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For Immediate Release: February 28, 2007

REP. FRANK FLOOR STATEMENT ON NATIONAL SECURITY FOREIGN INVESTMENT REFORM AND STRENGTHENED TRANSPARENCY ACT OF 2007

(House of Representatives - February 28, 2007)

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Mr. Chairman, I yield myself such time as I may consume.

   Last year the Bush administration made a grave error. A proposal came from the country of Dubai to buy a company that ran our ports. The response from the administration, and there was an intergovernmental committee called the Committee on Foreign Investment in the U.S. which Members will hear us abbreviating as CFIUS, should have said to Dubai, you know, we have found you to be a reasonable group of people, but you are in an area of the world where there is great tension, where there are violent, armed people who wish us ill. You will be subjected to great pressures. There will be efforts to infiltrate and there will be assaults on your integrity, and that makes us nervous about your controlling something as sensitive to security as ports. We have been worrying about the possibility of the shipping ports being entry ports for harmful activity.

   So the people of Dubai should have been told, look, we mean you no ill, but we think it is a mistake for you to buy these ports. There are, I would have thought, many other investments I think they could have made.

   Instead, incredibly, a series of people from the White House's various offices, from the Departments, did not see this coming; and in consequence, they gave an approval which led to an entirely predictable outcry in the country.

   Our job, Mr. Chairman, is to prevent this great lapse in judgment by the Bush administration over the Dubai situation from leading to bad public policy that would extend to restricting and discouraging foreign direct investment in general.

   Members should be very clear when we talk about foreign direct investment. All three words are important. We are not talking about buying equities and we are not talking about foreign countries holding our debt, which can be problematic. We are talking about foreign investors, mostly, in some cases government, but mostly private investors, taking money and investing it in real economic activity in the U.S. That is what direct investment means.

   And that inevitably, not inevitably, that, in fact, will produce more economic activity here. It is very much in our interest as a Nation to have people investing in real economic activity. That creates jobs and that creates taxation for local governments and that creates the kind of economic activity that we thrive on.

   The fear again was that others in other parts of the world, seeing the reaction to Dubai would say, you know what, we better not invest there.

   One of the great assets America has economically is we are about as stable a place as there is in the world to invest your money. This is a problem. It is a problem for Russia. Russia is suffering I believe legitimately because of concern from people that if they invest in Russia their investments will not be as fully protected as they should be. The security legally and in every other way of money invested in the U.S. in direct ways is an asset for us. We do not want the political fallout from the Dubai mistake to discourage this.

   What we then decided to do together, and while there was an earlier reference to this being a Republican bill, which I regret because this has been a genuinely bipartisan bill and that sort of partisanship doesn't help, the gentlewoman from New York (Mrs. Maloney) who was then the ranking member on the relevant committee; the gentlewoman from Ohio, who is with us now who was Chair of that subcommittee; the minority whip, then the majority whip; myself; the former chairman of the committee, Mr. Oxley of Ohio, we all worked together to say, look, let us give a set of rules and procedures so that people with money in other countries who want to invest it in the U.S. in ways that will be beneficial to us can get some assurance that they can make that investment and not be buffeted politically.

   People say, Look what happened to Dubai. First they got approval, and then it was withdrawn. We want to have a good process so that people can invest with assurance. People who are investing money need stability and certainty.

   They also need a certain amount of privacy before the fact. One of the things that we jointly did was to reject efforts to expose potential investments to wide publicity and the political process at too early a stage. There is no point in scaring these things off.

   Now it should be noted that entirely independent of this bill authority exists in the President of the United States, delegated as he chooses, to reject investments that would jeopardize our national security. There are also separate statutes that limit investment in particular parts of the economy. Some of those, I think, go too far. None of those are altered. In other words, this bill does not weaken any existing statutory protection against investment that might undermine our security.

   What it says is that the great bulk of investments not only do not undermine our security, but add to our prosperity by providing more resources here within the country for good, beneficial, economic activity. We will have a process which gives you some assurance that you can go ahead with that investment. That is what this bill does.

   There are some questions about it. There will be some amendments, but that is the core of the bill. It is in the interest of our economy. It protects national security even more than currently because it does have some procedures to require a kind of inspection that would have prevented, we believe, the Dubai mistake.

   I should say that this bill is widely supported. We have worked closely with the administration. The Treasury has been very helpful, and they do not like everything in this bill, but on the other hand, I do not like everything in the Treasury. In fact, if you look at the great bulk of it, we are together on this, and this is a bill which the Treasury, I am pleased to say, and you can see in the statement of administration policy, regards this as an advance. They would like some changes, but they clearly regard this bill as an advance. A broad swath of the business community is in favor of it, and all should be in favor of it.

   While there are controversial aspects of international policy, this is one that should not be controversial. This is one which welcomes foreign investors who want to take money and engage in real, beneficial, safe economic activity in the United States.