Obama Blocks Chinese Purchase of Windfarms

Wind farms can cause a rise in temperature, found a study in Nature.

(Photo: http://www.telegraph.co.uk/earth/earthnews/9234715/Wind-farms-can-cause-climate-change-finds-new-study.html)

 

Based on a recommendation by the Committee on Foreign Investment in the U.S. (CFIUS), last week President Obama signed an executive order that blocked Ralls Corporation from making an investment in wind farms in the United States. The order said in part:

There is credible evidence that leads me to believe that Ralls Corporation . . . might take action that threatens to impair the national security of the United States.

For those unfamiliar with this story, Ralls Corporation is a private, Chinese owned company. In early 2012, it “purchased four wind farms projects next to a naval test facility in Oregon.” Obama’s decision to block the deal was the first time in twenty two years that a foreign direct investment had been blocked on national security grounds.

As expected, Ralls Corporation is not taking the decision to block its purchase of winds farms sitting down. Earlier this week, it filed an amended complaint challenging  Obama’s executive order (Ralls already had filed a suit last month against CFIUS alleging its recommendation to block its purchase of wind farms constituted an “unconstitutional deprivation of property absent due process [and an] unconstitutional violation of the right to equal protection of the law.”).

Most of the media outlets I have come across covering this story indicate that Obama’s executive order was, at least in part, motivated by a desire to make the administration seem “tough” on China.  I hope they are wrong.

Obviously, if our national security is truly threatened by allowing Chinese interests to be so close to sensitive military testing, then the blocking of the purchase makes sense. But, if this is simply a political stunt, I am going to be truly disappointed with the administration. Given the fragile state of our economy and our economic dependence on a vibrant trading and investing relationship between ourselves and China, I hope the administration is not potential jeopardizing the relationship to score a few political points. I’ll be watching this case to see how it develops.

 

Sources:

Wall Street Journal

BBC News

 

 

 

4 comments

  1. I agree with Adam that Obama’s executive order to block Ralls Corporation from purchasing wind farm projects should be upheld if it is a matter of protecting the United States from a possible threat. Apparently the Oregon Navy base, which is near the wind farm projects, tests unmanned drones and electronic warfare aircrafts. I am sure our Government wants to keep the types of military equipment we use, or experiment with, a secret. If other countries could get a hold of that information, it could be used against us. I am glad Obama is taking precautions against allowing Ralls Corp. to buy up projects very close to one of our military bases; but, at the same time, I hope he does not jeopardize our relationship with our second largest trading partner in order to add some gold stars to his campaign. I will definitely be on the lookout for any information Obama and his administration may release as to why Ralls Corp. is considered a threat.

  2. I wanted to see what some other news sources were reporting on this story. The New York Times made a few points that I hadn’t seen elsewhere. Micah Zenko, a member of the Council on Foreign Relations, feels that Obama’s decision to prohibit Ralls Corporation’s acquisition of the wind farms was clearly justified. “He and other national security experts pointed to a 1998 case in which the Central Intelligence Agency is said to have collected intelligence from Iraq by having C.I.A. engineers pose as United Nations weapons inspectors and technicians, installing equipment to spy on Iraqi sites without United Nations knowledge.”
    http://www.nytimes.com/2012/09/29/us/politics/chinese-company-ordered-to-give-up-stake-in-wind-farms-near-navy-base.html?adxnnl=1&adxnnlx=1349704930-OpApZenYRf3VIvmEWizZKg

    Obama’s order reinforced an interim order issued in July, 2012 by the Committee on Foreign Investment in the U.S. (CFIUS) ordering Ralls Corporation to withdraw its operations from the Oregon wind farm sites. Bear in mind that our Navy conducts training operations near the sites. While the CFIUS rarely refers its rulings to the President, it did so here. It is clear that the President was taking smart, preemptive measures. If he hadn’t done so and a breach of our national security did occur, we all know he would be blamed first and foremost. Better safe than sorry. Our President is vested with the power to make the judgment calls on matters dealing with foreign relations and national security, matters like this one. Judges are already expressing hesitation, many of whom wouldn’t want to intervene on the pending lawsuit filed by Ralls Corporation because they feel like they can’t. “U.S. District Judge Amy Berman Jackson in Washington already said she can’t review the president’s decision because of the deference that she’s legally obliged to give the president on national security issues. She urged the government and Ralls to reach a deal.”
    http://www.bloomberg.com/news/2012-10-02/obama-bars-chinese-owned-company-from-building-wind-farm.html

  3. This isn’t the first such instance of the federal government having national security concerns over a Chinese company. This past Sunday, 60 Minutes did a feature on Huawei–a Chinese telecommunications company. This company has been bidding on US contracts to build 4G networks. However, they have been accused of outright patent infringement for their designs and have been attacked by a bipartisan panel due to National Security Concerns. Specifically, Congressional members are concerned about this company’s ability to hijack US data communications or eavesdrop on sensitive conversations pursuant to national security. The 60 Minutes Story can be viewed at the following link….it is worth the 15 minutes:

    http://www.cbsnews.com/video/watch/?id=7424702n

  4. Let’s be honest here: China is not the most transparent country in the world. They release questionable numbers from their economic sector and there is too much connection between the government and supposedly “independent” companies. Saying that, do you blame POTUS for not wanting a Chinese company owning a wind farm that close to a U.S military base? I do not at all. There will always be lingering questions on the motivation of the Ralls Corp. and that is not something that needs to occur.
    Brian’s link to the “60 minutes” segment is a very interesting watch now that we have a bi-partisan (such a special word nowadays) Congressional report that two other Chinese companies, telecommunication equipment suppliers Huawei Tech. and ZTE Inc., are being deemed national security threats. The House committee was concerned over their close connection to the Chinese government, especially the military arm, and the possibility any tech purchased by American companies could transmit data back to China. See http://www.nytimes.com/2012/10/09/us/us-panel-calls-huawei-and-zte-national-security-threat.html?pagewanted=1&_r=0
    It is also without a doubt a combination of scoring points in an election season for Obama while not having to directly attack the nation of China itself. I agree with Adam that if this is only a “political stunt” I will be disappointed with our President but I think when it comes to China, murky waters will always be the norm.

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