September 29, 2007
Who's minding the store?
Holy hell, does this scare the crap out of anyone besides me?
From the Weekly Standard:
Selling National SecurityChina bids for firm that makes "intrusion prevention" technology for the Department of Defense.
by Irwin M. StelzerTHE CHINESE ANNOUNCED on Saturday that they would be buying into the company that provides the Pentagon with technology to prevent cyber-attacks--of the sort the Chinese launched a few weeks ago. Why worry? We are all free traders now, according the president and his secretary of the Treasury--all except misguided Democrats, trade unions, displaced workers, and those who worry about our national security.
True, free trade is great--when dealing with other parties who are in it for the same thing--to make money. But that ain't the name of the game these days. Now we have a company that must answer to the Chinese government picking up a piece of an American company, 3Com, that--get this--makes "intrusion prevention" technology that helps the Defense Department, among other clients, protect itself from hackers.
True, the Chinese company, Huawei Technologies, will be a minority shareholder. But it--and one must assume any Chinese government official who asks for Huawei's cooperation--will have access to the books, financial records and any other company documents that they might find useful. Remember: The Pentagon is convinced that the Chinese Peoples' Liberation Army hackers were the perpetrators of a massive cyber-attack on it just a few weeks ago.
So never mind that Bryan Whitman, a Pentagon spokesman, told the Financial Times that he is "not aware of any concern" over the acquisition. Or that there is big money in this for 3Com shareholders, who are being offered a 44 percent premium over the share price set in the market--which only proves how really, really interested in 3Com's technology Huawei and its partner, Bain Capital, are.
Or that the Committee on Foreign Investment (Cifus) will review the deal. It is already leaking that it would be satisfied if the deal is drawn so that Huawei agrees, cross its heart and hope to die, to limit its access to certain technologies. And rest assured that Cifus will hear soothing words from Citibank, UBS, HSBC, and ABN Amro, who are putting the debt financing package together--oh yes, along with Bank of China.
One can only hope that Treasury Secretary Hank Paulson reads up on his Adam Smith, no protectionist he. Smith warned that when national security is at stake, free trade takes a distant second place as a national priority. The great Scot is, as usual, as relevant to our day as he was when he wrote The Wealth of Nations 230 years ago.
Cuban refugees are shot at, pepper-sprayed, and fire-hosed to prevent them from reaching freedoms shore, but we sell Pentagon access to the Chinese...
Posted by Ziva at September 29, 2007 10:49 PM
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Comments
It's like putting the cat in charge of the bird cage!
Posted by: ORGULLOSADESERCUBANA ![[TypeKey Profile Page]](http://www.babalublog.com/nav-commenters.gif)
at September 29, 2007 11:34 PM
The inmates are running the asylum.
Posted by: George L. Moneo at September 29, 2007 11:48 PM
You see cousin this is why I don't ever vote for either of the two main party promoted candidates. They do not know the difference between "free trade" and "trading your freedom."
Posted by: Tomas Estrada-Palma at September 30, 2007 07:27 AM
They got Clinton and now they bought off Bush.......we need Fred Thompson to win. He is the only Candidate raising the China menace issue.
Posted by: Guajiro_de_Broward at September 30, 2007 10:49 AM
I just read this post in a BLOG from an U.S. Marine Iraq warrior! He explains why the Anti-American movement will be confronted and lose in the coming years due to the guys in the war realising that the LEFT has sold America out. Read on.....
http://modernconservative.com/blog/934_Returning_soldiers_gunning_for_Democrats.html
Posted by: Guajiro_de_Broward at September 30, 2007 11:00 AM
Folks, this is a business deal, not a political deal. Please read this analysis:
http://sramanamitra.com/2007/09/28/3com-is-now-really-going-after-cisco/
Posted by: Sramana Mitra at September 30, 2007 01:37 PM
I do not think stock acquisition as such is great cause for worry. Shareholders generally have NO access to proprietary information, especially national security related technologies. Typically, I would worry more about espionage by an employee than penetration by a shareholder.
That said, I would tell the Chicoms to pound sand for their recent hacker attack on US installations. I would flip at the thought of a joint venture sharing technologies.
BJ Clinton's brokered a deal for Loral which SOLD MIRV technology to the PRC for campaign contributions is treason.
Posted by: Mark at September 30, 2007 04:08 PM
Business deal? Last time I checked, the Chinese economy (or in cold-war lingo, its "military-industrial complex") is, at its core, ultimately run by the communist elite.
In their territory, THEY run Wal-Mart, Wal-Mart doesn't run them. I'm utterly fed up with the talk of free trade at the expense of security. In a gross miscalculation by the West, free trade has not made China free -- it has only lifted the level of serfdom for its people.
If you think this is a simple business deal, I have a condo in the Everglades for you.....
Posted by: Gigi at September 30, 2007 11:56 PM
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