February 8, 2008 / 12:14 AM / 12 years ago

Obama says concerned about sovereign wealth funds

U.S. Democratic presidential candidate Senator Barack Obama (D-IL) speaks to supporters during a campaign event at the Tulane University in New Orleans February 7, 2008. REUTERS/Carlos Barria

OMAHA, Nebraska (Reuters) - Democratic U.S. presidential hopeful Barack Obama expressed concern on Thursday about the influence in the United States of funds controlled by foreign governments and said reforming U.S. energy policy was one way to curb their rise.

U.S. lawmakers are calling for tough scrutiny of so-called sovereign wealth funds as billions of dollars from state-owned funds from China, Kuwait and Singapore flow into the country to rescue major Western banks ailing from the subprime mortgage crisis.

“I am concerned if these ... sovereign wealth funds are motivated by more than just market considerations, and that’s obviously a possibility,” Obama told reporters on a flight from New Orleans to Omaha, Nebraska.

“If they are buying big chunks of financial institutions and their board(s) of directors influence how credit flows in this country and they may be swayed by political considerations or foreign policy considerations, I think that is ... a concern.”

Obama said he did not have a problem with foreign investment in the United States as such, but said Washington had to “get our balance of payments in order” by, for example, crafting an energy policy that reduced American dependence on foreign oil.

“If we are sending money to Kuwait and Saudi Arabia, (and) the United Arab Emirates because of our inability to control our consumption of oil, then we’ve got to expect that we are over time transferring wealth to those countries,” he said.

“That’s something I intend to stop as president.”

Sovereign wealth funds, which are owned primarily by Middle Eastern oil exporters and Asian countries running huge trade surpluses, are estimated to hold $2.5 trillion in assets and forecast to grow to $12 trillion over the next eight years.

Reporting by Jeff Mason; Editing by Stuart Grudgings

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