NBC "The Call" - Transcript

Interview

NBC "The Call"

MS. REGAN: While several wealthy nations are sending a message to sovereign wealth funds they're open for business, back home congressional members are divided about the recent rise of large-scale financial purchases by these foreign state-controlled investment vehicles. So do the risks of sovereign wealth funds outweigh the benefits? Is America basically for sale?

Joining us for discussion we have Jim Moran, a Democrat from Virginia, and Congresswoman Carolyn Maloney, Democrat from New York. Thank you to both of you for being here.

Congressman Moran, I'll begin with you, because, as I understand, you have just set up a task force to look into sovereign wealth funds, and actually you believe, as I understand it, that this is something that will be very beneficial to American companies going forward and something that we shouldn't write off.

REP. MORAN: Absolutely. I don't think it should be a question of allowing sovereign wealth fund investment. We need to figure out how to encourage it. Cumulatively, they now have about $2.3 trillion, but it's going to increase by almost 500 percent over the next five years. It's an inevitable result of the purchase of oil, which is now over $100 a barrel. We've got an annual trade deficit of $6(00 billion) to $800 billion. And then we have an annual budget deficit, when you exclude Social Security, of $4(00 billion) to $500 billion.

And so we're reliant upon the rest of the world to support our economy, but there's a tectonic shift that has occurred as a result. And we need that money reinvested back into the United States. Otherwise, the value of our assets is going to decline, and the value of other competitive countries and currencies is going to increase. They'll turn to China and India and Russia, and develop their economies and their infrastructure with money that we need being reinvested into our economy. Most of it's our money.

MS. REGAN: But that said, that said, Congresswoman Maloney, do we run the risk of becoming too dependent on foreign nations for this influx of capital?

REP. MALONEY: Well, I believe we need safe foreign investment, but not any investment that in any way compromises our national security or our economic security. In my opinion, the failed economic policies of the Bush administration has made our country ripe for foreign investment. The prior report from Mr. Hansen (sp) at the G-7 noted the weak dollar, the crisis in the mortgage -- the high cost of oil, and the fact that we have become an debtor nation -- I find something ironic in that the world's most powerful nation is now the nation that carries the largest amount of debt. So --

MS. REGAN: Yes, but aren't we in some ways, Congresswoman Maloney, risking our economic security by not incorporating all these other nations and welcoming an influx of capital, because this is what will make our companies and therefore our economy bigger and stronger?

REP. MALONEY: Well, Trish, you're absolutely right. We need to encourage safe foreign investment but have oversight for transparency, for other activities and governance of that sovereign wealth investment firms. To give one example, the Dubai Ports, which bought the infrastructure of our ports, which the -- that our Homeland Security says was a threat to our nation, was questioned by our government. But recently Dubai Ports bought 20 percent of NASDAQ, which was approved by our nation. So we need to encourage safe foreign investment, create jobs, create liquidity and capital. It was very important in stabilizing our markets and some of our most trusted institutions recently.

MS. REGAN: Okay.

REP. MALONEY: So safe foreign investment is a good thing, but it also has to be --

MS. REGAN: Well, you know, I want to jump in and get Congressman Moran back in, because I think that, you know, Dubai is a good example of the kind of political backlash you can see from everyday Americans that say, "You know what? I'm really scared at the idea of having a foreign company come in and have so much control over something that's so dear and important as ports are to U.S. security."

How do you fight that kind of political backlash that you're going to be feeling, you know, in Peoria, Illinois?

REP. MORAN: It's going to take some leadership, but you are absolutely right. I think the Dubai Ports World situation was a debacle. I understand why it was easy to demagogue. But you know, in talking with some of the Dubai Investment Authority managers, for example, they've had to put a 10 percent political risk premium on some of their investments in the United States in the wake of the Dubai Ports World experience. We can't afford that to happen.

And we have no evidence there that any investments by sovereign wealth funds have been for anything other than commercial purposes. They're not trying to control the companies. They're not trying to influence the board. They're simply trying to get a good return of their investment. And so far they haven't gotten a very good return. We need to encourage them to continue to put that money back into our economy.

MS. REGAN: Okay. On that note, we've got to run.

REP. MALONEY: Trish --

MS. REGAN: We're out of time. I'm sorry -- would love to chat some more about this, but we thank you so much, Congressman Moran and Congresswoman Maloney. We appreciate it.

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