▶ 0:17:32The subcommittee on national security, elicit finance, and international financial institutions will come to Without objection, the chairman is authorized to declare a recess of the committee at any time. This hearing is titled Evaluating the Operations of the Committee on Foreign Investment in the United States. Without objection, all members will have five legislative days within which to submit extraneous materials to the chairman for inclusion in the record.
▶ 0:17:54Today is the committee's annual oversight hearing on CPHAS and will provide members an opportunity to review the Trump administration's implementation of the CPHAS process and the the outbound investment security program, both of which are administered by the Office of Investment Security.
▶ 0:18:10The United States is the world's top destination for foreign direct investment with over 5.7 trillion dollars in total investment so far and trillions of dollars of new commitments during this uh President Trump's uh current term. Uh our open investment environment makes this possible which is why successive presidents have reaffirmed it's important.
▶ 0:18:33In fact, foreign direct investment accounts for 10% or more of jobs, while foreign firms employ around 25% of all manufacturing workers, making investment critical to the well-being of Americans across the country.
▶ 0:18:49Established in 1975 under the Department of Treasury, CPHAS seeks to preserve this open investment environment while ensuring that uh the very openness does not become a weapon our adversaries could use against us. The 2018 Foreign Investment Risk Review Modernization Act, otherwise known as FIRMA, expanded its jurisdiction uh to include non-controlling investments in critical technologies, infrastructure, and sensitive personal data.
▶ 0:19:18CPHAS must rigorously scrutinize foreign investments from any source that could undermine our technology, agriculture, energy sectors, and more while enabling beneficial investments and inflows that do strengthen our economy. At the same time, CPHAS must not become so bureaucratic that the process prioritizes answering every conceivable question over neutralizing threats.
▶ 0:19:43So with this in mind, I want to commend President Trump both for his America first investment policy, which reiterates his commitment to welcoming foreign investment as well as his tireless efforts to secure trillions in new investment in our country. I especially want to highlight CPHAS uh CPHAS's known investor portal pilot program which promises to streamline investment for repeat friendly investors allowing resources to be directed uh where they matter most for screening new risks.
▶ 0:20:12However, reviewing inbound investments alone cannot fully protect our national security. This is why Congress enacted Representative Bar's coins act last month as part of the NDAA, which tasks the Office of Investment Security to build on uh the outbound investment security program.
▶ 0:20:29Now that this legislation has become law, it falls on this committee to ensure that it is implemented in a targeted and thoughtful manner while ensuring that American capital does not support militaryindustrial bases of our adversaries, particularly the People's Republic of China.
▶ 0:20:46As Treasury writes an updated outbound investment rule, it's imperative that it's clear, streamlined framework so that it can ensure American investors can comply without uh overly burdensome bureaucratic obstacles that halts our financial sector.
▶ 0:21:04As the world becomes more complex and interconnected, OAS must ensure that US national security is protected both to inbound and in and outbound investment fronts and and ensuring that our processes are efficient and effective means investment screening must be uh transparent and clear for our friends and fellow citizens to comply with and difficult for our adversaries to exploit. This is our task today.
▶ 0:21:29I yield back and I now recognize the ranking member for her Good morning and thank you, Mr. Chairman, for holding this hearing and thank you to our assistant secretary uh for being here today. uh fresh on the job.
▶ 0:21:48The committee on foreign investment in the United States or CPHAS plays a pivotal role in our national security framework by ensuring that foreign direct investment transactions do not pose a threat to the United States while maintaining an open investment environment. Although CPHAS has only has only blocked a handful of transactions to date, its thorough vetting process is essential to protect our national security.
▶ 0:22:17The businesses that participate in that process rely on its clear and fair rules. Unfortunately, under President Trump, the cifhious review process has become unpredictable and turned into a political tool used to punish his opponents while enriching himself, his family, and his billionaire friends. We saw this with Tik Tok, where he exploited tangible security concerns for personal and political leverage.
▶ 0:22:45We saw this with the Nippon Steel US Steel Deal where he inserted his own name and operational controls into the new company's articles of incorporation. And since taking office, we've seen it with his crypto ventures involving foreign actors that have increased his personal net worth by billions. This repeated and blatant abuse of power does not make America safer. It only creates confusion for businesses.
▶ 0:23:12It scares investors and weakens our ability to compete with adversaries like China. Every member of this subcommittee should be concerned about the president's activities and the national security risks they create, particularly on the heels of last summer's hearing where we all agreed on the importance of a clean investment security process.
▶ 0:23:37We must preserve the integrity of CPHAS and ensure our national security tools remain protected and well resourced. That includes restate reinstating the bipartisan supported corporate transparency act rule to help national security programs like CPHAS combat anonymous shell companies used to obscure the true ownership and control beyond covered transaction.
▶ 0:24:06This administration and some of my colleagues across the aisle are determined to undercut this bipartisan law which will only make it harder for CPHAS, the outbound security program, financial institutions and national security agencies to properly assess national security risk. And certainly we are here because of the very nature of the name of this committee that we are committed and obligated to protect our national securities.
▶ 0:24:37And lastly, politics has no place in matters of national securities and Democrats will continue to resist efforts that would either undercut ZPHAS or distort its purpose. Since our last hearing on investment security, the comprehensive outbound investment national security or as we referred to coins act was signed into law codifying the expanding and outbound investment program.
▶ 0:25:06So, welcome and we'll be watching the implementations of this law closely. I look forward to learning more about our investment security framework in operating and in exploring ways that we can strengthen it. Thank you again for being here and thank you Mr. Chairman for holding this committee and I yield back.
▶ 0:25:26Uh thank the ranking member. I now recognize the chairman of the full committee, Mr. Hill, for one minute for an opening statement.
▶ 0:25:31Thank you, Chairman Davidson, and welcome Secretary Pickerton. We're glad to have you today. Congratulations. CPHAS plays a critical role in safeguarding the national security while also fostering here in the United States an open investment climate. Today, we're examining how its expanded authority under FRAMA impacts US investment in emergency security challenges. CPHAS continues to evolve to address national security threats from abroad.
▶ 0:25:56At the same time, Cphus' narrow mission supports the confidence investors have in the openness and integrity of the US economy. As with any any national security program, ongoing oversight and evaluation of CPHAS's effectiveness are essential duties for the members of Congress and particularly this committee. Our discussion will focus on evaluating CPHIS's role in protecting national security while upholding that open investment climate.
▶ 0:26:23CPHAS has earned bipartisan support by sticking to this mission. It does not and must not allow itself to become a tool for industrial policy and partisan agendas. I thank the witness for being here today and I look forward to our discussion. I yield back. Thank you, Chairman. Today we welcome the testimony of the Honorable Chris Pilkerton, Assistant Secretary for Investment Security at the US Department of Treasury. Assistant Secretary Pil Pilkerton, thank you for taking time to be here today. Congratulations on your confirmation.
▶ 0:26:52Uh you'll be recognized for five minutes to give an oral presentation of your written testimony. Without objection, your written statement will be made part of the record. Assistant Secretary Pilverton, you are now recognized. Good morning, Chairman Hill, Chairman Davidson, Ranking Member Batty, and members of the subcommittee. Thank you for inviting me here to testify today to provide an update on the Committee on Foreign Investment in the United States.
▶ 0:27:19I come before you today having been sworn in as the assistant treasury secretary for investment security just over a week ago on January 5th. But while I am new to this role, CPHAS is currently celebrating its 50th anniversary.
▶ 0:27:33And I humbly accept this important charge to safeguard our country's national security while ensuring that America continues to be the world's greatest destination for In his America first investment policy, President Trump committed to maintaining a strong and open investment environment coupled with critical national security protections.
▶ 0:27:53The president's tireless work on behalf of the American people is driving trillions of dollars of investment commitments into America, bolstering our superior commercial innovations and technologies, creating jobs, building communities, and providing opportunities for many Americans. As I'm sure you are all aware, the Cytheus annual report to Congress provides a more comprehensive picture of the committee's work.
▶ 0:28:15So, I'd like to use my statement here to share just some of the key program goals for First and foremost, CPHAS's core priority remains assessing and addressing any national security risks that arise from transactions that fall within its jurisdiction.
▶ 0:28:30By evaluating these potential threats from adversarial actors, the committee's many inter agency participants, including subject matter act experts, law enforcement, and the intelligence community, serve as important gatekeepers to protect our The commitment to this guiding principle must always lead the committee's work. Second, process efficiencies and stakeholder communication will be an important part of CPHAS.
▶ 0:28:56While the national security risk assessments must be thorough and dependable and will always serve as the touchstone of the program, we understand that unnecessary delays and overburdensome procedures can potentially reduce investment and limit the opportunity for job creation and local economic impact.
▶ 0:29:12In this spirit, as set forth in the America first investment policy, President Trump directed CPHAS to create an expedited fasttrack process to facilitate greater investment from allies and partners, which we are now piloting as the known investor program.
▶ 0:29:27This is the first iteration of a program that will seek to collect detailed information from foreign investors in advance of potential transactions so we can maximize administrative efficiencies while still adhering to the integrity of process including robust due diligence and tailored actions where necessary to protect national security. We intend to build upon this pilot over the course of this year and look forward to working with relevant parties to ensure its success.
▶ 0:29:54Third, as Congress directed, filing certain types of transactions with CPHAS is mandatory, and the committee has the authority to review any transaction not voluntarily filed with CPHAS that is covered by its jurisdiction and may raise national security considerations. Accordingly, CPHAS is focused on ensuring transaction parties comply with the mandatory filing requirement, and we're prepared to act if they fail to do so.
▶ 0:30:19When in doubt, we encourage parties to engage proactively with CPHAS and utilize the committee as a resource in these circumstances as addressing national security risks is typically easier for all parties involved before a transaction is closed than after. Fourth, building on the benefits of foreign investment, which include increased jobs, wages, research and development, exports, and many more.
