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Business poised for CFIUS win |
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By Jim Snyder and Jeffrey Young
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Posted: 07/10/07 07:56 PM [ET] |
As the Senate moves from one controversial topic — immigration — to another — the war in Iraq — the House takes up a once white-hot issue that has cooled considerably.
When Dubai Ports World’s (DPW) intended management takeover of American seaports through its acquisition of a British company became public, members of Congress rushed to the floor and nearby cameras to denounce the deal as a threat to national security.
Under bipartisan pressure, DPW forwent managing the American ports and took over the remaining pieces of the British firm.
That the regulatory fallout didn’t extend much beyond that is a testament to a coordinated lobbying effort by big business.
In the rush to pass legislation, for instance, one bill was introduced that would have banned foreign-owned companies from owning American subsidiaries that had a role in overseeing a broadly defined national infrastructure.
“It was crazy,” said Nancy McLernon, a senior vice president at the Organization for International Investment (OFII), a business lobby.
The debate centered on a theretofore ignored interagency panel known as the Committee on Foreign Investment in the United States (CFIUS), which is responsible for reviewing national security issues raised when a foreign company buys a domestic one.
Business’s biggest worry became proposals that would lengthen the time CFIUS has to review the implication of a foreign acquisition, which lobbyists claimed would put foreign companies at a significant disadvantage when trying to expand.
A measure passed by the Senate last year would have lengthened the process too much, according to business groups.
OFII partnered with groups including the U.S. Chamber of Commerce, Business Roundtable and the Financial Services Forum to show members that they weren’t “just going after companies that don’t vote,” McLernon said.
OFII also made its own economic arguments, stressing the 5 million American jobs created by foreign companies.
Some of OFII’s 160 member companies warned they would stop expanding in the United States if the Senate measure passed.
“This was a big issue for us,” McLernon said.
The tide turned in the House despite its reputation for acting on impulse, which was why, as George Washington once explained to Thomas Jefferson, a Senate was needed. The lower chamber offered the more moderate approach that business groups favored, according to McLernon.
Time ran out before a law was passed, however.
As a measure of how far the issue has come, the House is set to take up the CFIUS bill as soon as today on suspension calendar. The Senate has passed the bill.
The bill gives CFIUS about the same amount of time to review a merger as other agencies have to examine antitrust issues, which was a key business priority.
It also requires an active role for the director of national intelligence, as well as more communication between CFIUS and the relevant congressional oversight committees.
McLernon said the hope is that by keeping Congress better informed throughout the process, controversies of the kind that upended DPW’s deal can be avoided. She said the measure would not affect foreign investment in the United States.
The House also is set to take quick action on a prescription drug safety bill that had also been the subject of intense lobbying.
By placing the bill on the suspension calendar tomorrow, the Democratic leadership sent a signal that the legislation shepherded through markup by Energy and Commerce Committee Chairman John Dingell (D-Mich.) could very well head to conference committee unencumbered by controversial amendments — much to the relief of the drug and biotechnology industries.
The underlying measure would establish new authorities for the Food and Drug Administration (FDA) to set and enforce safety requirements and would reauthorize programs through which pharmaceutical and medical device companies pay user fees for agency reviews of their new products.
The bill had appeared to be a tantalizing target for other prescription drug legislation. The drug and biotech lobbies may be breathing easy this week, but their work isn’t done. Their lobbying efforts will have to intensify as conference negotiations approach.
Democratic Caucus Chairman Rahm Emanuel (Ill.), for example, has been seeking a vehicle for his measure to permit the importation of less expensive medicines from abroad.
The drug industry staunchly opposes the bill and succeeded in beating back previous attempts to get it enacted, but House Speaker Nancy Pelosi (D-Calif.) has promised Emanuel a floor vote.
Dingell himself voted against similar measures in the past. His Senate counterpart, Health, Education, Labor and Pensions Committee Chairman Edward Kennedy (D-Mass.), led a floor fight against Sen. Byron Dorgan’s (D-N.D.) drug imports amendment to the FDA bill that passed the upper chamber in April.
Rep. Henry Waxman (D-Calif.), second to Dingell in seniority on Energy and Commerce, has been working on another prescription drug bill that will have to wait for another day.
Waxman’s bill would establish new FDA authorities to approve generic versions of complex biologic drugs, but Rep. Jay Inslee (D-Wash.) and other committee Democrats are pushing an alternative bill that is considered friendlier to brand-name biotech companies.
Kennedy forged a deal in his committee on generic, or “follow-on,” biologic drugs two weeks ago, making the issue all but certain to be part of conference negotiations.
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