SILVER SPRING — Silver Spring. MANY ISSUES are called before Congress, but few have been chosen for the attention focused on foreign investment. Over 20 bills have been introduced concerning various aspects of foreign investment, including disclosure requirements for the owners, tax avoidance and the handling of crucial technology.
Foreign investment, ranging from banks in Manhattan to beachfront property in Maui, now totals more than $663 billion than Americans own abroad, making the United States the world's most indebted nation. On the shopping list of this $2 trillion ''buy American'' campaign has been more than $3 billion of property and businesses in Maryland.
Members of the Maryland delegation to Congress are alarmed. Rep. Helen Delich Bentley has repeatedly warned of the threat of Japanese economic domination through strategic investment in the U.S. Sen. Barbara Mikulski expressed concern about the commitment of foreign owners to local charities such as the United Way. Rep. Tom McMillen cautioned: ''As members of Congress, we must always remember that foreign investors, by their very nature, will have different values and objectives than will Americans.''
Polls reveal that about 80 percent of Americans feel the sovereignty of the United States is threatened by foreign investment.
Congress is considering legislation that would ban political-action committees at foreign-owned companies: Over $100 million annually is expended by overseas investors on lobbying fees, PAC contributions and other public-relations activity to influence government actions in the U.S. Representative McMillen cited news articles reporting ''that the Japanese trade ministry had proposed a $200,000 grass-roots campaign to promote their trade interests, [and that] foreign investors are forming a lobbying group to promote their interests.''
That foreign investors spend hundreds of millions annually to promote and protect their interests is to be expected. But, as Mr. McMillen warned, the interests and objectives of foreign investors will be different from those of an American.
When the department store Garfinckel's was owned by a local family, every effort was made to keep the business running. But when its Saudi owners chose to invest elsewhere, Garfinckel's recently slipped into bankruptcy. Many in Maryland lost their jobs; creditors and suppliers will not be paid.
Foreign investment can also reduce economic opportunity for Americans. By a 20-1 margin in terms of workers employed, foreign investors buy existing U.S. companies rather than starting up new ones. Department of Commerce data show that foreign-owned companies prefer to contract with suppliers back home, rather than U.S. firms. For each worker employed, foreign-owned businesses imported goods worth over $40,000;
the comparable figure for American-owned businesses is about $3,000 for each worker, adding billions to the trade deficit.
Control of basic industries is also threatened. Foreign-owned companies control 55 percent of the leather-goods market in the U.S., 28 percent of banking, 25 percent of apparel, 23 percent of transportation, 20 percent of electronics, and 20 percent of the primary metals and instruments markets. OPEC nations control a large number of refineries and gas stations in the U.S. The U.S. could not go to war without having to rely heavily on suppliers controlled by overseas entities.
Foreign investment also distorts the economy. In growth years, foreign investors buy up the best assets, driving up prices. Purchases of New York real estate by overseas buyers are considered to have inflated prices 20 percent. During low growth periods, distress selling by foreign investors forces down the market. Japanese and other investors are now selling their holdings of U.S. real estate, stocks and bonds, exacerbating recessionary conditions.
The Federal Reserve now finds its options restricted by foreign activity in Treasury bonds. For the 1980s, foreign investors bought about $80 billion annually in Treasury bonds, helping finance the budget deficit and keep interest rates low. But in the first six months of 1990, foreigners sold $20 billion more in Treasury bonds than they bought, leaving little room for the Federal Reserve to lower interest rates to avert a recession in the U.S.
The argument is made that foreign investment poses no threat, but brings net gains from capital infusions, new technology and innovative management techniques. Then why do other advanced countries, such as Japan, control the access of foreign investors to their markets and economy? Some countries that have invested heavily in the U.S. do not even allow foreigners to own businesses in their own domains. Others limit the extent of the investment to minority ownership in joint ventures.