Communist China and CFIUS: “Dropping the Shark”
By Rep. Thaddeus McCotter Posted in Congress — Comments (14) / Email this page » / Leave a comment »
To resuscitate the TV sitcom Happy Days, the show’s main character, Arthur Fonzarelli, was aquatically clad in a swim suit, white tee-shirt, and leather jacket and filmed performing a harrowing water ski jump over a shark. Though “The Fonz” pulled it off, the network pulled the plug on Happy Days. Subsequently, any inane attempt to prevent a show’s cancellation by scripting an absurd scene which only serves to end an audience’s willing suspension of disbelief has been colloquially deemed “jumping the shark.”
But what does one call a situation where a U.S. governmental entity willfully suspends its disbelief communist China is a strategic threat and, ergo, appeases it with the sale of sensitive technologies currently employed in defending our computer systems from cyber warfare and espionage? I suggest we call it “dropping the shark.”
My friends, this is not a hypothetical homage to Seinfeld scriptwriters.
Read on . . .
The Committee on Foreign Investment in the United States (CFIUS) must review and block Bain Capital and communist China’s Huawei Technologies’ acquisition of a significant stake in the 3Com Corporation. If approved, Bain Capital and communist China’s Huawei Technologies’ stake in the 3Com Corporation will gravely compromise our free republic’s national security. The 3Com Corporation is a world leader in intrusion prevention technologies designed to protect secure computer networks from hacker infiltration. To date, the United States Department of Defense (DoD) extensively utilizes 3Com Corporation’s intrusion prevention technologies. Thus, in the wake of this year’s successful cyber warfare by the communist Chinese People’s Liberation Army (PLA), in which they hacked into one of our DoD’s and one of the German Foreign Ministry’s computer networks, approving this sale would be an abject abnegation of CFIUS’ duty to protect America’s vital defense technologies from enemy acquisition.
There should be no doubt about the aims of communist China’s Huawei Technologies. The Pentagon has identified communist China as the culprit in recent cyber attacks on our military’s computer networks, which caused their shut down in June. Small wonder the pending sale to Huawei is deemed "really worrisome" by former Pentagon cyber security expert, Sami Saydjari.
Nor is this the first time communist China’s Huawei Technologies has raised legitimate American concerns. In Newsweek’s Jan. 16, 2006 issue it described Huawei Technologies “a little too obsessed with acquiring advanced technology.” Further, in Congressional testimony before the House Armed Services Committee on September 19, 2002 University of Wisconsin Law School Professor, Gary Milhollin, Director of the Wisconsin Project on Nuclear Arms Control, explained Huwei Technologies assistance in supplying technological support to our enemies in Iraq. Mihollin stated, “The history of Huawei shows how sensitive American exports can wind up threatening our own armed forces… So, when we talk about export controls, we are not just talking about money. We are talking about body bags.” Even earlier, in 2000, the CIA discovered Huawei Technologies was selling fiber optics equipment to Saddam Hussein to advance Iraqi’s military technology and communications. This was in direct violation of the United Nations' international embargo.
Moreover, in 2003, Cisco Systems formally charged Huawei Technologies with grievous intellectual property violations such as infringing on its patents, copying its Inter-Network Operating System (IOS) source codes, and copying its Command Line Interface (CLI) and corresponding screen displays. This is especially disturbing in light of the reports confirming the strong ties between Huawei Technologies, the communist Chinese government and its armed-wing – the People’s Liberation Army. In only two decades Huawei has expanded to over one hundred (100) countries; amassed sales over $8.7 billion; and greatly benefited the communist Chinese’s alarming military build-up.
To protect Americans’ security, Congresswoman Ileana Ros-Lehtinen (R-FL), Ranking Member of the House Foreign Affairs Committee, has sponsored House Resolution 730, of which I am an original cosponsor. Her resolution declares the 3Com transaction threatens national security and “should not be approved by the Committee on Foreign Investment in the United States." All of us are fortunate for Representative Ros-Lehtinen’s courageous leadership on this issue; and hopefully CFIUS will heed her counsel.
If they do not, and CFIUS approves this sale and its accompanying sensitive defense technologies to Huawei, it will place in communist China’s cyber-hacking hands some of our most sensitive technologies employed for our high-tech defense; and it will be akin to CFIUS dropping the shark in our fish bowl and pulling the plug on America’s happy days.
What does sovereignty have to do with anything here? Are you essentially claiming the State may nationalize whatever it deems important on a whim?
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Are you suggesting that the US doesn't have a right to restrict what crosses it's own borders?
The only reason 3COM even has a patent on this tech is because the State enforces patent rights. And we respect Chinas patent rights. Do you actually think that would happen in the opposite direction? US Patents are backed by We the People, and yes, we can and do restrict access to them INTERNALLY based on national security grounds, let alone externally.
Like nuclear knowledge to Iran. I guess you think neither the goods nor the know how should be restricted. The STATE HAS NO RIGHT!
Furthermore, the present "free trade" set up is anything but. Is China allowing its currency to float? No. Does WTO really have the power to make them? No. They're set up just like the UN. I'm not interested in moving our entire regulatory regime to international courts Neil. It's a violation of Sovereignty.
