[Congressional Record Volume 152, Number 31 (Monday, March 13, 2006)]
[Senate]
[Pages S2028-S2032]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself, Mr. Lieberman, Mr. Coleman, Mr. 
        Akaka, Mr. Talent, and Mr. Graham):
  S. 2400. A bill to transfer authority to review certain mergers, 
acquisitions, and takeovers of United States entities by foreign 
entities to a designee established within the Department of Homeland 
Security, and for other purposes; to the Committee on Banking, Housing, 
and Urban Affairs.
  Ms. COLLINS. Mr. President, I rise today to introduce legislation to 
reform and strengthen the national security review process for foreign 
investments in the United States. I am very pleased to be joined by 
three of my colleagues--Senator Lieberman, Senator Coleman, and Senator 
Akaka--in introducing this legislation.
  In a global economy, foreign investment in this country is becoming 
increasingly common. The national security and homeland security 
implications of those investments must be

[[Page S2029]]

scrutinized by the departments with responsibility for those critical 
matters.
  The controversy over the Dubai ports transaction has exposed serious 
flaws and shortcomings in the current law and process that is used to 
review foreign investments in our country.
  In 1988, Congress passed the Exon-Florio provision of the Defense 
Production Act to get the President the authority to suspend or 
prohibit any foreign acquisition, merger, or takeover of a U.S. 
corporation that is determined to threaten our national security.
  Through an Executive order, the President gave a new committee--known 
as the Committee on Foreign Investment in the United States, often 
referred to as CFIUS--the responsibility of reviewing transactions 
pursuant to the Exon-Florio law and to make recommendations to the 
President.
  The law is something of an anachronism because of what it doesn't 
say. It focuses on acquisitions of American companies that are either 
important to our military industrial base or have technology that could 
help a terrorist state develop weapons of mass destruction. Obviously, 
both of those concerns are very important. We do want to preserve our 
military industrial base, and we do want to safeguard technology that 
could help terrorists or anyone else develop weapons of mass 
destruction. But neither of those transactions or those requirements 
address transactions that could assist terrorists in threatening our 
security right here at home.
  Obviously, there are other ways for terrorists to undermine our 
security that might be completely separate from the military industrial 
base issues or the technological issues related to weapons of mass 
destruction. In other words, the law is simply too narrow in its 
application. The current CFIUS process is not designed to analyze 
transactions that involve a port terminal or other critical 
infrastructures within our borders.
  The Government Accountability Office, in a report issued last 
September, found that the Exon-Florio law's effectiveness in protecting 
U.S. national security may be limited--limited because the Department 
of Treasury, as the chairman of the Committee on Foreign Investment in 
the United States, narrowly defines what constitutes a threat to our 
national security. The Committee on Foreign Investment in the United 
States, CFIUS, focuses too much on the financial component and not 
enough on security.
  I think that is what many of us concluded happened in the review of 
the Dubai ports transaction. The focus was on investment, needed 
investment in our ports, rather than being focused on the national 
security or homeland security implications that could possibly arise 
from that transaction. The committee is supposed to identify 
transactions that could affect our national security. It doesn't say 
``harm'' our national security; it says ``affect'' our national 
security. That is supposed to be sufficient to trigger a full 45-day 
investigation. But, unfortunately, that is not initially what happened 
with the proposed Dubai ports transaction.
  I would like to draw the attention of my colleagues to a broader 
issue, and that is the composition of CFIUS. Remember, this is supposed 
to be a national security review, but who chairs the committee? Not the 
Department of Homeland Security, not the Department of Defense, not the 
Department of Justice. The committee is chaired by the Department of 
the Treasury, and chairing this committee is meaningful because the 
chairman's interpretation of the law, including the provision that 
makes a 45-day investigation mandatory in the case of foreign 
government control to entities that could affect national security, 
tends to govern. In other words, what the chairman decides in 
interpreting whether the 45-day investigation is triggered tends to be 
what happens.
  I suggest to you, and to my colleagues that the system is 
