- The Washington Times - Sunday, March 26, 2006

Senators return from a weeklong recess today, with the issue of foreign — and especially Gulf-Arab — ownership of U.S. critical infrastructure front and center.

Several competing bills in both chambers of Congress aim to reform the process by which the federal government assesses the national security implications of foreign takeovers of U.S. companies or assets.

And, in the wake of the derailment of the Dubai ports takeover, lawmakers’ concerns threaten another acquisition by the tiny oil-rich emirate.

Dubai International Capital, an investment company owned by the emirate’s ruling al-Maktoum family, signed a deal last year to acquire a privately held British aerospace company called Doncasters Group Ltd.

The company owns nine plants in the United States and makes parts for U.S. tanks and military planes, including for the Joint Strike Fighter — currently at the center of a trans-Atlantic row about contracts and technology sharing.

After senators questioned officials about the Doncasters deal earlier this month, the Committee on Foreign Investment in the United States (CFIUS), which is responsible for assessing such takeovers, announced that it was launching a special 45-day national security review of the purchase.

The attention led Dubai International Capital to announce last week it was postponing the $1.2 billion takeover for two months while the review proceeded.

During the furor over the DP World acquisition, administration officials attempted to satisfy critics with an agreement to conduct the same kind of review in that case. Several congressmen continue to think the assessment process is inadequate.

“This process is a flawed process that’s being conducted behind closed doors,” said Rep. John Barrow, Georgia Democrat, whose district includes one of the Doncasters plants.

Under current law, because of concerns about the huge financial implications of information about blocked or potentially blocked takeovers being leaked, investment committee investigations are kept confidential.

After criticism over a foiled Chinese effort to buy a U.S. oil company last year, the administration agreed to provide Congress with more information about blocked deals. The investment committee has received over 1,500 notifications of foreign acquisitions, but only one has ever been blocked — in 1990.

Mr. Barrow and Rep. Bennie Thompson, Mississippi Democrat and ranking member of the House Homeland Security Committee, are pushing a bill requiring that the investment committee notify Congress about pending foreign investments it is looking at and calling on the president to make the homeland security secretary, rather than the secretary of the Treasury, the chairman of the review panel. Another bill, from Rep. Duncan Hunter, the California Republican who chairs the Armed Services Committee, would effectively outlaw foreign ownership of any infrastructure listed as critical to national security by the Department of Defense and put the Pentagon rather than the Treasury or Homeland Security departments in charge of the review.

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