WASHINGTON — When a Dutch company sought to take over Silicon Valley Group Inc., a high-tech firm in San Jose, the ultimate vote was cast not by shareholders or executives or even the board of directors.
That job went to the Committee on Foreign Investment in the United States, a secretive, little-known panel of U.S. officials that rules on whether purchases of U.S. businesses by foreign entities would impair national security and should be banned.
The committee approved the $1.6-billion purchase in 2001, but only after setting conditions for the deal, including that the foreign owner -- ASM Lithography Holding -- unload one of the California firm's assets, a laboratory that produced optical components for spy satellites.
"If they can, they'll work out a deal with the company," explained James Andrew Lewis, a senior fellow at the Center for Strategic and International Studies, of the influential U.S. panel. "If they want to deter a purchase, that's usually what happens."
The obscure committee known as CFIUS may face a high-profile decision in the near future: The Chinese bid to buy El Segundo-based Unocal Corp. appears likely to trigger a national security review unless the process is derailed by Congress.
House members voted Thursday to block the government from spending money to recommend approval of the bid by CNOOC Ltd., an arm of government-owned China National Offshore Oil Corp. -- a backdoor way to block a CFIUS investigation. It was not immediately clear how such a proposal would fare in the Senate or how it would affect administration policy.
House members who oppose the Unocal takeover fear that the panel would approve the deal, and they want to stop the process in its tracks.
The Chinese firm -- which is trying to trump Chevron Corp.'s previously announced deal for Unocal -- had formally requested a review before the vote Thursday.
CNOOC representatives contend that an investigation would put to rest any fears that the takeover poses a security threat to the U.S. The company also wants any objections dealt with before the acquisition goes further, and it has suggested that it might sell certain Unocal properties, including pipeline and storage assets, to satisfy the government panel.
"There's a long-proven process for reviewing foreign investment in the United States," said Mark Palmer, a U.S. spokesman for the Chinese firm. "We believe the process will be thorough and fair, and in the end it will not be influenced by emotion or politics."
