Congress warns U.S. is ignorant of foreign investment, vulnerable to Chinese takeovers

A former Commerce Department official has warned lawmakers that the federal government has no idea who is financing the purchase of U.S. companies and critical technology, leaving the U.S. vulnerable to foreign threats, including China.

Nazak Nikakhtar, a former assistant secretary of commerce in the Trump administration, told lawmakers that companies have failed to adequately investigate the funding of their work, and the U.S. government has sometimes failed to conduct due diligence.

Ms. Nikakhtar is the Commerce Department’s chief representative to the Committee on Foreign Investment in the United States (CFIUS), which reviews business transactions for national security risks.

“As the former CFIUS head of the Department of Commerce, yes, we are completely clueless, our intelligence community doesn’t have enough information, and I’m often in the office until 3am using whatever open source information I can find to the ultimate benefit Everyone,” Ms Nikahtar told the Senate Intelligence Committee at a hearing this week.

Ms. Nikakhtar, now a partner at the law firm Wiley Rein, also said in written testimony that U.S. data and technology transfers have enabled China to lead in artificial intelligence, and that China will use U.S. production to counter the U.S.

“We’ve had decades of unregulated supply chains and technology transfer to [People’s Republic of China] This systematically erodes our own supply chains and makes us dangerously dependent on adversaries,” she wrote. “This is not a good national security strategy. We need a new strategy. “

The Office of the Director of National Intelligence did not immediately respond to a request for comment.

CFIUS includes representatives from seven different federal departments as well as White House officials, and its remit has been expanded through the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA). Ms Nikakhtar, who was confirmed by the Senate in March 2018 and will serve until 2021, said the federal government had not yet made full use of its powers under the law.

“Joseph Stalin is rumored to have said, ‘We will hang the capitalists with the ropes they sold us,'” Ms Nikakhtar wrote. “Whether that statement is accurate or not, it says something about what’s going on today.”

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