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House OKs investment review

The bill, written in the wake of the Dubai-ports uproar, requires more study of foreign deals. Bush is likely to sign it.

July 12, 2007|Richard Simon | Times Staff Writer

WASHINGTON — Quietly closing out the flap over a state-owned Arab company's attempt to take over operations at some U.S. port facilities, Congress on Wednesday sent to President Bush legislation requiring greater scrutiny of foreign investment in the United States.

The measure, which cleared the Senate last month, was easily passed in the House, 370 to 45, and Bush was expected to sign it.

The bill's primary aim is to overhaul the Committee on Foreign Investment in the United States, an obscure panel of federal officials that reviews national security implications.

The panel's approval early last year of Dubai Ports World's plan to manage facilities in six East Coast cities caused an embarrassing rift between Bush, who supported it, and his usual Republican allies in Congress, who voiced security concerns. Democrats also objected, using the proposed takeover to highlight the vulnerability of ports to attack and to showcase the party's national security credentials.

In response to the furor, the Dubai company abandoned the proposal.

"Dubai Ports World has left the front page, but it is not forgotten," Rep. Deborah Pryce (R-Ohio) said this week.

Rep. Carolyn B. Maloney (D-N.Y.) added: "I think we have struck the right balance in this bill in protecting the national security interests of our country ... but also providing a certain and clear procedure to encourage safe foreign investment that will create jobs and boost the economy."

Other efforts by foreign companies to take over U.S. firms also have generated controversy, including attempts -- later abandoned -- by Chinese firms to operate a cargo terminal on the site of the former Long Beach Naval Station and to buy Unocal Corp.

The measure would require more intense reviews of foreign investment in the United States that could pose security risks. Greater scrutiny would be required of attempted takeovers of U.S. businesses by companies controlled by foreign governments. High-level officials would have to sign off on transactions.

The measure would also require the administration to alert Congress to reviews. Lawmakers had said that the Dubai deal was approved by low-level officials without notice to Congress.

Business groups, which expressed concern that earlier versions of the legislation could discourage foreign investment, expressed support for the final measure.

"This bill is a victory for the U.S. economy and the 5 million American workers whose jobs depend on foreign investment," said the Business Roundtable, the Financial Services Forum, the Organization for International Investment and the U.S. Chamber of Commerce in a statement.

Rep. Duncan Hunter of El Cajon, the top Republican on the House Armed Services Committee and a candidate for his party's presidential nomination, was among those voting no. He said the measure was weaker than a version approved last year by the Republican-controlled House.

"This legislation would remove the abilities of the secretary of Defense and the director of National Intelligence to force an investigation of a proposed deal that may have dire national security implications," he said in a statement. "This would pave the way for another Dubai Ports World fiasco."


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