Financial Times: Smartmatic-Sequoia Venezuela Deal Stirs CFIUS Interest
Venezuela deal in US stirs Cfius interest
By Stephanie Kirchgaessner in New York
Financial Times
The takeover last year of a California-based voting machine company by a group with ties to Venezuela has caught the attention of the Treasury-chaired committee that investigates deals on national security grounds.
The revelation that the committee on foreign investment, or Cfius, has shown interest in the deal – and could initiate a retroactive review – underscores how dramatically the vetting process for foreign takeovers has changed following the furore earlier this year over the approval by the Bush administration of the sale of five US port terminals to a Dubai-controlled company.
The Treasury Department said it had made contact with Smartmatic, a private Delaware-incorporated subsidiary of a Dutch company that is controlled by Antonio Mugica, a Venezuelan citizen, but declined to comment on whether Cfius was reviewing the deal.
In the years before the Dubai controversy put Cfius at the centre of a political storm, the panel, comprising 12 government agencies, generally reviewed transactions involving sensitive defence technology. But the uproar over the approval of the Dubai deal, which ultimately scuppered it, has prompted the administration to take a tougher approach, in part because it is fighting off attempts in Congress to give lawmakers more oversight of Cfius.
The Treasury said it had taken steps to get Congress more involved, including notifying congressional committees once investigations of deals are closed, giving the director of national intelligence a greater role, and by giving only "Senate-confirmed officials" the ability to sign off on Cfius cases.
"There have been a number of changes in Cfius. It is a much more difficult regulatory environment than it was six months ago," says David Marchick, an attorney with Covington Burling who handles Cfius cases.
Todd Malan, who heads the Organisation for International Investment, which represents US subsidiaries of foreign companies, said of the Smartmatic takeover of Sequoia, the California-based company, that he could not recall another instance when Cfius had contacted a company after a transaction was complete but that it was sign of a more flexible approach to defining "national security".
"To me, all this adds up to the fact that elected policy- makers should have confidence that things are happening outside the legislative context," Mr Malan said.
The Treasury declined to say what spurred its interest in the Smartmatic deal but it was the subject of a letter to John Snow, then Treasury secretary, last May from New York congresswoman Carolyn Maloney, who has backed a House proposal to tweak the Cfius process.
Smartmatic said there was "absolutely no ownership" by the Venezuelan government and that the deal had no "military, defence or national security applications".
Copyright The Financial Times Ltd. All rights reserved.
URL: http://msnbc.msn.com/id/14001689/
By Stephanie Kirchgaessner in New York
Financial Times
The takeover last year of a California-based voting machine company by a group with ties to Venezuela has caught the attention of the Treasury-chaired committee that investigates deals on national security grounds.
The revelation that the committee on foreign investment, or Cfius, has shown interest in the deal – and could initiate a retroactive review – underscores how dramatically the vetting process for foreign takeovers has changed following the furore earlier this year over the approval by the Bush administration of the sale of five US port terminals to a Dubai-controlled company.
The Treasury Department said it had made contact with Smartmatic, a private Delaware-incorporated subsidiary of a Dutch company that is controlled by Antonio Mugica, a Venezuelan citizen, but declined to comment on whether Cfius was reviewing the deal.
In the years before the Dubai controversy put Cfius at the centre of a political storm, the panel, comprising 12 government agencies, generally reviewed transactions involving sensitive defence technology. But the uproar over the approval of the Dubai deal, which ultimately scuppered it, has prompted the administration to take a tougher approach, in part because it is fighting off attempts in Congress to give lawmakers more oversight of Cfius.
The Treasury said it had taken steps to get Congress more involved, including notifying congressional committees once investigations of deals are closed, giving the director of national intelligence a greater role, and by giving only "Senate-confirmed officials" the ability to sign off on Cfius cases.
"There have been a number of changes in Cfius. It is a much more difficult regulatory environment than it was six months ago," says David Marchick, an attorney with Covington Burling who handles Cfius cases.
Todd Malan, who heads the Organisation for International Investment, which represents US subsidiaries of foreign companies, said of the Smartmatic takeover of Sequoia, the California-based company, that he could not recall another instance when Cfius had contacted a company after a transaction was complete but that it was sign of a more flexible approach to defining "national security".
"To me, all this adds up to the fact that elected policy- makers should have confidence that things are happening outside the legislative context," Mr Malan said.
The Treasury declined to say what spurred its interest in the Smartmatic deal but it was the subject of a letter to John Snow, then Treasury secretary, last May from New York congresswoman Carolyn Maloney, who has backed a House proposal to tweak the Cfius process.
Smartmatic said there was "absolutely no ownership" by the Venezuelan government and that the deal had no "military, defence or national security applications".
Copyright The Financial Times Ltd. All rights reserved.
URL: http://msnbc.msn.com/id/14001689/
posted by ConcernedVoter06 at 9:23 PM
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