CFIUS Decision-Making Needs Changes, Accountability, Former Official Says
The Committee on Foreign Investment in the U.S. needs significant revisions to fix its unbalanced, secretive reviews, which fail to hold member agencies accountable and are damaging the U.S. investment atmosphere, said Stephen Heifetz, a former CFIUS official. Heifetz said CFIUS may be unnecessarily driving away foreign investment with the threat of national security reviews, which can take more than a year to resolve and sometimes don’t provide reasonable justifications to the parties involved.
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“[T]he committee's decision-making has run amok -- no accountability leading to lengthy delays and lack of balance between security and economic concerns on too many deals -- endangering the United States' reputation as a welcome home for foreign investment and the dazzling array of companies that investment supports,” Heifetz wrote in an Oct. 4 opinion piece for the technology publication Protocol.
Heifetz, who is now a CFIUS lawyer after serving on the committee under both Republican and Democratic administrations, said CFIUS personnel are smart and hardworking, but the committee is a “structural nightmare.” Because no single agency controls the committee -- composed of representatives from the Treasury, Commerce and Defense departments and others -- “the loudest voice often wins,” Heifetz said. “Further, deliberations occur in secret, under a national security cloak. While the committee typically communicates through Treasury Department staff, no individual takes responsibility for decisions, the committee generally makes those decisions without providing specific reasons to affected parties and there is no oversight.”
Heifetz said CFIUS decisions to interfere in certain investments should be made by a single, identified senior official, such as the Treasury secretary. Secretary Janet Yellen should “make clear” that “she is ‘the committee’ and is accountable for balanced, timely decisions,” he said. “Secretary Yellen is an honorable public servant, by all accounts, but with regard to the committee, she and her predecessors have been derelict. That should not continue.” A Treasury spokesperson did not comment.