▶ 0:30:43In line with CPHAS's mandates to educate the business community and strengthen national security, we want to work with industry to better understand their supply chain and vendor needs so we can work with inter agency partners such as Select USA, the US Small Business Administration, and the Department of War's Office for Industrial-based Policy as well as the private sector to better inform their deployment of capital to build secure and resilient sources of supply right here in the United States.
▶ 0:31:12Fifth, as Congress set forth in the Foreign Investment Risk Modernization Act in 2018, CPHAS will continue to actively work with allies and partners on their own investment security programs. This engagement to date has led to the establishment and enhancement of dozens of investment screening mechanisms around the world and will remain an important important part, an important tool as this administration engages the global community on critical economic and national security issues.
▶ 0:31:40This work will be coupled with the insights of our growing team of subject matter experts, scientists, and engineers to ensure we stay ahead of global technology trends and potential threats. Cyphus will continue to review the committee's processes, practices, and authorities to ensure that we are well equipped to address existing and evolving threats that can accompany foreign investment while preserving the United States strong and open investment environment. Thank you again for inviting me to appear today and I look forward to your questions.
▶ 0:32:12Thank you. We'll now turn to member questions and I recognize myself for five minutes. I support President Trump's February National Security Presidential Memorandum which makes clear that the United States can and must encourage foreign investment while rigorously protecting our own national security. The memorandum reaffirms a core principle of America's economic leadership.
▶ 0:32:33remain open for business to our allies and trusted partners, but we will not allow adversaries to exploit our openness to undermine our technological edge, our supply chains, or our overwhelming military superiority. That balance, speed for trusted investors, scrutiny for adversaries, is essential if we want the United States to remain the world's top destination for investment while keeping our national security front and center.
▶ 0:32:59And I hope that we grow our friends, grow our allies, and diminish our enemies in this process. But with the surge of uh commitments in foreign direct investment, efficiency becomes even more important. So in May, CPHAS launched the known investor portal. Um Mr. Secretary, how will you and your team ensure that information collected by the portal actually expedites reviews without becoming just another uh bureaucratic process?
▶ 0:33:27Mr. Chairman, thank you for that question and I wholeheartedly agree with you that predictability, durability and efficiency of the process is absolutely critical. The known investor program uh which is tied back to the fasttrack concept in the America first investment policy is currently under pilot. Uh we are in the process of gathering information and learning new information to ensure that that process is as efficient as it possibly can be.
▶ 0:33:56In fact, we are going to be releasing soon a request for information from the public as well to get a sense from a whole variety of stakeholders so we can ensure that we're accounting for all of that. Under my leadership, it will not be just another bureaucratic exercise. The purpose of this exercise is to get as much data as possible so that as we conduct our national security reviews, we can have a very good understanding of the parties that we're conducting transactions with and their intentions.
▶ 0:34:26Thank you so much. Um, in CPHAS's annual report for 2024, it states that the committee quote identified and considered thousands of potential non-notified transactions. Uh do you know how CPHAS calculated the thousands number and are you satisfied with the number of voluntary filings you received? I think the concern is is there a type of transaction that's not where you're not being notified at CPHAS?
▶ 0:34:51So what steps can Congress do to shore that up or what are your concerns as you come into this role?
▶ 0:34:57Thank you for the question. As I alluded to in my opening statement, we can't conduct national security reviews of transactions that we don't know about. So non-notified transactions are going to be a priority for this administration. There's various sources that we can identify these through open- source activities, referrals, intelligence community, law enforcement, but one of the things that I intend to do is be able to to travel and and share some information about CPHAS and the program at large
▶ 0:35:27with the communities and and with the country so that we can inform folks so we can get more information about non-notifies. The important thing to recognize about non-notified transactions, as I said in my earlier statement, is if we find out about them, then we can work with the parties to see if there is a way to get to mitigation or get to a potential
▶ 0:35:47Yeah, thank you. And as we look forward to u the you know challenge of looking at outbound screening as well one of the concerns is even on the current inbound process it seems like every year it gets more complex and less transparent and sometimes takes longer. So uh to what extent is Treasury playing uh kind of quality control and making sure these are relevant questions and at some level they kind of have to be unique to the situation even if it's a known investor.
▶ 0:36:15this particular investment is uh got its own criteria to some extent. How do you how do you get I guess efficient at operating that because that's I think a concern a lot of folks in industry have is that it's inconsistent or not a very efficient process.
▶ 0:36:30Thank you very much for the question. Um, while I've just been in the office for about a week, I already have a big whiteboard in my office that says process, process, process. And I want to make sure that we are minimizing the inefficiencies in the process and hearing from the public and the stakeholders to ensure that the information that we're asking for is certainly consistent with what we need to make this decision.
▶ 0:36:53uh we engage very closely with the intelligence community, law enforcement, and of course the other committee members to make sure the information that we're gathering is useful to them. So I think that will be sort of a an ever growing process. Uh but once again, I I take your point that efficiency is critical for the predictability of these transactions.
▶ 0:37:11Thank you so much. I now recognize the gentleoman from Ohio, uh Miss Batty, who's the ranking member of the
▶ 0:37:19Thank you, Mr. chairman and again thank you uh to our witness. Um in September, President Trump signed an executive order announcing the formal start of the Trump Gold Card Visa program whereby individuals and corporations can fasttrack their US residency process by making a financial contribution to the United States.
▶ 0:37:40How are investments related to these so-called golden visas being reviewed by CPHAS for national security implications and describe in detail what is being done on this issue
▶ 0:37:54Ranky member Batty thank you very much for the question and and I appreciate you having me before the committee today. Uh as you are aware there is cifious confidentiality across any cases that may or may not be part of the committee's uh jurisdiction or under review. Um so I can't speak to any particular matter. Uh the the visa that you're referencing is being overseen by the commerce department. So I certainly could refer you to them.
▶ 0:38:21But for your awareness and I'm sure as you know commerce is a very important part of the committee. Um and so on any issues that are they're overseeing uh we'll be working closely with them and that information will also be shared with the rest of the committee so they can help us identify any national security risks regardless of the matter before them.
▶ 0:38:42Okay. So you don't have anything to do with that at all. Is that what you're basically saying? And I can check with
▶ 0:38:48to see what they would have to say.
▶ 0:38:50I certainly understand and appreciate that but I I I can't speak to any
▶ 0:38:54you can't tell me if you have something to do with it or not. That's a yes or
▶ 0:38:58I understand your point about you can't go into details, but you could say yes or no that you have something to do with it in your authority or not.
▶ 0:39:08So, is that a no? Because I'm going to research it more and I think there might be something that you are looking at, but I'll accept your yes or no.
▶ 0:39:16With all due respect, under my understanding of CPHA's confidentiality, I can't speak to transactions that may or may not be coming through the process. So you don't know if it's coming through the process or not.
▶ 0:39:28I can't speak to anything with respect
▶ 0:39:30I'm not asking you to speak about it. I'm simply asking you in your role. Is this something that could or would come through your process? That's not violating any confidentiality. I'm not asking you to address talking about it. Just if you have any belief or knowledge that it could or may come through you, that's a simple yes or no. I take that as you're not going to answer. Let me go to my second question.
▶ 0:39:56You noted in your opening testimony that pursuant to President Trump's direction, CPHAS is piloting an expedited review process for lower risk transactions. What is the status of this procedure which is through your jurisdiction? And for the record, uh a followup to Mr. Chairman's question uh is you can say yes or no that this will go through the notice and comment period.
▶ 0:40:25Yes. So with respect to uh the known investor program uh I certainly can confirm that process is in an up and running pilot. Um we anticipate that pilot to go through 2026. We are gathering information and getting lessons learned. And as I did reference before, we do have a request for information that will be coming out soon to get from more more information.
▶ 0:40:49I would also anticipate that we would be putting out a lot of public guidance associated with that over the course of the year. I know it's an area of specific interest obviously for you and for the committee. So, we want to be sure that we're not only sharing that information um but also getting as much feedback as we can to make sure it's as efficient as possible. How long of a period is that? A 60-day period, a 90-day period of the notice and comment
▶ 0:41:15I don't know that we've determined that, but I think it would probably be around 60 days. That would be my guess.
▶ 0:41:21Uh, also the foreign investment risk uh review modernization uh act mandates that CPHAS coordinate with allies and partners in information sharing and investment screening efforts. Is CPHAS doing this? And in what ways could the committee improve uh those efforts? Could you repeat the question? I'm sorry. The door just
▶ 0:41:42No, no worries. The Foreign Investment Risk Review Modernization Act mandates that CPHAS coordinate with allies and partners in information sharing and investment screening efforts. Are is CPHAS doing this? And in what ways could the committee improve those efforts?
▶ 0:42:00Thank you very much for the question and thank you for repeating it.
▶ 0:42:03No worries. Um yes the international partner engagement for CPHAS as I mentioned in my opening statement is absolutely critical uh over the course of the program particularly over the last few years we have had a number of interactions and it's very routine um with folks around the world to help them to develop their investment screening processes. Um, some of the countries that we talk with don't have any investment screening. Some only have sort of a smaller version of it.
▶ 0:42:32And so we want to share best practices as to what we've learned as well because not only is it just sharing that information abroad, there's also a huge benefit to the United States because any country that we do business with could certainly become an unwinning vector for an
▶ 0:42:47Thank you. My time is up. Thank you for that detailed response.
▶ 0:42:50Thank you.
▶ 0:42:51I thank the ranking member. I now recognize the gentleman from Arkansas, Mr. Hill who's the chairman of the full committee for 5 minutes.
▶ 0:42:58Thanks Chairman Davidson and again welcome Mr. Secretary. We heard in opening comments about not wanting to undercut CPHAS's important role due to but I think many believe that President Biden politicized CPHAS the CPHAS process when he rejected Nippon Steel's acquisition of US Steel. In my view, this abuse undermined the national security function of CPHAS and called into question the credibility of the process.
▶ 0:43:26I'm glad to see in the last few months that the Trump administration has reversed that decision and that you've mentioned in your opening statement the importance of the uh integrity of the system. Can you tell me what steps Treasury has taken to undo that damage and return CPHAS to its impartial national security role?
