of national intelligence (DNI) in providing CFIUS with threat assessments posed by a foreign purchase and adds a requirement for the DNI to assess “potential consequences” of a foreign deal involving a U.S. company.
However, a comparison of the new order with a draft order from October — which was opposed by U.S. national security officials — shows that CFIUS will continue to be dominated by pro-business elements of the government.
As late as last month, national security officials from the Homeland Security, Justice and Defense departments expressed concern the order was being co-opted by pro-business officials at Treasury, Commerce and other trade agencies.
A memorandum from the three national security agencies obtained by The Washington Times called for tightening the draft order’s national security provisions to “accurately reflect pro-security interests.”
The final order released by the White House yesterday removed a provision that would have required the committee to “monitor the effects of foreign investment in the United States.”
The last sentence is very key. This essentially means that there will be no accountability–no monitoring of the effects of a decision by CFIUS on national security. I really hope I’m missing something here because if not, that’s very troubling. I mean shouldn’t we monitor the effect and the results of decisions we make so that we can ensure we are making the most appropriate and safest decisions possible with respect to national security?
The bottom line here is that we need more national security influence on CFIUS.