[Congressional Record (Bound Edition), Volume 153 (2007), Part 16]
[Senate]
[Page 22848]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                 CFIUS

  Mr. MARTINEZ. Mr. President, I applaud the signing of the Foreign 
Investment and National Security Act of 2007 by President Bush. After 
more than a year and a half of work, this critical piece of legislation 
was finally signed into law on July 26, 2007. I would also like to 
commend Chairman Dodd and Senator Shelby, my colleagues on the Banking 
Committee for their leadership in forging bipartisan legislation that 
will further protect critical U.S. assets and infrastructure from 
predatory foreign control.
  This much needed legislation updates, reforms, and provides 
transparency to the review process conducted by the Committee on 
Foreign Investment in the United States, CFIUS. This Act will ensure 
national security while promoting foreign investment and the creation 
and maintenance of U.S. jobs. As we have seen over the last couple of 
years with the Dubai Ports and China National Offshore Oil Corporation, 
CNOOC, issues, greater oversight and transparency is needed for foreign 
investment in the United States.
  This legislation also clarifies and expands the term ``national 
security'' to include those issues related to ``homeland security,'' 
including its application to critical infrastructure. The Act also lays 
out additional factors to be considered during the CFIUS review process 
as they relate to our ``national security.''
  I would like to address two of these factors today as they relate to 
a real threat in our hemisphere and to the United States. The Act 
requires that CFIUS review any transaction related to major U.S. energy 
assets as part of our critical infrastructure and any covered 
transaction that would result in the control of any critical U.S. 
infrastructure by a foreign government or an entity controlled by a 
foreign government.
  I raise these issues because I am particularly concerned by the 
recent, and ongoing, actions of Venezuelan President Hugo Chavez 
against U.S. oil companies in Venezuela. While Venezuela has undertaken 
many actions to the detriment of U.S. companies, President Chavez and 
Petroleos de Venezuela have been courting government-controlled Russian 
and Iranian oil interests to take their place.
  It is no secret that Hugo Chavez is an enemy of the United States, 
the liberty and freedom we stand for, and the open and honest commerce 
that is the life-blood of our economy. It is also no secret that 
President Chavez will use whatever assets are at his disposal to harm 
our country. The lone tool in his kit is Venezuela's oil and gas 
wealth.
  Petroleos de Venezuela, S.A. already has a footprint in America 
through the ownership of CITGO Petroleum Corporation. While the CITGO 
gas stations you see on the roadsides and corners of American streets 
are franchised and owned largely by American small business men and 
women, these gas stations rely upon Petroleos de Venezuela and Hugo 
Chavez for their gas supply.
  Because the revenue it generates supports the Venezuelan economy, we 
might think it is a far-fetched idea that Hugo Chavez and Petroleos de 
Venezuela would cut off oil and gas supplies to the United States, or 
other Nations. Yet one only has to look at the actions of the Russian 
Government to see how energy supplies can be used as an economic and 
political weapon against other nations.
  The Russian strategy of using the power of energy assets as an 
economic tool began in 2003 when the Russian Government expropriated 
the assets of Yukos Oil, at that time, Russia's largest privately owned 
energy company. The Russian Government took Yukos assets without 
compensation to Yukos owners or investors and these assets also 
included $6 billion of U.S. investors' money.
  In the winter of 2006, the Russian Government cut off natural gas 
exports to the Ukraine in an attempt to pressure the Ukrainian 
Government to slow its democratic reforms and move toward the West. 
Later in 2006, Russia also cut off crude shipments to Lithuania in an 
attempt to stop the sale of a refinery to a Polish competitor. And 
earlier this year, the Russian Government cut off shipments to Belarus 
to force that country to accept higher prices and turn its pipeline 
system over to Russian Government-controlled companies.
  The Russian Government continues using heavyhanded tactics to move 
Western companies out of Russia so it can regain control of oil and gas 
reserves previously sold to these companies for development.
  The comparisons of President Chavez's actions to renationalize 
Venezuela's oil and gas industry are eerily similar to those taken by 
the Russian Government. As Hugo Chavez increases his government's 
stranglehold on Venezuela's oil and gas supply, will he cut off supply 
to the United States, or other nations, in an attempt to influence 
economic and political events? Will he cut off supply to CITGO stations 
in the United States?
  Reforms to the CFIUS process identifying energy infrastructure and 
energy security as national security interests, and the inclusion of 
these as factors to review when foreign-owned companies especially 
state-controlled companies with histories of using energy assets as 
political and economic tools will prevent Hugo Chavez and the 
Venezuelan Government from controlling additional energy assets here in 
the United States.
  I applaud President Bush for signing this important measure and 
encourage the CFIUS panel to perform stringent reviews of any potential 
sale of critical U.S. energy infrastructure to a foreign-government 
controlled company and deny any sale to entities controlled by tyrants 
like Hugo Chavez who have a history of expropriating U.S. assets and 
who, no doubt, would be willing to use the control of these assets to 
threaten U.S. national security and our economic well-being.

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