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Features
Special> 2012 United States Presidential Election > Features
UPDATED: October 11, 2012 Web Exclusive
Political Blowhards Scuttle Wind Farm Investment
Protecting national security or scoring political points? U.S. President Obama has blocked a Chinese firm from acquiring a wind farm in northern Oregon
By Corrie Dosh
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In an election year, U.S. presidents wear two hats. For one, they must be the chief administrator, running the day-to-day operations of the government. At the same time, they are a candidate, convincing voters to extend their employment for another four years. It's a time when politics can trump policy, and that is exactly what a Chinese-owned company has accused President Barack Obama of doing.

Obama blocked Rall Corp., owned by Chinese nationals, from purchasing an interest in four northern Oregon wind farms, citing national security risks. The farms are located only miles from the Naval Weapons Systems Training Facility, where unmanned drones and electronic-warfare planes are tested. The company has filed suit against the Obama Administration, saying the block was unlawful and unauthorized.

"By failing to provide Ralls with sufficient notice and opportunity to be heard prior to prohibiting its acquisition of the wind farms and imposing extraordinary restrictions on the use and enjoyment of its property interests, CFIUS [Committee on Foreign Investment in the U.S.] and the president have unconstitutionally deprived Ralls of its property absent due process," the complaint stated.

Every American president has the power to block foreign transactions under the Defense Production Act, but few have exercised that right -- preferring the free market ideals of capitalism to prevail. In fact, the last time a deal was voided under the law was in 1990, when President George H.W. Bush blocked the sale of Mamco Manufacturing to a Chinese-owned agency.

The Treasury Department has sought to defend the president's action, saying it "demonstrates the Administration's commitment to protecting national security while maintaining the United States' longstanding policy on open investment." But it's easy to see why Rall Corp. suspects the move may be politically motivated. Republican presidential candidate Mitt Romney has accused Obama of being soft on China, and both have ramped up criticisms of Chinese trade practices (click here for story).

Both campaigns are running ads on China in battleground states, especially in Ohio, where the manufacturing industry has lost jobs to outsourcing overseas, according to the Huffington Post. Obama has filed two trade complaints against China in the past three months, and conspicuously announced both moves in Ohio.

The Wall Street Journal, in an editorial, called accusations that the move was politically motivated "plausible."

"The Oregon wind project, which remains on the drawing board, would be near the Navy's Boardman bombing range. So are a lot of things. If a wind farm can be used to spy on Boardman, why not a barn or a Winnebago parked on the roadside?" said columnist Holman W. Jenkins, Jr.

The deal posed a political landmine for Obama, Jenkins said. Chinese-owned wind farms have already been approved for $3.2 million in incentives from the U.S. Treasury, which allows investors to recoup 30 percent of start-up costs of a renewable energy project. The rebates were part of Obama's 2009 economic stimulus law that Romney has sharply criticized.

Washington lawyer Stephen Mahinka of Morgan Lewis & Bockius told the Financial Times the crux of the criticism is in the opaque manner the case was handled. "From the U.S. point of view of attracting foreign direct investment, it is counterproductive to be so non-transparent," he said.

In fact, the Oregon wind farm has had other foreign owners. After an American owner initially launched the project, a Greek company, Terna Energy, acquired it. The president's claim that the move was to protect national security would carry more weight if he had blocked the sale of the farm to Terna.

Obama's move would also seem more legitimate if the Navy sided with him. The Navy had already persuaded Ralls to move one of its proposed installations, and had urged Oregon regulators to approve the deal.

"Mr. Obama's intervention was nicely timed for the pre-election hoo-hah created by a congressional report insisting that Chinese telecom giant Huawei is an espionage threat," wrote Jenkins.

The author is a freelance writer living in New York City



 
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