This is one of Senator Bayh's pet projects. He has been fighting this type of battle for a long time.......and has had some success.....

http://bayh.senate.gov/releases/2006/02/21FEB06PR.htm

Bayh to Introduce Comprehensive Legislation to Ensure U.S. Control of Security Concerns

Legislation would require Director of National Intelligence to certify foreign acquisitions like Dubai port sale


Washington, D.C. -- Calling the Dubai takeover of operations at U.S. ports a symptom of a larger problem, U.S. Senator Evan Bayh announced today he will introduce comprehensive legislation that would ensure U.S. control of homeland security concerns by increasing the scrutiny of business deals with foreign companies. Among other things, Bayh's legislation would require the Director of National Intelligence to approve such sales, so that homeland security is given greater consideration before deals are approved.

"We have to stop outsourcing our homeland security," Senator Bayh said. "The Dubai takeover is a symptom of a much larger problem. Again and again, the current system for overseeing foreign takeovers has undermined our national security interests by rubber stamping deals like this one. My legislation offers a comprehensive solution to the problem by ensuring that national security takes priority in all future business deals, whether they involve port security or any other homeland security concern."

Currently, the Committee on Foreign Investment in the United States (CFIUS) is responsible for reviewing the national security implications of foreign takeovers of domestic companies. However, since CFIUS was enacted in 1988, it has blocked only one purchase of a U.S. company. A 2003 Government Accountability Office (GAO) report requested by Senators Bayh, Shelby (R-AL) and Sarbanes (D-MD) found that CFIUS uses such a narrow definition of national security that it approves too many questionable takeovers without sufficient review.

Another example of CFIUS failing to prevent the takeover of a company with national security interests took place in 1995, when the Committee approved the sale of Magnequench, an Indiana-based company responsible for making 80 percent of the magnets used to guide U.S. smart bombs, to a Chinese consortium.

"It's not smart to rely on China to produce important weapons systems for this country, just like it's not smart to outsource our port security," Senator Bayh said. "We have to do whatever it takes, even if it costs us a little more, to protect this country."

Bayh's legislation would put in place several steps to reform the process to ensure that national security is given greater consideration in the review of such acquisitions. This comprehensive approach would not only guard against future port takeovers, but also purchases involving other U.S. homeland security assets, such as defense companies and energy interests. Bayh's legislation would:

· Require the Director of National Intelligence (DNI) to certify that there are no troubling national security implications before the sale is reviewed by CFIUS;

· Add the Director of National Intelligence (DNI) to the Committee to bolster national security consideration;

· Require CFIUS to consider the country in which the foreign investor is located, including its relationship with the United States and its expanding defense capabilities. Currently, the home country is not taken into account during the approval process, so a nation with possible ties to terrorism is given the same consideration as a long-standing ally, such as Great Britain;

· Require the President to notify Congress and relevant state officials of all proposed foreign acquisitions; and

· Increase transparency by requiring CFIUS to hold a public hearing on proposed transactions before a final decision is made.