fundamentally flawed if it has the Secretary of Treasury, no matter how 
capable and well qualified he is--and I believe he is all of those 
things--chair a committee that is supposed to be looking at national 
security. Thus, I believe the CFIUS process has been weighed too much 
toward investment considerations and not sufficiently attentive to the 
national security and homeland security implications. Indeed, the GAO 
found that Treasury is ``reluctant to initiate investigations to 
determine whether national security concerns require a recommendation 
for possible Presidential action.'' That is what GAO found, and that 
certainly seems to be an accurate finding.
  These are concerns which we simply cannot tolerate given today's 
threat environment, and that is why I am introducing legislation to 
abolish the CFIUS process and to create a new interagency, 
interdepartmental mechanism chaired by the Department of Homeland 
Security to analyze transactions for both their homeland security and 
national security implications. Our bill is designed to fix the process 
through the following changes:
  First, the bill would establish a new committee, the Committee for 
Secure Commerce, to replace the old CFIUS. The Committee for Secure 
Commerce would be chaired by the Secretary of Homeland Security, and 
the Secretary of Defense would serve as the vice chairman. The Director 
of National Intelligence would be specifically designated as a standing 
member of the committee in order to ensure that important intelligence 
information is part of the deliberative process. The Department of 
Treasury will still be represented on the committee, but with respect 
to the other members, the President shall name the appropriate agencies 
and departments to sit on the committee. This is an important change 
because it helps ensure that the focus will, indeed, be national 
homeland security, and it corrects what I believe to be a major 
shortcoming in the composition of the current committee, and that is 
that the intelligence community is not represented. That is 
extraordinary, given the purpose of this committee.
  Second, the bill would explicitly include homeland security among the 
factors the committee would evaluate in deciding whether to review or 
investigate a transaction.
  Third, the Secretary of Homeland Security would establish a process 
by which the committee reviews transactions and would establish the 
role and responsibility of each member.
  In addition, each member would establish the process and procedure by 
which each respective agency would conduct its review, sharing that 
with the other committee members. It is important that committee 
members each have a general understanding of the scrutiny being applied 
to a transaction both within their own agencies and across the 
government. Such understanding was not apparent in the current CFIUS 
process.
  Should a transaction warrant an investigation, the bill would require 
the Director of National Intelligence to consolidate intelligence 
assessments.
  Lastly, this legislation would strengthen the reporting requirements 
to Congress. The existing process lacks transparency and does not allow 
sufficient oversight. It may be appropriate for the reviews, which may 
involve proprietary data and classified information, to be conducted 
confidentially. However, it is wholly appropriate that Members of 
Congress be briefed in a timely manner.
  The bill would also address the so-called Byrd amendment loophole, 
requiring an investigation where the entity would be controlled by a 
foreign-government. In looking at the plain language of the existing 
statute, a 45-day investigation should have taken place in the Dubai 
Ports World purchase of Peninsular & Oriental Steam Navigation Company. 
However, the Treasury Department interpretation of the statute for 
nearly 15 years has been contrary to congressional intent, and thus, 
Treasury found there was no need for the 45-day investigation. That so-
called ambiguity has been clarified in our bill. The law requires a 45-
day investigation in cases where an acquirer is controlled by a foreign 
government, as in the case of DP World, and the acquisition could 
affect the national security of the U.S.
  It is important that Congress take action to reform the review 
process for foreign investment in the U.S. This bill provides a new 
structure, appropriately focused on national security and homeland 
security. I seek my colleagues support in moving this legislation 
forward.

[[Page S2030]]

  The Dubai ports controversy may have temporarily or perhaps 
permanently been set aside, but that does not mean we should abandon 
the efforts to reform and strengthen the law to ensure a proper review 
of foreign transactions.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2400

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. TRANSFER OF AUTHORITY TO REVIEW CERTAIN MERGERS, 
                   ACQUISITIONS, AND TAKEOVERS.