I will extend the defense of the position if you want, but basically your argument holds no water. The situation is analogous to the gun control argument. Criminals will violate the law anyway, so only the law abiding end up defenseless. No Thanks.
Or if you prefer, from a market perspective, the Nash equilibrium view works. You want access to our markets, then we want access to yours. Your not going to float your currency, then we aren't going to give you as much access. Two way street, Neil, not "Hey, bend over and like it".
If you just want to talk about things leaving, the Constitution is protective of those: "No Tax or Duty shall be laid on Articles exported from any State."
But again, I ask you: What right do you have to tell the shareholders of 3Com that they don't have the right to sell their property as they see fit? Who are you to steal their property's value by denying them the right to operate in the market?
Americans who dislike the Chinese offer ought to pony up out of their own wallets to beat the offer, rather than run to government to snivel and whine.
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First of all, I've noticed a little increase in TAKINGS by the state at the behest of large multi-nationals in the last 10 years. Why should I support their property rights when they don't support mine?
Second, if you want to talk about things leaving, I can assure you that none of the founders thought it was illegal for the federal government to prevent selling an enemy state an arsenal, Neil.
The problem, Neil, is not that I don't like the ideals of free trade. The problem is that big business doesn't like the ideals of free trade and neither do commie party state apparatus. They can, and have, and will continue, to attempt, and often succeed, in subverting free markets for their own gain. I don't want to remove our ability to punish them when they make that attempt. That wouldn't be conservative.
3M only has property rights because the state enforces them. Undermine that state enforcement, and property rights will be gone. Like in China.
This isn't about 'free trade,' though. This is fundamental property rights. The owners of 3Com wish to sell their property, but some wish to have the government intervene and prevent that.
And you're right, property rights only exist when the state ensures we have that liberty. If we intervene here, what's to prevent the state from just outright stealing the property next, in the name of the We The People just like Fidel Castro and Hugo Chavez?
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he owners of 3Com wish to sell their property, but some wish to have the government intervene and prevent that.
No. The government is NOT preventing 3COM from selling their property. They can sell their property all day long. The government is contemplating restricting WHO they might sell it to. And it's on the basis of a legitimate -- no, CRUCIAL -- national security interest.
It's war -- so when can we start shooting back at the enemy Democrats?
Takings Clause. If the Federal Government decides that its interests would be best served if the shareholders of 3Com were not permitted to dispose of their interest as they see fit, then that amounts to a taking, since the value of 3Com stock would immediately fall to the floor.
The Government should match Bain's acquisition offer and simply buy 3Com, if they honestly believe it shouldn't be part-owned by the Chinese.
For what it's worth, the Chinese play this game every day of the week. There is only a small amount of stock in Chinese business enterprises that is allowed to be purchased by non-Chinese.
It's a new world out there. The Chinese are most definitely trying to attenuate our ability to wage conventional war. The problem is that there's no real way to constrain information. Conventional war is obsolete. It unfortunately happens to be the case that it's one of the things we're the best in the world at.
I don't think people at the receiving end of a MOAB would agree, heh.
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Takings ARE happening, but always in one direction, which is to bigger players. I HATE takings. However, restricting the sale of assets is NOT a taking in the sense that is used by everybody else.
My property can be rezoned without compensation. My property use can be restricted (wetlands, for instance), as long as the State leaves any plausible use for the property.
You want to get rid of most of thoses things, fine by me. I don't like them.
But I'm not interested in giving up my limited power over the very entities that are doing that taking. Forget it. You take from me, I take from you. That's a Nash Equilibrium, Neil, the foundation of modern economics. What's going to happen when the big players can take from me, but I can't hit back? The answer is clear to me.
But I guess I just failed in that now, heh.
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Too many in the Republican Party are ignoring the national security ramifications of having such open trading policies with China. Conservatives seem to think, "if Big Business wants it, it must be okay." I think our national security is far more important than whether corporations like Cisco or Coca-Cola can please shareholders with their balance sheets.
The Republican Party could win back a lot of the Reagan Democrats if they made a strong stand against our trade policies with China.
I have no problem engaging in free trade with a country like the UK or Japan, but I do have a problem when we're building up an "Evil Empire" like China as a massive superpower with our insane trade defecits and our technology. Where do you think they get their trillion dollar government surpluses from? Americans are funding their war machine.
America must decide which countries only have economic interests in trading with the U.S., and which countries have more sinister intentions.
Free trade doesn't have to be a suicide pact.
"Back in the thirties we were told we must collectivize the nation because the people were so poor. Now we are told we must collectivize the nation because the people are so rich. "
William F. Buckley, Jr.
Take a look at the back or bottom of anything they make. Its already made in china.
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"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
Sovereignty must win in these instances, and if we find the apparatus ignoring it's duty to such maintainence, then the trade systems need tweaked, not my Liberty.
I love markets and I love free trade, but Commies aren't interested in either except where it will advance their power position. This type of technology trade was a bad idea when Clinton did it in exchange for illegal election funds, and it's just as bad an idea now.
I agree with you, Mr. McCotter, but I would carry a bigger stick.
If the business community continues to ignore its required duty to support liberty, they can expect me to abandon them on trade and move to a protectionist stance. Remove presidential expedited trade authority. Drop out of WTO. Ditch NAFTA.
Choose, morons. You're position of invulnerability is an illusion.