▶ 0:43:46Thank you very much for the question, Mr. chairman. So obviously Congress has established a very clear process and as I mentioned in my opening, CPHAS is celebrating its 50th anniversary and obviously the laws have been updated over the years um including most recently with FMA and and now um the coins act that we have from the NDAA and it's been a key principle that when we look at a transaction the entire committee so you've got experts from
▶ 0:44:16all the different agencies looking at these transactions to determine what the potential national security risks are. And those national security risks are a whole host of different things. And I know we spent a lot talking about technology and data. And obviously those are some of some of the large ones. But when we go through the process, we move from the area of identifying the risks to looking at what the potential mitigation strategies or controls will be.
▶ 0:44:44It's a standard enterprise riskmanagement process that I've taught in academia prior to this. And that is what is supposed to happen. It is the threat of the potential actor, the vulnerability of the actual transaction and then what is that risk that we need to control for. And it's it's a very sort of I'm opening it as a sort of simple equation. It's obviously much more complicated than that, but that is what the process should be and will certainly continue to be under my leadership.
▶ 0:45:13We'll certainly be watching for that here in the committee in our oversight capacity. Japan's one of our closest allies, no doubt, but CPHAS has still not granted Japan accepted foreign state status. Why do so many of our friendly uh partner nations remain subject to CPHAS hurdles when Congress gave you a tool to exempt
▶ 0:45:37So, thank you very much for the question. Um, as you know, right now the accepted foreign state status is is limited to the Five Eyes partners. Um, we certainly are always examining that and looking at opportunities to ensure that we're able to bring in um various investment from from various countries. I think known investor programs is certainly another way to to take a look at that and we certainly want to advance
▶ 0:46:05Um, Japan has certainly been a strong ally and partner. Um and I'm always happy to engage with you and the
▶ 0:46:11I think we should continue the conversation because uh as we as the government moves to a more of a French shoring issue and challen taking the challenge of critical mineral development you know the processing of those is unlikely to take place in the US but it's also unlikely to take place in a lot of the five eyes member countries with the exception perhaps of Australia. So I think that kind of business combination is going to be important going forward.
▶ 0:46:40On the nations that have sought consultation with you on developing their own inbound uh investment screening protocol, could you provide us a list of those countries uh in the Western Hemisphere that you've consulted with? So, um, just picking up on your last point about Japan, I know Japan has been increasing their investment screening and and we'll be likely engaging with them to to learn more and be as helpful as we can
▶ 0:47:08with respect to the the number of countries that we've had um in the Western Hemisphere that we've engaged with. I'm happy to circle back to you on
▶ 0:47:15That would be helpful and we're we're happy to receive that if it needs to be classified in a classified setting. Um, Treasury continues to implement the outbound investment restrictions that were launched by the Biden administration. Um, and just last month it was though reported that China was trying to undo the US investment assumption of CK Hutcherson's ports which included those at the Panama Canal. That was a major outbound investment champion by the president.
▶ 0:47:46And so I'm concerned that it's off track. Could you in the time I have remaining, we don't have much, so would you respond to me in writing on that
▶ 0:47:54Yes, sir. Happy to do so.
▶ 0:47:55Good. Thank you very much, Mr. Chairman. I yield back to you.
▶ 0:47:57Thank you, Chairman. And I recognize the gentleoman from California, Miss Waters, who's the ranking member of the full
▶ 0:48:03Thank you very much. Uh Mr. Pelkerton. Last year, it was announced that President Trump's World Liberty Financial completed a deal with MGX, a company based in the United Arab Emirates.
▶ 0:48:20The foreign film firm invested two billion in Binance, a shady Chinese-owned cryptocurrency exchange at where Treasury had said, and I quote, allowed money to flow to terrorists, cyber criminals, and child abusers through its platform, quote unquote, to fund the deal.
▶ 0:48:42MGX purchased two billion of Trump's World Liberty Financial Stable Coin, USD1, effectively a hefty foreign investment in Trump's then brand new stable coin.
▶ 0:48:57Further, while it's unclear what role Binance played or continues to play in World Liberty Financial, we do know that the foreign firm has no public headquarters and the former CEO received a pardon shortly after accepting the Trump stable coins.
▶ 0:49:18Thus, we know that this sounds like a covered transaction between a US business and a foreign person that would require CPHAS review. Did CPHAS receive the required filing from the parties for this significant transaction? Did CPHAS complete a review of the transaction? And if so, what was the outcome?
▶ 0:49:47Ranking member Waters, thank you very much for the question. Um, given the fact that there is statutory confidentiality associated with the CPHAS program, I'm not permitted to speak about any matter that may or may not have come through uh the CPHAS
▶ 0:50:02So, was the review done?
▶ 0:50:04So, with respect to this or any other matter under the statutory confidentiality, I'm not able to speak to any particular matter. Uh, what I'd like to ask you is if there was a review of the transaction, could we get a briefing on it here in financial services?
▶ 0:50:24I'm happy to have our legislative team work with your staff.
▶ 0:50:28I beg your pardon?
▶ 0:50:28I said I'm happy to have our legislative team work with your staff on this.
▶ 0:50:32You will have them do the re give us the
▶ 0:50:36I will certainly ask my legislative team to engage with your staff on this matter. who has the authority uh to make sure that they do it. You said you would ask uh what if you get a no?
▶ 0:50:49I will talk to my legislative team and I will certainly have them engage with your staff on this matter.
▶ 0:50:53You will do that.
▶ 0:50:54I absolutely will speak.
▶ 0:50:56Let the record such. Thank you so very
▶ 0:50:59Thank you, ma'am.
▶ 0:51:00Uh I have another question I'd like to ask you at this point. Um, if I can just identify where that question is. I I thank you for being here. As you know, Congress passed the outbound investment legislation in the most recent national defense authorization act, NDAA.
▶ 0:51:24It included language that provided exempt exemptions that limit the coverage of passive US financial investments in Chinese technology firms and sectors. This is despite numerous studies, for example, from the Morgan Stanley, the US China Economic and Security Review Commission and the Coalition for a Prosperous America that show that US firms have billions passively invested in Chinese companies, including
▶ 0:51:55Chinese military industrial complex companies. Thus, how does Treasury access whether US funds, particularly retirement funds such as those managing public sector pensions for teachers, first responders, and other American workers are being invested unbeknownst to the individual Americans and companies that support adversarial governments or their defense
▶ 0:52:21Thank you very much for the question. Um the outbound program is something as you know that is relatively new over the course of the last year. Treasury has issued regulations around this but given the fact that there are certainly other ongoing questions uh we also have a number of frequently asked questions that are on the website. Um and now we have the the coins act that we'll be able to regulate and administer and we would anticipate that that would be a new regulatory regime.
▶ 0:52:50In other words, new rules will be written. Um, and that will certainly go through the notice and comment process. I think the most important thing maybe gets at the core of your question is that people have a level of predictability when they're making investments and there's very clear guidelines particularly around the national security risks that that you highlight and you mentioned.
▶ 0:53:12Um, so when we look at China, when we look at, you know, some of the other, u nations that are identified in the coins act, uh, those are areas that we'll be looking at very closely. Um, and we'll continue to get information out there to the public and work with this committee. The
▶ 0:53:27gentleoman's time is expired. And now,
▶ 0:53:29thank you. Yield back.
▶ 0:53:30Thank you. Uh, the gentleman from Oklahoma, Mr. Lucer, Mr. Lucas, who is also the chairman of the task force on monetary policies, now recognized for five minutes.
▶ 0:53:40Thank you, Mr. chairman, and thank you to our witness, the assistant secretary, for being here today. The topics you deal with are some that I've been concerned about for the better part of a decade. Specifically, the issue of ownership of key agricultural equities like land and infrastructure by foreign adversaries has continued to raise alarm bells across the country.
▶ 0:54:01That's why I introduced the bipartisan agricultural risk review act to add the secretary of agriculture as a permanent member of CPHAS for any transaction relating to the a industry and to require CPHAS to initiate reviews of threats notified by Our annual appropriation bills have recognized the need for this language, but we must cement this practice into law. Mr.
▶ 0:54:25Secretary, USDA has committed to working across agencies to ensure sensitive a equities aren't controlled by foreign Can you provide Treasury's perspective? How does CPHAS benefit from the Secretary of Agricultur's input and would it be helpful for the Secretary to be a permanent member uh for transactions related to a
▶ 0:54:50Congressman? Thank you very much for that question. Um so under the consolidated appropriations act the uh USDA secretary is a member of the committee uh for aggrelated transactions and I can tell you that Secretary Rollins is in the room for those conversations. Her staff is very engaged. Deputy Secretary Vaden I've met with both of them and spent time with them because I know this is an incredibly important issue to them as it is to Secretary Besson.
▶ 0:55:20In fact, Secretary Besson and Secretary Rollins signed a memorandum of understanding last year to enhance focus on agricultural land, biotech transactions, transportation, storage, and processing. And Secretary Rollins often says food security is national security. And I certainly agree with that. And her leadership has been very important. So I look forward to working with them very closely on these issues as well as getting their insight and leadership.
▶ 0:55:49My bill preserves CPHAS's casebycase approach to ensure that the United States retains a friendly investment climate. Can you expand on Treasury's efforts to attract investment without compromising national security?
▶ 0:56:06Thank you very much for the question. So I think one example of that under the America first investment policy is the known investor program trying to ensure that we get more information upfront so that when we're making these decisions when the capital is coming through we have more information um about the underlying transaction and the investors. Uh we're also going to be uh traveling the country and spending time with various communities to ensure folks are aware of CPHAS, aware of the program, aware of the process.
▶ 0:56:36Um and we'll be doing more roundts and conferences associated with that and then work very closely with our partners at commerce and state who have an international investment mission of bringing FDI back into the United
▶ 0:56:49Secretary, we have a patchwork of state laws across the country dealing with the issue of foreign adversary ownership of a equities. How is the Treasury Department thinking about the interplay between the various state laws and our federal regulations? Thank you very much for the question and it's an important one. We work closely with our state partners um and implementing our our process.