       (a) Repeal of Defense Production Act Provision.--Section 
     721 of the Defense Production Act of 1950 (50 U.S.C. App. 
     2170) is repealed.
       (b) Transfer to Homeland Security.--Title II of the 
     Homeland Security Act of 2002 (6U.S.C. 121 et seq.) is 
     amended by adding at the end the following:

   ``Subtitle --E--Review of Mergers, Acquisitions, and Takeovers by 
                            Foreign Entities

     ``SEC. 241. AUTHORITY TO REVIEW CERTAIN MERGERS, 
                   ACQUISITIONS, AND TAKEOVERS.

       ``(a) Review and Investigation.--
       ``(1) In general.--The President or the President's 
     designee may undertake an investigation to determine the 
     effects on national security or homeland security of mergers, 
     acquisitions, and takeovers proposed or pending on or after 
     the date of enactment of this section by or with foreign 
     persons which could result in foreign control of persons 
     engaged in interstate commerce in the United States.
       ``(2) Review.--For purposes of determining whether to 
     undertake an investigation under this subsection, the 
     President or the President's designee shall conduct a review 
     of the proposed or pending merger, acquisition, or takeover, 
     which review shall be completed not later than 30 days after 
     the date of receipt by the President or the President's 
     designee of written notification of the proposed or pending 
     merger, acquisition, or takeover.
       ``(3) Timing.--If it is determined that an investigation 
     should be undertaken under this subsection, such 
     investigation--
       ``(A) shall commence at such time as the determination is 
     made under paragraph (2), and not later than 30 days after 
     the date of receipt by the President or the President's 
     designee of written notification of the proposed or pending 
     merger, acquisition, or takeover, as prescribed by 
     regulations promulgated pursuant to this section; and
       ``(B) shall be completed not later than 45 days after the 
     date of its commencement.
       ``(4) Intelligence assessment reports.--With respect to any 
     investigation undertaken under this subsection, the Director 
     of National Intelligence shall create a report that 
     consolidates the intelligence findings, assessments, and 
     concerns of each of the relevant members of the intelligence 
     community. Such report shall be considered as part of the 
     investigation, provided to all members of the Committee, and 
     included as part of any recommendation to the President.
       ``(b) Mandatory Investigations.--
       ``(1) In general.--The President or the President's 
     designee shall undertake an investigation, as described in 
     subsection (a)(1), in any instance in which an entity 
     controlled by or acting on behalf of a foreign government 
     seeks to engage in any merger, acquisition, or takeover which 
     would result in control of a person engaged in interstate 
     commerce in the United States.
       ``(2) Timing.--An investigation undertaken under this 
     subsection--
       ``(A) shall commence not later than 30 days after the date 
     of receipt by the President or the President's designee of 
     written notification of the proposed or pending merger, 
     acquisition, or takeover, as prescribed by regulations 
     promulgated pursuant to this section; and
       ``(B) shall be completed not later than 45 days after the 
     date of its commencement.
       ``(c) Committee for Secure Commerce.--
       ``(1) Establishment.--There is established the Committee 
     for Secure Commerce, which shall serve as the President's 
     designee for purposes of this section.
       ``(2) Chairperson.--The Secretary, or the designee thereof, 
     shall serve as the chairperson of the Committee.
       ``(3) Vice chairs.--The Secretary of Defense, or the 
     designee thereof, and the Secretary of the Treasury, or the 
     designee thereof, shall serve as vice chairs of the 
     Committee.
       ``(4) Membership.--The standing members of the Committee 
     shall--
       ``(A) be made up of the heads of those executive 
     departments, agencies, and offices as the President 
     determines appropriate; and
       ``(B) include the Director of National Intelligence.
       ``(5) Assistance from other federal sources.--The 
     chairperson of the Committee may seek information and 
     assistance from any other department, agency, or office of 
     the Federal Government, and such department, agency, or 
     office shall provide such information or assistance, as the 
     chairperson determines necessary or appropriate to carry out 
     the duties of the Committee under this section.
       ``(6) Review process; documentation.--
       ``(A) Committee review process.--The chairperson of the 
     Committee shall establish written processes and procedures to 
     be used by the Committee in conducting reviews and 
     investigations under this section in any case in which the 
     Committee is acting as the President's designee, including a 
     description of the role and responsibilities of each of the 
     member departments, agencies, and offices in the 
