U.S. Warned on Foreign Investments

The federal government must keep closer watch on foreign investment in this country, backers of legislation to let federal agencies share data on investors told a House panel today.

“Americans have the right to know what foreign interests are buying up our country,” said Rep. Doug Walgren (D-Pa.), chairman of the House Energy and Commerce Committee’s subcommittee on commerce.

Foreign investment in the United States nearly quadrupled during the last decade, from $500 billion in 1980 to nearly $1.8 trillion in 1988, he said.

“When a foreign investor buys a U.S. firm it often means U.S. technology is transferred abroad,” Walgren said during a subcommittee hearing.

The panel is considering an Administration bill to give the Commerce Department’s Bureau of Economic Analysis access to Census Bureau data on foreign-owned U.S. companies.

Commerce keeps data only on each foreign investor as a whole, while the Census has information on each location that is owned by foreign interests.

Rep. Norman F. Lent (R-N.Y.), a co-sponsor of the Administration-backed bill, noted that foreign investment brings substantial benefits, “the most important being 3.2 million jobs.”

Sen. J. James Exon (D-Neb.), also a co-sponsor, said the government now has “an incomplete and distorted picture” of the extent of foreign investment.

“I have repeatedly expressed my concern about America’s growing dependence on foreign capital,” Exon said. “At risk is America’s economic independence.”

A broader proposal by Rep. Philip R. Sharp (D-Ind.) also would give Commerce access to data from other agencies, including the Internal Revenue Service. However, the Administration contends that it could allow confidential business records to be publicly disclosed and would thus discourage foreign investment.

Rep. Lee H. Hamilton (D-Ind.) contended, however, that the Sharp measure would protect confidential information and that it would require no new information to be given to the government.