▶ 0:57:15Um and one of the things that I want to be able to do during my tenure as assistant secretary is to ensure that state legislators and state chambers of commerce in particular are aware of CPHAS, its role and its jurisdiction. I can only execute on the laws that this Congress has passed. But I think that information sharing um certainly at a high level, but just understanding processes will be very good for those relationships um and hope to close the loop here.
▶ 0:57:45In Oklahoma under state law, we have some very strong language dealing with these kind of issues. My state authorities are very enthusiastic about enforcing that. A lot of times they have to be made aware of what's going on in order for them to enforce state law. So this sharing of information is critically important.
▶ 0:58:04That's an invitation I humbly accept,
▶ 0:58:06Absolutely. With that, Mr. Secretary, thank you for being here. You have perhaps one of the most critical roles when it comes to the future of the economy of this country. Yield back, Mr.
▶ 0:58:15Thank you. Thank the gentleman. Um gentleman from California, Mr. Vargas, who is the ranking member of the task force on monetary policy, is now recognized for five minutes.
▶ 0:58:24Uh thank you very much, Mr. chairman, I also want to thank the ranking member for this hearing. I think it's a very important one. And again, I want to thank the witness. We did hear earlier about the politization of government. I mean, it's it's ironic because right now, and I'll have much more to say this afternoon at the monetary policy task force about the politization of the Justice Department going after Chairman Powell. I mean, it's unbelievable to me. Um, you know, it's almost as they're eating their own.
▶ 0:58:54I mean, Chairman Pal's actually a Republican. He's not a Democrat, but he I think he's one of the most honest, straightforward people I've ever met. I mean, if there's anyone that's above reproach in the sense of his honesty, I think is Chairman Powell. And to go after him, to try to force him to be political, uh, I I think is is is horrible and something that's very damaging to our reputation as a nation and certainly to the Justice Department.
▶ 0:59:22All that being said, talking about um, Secretary, you have a very sterling one. You come very well regarded by everyone that you've, um, worked with so far, and I was very pleased to see that you were appointed this position. I know the reason for that is your tremendous Jesuit education and training at Fairfield University. Congratulations for that. But I do want to ask you about uh, the Nippon Steel Deal.
▶ 0:59:50So there was a reversal as the chairman said earlier of that and I wanted to to get your uh sense why why did that happen? Was there politics involved in the overturning of that decision?
▶ 1:00:09Congressman, thank you very much for uh your question and and thank you for your kind words as well. Um, with respect to Nippon Steel, uh, I am limited under the CPHAS confidentiality requirements as to what I can say, but I would point you to the June executive order that the president set forth setting through the resolution of the national security
▶ 1:00:36Okay. I and I do understand that you are quite limit. I'm an attorney myself and I do understand confidentiality in those issues. So again, I'll I'll take your word on it and I'll also follow up with the reference that you gave us. I do want to ask though about emerging technologies such as AI, semiconductors, and the biotech are becoming increasingly important in the national security realm. Many of these companies hold large amounts of personal of our personal data.
▶ 1:01:02What measures does CPHAS require to ensure that adversarial actors cannot access this sensitive US data such as our health or biological Thank you very much for the question, Congressman. And what your question is really almost at the core of the program.
▶ 1:01:20Emerging technologies are advancing so quickly that this program has a huge responsibility to uh oversee that to identify national security risks and figure out ways to sort of move forward within this space. So Ferma gave us quite a bit of latitude and authority over a lot of of that technology. Um and there's actually been an expansion of the technology as well in the coins act on on the outbound side.
▶ 1:01:50So when we see a new technology whether it's AI or quantum we go through a whole host of protocols. Uh we have the entire committee process involved in that and certainly the experts are looking at that from law enforcement and from the IC. But I take your point that because things are emerging and advancing so quickly, Cythus has a responsibility to the program, to the administration, to the Congress, and obviously to the country to ensure we're staying ahead of those.
▶ 1:02:18So, one of my priorities is to double the size of our research team to ensure that we have PhD experts that are working on each of these areas as sort of a technology center of excellence so we can stay ahead of the curve. Now, but how will you monitor later later on for compliance? Because I understand that that's the initial hit. How are you going to be able to monitor it?
▶ 1:02:42Monitor the compliance with
▶ 1:02:44Oh. Um, so there's a lot of different ways that we can actually look at that. um we can look at the different type of protocols that might be around particular technologies like so for example if you were looking at AI um it's usually a stack of products looking at the particular products that you know a um a an organization may be investing in or what have you that's a very high level explanation um but at the end of the day each of those transactions are going to be reviewed not just for technology risk of
▶ 1:03:14course because we're looking 360 all the way across the board but we need to make sure that we're protecting our country and protecting our homeland on each other.
▶ 1:03:21My my time is up ice again. Wanted to congratulate you and wish you good luck.
▶ 1:03:25Thank you very much, sir.
▶ 1:03:27Thank the gentleman. The gentleman from Texas, Mr. Sessions, is now recognized for five minutes.
▶ 1:03:32Chairman, thank you very much. And Secretary, uh we're delighted that you're here. As you can see, this not just subcommittee, but the members of this committee have important questions and consider that the job that you and your team does is very important. You earlier received a question from my colleague, Mr. Lucas. I'm from uh Waco, Texas, and have a district that is dominated by agricultural interest and products, and Mr.
▶ 1:04:02Lucas has the same. And we have spent a great deal of time attempting to work not only with the state with the sec the secretary on these sorts of issues from agriculture but also with you because you're the beginning point where people have to as required by law to talk about the investments they would wish to make.
▶ 1:04:28We have, both Frank and I, and I'm sure most members have come to find out that there were some perhaps intended consequences, perhaps unintended consequences about decisions that have been made about foreign ownership of companies and contracts and properties that maybe one would not have seen altogether except the Chinese or these These entities
▶ 1:04:58effectively used our capitalist system to go and acquire a number of things. In other words, when they made an investment, they kept going our system.
▶ 1:05:13Do you track those when someone comes and makes an investment and you decide, well, it looks benign, it looks legitimate, but then they then use our system to go and buy more property, more land, more product.
▶ 1:05:35So, thank you very much for the uh the transactions that come through CPHAS are certainly tracked and when folks come through for additional transactions uh that information is obviously reviewed and certainly
▶ 1:05:52So, Secretary, you're suggesting to me that you continue to track them and they would be required under the law even though they originally allowed under the requirements to make a purchase. You're saying that then anytime they further make an investment that is required under the law.
▶ 1:06:14So I I want to be clear um just to go back to what I said because I just want to make sure I'm absolutely crystal clear on this. When someone comes through on a transaction, there is underlying due diligence conducted on that person or company or or what have you. Um and then if they come through a again then that information is certainly updated included and there's information from the intelligence community and law enforcement to support that.
▶ 1:06:41With respect to your particular question I'm certainly happy to engage deeper with you in different setting. I would ask that that take place because I think that that sets in place something that we by and large have not on this side been looking and tracking but at some point we figure out. So I'm very available. Mr.
▶ 1:07:07Lucas and I are very available and we would be very pleased to establish that. But I think that this is important for us to understand that when a benign transaction comes in or something we think is benign that we still understand that and so I want to thank you. I think I have an additional question but it is very germanine to the question I was asking. So I will wait.
▶ 1:07:35If you would please have someone in your organization get in touch with me. I would like to set this up and then ask those questions that are better offline. I want to thank you and your team for the service to this country. Mr. Chairman, I yield back my time.
▶ 1:07:52Thank you, Mr. Sessions. The gentleman from Illinois, Mr. Casten, is now recognized for five minutes.
▶ 1:07:57Thank you for joining us today, Mr. Pilkerton. Thank you, Mr. Chairman. Um so CPHAS's authority is granted by Congress uh is to negotiate, impose, enforce any national security agreement to mitigate the risks associated with any particular transactions. Looking at your website today, it's essentially what the your website says is your role. You do you agree that's the basic scope of CPHAS? Yes, sir. Yeah. So I I I ask that because I want to follow up on your exchange with Mr.
▶ 1:08:23Vargas about the Nepon Steel US Steel deal and and I want to just focus on public information. I don't not trying to get you into any any confidential things you can't disclose. Trump reversed Biden's decision to block the proposed deal between US Steel and Nippon Steel and he allowed the transaction to proceed on the condition that the parties enter into a national security agreement.
▶ 1:08:44The terms of that agreement which are public personally grant President Trump veto power over major business decisions including offshoring of production, changing the investment schedule, their business model, the specific products they make. Furthermore, President Trump is listed by name, again, public information in US Steel's amended corporate charter filed with the Securities and Exchange Commission.
▶ 1:09:07What I want to know is what was the process within CPHAS to authorize Donald Trump's name to appear in the filings and give him direct veto powers over major corporate decisions. Congressman, thank you very much for the question.
▶ 1:09:23Um I will reiterate as you know that there is cifhious confidentiality related to to my role um which is mandated by Congress and I know you're you indicated that you're referencing public information but I think it's important to lay that foundation with respect to the decision process that was made there. Um that information is contained in the June executive order.
▶ 1:09:46So was CPHAS responsible for that or was it delegated to a CPHAS member agency? Once again, I'll have to rely on the
▶ 1:09:54I'm I'm asking I'm not asking what the decision was. I'm asking who made the decision. Was it made in your office or was it not made in your office?
▶ 1:10:00The confidentiality provisions of CPHAS set forth by Congress are very broad. So, I'm not in a position to be able to
▶ 1:10:06I'm sorry that you feel the need to evade. Can you can you then point to any prior cases where CPHAS authorized the president to exercise a direct role over a private company's operations? So in my role having been in this role for about a week um once again can't speak to any particular
▶ 1:10:24so it's over the entire history of
▶ 1:10:26what I would like to say if I may um is that as part of mitigation agreements there are from time to time veto rights on certain types of things
▶ 1:10:37but but let's be clear the the the president as an individual is named I'm asking if there is any precedent for that in the history of CPHAS because according to Stephen Hifitz former CPHAS attorney. He said that this is this is Do do you disagree with Mr. Hyitz?