     investigation of foreign investment in the United States.
       ``(B) Departmental review process.--The head of each 
     department, agency, or office that serves as a member of the 
     Committee shall establish written internal processes and 
     procedures to be used by the department, agency, or office in 
     conducting reviews and investigations under this section, and 
     shall provide such written procedures to the Committee.
       ``(7) Independent agency reviews required.--In any case in 
     which the Committee is acting as the President's designee 
     under this section, each member of the Committee shall 
     conduct, within the department, agency, or office of that 
     member, an independent review of each proposed merger, 
     acquisition, or takeover described in subsection (a) or (b), 
     and shall timely provide to the Committee written findings 
     relating to each such review.
       ``(8) Determinations not to conduct an investigation.--A 
     determination by the Committee not to conduct an 
     investigation under subsection (a) shall be made only after a 
     review required by subsection (a)(2), and shall be unanimous.
       ``(d) Action by the President.--
       ``(1) In general.--Subject to subsection (e), the President 
     may take such action for such time as the President considers 
     appropriate to suspend or prohibit any acquisition, merger, 
     or takeover of a person engaged in interstate commerce in the 
     United States proposed or pending on or after the date of 
     enactment of this section, by or with a foreign person so 
     that such control will not threaten to impair the national 
     security or homeland security.
       ``(2) Announcement by the president.--The President shall 
     announce the decision to take action pursuant to this 
     subsection not later than 15 days after the investigation 
     described in subsection (a) is completed. The President may 
     direct the Attorney General to seek appropriate relief, 
     including divestment relief, in the district courts of the 
     United States in order to implement and enforce this section.
       ``(e) Findings of the President.--The President may 
     exercise the authority conferred by subsection (d) only if 
     the President finds that--
       ``(1) there is credible evidence that leads the President 
     to believe that the foreign interest exercising control might 
     take action that threatens to impair the national security or 
     homeland security; and
       ``(2) provisions of law, other than this section and the 
     International Emergency Economic Powers Act, do not, in the 
     judgment of the President, provide adequate and appropriate 
     authority for the President to protect the national security 
     or homeland security in the matter before the President.
       ``(f) Actions and Findings Nonreviewable.--The actions of 
     the President under subsection (d) and the findings of the 
     President under subsection (e) shall not be subject to 
     judicial review.
       ``(g) Factors to Be Considered.--For purposes of this 
     section, the President or the President's designee shall, 
     taking into account the requirements of national security and 
     homeland security, consider among other factors--
       ``(1) critical infrastructure, the control of which is 
     important to homeland security;
       ``(2) domestic production needed for projected national 
     defense and homeland security requirements;
       ``(3) the capability and capacity of domestic industries to 
     meet national defense requirements, including the 
     availability of human resources, products, technology, 
     materials, and other supplies and services;
       ``(4) the control of domestic industries and commercial 
     activity by foreign citizens as it affects the capability and 
     capacity of the United States to meet the requirements of 
     national security or homeland security;
       ``(5) the potential effects of the proposed or pending 
     transaction on sales of military goods, equipment, or 
     technology to any country--
       ``(A) identified by the Secretary of State--
       ``(i) under section 6(j) of the Export Administration Act 
     of 1979, as a country that supports terrorism;
       ``(ii) under section 6(l) of the Export Administration Act 
     of 1979, as a country of concern regarding missile 
     proliferation; or
       ``(iii) under section 6(m) of the Export Administration Act 
     of 1979, as a country of concern regarding the proliferation 
     of chemical and biological weapons; or
       ``(B) listed under section 309(c) of the Nuclear Non-
     Proliferation Act of 1978, on the `Nuclear Non-Proliferation-
     Special Country List' (15 C.F.R. Part 778, Supplement No. 4) 
     or any successor list; and
       ``(6) the potential effects of the proposed or pending 
     transaction on United States international technological 
     leadership in areas affecting United States national security 
     or homeland security.
       ``(h) Confidentiality of Information.--Any information or 
     documentary material filed with the President or the 
     President's designee pursuant to this section shall be exempt 
     from disclosure under section 552 of

