"I think now, finally, we're in a position where we'll be able to pass something we were not able to pass before," Sen. James M. Inhofe, an Oklahoma Republican, said last week.
Sen. Richard C. Shelby, the Banking Committee chairman, called the Dubai case an indictment of the obscure interagency panel, the Committee on Foreign Investment in the United States, charged with reviewing foreign investment.
"A process that could produce such a result is simply no longer acceptable," said the Alabama Republican, who is working with senior lawmakers, including Democratic Sen. Paul S. Sarbanes of Maryland, to revamp the review process. Sarbanes said he is concerned about the "deeply flawed process that permits this sort of transaction to go forward before it is analyzed sufficiently."
Most lawmakers say they should be kept better informed about the work of the committee, led by the Treasury Department and which, by law, operates in secret to protect proprietary business information and prevent disclosure of national security details that are classified.
Created in 1975 to monitor the impact of foreign investment in the United States, the committee was charged in the late 1980s with considering the national security effects of proposed deals, as part of a move to give the president power to block any transaction deemed a security threat.
The group, with representatives from 12 agencies, has 30 days to review proposed transactions. If members raise national security concerns, it can take up to another 45 days for a deeper investigation. Ultimately, the president has the last word. Congress hears about transactions after the fact, and only if they are subjected to a national security probe that prompts the president to weigh in - something that has happened only 25 times out of more than 1,600 applications.
Bayh's measure would require Congress to be notified at the outset of any foreign purchase of a U.S. firm, while other proposals would require that lawmakers are told whenever a government-owned foreign company seeks to buy an American business.
"There needs to be enough transparency so that you can make a good, hard evaluation about security without compromising trade secrets," said Rep. Donald Manzullo, an Illinois Republican who is proposing legislation that would require the administration to notify Congress and hold a public hearing any time a deal is submitted for review. "The problem with [the interagency committee] is that no one even knows when somebody files."
Other lawmakers want to keep foreign firms from owning any U.S. facility related to critical homeland security infrastructure. Democratic Rep. Debbie Wasserman Schultz of Florida proposes to ban any foreign ownership of property at U.S. ports, while several lawmakers in both parties, including Democratic Rep. Benjamin L. Cardin of Baltimore, want to keep out any government-owned foreign firm. Republican Rep. Mark Foley of Florida and Democratic Rep. Edward J. Markey of Massachusetts both want Congress to be able to weigh in on deals involving foreign governments, which their measures would automatically subject to a 45-day review.
Businesses and some veterans of the review committee shudder at the idea of letting Congress keep close tabs on the process, fearing that would hamper foreign investment without protecting national security.
"If you had 535 members of Congress able to question every transaction, our economy would come to a screeching halt," said William H. Lash III, a George Mason University international trade law specialist who formerly served in Bush's Commerce Department.
Other proposals in Congress would require a 45-day national security review of any deal involving a foreign government-owned firm, whether or not the committee on foreign investment sees a potential threat.
Manzullo proposes moving the panel out of the Treasury Department, where, critics say, it sometimes focuses on welcoming foreign investment to the detriment of national security. The committee often works with foreign firms to cut side deals on security issues and sparing them more lengthy national security reviews, a practice that, skeptics say, papers over real threats.
"When somebody from a national security agency shows up at the meeting and you start raising concerns, you become the skunk at the garden party, and they try to mollify you in some way without really taking care of the problem," Mulloy said.
Bush administration officials and some foreign investment analysts argue that the reviews give proper weight to national security concerns, arguing that changing them won't make the country safer and might harm the economy.
"We'll get a slower, less effective and more cumbersome regulatory process for no benefit in security," said James Andrew Lewis, of the Center for Strategic and International Studies. "Foreign investors are going to say, `Those Americans are so crazy - I'm not going to put myself through that.'"
julie.davis@baltsun.com
The Associated Press contributed to this article.