▶ 1:10:54Without seeing the actual document that you're talking about, I can't speak to that, but I will just say that there is a CPHAS confidentiality component here and I'm unable to
▶ 1:11:03Okay. Is CPHAS considering any other agreements that have these golden share So with respect to the statutory confidentiality that's required, I'm unable to speak to any particular matters that are going forward.
▶ 1:11:14So for so for all we know for all we know you're and you can't shut you can't say that they are not looking to coingle the personal interests of President Trump and the interests of private sector economies. You can't affirmatively say that's not happening.
▶ 1:11:29Sir, that's not what I said. I asked are there any other golden share agreements where President Trump would be named and would be named in SEC filings that you are reviewing?
▶ 1:11:40Yes, no, or you can't say
▶ 1:11:42under the confidentiality requirements. I can't speak to any particular case.
▶ 1:11:46Okay. Well, let's let's talk more philosophically then because this isn't a one-off. Last year, the Trump administration acquired a 10% stake in Intel, making the US government their largest shareholder. Um, that is not the Republican party that I I thought I knew. Um, I think when the government takes control of private entities, it's called socialism.
▶ 1:12:07Um, setting aside what Trump may do, that creates a massive conflict of interest for any future administration because simply the act of trying to unwind that could put huge downward pressure. Threatening to unwind that could put huge downward pressure on their on their their share price. You used to be the compliance officer at JP Morgan.
▶ 1:12:30What is your message as you sit here today to corporate boards who put an emphasis on regulatory compliance, who like the rule of law, who would like to be independent of the government, and they're confronted with the threat of direct government action because as you sit here, you cannot tell us whether President Trump is going to do this
▶ 1:12:51Congressman, I certainly appreciate the question. Um, and I I certainly believe very strongly in regulatory compliance, very strongly in the rule of law. When it comes to the particular matter that you're talking about, I would refer you to the Department of Commerce and the team there that worked on that matter.
▶ 1:13:09I am extremely disappointed in your answer. I yield back.
▶ 1:13:12Thank gentleman from Kentucky, Mr. Bar, who's the chairman for our subcommittee on financial institutions, is now recognized for five minutes. Secretary Pilkerton, thank you for your service to the country. Congratulations on uh your appointment to this important assignment. Uh as of early 2026, President Trump had announced up to $9 trillion in total foreign direct investment commitments that he negotiated.
▶ 1:13:38Just as an example, UAE 1.4 trillion investment framework cutter uh 1.2 2 trillion uh Japan 550 billion in key industries including uh energy and AI infrastructure investments. Uh Saudi Arabia 600 billion investments in trade over four years later expanded to almost a trillion. South Korea pledged 350 billion in investment with an additional commitment to purchase 100 billion in US energy products.
▶ 1:14:06Um the president has been remarkably successful in just 12 months time to negotiate massive amounts of foreign direct investment in the United States. Uh consistent with that, I applaud uh your office's known investor program.
▶ 1:14:22How important is it uh that as you fulfill your national security obligations uh implementing CPHAS that we keep this open investment climate especially with respect to these key investments that President Trump has Congressman, thank you very much for your question and thank you for your leadership on the recent uh outbound legislation as well. With respect to this question, I think it's incredibly important.
▶ 1:14:46The America first investment policy made it very clear that while national security is going to remain a priority, America is open for business and Americans is open for business in a whole host of areas. You talk about the the technology pieces, AI and quantum and other areas, but we really want to bring in business from all different areas because obviously the benefit to that is not just to those business to the the to America itself, but to those communities, jobs, research and development. Obviously, there's a whole host of things.
▶ 1:15:16So when it comes to that money that's actually coming in, I see it as part of my responsibility to ensure that the program is in place, whether it's known investor or the standard CPHAS program has all of the efficiencies that that money, assuming that it passes the National Security Protocols, is able to come into the country and be put to work.
▶ 1:15:34Well, thank you. And at the end of last year, as you just noted, the president signed into law the National Defense Authorization Act, which included my legislation, the Comprehensive Outbound Investment, National Security, or Coins Act, also known as the Fight China Act, the Foreign Investment Guard Rails to help thwart China Act. The The Coins Act ensures that Americans are not unknowingly funding the military-industrial complex of our adversaries by codifying and enhancing the Trump administration's America First investment policy and the outbound investment security program.
▶ 1:16:02Uh your office, the office of investment security is responsible for implementing the statute and overseeing the prohibition and notification investments into certain sensitive technologies. Um Treasury released FAQs at the end of last year expressing awareness of the new obligations under the law. Uh under those FAQs, you have 450 days after enactment to issue regulations. What is your time frame?
▶ 1:16:24U so thank you for the question. Uh well 450 days is what we have and I've been on the job about eight but I have met with the team and we are looking at that very closely. As I mentioned before the regulatory process for this uh will be full notice and comment. Of course there will be overlap from the regs that that are in place. Um but based on your leadership um and the work of folks around this committee there are new components to this program including new technologies.
▶ 1:16:53So we'll be getting a lot of information out there.
▶ 1:16:54Let me just move on real quick. the sanctions title and the list coordin coordination provisions are admin administered by OFAC. You have the notification and prohibitions on sensitive technologies piece. How will you collaborate with OFAC on implementation of coins?
▶ 1:17:09So with respect to that language, we are examining that very closely. Uh we will we coordinate with OFAC in our day-to-day work as as you know and we'll continue to do that closely through this
▶ 1:17:19Thank you. Um, Meta is currently trying to acquire uh Singapore-based Chinese founded Manis, an artificial intelligence startup. Earlier this year, Black Rockck backed the acquisition of key ports in the Panama Canal. Both of these acquisitions are examples of outbound investments that actually promote US national security and competitiveness.
▶ 1:17:36Unfortunately, uh, section 8521 of the NDAA includes a national interest exemption that states, quote, "The secretary is authorized to exempt from prohibition, um, any activity determined by the president to be in the national interest of the United States." While I recognize Treasury still needs to go through rulemaking, do you agree that there are national security benefits of certain outbound investments? And will you aim to be certain that the program is designed properly so we don't inhibit outbound investments that advance our national security? I certainly agree with that congressman.
▶ 1:18:06I think that uh there are certain investments that obviously we have to assess everything for national security concern as you know but if there are investments that pass muster on those and present opportunities and provide benefits to the American people once again with the national security constraints in mind then I think there's certainly a lot of benefit to that. run out of time, but we want our intention in this bill was red light, green light.
▶ 1:18:31We embedded in the process um a a process for non-binding feedback to investors so that they're given certainty and clarity about what's permitted and what's prohibited. Not a question, just a commentary on legislative intent here. We hope you provide investors with that red light, green light.
▶ 1:18:48Thank you.
▶ 1:18:49I yield back.
▶ 1:18:50Thank you, Mr. Bar. The gentleman from Illinois, Dr. Foster who's also the ranking member of the financial institution subcommittee is recognized for five minutes.
▶ 1:18:58Uh thank you Mr. Chair and secretary assistant secretary Pilkerton. You at the core of CPHAS's work is it's being able to understand who the beneficial owner of a covered transaction is and whether they or their affiliates have interests that run counter to the security of our country.
▶ 1:19:14And this work requires significant due diligence that I believe was undermined by this administration's move to gut the corporate transparency act which aimed to crack down on anonymous shell companies that conceal the true beneficiaries of businesses operating in the United States.
▶ 1:19:30Um now identifying the interests of businesses is going to become more difficult and more important to with advances in artificial intelligence and specifically agentic AI which is coming at us fast and is going to really dominate the next uh the next decade in financial services is become a primary concern of mine. uh we're going to, you know, we're, you know, we've grown tolerant of the use of shell companies to conceal ownership within limits.
▶ 1:19:58Uh but historically, there's always been a human in the loop somewhere down the line. And now we're going to have money flying around under the control of AI agents um signing contracts, doing deals at the speed of AI. And uh and so other countries are looking at this and we're starting to see international work developing the standards for communications uh and conversations and contracts uh between AI agents.
▶ 1:20:22And every country, every advanced country except the United States has an understanding that when my agent contacts your agent, they will exchange information about who the legally traceable human is at the that's responsible for that agent's actions. Um, and and so what is the how is this going to work? If we if if the answer you get back, well, I'm an agent and I'm working for an anonymous shell corporation and I'm not going to tell you who's behind it.
▶ 1:20:49How can isn't that going to just make the United States not a player in this new ecosystem? How do you intend to handle that problem?
▶ 1:20:57Thank you very much for the question, Congressman. uh over the course of the CPHAS process as I mentioned we have a number of committee members many of the larger cabinet agencies um but we also work very closely with the intelligence community and law enforcement um and of course have access to a variety of different databases associated with that. So regardless the cphas process will continue to be diligent continue to be thorough and wholesome.
▶ 1:21:27So with respect to our work, we will move forward to identify national security risks of the investors of those companies um as well as the transaction
▶ 1:21:40But how is that even going to work in in real time? You know when you know when if someone from EU and Korea or Japan wants to engage in an agentic transaction, they get out their cell phone and they say, "Here is my my legally traceable identity." And you do your biometric login and they present uh they present a secure digital ID that every citizen of the EU is going to have.
▶ 1:22:03I think by the end of this year, every citizen of the UK, um every citizen of Korea and Japan have had for more than more than a decade, I believe. And so we do not we don't have that. What we have is a hodgepodge of a handful of states that are getting um uh mobile ID, digital driver's licenses. And that's the best we have.
▶ 1:22:22And so as a result, it seems like we're we're really going to not be able to play in the next stage of of development because no one is going to trust any agent that's unwilling to say here is the legally traceable human behind behind what I'm the deal I'm offering you.