[[Page S2031]]

     title 5, United States Code, and no such information or 
     documentary material may be made public, except as may be 
     relevant to any administrative or judicial action or 
     proceeding. Nothing in this subsection shall be construed to 
     prevent disclosure to either House of Congress or to any duly 
     authorized committee or subcommittee of Congress.
       ``(i) Reports to Congress.--
       ``(1) Reports on investigation.--The President, or the 
     President's designee, shall immediately upon completion of an 
     investigation under subsection (a) or (b) transmit to the 
     members of Congress specified in paragraph (3) a written 
     report of the results of the investigation, before any 
     determination by the President on whether or not to take 
     action under subsection (d), including a detailed explanation 
     of the findings made under subsection (e), details of any 
     legally binding assurances provided by the foreign entity 
     that were negotiated as a condition for approval, and the 
     factors considered under subsection (g). Such report shall be 
     prepared in a manner that is consistent with the requirements 
     of subsection (h).
       ``(2) Quarterly submissions.--The President, or the 
     President's designee, shall transmit to the members of the 
     Congress specified in paragraph (3) on a quarterly basis, a 
     detailed summary and analysis of each merger, acquisition, or 
     takeover that is being reviewed, was reviewed during the 
     preceding 90-day period, or is likely to be reviewed in the 
     coming quarter by the President or the Committee under 
     subsection (a) or (b). Each such summary and analysis shall 
     be submitted in unclassified form, with classified annexes, 
     as the Secretary determines are required to protect company 
     proprietary information and other sensitive information. Each 
     such summary and analysis shall include an appendix detailing 
     dissenting views.
       ``(3) Members of congress.--The reports required by this 
     subsection shall be transmitted to--
       ``(A) the Majority Leader and the Minority Leader of the 
     Senate;
       ``(B) the chairs and ranking members of the Committee on 
     Homeland Security and Government Affairs, the Committee on 
     Armed Services, and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate;
       ``(C) the Speaker and the Minority Leader of the House of 
     Representatives; and
       ``(D) the chairs and ranking members of the Committee on 
     Homeland Security, the Committee on Armed Services, and the 
     Committee on Financial Services of the House of 
     Representatives.
       ``(j) Regulations.--The Secretary shall issue regulations 
     to carry out this section. Such regulations shall, to the 
     extent possible, minimize paperwork burdens and shall to the 
     extent possible coordinate reporting requirements under this 
     section with reporting requirements under any other provision 
     of Federal law.
       ``(k) Effect on Other Law.--Nothing in this section shall 
     be construed to alter or affect any existing power, process, 
     regulation, investigation, enforcement measure, or review 
     provided by any other provision of law.
       ``(l) Technology Risk Assessments.--In any case in which an 
     assessment of the risk of diversion of a critical technology 
     is performed by a person designated by the President for such 
     purpose, a copy of such assessment shall be provided to each 
     member of the Committee for purposes of reviewing or 
     investigating a merger, acquisition, or takeover under this 
     section.
       ``(m) Quadrennial Report.--
       ``(1) In general.--In order to assist the Congress in its 
     oversight responsibilities with respect to this section, the 
     President and such agencies as the President shall designate 
     shall complete and furnish to the Congress, not later than 1 
     year after the date of enactment of this section and every 4 
     years thereafter, a report which--
       ``(A) evaluates whether there is credible evidence of a 
     coordinated strategy by 1 or more countries or companies to 
     acquire critical infrastructure within the United States or 
     United States companies involved in research, development, or 
     production of critical technologies for which the United 
     States is a leading producer; and
       ``(B) evaluates whether there are industrial espionage 
     activities directed or directly assisted by foreign 
     governments against private United States companies aimed at 
     obtaining commercial secrets related to critical technologies 
     or critical infrastructure.
       ``(2) Release of unclassified study.--The report required 
     by this subsection may be classified. An unclassified version 
     of the report shall be made available to the public.
       ``(n) Exemption.--Notwithstanding any other provision of 
     law, the provisions of section 872 do not apply to the 
     Committee or with respect to any provision of this subtitle.
       ``(o) Definitions.--As used in this section--
       ``(1) the term `critical technologies' means technologies 
     identified under title VI of the National Science and 
     Technology Policy, Organization, and Priorities Act of 1976, 
     or other critical technology, critical components, or 
     critical technology items essential to national defense 
     identified pursuant to this section;
       ``(2) the term `Committee' means the Committee for Secure 
     Commerce, established under subsection (c);
       ``(3) the term `foreign person' means any foreign 
     organization or any individual resident in a foreign country 
     or any organization or individual owned or controlled by such 
     an organization or individual; and
       ``(4) the term `intelligence community' has the same 
     meaning as in section 3 of the National Security Act of 1947 
     (50 U.S.C. 401a).''.

