[Congressional Record Volume 151, Number 96 (Friday, July 15, 2005)]
[Extensions of Remarks]
[Pages E1506-E1507]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 CHINA NATIONAL OFFSHORE OIL CORPORATION LTD'S TAKEOVER BID FOR UNOCAL 
                       CORPORATION OF CALIFORNIA

                                 ______
                                 

                           HON. FRANK R. WOLF

                              of virginia

                    in the house of representatives

                        Thursday, July 14, 2005

  Mr. WOLF. Mr. Speaker, I submit for the Record a letter I sent on 
July 13 to the law firm Akin Gump outlining my concerns with regard to 
the firm's representation of China National Offshore Oil Corporation 
Ltd. (CNOOC) in its takeover bid for Unocal Corp. of California.
  A critical element that has been absent in much of the discussion 
surrounding free trade is the fact that CNOOC is not a private foreign 
company. It is a Chinese state-run entity--70 percent state-owned.
  Lest there be any confusion about who we are dealing with when we 
speak of the Chinese Communist government, I want to highlight a quote 
from a July 13 Washington Post article. An adviser to the Chinese 
central government, who spoke on the condition of anonymity fearing 
government disciplinary action, said, ``No matter if it's rogue or a 
friend's oil, we don't care. Human rights? We don't care. We care about 
oil. Whether Iran would have nuclear weapons or not is not our 
business. America cares, but Iran is not our neighbor. Anyone who helps 
China with energy is a friend.''
  Is there no bright line to separate who the lobbyists in Washington 
will or will not represent?

     Mr. R. Bruce McLean,
     Akin Gump Strauss Hauer & Feld LLP, New Hampshire Ave NW., 
         Washington DC.
       Dear Mr. McLean: I write today in response to a packet of 
     information I received in late June, which included a letter 
     from the chief executive officer of China National Offshore 
     Oil Corporation Ltd. (CNOOC) peppered with assurances, aimed 
     at easing growing congressional concern, that CNOOC's bid to 
     ``merge'' with Unocal Corp. of California was in fact 
     friendly. I must say in all candor that I was shocked that 
     the packet arrived courtesy of Akin Gump--one of Washington's 
     most distinguished and reputable lobbying and law firms.
       Having worked in Washington for over three decades, I 
     understand that lobbying is part and parcel of everyday life 
     in the nation's capital. Every day, good people walk the 
     halls of Congress making the case for their constituency, 
     advocating on any number of issues and causes with great 
     passion and insight. That said, when I noted that CNOOC was 
     one of your newest clients, I immediately thought, ``Is there 
     no bright line to separate who the lobbyists in Washington 
     will or will not represent?''
       A critical part of the discussion recently surrounding the 
     free market, charges of protectionism and the politicization 
     of trade within the context of CNOOC's takeover bid for 
     Unocal is that CNOOC is not a private foreign company. CNOOC 
     is a Chinese state-run entity--70 percent state-owned. At the 
     end of the day, it has to be obvious that any decisions on 
     the issues of energy, economic and ultimately national 
     security regarding the operations of this company will be 
     based on what is advantageous to the Chinese Communist 
     government. It is noteworthy that a Pentagon report released 
     in January by the Office of Net Assessment has warned that 
     China's need for oil, gas and other energy resources appears 
     to be driving the country toward becoming an expansionist 
     power.
       As Irwin Stelzer with the Hudson Institute recently wrote, 
     ``China has decided to use its state resources to convert its 
     major companies into important multi-nationals--part of an 
     aggressive policy of projecting Chinese power on a global 
     basis. If that's not political, nothing is . . . That policy 
     is most noticeable in oil markets. China's acquisition of 
     Unocal's substantial Asian assets will increase its political 
     influence in that part of the world.''
       But we need not look to ``inside the Beltway'' policy 
     analysts for insight into China's global ambitions. Chen 
     Yonglin, the high ranking Chinese defector with intimate 
     knowledge of China's worldwide intelligence gathering 
     efforts, has said, ``The United States is considered by the 
     Chinese Communist Party as the largest enemy, the major 
     strategic rival.''
       I recall with great irony the heated annual debates in 
     Congress surrounding Most Favored Nation trade status and 
     ultimately Permanent Normal Trade Relations for China. The 
     coalition that battled granting China this privilege faced an 
     almost certain perennial loss. Even so, it served as a 
     valuable forum in which to highlight just what kind of a 
     country we are dealing with in China. The list of 
     egregious actions laid at the feet of the Communist 
     government of the People's Republic of China is long and 
     spans decades--human rights abuses, religious persecution 
     including torture and imprisonment, slave labor practices, 
     forced sterilization, espionage operations against U.S. 
     businesses, software piracy and intellectual property 
     theft, military spying. At the time many argued with 
     tremendous passion, business interests foremost among 
     them, that trade with China would change China, not the 
     other way around.
       But recent reports have painted a grim picture of the 
     purported ``information age'' in China. Chinese bloggers who 
     have the audacity to type in words like ``freedom,'' 
     ``democracy,'' or ``human rights'' receive a message, 
     courtesy of Microsoft software, that says, ``Prohibited 
     language in text, please delete.'' It seems China is changing 
     us after all.
       And the change is perhaps no where more apparent than in 
     the willingness of American companies and lobbyists to do the 
     bidding of the Chinese government--a government which despite 
     increased ``engagement'' over the last several years 
     continues to pose a national security threat, blatantly 
     disrespects free trade norms, persistently violates human 
     rights, consistently stifles political dissent and is 
     indiscriminate in its repression, arrest and torture of 
     varied faiths targeting the Uygher Muslim population, the 
     underground Protestant and Catholic house

[[Page E1507]]

     churches, the Tibetan Buddhists and the Falun Gong spiritual 
     movement.
       I am left to wonder if it was Akin Gump which counseled 
     CNOOC, and ultimately the Chinese government, to first 
     caution President Bush not to politicize the Unocal takeover 
     bid, and then warn Congress to ``correct its mistaken ways of 
     politicizing economic and trade issues and stop interfering 
     in the normal commercial exchanges between enterprises of the 
     two countries.''
       Ultimately, I question the appropriateness of an American 
     firm advising and being on the payroll of the Chinese 
     government. In my opinion, their interests, and all which 
     that encompasses, are simply not deserving of your 
     representation and only serve to degrade the strong 
     reputation for integrity your firm has enjoyed over the 
     years.
           Sincerely,
                                                    Frank R. Wolf,
                                               Member of Congress.
       P.S. During the presidency of Ronald Reagan, no major law 
     firm or lobbying organization would have represented the 
     Soviet Union if it had tried to take over an American oil 
     company.

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