▶ 1:22:38uh and and so I I urge you to have a look at this and try to get ahead of the curve on this whole operation because it's it's going to be important and it will be a huge um it'll be a competitive disadvantage to the United States if we don't have a way of actually understanding um you know who who authorized um some agent and who is going to take responsibility for that agent's action because this is going to be the dominant um the dominant activity in financial services.
▶ 1:23:07Um and let's see the um is there can we expect actually on the specific issue of of privacy preserving secure digital credentials? You know this is something the the Biden administration came in and promised they'd do something to move the ball forward. Do you have any insight into what the plan of this administration is going to be doing in terms of making um giving US citizens the ability to prove they are who they say they are online? Is that on the on the agenda?
▶ 1:23:38So with respect to data and privacy information that come through the CPHAS process, that's one of our highest levels of concern and that was outlined in FMA and we conduct analyses and put together processes and procedures to ensure that that data is protected. But once again, that's through the CPHAS process. It appears your question may be alluding to um some other agencies perhaps DHS or or others and I can't speak to that.
▶ 1:24:06Okay. But I just you know when when our agents start talking to each other and doing deals you can't convene a committee to figure out even who the principles are in the deal. You have to have standards and and so you should get involved in that conversation. Thank
▶ 1:24:20Thank you.
▶ 1:24:23Thanks Mr. Foster. The gentleman from Texas Mr. Williams, who's also the chairman of the Small Business Committee. He's now recognized for 5
▶ 1:24:30Thank you, Mr. Chairman. Mr. Pington, thank you for being here today. Uh, the United States has long benefited from being the world's top destination for foreign investment. That openness has helped drive jobs, innovation, economic growth, and at the same time, we face increasingly sophisticated threats from adversarial nations that uh seek to exploit our openness to gain a strategic advantage. Getting the balance right is critical. We've talked about that much today, but both for our security and our competitiveness. And Mr.
▶ 1:24:57Pilkerton, how do you balance protecting national security while preserving the United States reputation as the safest and most attractive power to invest? Congressman, thank you very much for your question and thank you for your leadership um on on small business. The question that you point out is really at the core of President Trump's America First investment policy.
▶ 1:25:21As I said in my opening statement, national security will always be the priority of the CPHAS program, but the opportunity to bring in foreign direct investment and share to the world that America is open for business is incredibly important. The way that I can do my part in both of those things is to ensure that the program that we have at CPHAS remains robust, thorough, and understandable to the parties. It's got to be efficient.
▶ 1:25:52As I said before, process, process, process. And that process does include the analysis of the risks and the mitigation potentially associated with them. The other thing that I can do is ensure that people understand the process.
▶ 1:26:08And so, as I mentioned before, I would like to be able to get out into the communities, talk to the state chambers, as well as travel internationally with our state and commerce partners and make sure they understand the process so that when they come through it, we can come and have an understanding and a conversation and ensure that it's as efficient as possible as it can be to bring those dollars into the country.
▶ 1:26:32All right. Uh secondly, CPHAS has been given expanded responsibilities over the past several years, including authority over non-controlling investments and certain real estate transaction. But as foreign investment strategies evolve and threats become more complex, it's important for Congress to understand whether the current framework is keeping pace. So looking ahead, where do you see the biggest gaps in CPHAS authority that Congress may need to address?
▶ 1:26:57At this time I'm once again having been on the job for a week I'm conducting sort of my own risk assessment of that um working with the team and sort of finding where there may be you know potential gaps or things to think about. To date I feel that the authorities there are strong and to date I feel like we have what we need to do our job and look at all the national security risks that are at issue.
▶ 1:27:22If at any point I don't, I have absolutely no hesitation to come back to this committee because I note that there is a lot of nonpartisan interest to help advance this program and I would certainly engage with both sides of the aisle to advance that.
▶ 1:27:36Thank you. On my last question, I want to discuss the 2017 purchase of a trailer park located uh to Whiteitman Air Force Base. As you know, Whiteitman is home to our nation's B2 stealth bomber fleet, one of the most sensitive and strategically important assets in the US military. The acquisition of a property that is less than one mile away from Whiteitman's runaway raises serious national security concerns particularly given the potential for persistent surveillance intelligence collection or interference with base operations.
▶ 1:28:03So quickly this is a property is reportedly one of several properties that have been purchased by individuals with with alleged ties to the CCP intelligence. So question is Mr. Pinkerton, without commenting specifically, uh, is this the kind of transaction that CPHASS would typically want to review for national security purposes?
▶ 1:28:24Thank you very much for the question, Congressman. Um, as you identified, I can't speak to any specific type of transaction. Um, but protecting our national security where transactions are close to military bases or sensitive sites is another priority for for CPHAS. Uh, in fact, the NDAA had a component entitled Protect Our Bases Act. Um, and so those are things that we are doing.
▶ 1:28:50We will certainly implement um that law and and work through the CPHAS process, but it is critical that we protect the sensitive sites, including military
▶ 1:29:00Absolutely. Uh, I yield my time back. Thank you for being here.
▶ 1:29:04Thank you.
▶ 1:29:04Thank you, Mr. Williams. Uh, another gentleman from Texas, Mr. Gonzalez, is now recognized for five minutes.
▶ 1:29:10Thank you, Mr. Chairman. Uh thank you Mr. Pilkerton for being here with us this morning. Uh Mr. Pil Pilkerton, foreign investment plays a major role in the great state of Texas as you may know. Uh we're deeply integrated. Uh we're a deeply integrated crossber region economically, culturally, and financially. Uh with families, businesses, and investors operating on both sides of the border.
▶ 1:29:34And while I fully understand and support the Treasury's responsibility to protect national security and combat illicit finance, I'm somewhat concerned that the increasingly punitive or opaque federal actions, whether through cphus uh reviews or heightened compliance burdens on banks and financial institutions or related treasury tools, will have unintended consequences for communities like ours.
▶ 1:30:01Actions like these will have will discourage legitimate foreign investment and push capital to other countries where United States has less visibly less visibility or leverage. Uh we already have some foreign nationals that normally used our banks moving to Canada and Europe.
▶ 1:30:18Uh my question is how is CPHAS balancing the need to safeguard national security while maintaining an an open investment posture for lawful goodfaith investments and investors to ensure capital remains in places like Texas and other places around the
▶ 1:30:36Thank you, Congressman. Um and it's an incredibly important question um and one that we look at every day. in the America first investment policy by the president. He specifically called out overburdensome mitigation agreements. Um, and these are parties as you know that come through the process.
▶ 1:30:54We've identified potential risks and then we work with the parties to determine are there controls that we can sort of put on this process so that we can mitigate those risks to a point where it's acceptable to the committee. Um, in my experience, I I certainly understand and appreciate why those mitigation agreements are necessary and they will continue to the extent it's applicable and appropriate for a certain act.
▶ 1:31:21But as the president has called out the overburdensome piece, I do think we need to pay very close attention to that to ensure that folks that can come through the process and are appropriate to come through the process can do so in an efficient manner. And not just that the process works, but that they're aware of that. Right. Because to your point, I want them to be able to take a look at the United States and land in the United States and sort of understand the process, which is one of the reasons
▶ 1:31:52my concern my concern now is we have banks actually closing foreign deposits, closing the accounts because of the overburdensome policies uh that have come from this administration and prior. But we need to I mean Chase, which is one of the larger banks, just closed, you know, hundreds or thousands of accounts uh in South Texas from foreign nationals just because they just couldn't deal with the compliance. And these were good, legitimate, solid depositors that had been banking in the United States for a long time. And we're losing them to Canada and Europe and other countries around the world.
▶ 1:32:22So, I'll be candid. Actions taken by this administration make it difficult for me to trust that the current strategy is actually supporting investment and economic stability in border regions. I'd like to ask you to please take a close look at this because it's hurting states like Texas and other places and and it's not in the interest of our country, but what specific steps are being taken to assure I know you saying you you are doing something.
▶ 1:32:44What specific uh steps are being taken to ensure that heightened scrutiny for certain jurisdictions like border states does not inadvertently penalize communities like ours and continue to promote commerce and foreign deposit in American banks. Are y'all doing something strategically targeted for this purpose?
▶ 1:33:03So I would like to make the distinction between sort of a cythe transaction and then perhaps the regulatory rules around these that are overseen certainly by the treasury department and coordination with the OC and and others. Um but those are done in our uh office of of domestic finance. Um but I'm happy to engage with them and certainly would point you to them as well. We don't oversee some of these.
▶ 1:33:27Secondly, uh we're seeing a very real strategic competition playing out in Latin America, particularly as bricks countries continue to expand their economic footprint across the region. Even after the United States supported a bailout package for Argentina, we saw Argentina deepen its economic ties with China by exporting soybeans and other commodities there, signaling in alignment with brick and undermining American interests. That should be a warning sign for all of us.
▶ 1:33:52If our investments posture is perceived as unpredictable or overly restricted or disconnected uh from regional realities, we risk losing influence not because we lack capital but because we lack a coherent strategy that aligns security, economic growth and partnership.
▶ 1:34:09How is this administration uh integrating its inbound and outbound investment strategies to ensure the US remains the preferred uh partner in the region especially for our farmers that are getting killed, you know, just with tariffs and and complications and lack of lack of uh labor. Are we doing something to improve those conditions?
▶ 1:34:26I would just ask that that response be in writing. The gentleman's time has
▶ 1:34:31Thank you.
▶ 1:34:32Thank you, gentlemen. Uh the gentleoman from California, Miss Kim, is now recognized for five minutes. Thank you, Chairman Davidson and uh ranking member uh Batty for holding today's hearing. And to you, our witness, thank you very much for joining us. Um while China's investment in US agricultural land has garnered much congressional attention, I'd like to first focus on secondass of property purchases that is greenfield investments.
▶ 1:35:00Um these are parcels of land that are meant for real estate or industrial manufacturing development and those green field investments near military installations and sensitive sites fall squarely under CPHI's jurisdiction and in successive reports like US China economic security review commission it has stressed the need to review those investments. So Mr. Pleton.
