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Lawmakers want info on 3Com-Bain security review
WASHINGTON (Reuters) - Citing national security concerns, a House of Representatives committee wants detailed information from the Treasury Department about the government's review of a Chinese company's bid to acquire a minority stake 3Com Corp (COMS.O), according to a letter given to the press on Friday.
Rep. John Dingell of Michigan, chairman of the Energy and Commerce Committee, and the panel's ranking member, Joe Barton of Texas, said in a letter on Thursday to Treasury Secretary Henry Paulson they are concerned about Huawei Technologies' HWT.UL alleged ties to the Chinese military.
3Com, a communications equipment company that makes network components like firewall technologies, has agreed to be acquired by private equity firm Bain Capital for $2.2 billion.
The deal, expected to close in the first quarter of 2008, gives Huawei a 16.5 percent minority stake in 3Com but no operational control or decision-making power.
Dingell, Barton and two other committee members -- Kentucky Republican Ed Whitfield and Illinois Democrat Bobby Rush -- said they were concerned about the proposal's potential effect on national security, after media reports in 2007 and 2008 that China's military hacked into the Pentagon's computer network in 2007.
The letter asked the Treasury Department to provide a nonpublic briefing to the Energy and Commerce Committee staff no later than February 28 to answer specific questions related to the government's review of the deal.
The inter-agency Committee on Foreign Investment in the United States (CFIUS), headed by the Treasury Department, reviews corporate acquisitions involving foreign buyers.
Federal laws have been strengthened to require CFIUS to spend more time vetting deals.
Bain Capital said in a statement that it was engaged in a "constructive dialogue" with CFIUS on the proposed purchase of 3Com and was working closely with U.S. officials to provide information about the deal.
"This is a confidential process to which we submitted voluntarily. We continue to believe CFIUS will conclude that the company will remain firmly in the control of an American firm, has only a small minority foreign shareholder, and that the completed deal will present no risks to national security," the firm said.
(Reporting by Rachelle Younglai; Editing by Toni Reinhold, Gary Hill)