  Mr. LIEBERMAN. Mr. President, I rise today to speak on behalf of 
legislation introduced by Senator Collins and myself that would create 
a new Committee for Secure Commerce at the Department of Homeland 
Security to review the proposed sale of U.S. properties to foreign 
investers. This Committee would replace the Committee on Foreign 
Investments in the United States, whose hasty approval of the Dubai 
Ports World acquisition of terminals at several U.S. ports led to a 
public outcry, which eventually led to DPW's withdrawal from the deal.
  The entire affair has been poorly handled, from the original failure 
to conduct a thorough investigation to the failure to consult with and 
inform the Congress and the American public. Any proposed foreign 
investment in this country needs a thorough and fair review to ensure 
that our national security or homeland security is not jeopardized. I 
was not among those who called for the deal to be prohibited before a 
thorough investigation was conducted, because I felt that Dubai Ports 
World never got a chance to make a case that its ownership of port 
terminals in the U.S. would not jeopardize our homeland security. 
Because of the initial public outcry, they were condemned before they 
were allowed to stand trial, and I believed that violated this Nation's 
commitment to the rule of law. A required 45-day investigation of the 
deal should have been initiated. Congress should have been better 
informed of the proposed acquisition in the works. And the American 
people deserved a clear explanation from their President about why he 
thought the sale was in our interest.
  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. Our 
legislation would ensure that foreign investments are scrutinized by 
the agencies most directly responsible for protecting this Nation.
  That is the underlying purpose of our legislation.
  Our bill would create the Committee for Secure Commerce within the 
Department of Homeland Security to review and investigate any mergers, 
acquisitions, or takeovers of assets within the U.S. by foreign 
companies.
  Like CFIUS, the new Committee would have 30 days to conduct a review 
of transactions, but could also seek a longer, 45-day investigation as 
well. A 45-day investigation would be obligatory if a company 
controlled by a foreign government tries to purchase assets involved in 
U.S. interstate commerce. And if any member of the Committee objected 
to a proposed deal, the President would have the final say on whether 
it went forward, or whether a divestiture, or some other remedy, was 
necessary.
  The Committee would be chaired by the Department of Homeland 
Security. The Defense Department would serve as a vice chair. Our bill 
also strengthens Congressional oversight by requiring immediate 
congressional notification of all mandatory investigations, and 
quarterly reports on all other transactions.
  The Senate Committee on Homeland Security and Governmental Affairs 
received an illuminating briefing on the Dubai Ports World deal late 
last month. At that briefing, we learned that the Coast Guard had 
expressed some intelligence concerns about the transaction but that not 
all CFIUS members were informed of these concerns. Our legislation 
addresses this shortcoming by adding the Director of National 
Intelligence as a full member of the committee and ensuring all 
intelligence assessments are consolidated and shared with all Committee 
members and the President.
  Our legislation is intended to directly address the concerns raised 
by the Government Accountability Office that CFIUS tended to focus more 
on investments issues rather than security issues--by placing DHS and 
DoD in charge, and by specifically including homeland security issues 
as factors to be considered by the new committee.
  The rush to judgment on the DPW deal did not allow the company to 
stand or fall on its own merits. And