▶ 1:35:25Um, what is CPHIO's procedure for determining which Greenfield investments the committee review both in terms of jurisdiction and in terms of substance?
▶ 1:35:38Congresswoman, thank you very much for that question. Um, CPHAS has jurisdiction over certain green field investments via its real estate authority um with the purchase and sale of and leasing rather of of land areas. We are looking at that question very closely.
▶ 1:35:58Um there is some international information around green field investments and we are assessing that to make a determination as to what our authorities would look like in that space um to balance the national security risks as well as the open investment posture of the country.
▶ 1:36:16Um because China's economic threat has arrived in the mainstream only in recent years. I imagine the United States has neglected the opportunity to evaluate myriad of uh foreign investments. This leads me to believe that there is substantial time frame for which Greenfield investments have not been accounted.
▶ 1:36:38Um do you believe that there is a reasonable time frame to look back and conduct CPI's greenfield review that balances both staff resources and national security? So for transactions that come through CPHAS and have been cleared um they have a a certain safe harbor from re-review. Um that having been said there can be of mitigation agreements and things if there are changed circumstances.
▶ 1:37:08But I I think to your to your question as we look at this green field space we'll be looking to perhaps u examine it more closely. But I think another point that you make that's um inherent in the question is the idea of non-notified transactions. So if there are transactions that we would have jurisdiction over. So if there are certain technology transactions that may have started or what have you, that's something that the administration is very very focused.
▶ 1:37:39Can you tell me in the last year how many um greenfield investments uh COS has looked into? I don't have that number handy, but I'm happy to get back to you on that.
▶ 1:37:50Okay. Well, let's shift gear beyond Greenville Investments. Um, I'd like to discuss the implications of Chinese acquisitions of companies that have the potential to damage American interest under uh jurisdiction. like last year, Epic, it's an education software company that recently declared bankruptcy that was acquired by Chinese holding company uh Tel Tal Education Group.
▶ 1:38:18I know that I along with many of my uh Senate colleagues have concerns that this acquisition could result in the chance for the CCP to access the students private data and also uh conduct the uh influence operations against American uh students.
▶ 1:38:36So can you talk about how CPHAS determine which non-notified transactions it should request a declaration from especially acquisitions of companies that possess I mean poses uh the Americans personal data. That's a great concern for many of us.
▶ 1:38:57No and I certainly share that concern. uh while I can't speak to any particular matter as as you're aware uh we need to ensure that any transaction that comes through CPHAS there there's no sort of per se prohibition per countries but we want to ensure that we're constantly evaluating some of our most critical national security risks and I think data and privacy is is one of those so when we look for non-notified information when we get information that comes in
▶ 1:39:28it goes through a standard review process to make a determination as to whether it as what whether it should have gone through CPHAS in the first place. Um, and it kind of goes through that exact same lens that a covered transaction or filing would go through anyway, including the data piece that you
▶ 1:39:46Thank you for your time. I yield back.
▶ 1:39:48Thank you. Uh, the gentleman from California, Mr. Licardo, is now recognized for five minutes.
▶ 1:39:54Thank you, Mr. Chair. Um, Assistant Secretary Picorton, thank you for your testimony today. I appreciate your recent emphasis on protecting the sensitive personal data of Americans. Uh I think CPHAS was preient and correct in identifying for example Tik Tok and the implicit control of the Chinese government of sensitive personal data of millions of Americans as a potential threat to national security.
▶ 1:40:19I know you can't talk about specific cases, but I'm guessing you would also agree that that was a sensible thing for CPHAS to be doing. Is that fair to say? Well, I can't speak about a particular case. It is certainly very important to protect privacy data of American people.
▶ 1:40:35And the statutory language that describes CIA's scope and jurisdiction um describes uh focus on any investment by a foreign person in any unaffiliated United States business that I'm using ellipsies periods here to get to the chase. uh that maintains or collects sensitive personal data of US citizens that may be exploited in a manner that threatens national security. Does that sound familiar?
▶ 1:41:03Yes. Yes. So, I'd like to provide you with a hypothetical knowing that you cannot discuss a particular case. Um, and I guess before I get there, I understand it is standard practice for you and your staff to engage in confidential briefings with members of Congress, members of this committee about individual cases. Is that is that
▶ 1:41:24Uh, there's certainly been a history of that in the past. Yes.
▶ 1:41:27Okay. You can probably tell I'm building toward that request. U, I'd like to provide you with a hypothetical. I want you to imagine a conglomerate media company that had the sensitive personal data of more than 100 million Americans, including what you all know is typically collected by many media or online companies around location information, viewing habits, page views, personal financial data, credit cards, etc.
▶ 1:41:53I want you to imagine that conglomerate also had the ability to use its technology and its outlets to communicate instantly with hundreds of millions of Americans. and that there was a proposed purchase of that American media conglomerate by a group of investors and among those investors were some foreign entities including sovereign wealth funds. Now in the abstract assuming nothing more that you knew nothing more that might be something that would get on CPHAS's radar. Is that fair to say?
▶ 1:42:27Congressman, thank you very much for the question. Um, I certainly appreciate that this scenario is a hypothetical. If there is any scenario that potentially could include national security risk that the CPHAS program would have jurisdiction over um, and under firmma components of that maybe data privacy um, that would certainly be something that potentially could be under
▶ 1:42:53I I appreciate that. uh because I'll push the hypothetical a little further and offer uh that this sovereign wealth fund was controlled by an autocratic ruler uh that would be investing tens of billions of dollars in equity in this proposed takeover. That autocratic ruler directed the brutal killing of a foreign journalist who worked for an American newspaper in 2018.
▶ 1:43:15According to the United States intelligence reports that were published, that autocratic ruler and his nation spies on activists, journalists, and foreign entities using technological tools like Pegasus and Predator, according to independent international reports, various NOS's. And that ruler engaged in a pattern of what Facebook reported to be quote coordinated inauthentic behavior in 2019 when Facebook took down 350 of its phony accounts that were used in a mass disinformation campaign to manipulate public behavior.
▶ 1:43:44Uh would any of those kinds of facts be the kinds of facts that would be relevant in consideration of CPHAS exerting its uh review uh and perhaps So any transaction that comes through CPHAS we do make an assessment of the parties of the transaction um their history any u other underlying national security risks.
▶ 1:44:09So without speaking to any particular scenario that would be something that would be standard in any transaction that we would see that we would have jurisdiction over. You might have already suspected I'm referring that particular ruler is Muhammad bin Salman head of Saudi Arabia and obviously they have uh a sovereign wealth fund that is involved in this proposed uh takeover uh of a very important media property in the United States Warner Brothers Discovery. It's part of the Paramount deal.
▶ 1:44:37I know this is far from anywhere near a finish line. I would like to request a confidential briefing uh of this matter and CPHAS's role and I have today submitted a letter to the CEO of Paramount who's involved in that potential takeover uh urging them to voluntarily submit to CPHAS and your review because I think it's a matter of national security.
▶ 1:45:00Would you be willing to to grant the request for a Uh once again with respect to confidentiality, I am unable to confirm whether any transaction is or is not part of the CPHAS portfolio. So I'd like to be clear about that. Um but secondly, I'm happy to have the legislative team at Treasury engage with your staff.
▶ 1:45:19Thank you very much. I yield.
▶ 1:45:22Thank you, gentlemen. Gentleman from Tennessee, Mr. Ogles, is now recognized for five minutes.
▶ 1:45:26Uh thank you, Mr. Chairman. Um and if I may, you know, one of uh our colleagues from the other side uh you know, criticized the Trump administration and their 10% stake uh in intel uh without mentioning the strategic value that what role that that may play in national security. And so I want to look back backwards uh to an obvious example of precedence.
▶ 1:45:51So if you go to late 2008 and 2009, you had the troubled asset relief program affectionally known as TARP uh where the Treasury took stake in multiple corporations at a time of economic difficulty because it was of strategic value both from an economic but a national security standpoint. So for example, General Motors $50 billion which was at that time about a 60.8% stake in the company and equities.
▶ 1:46:16Chrysler was 12 billion which was later sold to Fiat uh which was a 9.9% stake. Uh then you look to the financial services industry which would obviously be the jurisdiction of this committee where Cityroup and Bank of America received $45 billion in equity purchases and then AIG had a very complicated structured uh purchase uh agreement of 182 billion which roughly was a 79.9% stake.
▶ 1:46:42So there is a historic precedence for Treasury getting involved when it is to the benefit of the United States of America and failing to mention that and I serve as the chairman of Homeland Security Cyber uh subcommittee uh where we deal with uh these types of conversations on equities and foreign interests and how it affects our country and obviously our biggest adversary is China. But that being said, I want to thank the chairman Mr.
▶ 1:47:11Pilkerton for being here. Uh, you know, we meet at a defining moment in the global economy, a moment when our prosperity and our security is inseparable. The Committee on Foreign Investment in the United States or CPHAS is one of the nation's most important lines of defense. Its job is to scrutinize foreign capital that could intentionally or inadvertently undermine American national security. That mission has never been more vital. And again, when you look at the AI and the cyber space, the interconnectivity here is almost unfathomable.
▶ 1:47:41For years, the the People's Republic of China has blurred the lines between commercial activity and state power. Unlike Western markets, where private companies operate independently of government direction, China's corporate sector exists within a political system that compels the cooperation with the Chinese Communist Party's strategic objectives. Beijing's made in China 2025 industrial plan.
▶ 1:48:04Its dominance of key supply chains from rare earth rare earth minerals to semiconductors and an expansive industrial subsidies are all aligned to exploit open economies while denying reciprocal access to ours. This is not a benign investment. It is a long-term strategy to acquire sensitive technologies, critical infrastructure, and intellectual property that can be used to China's advantage in future conflict or economic leverage.
▶ 1:48:31At the same time, the Islamic Republic of Iran has repeatedly used opaque corporate structures and front entities to evade sanctions and funneled hard currency into its military and security apparatus. Iran's network of proxies across the Middle East as sponsorship of terrorism and its systematic efforts to gain access to Western capital and technology pose a clear and present threat to US interests.
▶ 1:48:55Iranian actors have used complex ownership chains to mass control of entities that operate across borders. A strategy that without vigilant scrutiny could allow hostile regimes to penetrate or influence American technology and infrastructure markets. CPHAS must remain robust, discerning, and unafraid to use its full statutory authority to scrutinize transactions involving entities tied to these regimes. And I want to underscore, Mr. chairman.
▶ 1:49:24As someone who sits on the cyber uh subcommittee, I serve as chairman. I spent a lot of time in the skiff in a classified uh setting. We are attacked daily by China, by Iran, by North Korea. They want access to our markets. They steal our technologies. And it is imperative that we support CPHAS in its mission. The uh Mr. Secretary, Assistant Secretary.
▶ 1:49:49The Chinese Communist Party requires companies under its jurisdiction to cooperate with state intelligence and security services regardless of how these companies present themselves abroad. Given that reality, does CPHAS treat transaction transactions involving Chinese controlled entities as presumptively high risk even when those entities claim to be a private or or routed through third countries? Sir,
▶ 1:50:12Congressman, thank you for the question. uh as you know under the CPHAS program there is no per se prohibition from a particular country that having been said um with respect to China I'm aware of some of the distinct risks that you're you're talking about and so I think taking it at at a higher level with respect to the impact of things like cyber like impact on military technologies intelligence technologies those areas are particularly important for the committee and we rely upon the entire committee around
▶ 1:50:42the table to help us and inform us of those national security risks so we can make a deter determination as to whether they exist, whether we can mitigate or whether to prohibit a transaction.
▶ 1:50:52Thank you, Mr. Chairman. I yield back.
▶ 1:50:54Thank you. Uh the gentleman from Iowa, Mr. Nun is now recognized for five
▶ 1:50:59Well, thank you, Mr. Chairman. Thank you for CPHAS for being with us here today. Let me be very clear. The US homeland is not for sale. That means not our military bases, not our family farms, not our key industries. My home state of Iowa has seen agricultural espionage before. Chinese spies were stopped at the De Moines airport for stealing seeds, literally going to a farm field and pulling them out of a test unit.
▶ 1:51:25But because of good work here in the United States, we were able to stop those agents at the De Moines airport before they fled back to China. Now they can do it blainly over line. Uh the challenge here is that as I sit on the China Select Committee and understand the CCP's tactics to penetrate the US market and establish a presence here in the United States, we need a CPHAS program that works. And we welcome foreign investment in the United States, but there needs to be a more thorough and transparent process for understanding and addressing the entities of concern.
▶ 1:51:56I think of CPHAS like airport security in a lot of very good ways. We want to move legitimate travelers or legitimate investment into the United States successfully while quickly stopping and identifying those threats before they can enter the United States and take root as I noted with the Chinese. Right now, we're making everyone wait in that same tragically slow line.
▶ 1:52:18As a result, I call on Treasury and Civia several times to Congress to review and address the national security issue which we've flagged the Bitman and Kango active in the digital asset space. This is iRoot and uh other robotics that are now flowing back to Beijing.
▶ 1:52:35The challenge here is not only could you have a Ramba that could map your entire area and report that back, but the very fact that the Chinese are using lawfare to be able to acquire sensitive proprietary information, whether it be corn seeds or robotics, and take that back to replicate inside Beijing. This is a concern that affects all of us. So, Mr. Mr. Pleton, appreciate your leadership as assistant secretary for investment security at Treasury.
▶ 1:53:00I think members of Congress, we want to make sure that we've got clear insight in the CPHAS review process, particularly where it's most appropriate. I want to ask some specific questions here and I appreciate the conversation today. Is there a reason that we on the financial services committee can't get updates on our request? specifically treasurer's response to my letter about Bitman and um the work that CPHIA said is a matter that we can't share anything. Can we get into a skiff? Can we understand what's going on?
▶ 1:53:28Can you help provide the clarity to this body so that we can better address legislative solutions with you? Congressman, I certainly appreciate the question. I'm not familiar with your letter, but happy to engage with our legislative team to to come back and and speak with your staff. But but you raise a couple of really important points that I'd like to speak to if I may.
▶ 1:53:50Um the first is the engagement of this committee is very important and as I stated before the ability to be able to come to you and work with you to see if there are authorities or things that the program might need to be able to ensure that national security remains the number one and the the abilities and processes are in place there is going to be incredibly important and I feel very strongly that we have that now. Um, you made reference to the agricultural area.
▶ 1:54:19Uh, earlier in in 2005 or 2025, Secretary Bessant signed anou with Secretary Rollins to focus particularly in areas of ALAN, biotech, transportation, storage, and processing. Um, so just for you and your constituents, I want you to know that that's an area I've spoken to Secretary Rollins about personally, Deputy Secretary Vaden, and it's very high on our radar, and we're excited to have them as part of the committee for those transactions. I'm very encouraged to hear that feedback.
▶ 1:54:49I think that is a move in the right direction. When we look at uh I think there's 330 transactions annually that your team reviews, that is no small accomplishment. At the same time, I want to make sure that there are prioritizations happening within there. I have to assess that CPHIA is doing some level of elevation for key things that are really critical to the United States. Can you speak to us on how that process is working now so we can go after these top tier bad actors first versus looking at everything in a monolithic approach?
▶ 1:55:20Sure. So from a process perspective, going back to your sort of airport analogy, we have the known investor program that is under development. It's still under a pilot. But the idea there is, you know, when we look at the people that are engaged in a transaction and the actual transaction itself, we have to assess both of those components for the national security risk. Our hope and goal is that under the known investor program, we'll be able to get a better understanding of the parties from as much information as we can get.
▶ 1:55:49Now, that will continually be updated as you would imagine, but that process will be as efficient as possible. We have a very
▶ 1:55:57I'd like to make sure that we not only encourage this pilot program, but those who want to invest do have a clean, safe pathway to do it, and those who are dangerous are priorities at the top. This is something we should be working on together. Thank you, Mr. Chair.
▶ 1:56:08Thanks, Mr. Nun. Uh the gentleman from Texas, Mr. Green, is now recognized for five minutes.
▶ 1:56:13Thank you, Mr. Chairman. Mr. Chairman, ranking member, I have in my hand a bill styled the preeemption of real property discrimination act. Uh this legislation would preempt states from producing unacceptable laws related to real property transactions as they relate to persons who may have a foreign background.
▶ 1:56:41I'll say more about that at some other time. What's important to say is this. This legislation is legislation that would preempt the 50 from each having their own laws related to individuals who are from other countries buying property. I'm honored to tell you that the Honorable Judy Chu is a co-lead on this legislation.
▶ 1:57:11It was introduced in a previous Congress and uh today I plan to introduce it again. 50 states, 50 different laws. has the authority to deal with these 50 states, 50 different laws.
▶ 1:57:34Uh would you kindly explain sir whether you think we should have 50 states with 50 different laws? Some may have a ceiling that's quite high. Others may have a floor. Your your response please.
▶ 1:57:51Thank you congressman for the question. in the the CPHAS program um that I have uh gotten the honor to lead focuses obviously on the federal uh CPHAS laws. Now in implementing that program, we work very closely with state actors to ensure we understand their concerns and are able to engage accordingly.
▶ 1:58:16Let me ask you this, sir, if I may. Um, I appreciate your interacting with them, but if it's only an interaction and they are allowed to do whatever they choose, we still have 50 states with the ability to promulgate 50 different laws.
▶ 1:58:37And thank you very much for for that question. And I just wanted to finish up saying that I not only will be engaging with the states but also with the chambers of commerce so they understand the federal CPHAS program. With respect to the CPHAS program that I lead, I can only execute the laws on the federal side. I have not seen your legislation, but obviously I'll be proud.
▶ 1:58:59I'll be proud to have you review it, but 50 states with 50 different laws is Uh, I think we need to preempt CPHAS should have the authority to do this. And if we need additional laws other than what I'll be introducing along with the honorable Judy Chu, I'll be more than pleased to to look at producing the laws to do this. Th this would uh undermine CPHAS to have these 50 states engaging in this process at will.
▶ 1:59:29But there's something more sinister that's taking place right now. It creates When a state like Texas produces its law and you are relying on realtors to enforce the law, there's a certain amount of xenophobia that's taking place and people are worried about their ability to engage in a legal I'm going to give you a vignette that I have a personal relationship
▶ 1:59:59with. I buy property and I was purchasing a piece of property and dealing with the typical methodology by which one makes the purchase. And at the closing, the persons who were assisting us wanted me to sign a document indicating that the seller is not a foreign national.
▶ 2:00:28I don't know the seller's origin. I know nothing about the seller. As a matter of fact, never met the man. It was a man. Never met him. But somehow there was an expectation that I would sign a document saying that he was not a foreign national. That's the kind of confusion that these laws can create because people are desiring to be law-abiding and make sure that they do that which is within the law.
▶ 2:00:59I'm a very strong believer and advocate for equality, liberty, and justice for all as we extol it in the pledge of allegiance. This this behavior of allowing 50 different states to produce laws comparable to what we have in Texas is unacceptable. I think this bill is going to be very helpful. And finally, Mr. Chairman, thank you for giving me this second to say this.
▶ 2:01:22Um, I I support protecting our military installations, but I don't think we have to produce a law that will allow an American to American citizen to buy that land and prevent a foreign person. I want to protect us from anyone living near those sensitive sites. Doesn't matter to me where you're from. It's a sensitive site that judges that I judge. Thank you very much, Mr. Thank you Jim.
▶ 2:01:46Gentleman's time has expired. All times for questions is expired. I'd like to thank uh you, Mr. Assistant Secretary Pickerton for your testimony today. And without objection, all members will have five legislative days to submit additional written questions for the witness to the chairman. Questions will be forwarded to the witness for his response. Assistant Secretary Pilkton, please respond no later than February 18th. If we get those to you and this hearing stands adjourned.