[[Page S2032]]

that is not how we do things in America. We do not judge people in our 
democracy by their race, nationality, religion, gender, sexual 
orientation, or age. We judge people on their merits.
  I believe this legislation would establish a better process for 
judging the wisdom or folly of selling U.S. property to foreign owners 
by establishing that the Nation's security should be the pre-eminent 
consideration in foreign purchases of U.S. property and by ensuring 
that everyone's concerns about such sales get a fair hearing.
  Mr. AKAKA. Mr. President, I am pleased to join Senator Collins and 
Senator Lieberman in introducing a bill to transfer the authority of 
reviewing foreign investment in the United States to the Department of 
Homeland Security and to impose additional structure and increase 
congressional oversight on the review process. There has been a failure 
in Government procedure that must be corrected, and this legislation 
will address those procedural failures.
  I am concerned that our process to review acquisitions, mergers or 
takeovers of U.S. corporations by foreign entities that ``may'' pose a 
national security threat, did not trigger the Committee on Foreign 
Investment in the United States, CFIUS, to conduct a more thorough 
review. While the United Arab Emirates has supported the United States 
in the war against terrorism, its past activities related to terrorist 
groups should have triggered CFIUS to conduct a more thorough review.
  More specifically, the act states that if there is an acquisition, 
merger, or takeover of a U.S. corporation by a foreign entity, then 
CFIUS, an interagency committee chaired by the Secretary of Treasury, 
reviews the deal to ascertain if there is any threat to our national 
security. In addition, in accordance with Section 837(a) of the 
National Defense Authorization Act for fiscal year 1993, called the 
Byrd amendment, amended Section 721 of the Defense Production Act, the 
Exon-Florio provision, a more extensive review should have been 
conducted on the Dubai Ports World deal, especially since certain 
members of CFIUS did have national security concerns about the 
acquisition.
  Given the questionable interpretation by CFIUS on the Byrd amendment, 
I believe it is important for Congress to revisit the act and clarify 
the provisions that require CFIUS to conduct a thorough review of 
foreign acquisitions, mergers, and takeovers.
  Our legislation removes any ambiguity by specifically requiring an 
investigation any time a foreign government-owned corporation is 
involved in a transaction. As ranking member on the Oversight of 
Government Management Subcommittee, it is my responsibility to evaluate 
governmental processes and develop solutions that ensure our national 
and homeland security while maintaining the favorable promotion of 
foreign investments in the United States.
  I was pleased to work with Senator Collins and Senator Lieberman, 
chairman and ranking member of the Homeland Security and Government 
Affairs Committee, respectively, on drafting the legislation to address 
these process shortcomings, which will promote reasonable transparency 
and oversight within the foreign investment review process. The 
security of U.S. ports is of great concern to me because my home State 
of Hawaii receives 98 percent of its imports via sea-based 
transportation.
  Given the national and homeland security implications of the proposed 
DP World takeover, I believe it is absolutely necessary for Congress to 
ensure that the executive branch performs a rigorous review of the 
transaction. Our bill ensures that Congress is informed of pending 
investigations that may impact national or homeland security prior to 
the President making a decision whether to disapprove the transaction. 
I believe that additional intelligence community resources should have 
been drawn upon before the President made his determination to support 
the transaction. There should have been a consolidated intelligence 
assessment, and this report should have been provided to all senior 
members of the review committee. The bill we introduce today requires 
consolidated intelligence assessments to be developed by the Director 
of National Intelligence and provided to all review committee members, 
thereby ensuring that all members are sufficiently informed.
  I was also disturbed that two of the reviewing Departments--the 
Departments of Defense and Homeland Security--do not currently have 
internal written instructions on their review processes. How do we know 
that adequate reviews of foreign investment in the United States are 
being conducted by these two critical CFIUS members if a systematic and 
documented process, subject to audit, does not exist? Our legislation 
requires the development and documentation of internal procedures to 
ensure that all reviewing members use a standardized process while 
conducting their review of foreign investment proposals.
  Mr. President, I am pleased that Dubai Ports World is attempting to 
address the concerns of the American public. However, this problem is 
bigger than just a single transaction, which is why we are introducing 
this legislation today. I am honored to cosponsor, with Senator Collins 
and Senator Lieberman, this bill which reforms the process of reviewing 
foreign investment in the United States.
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