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Question of the week: Do you believe the purchase of Smithfield Foods, Inc. necessitates CFIUS review and investigation to ensure the safety and security of America’s citizens?
Posted by Randy | June 14, 2013
On May 29, 2013 Smithfield Foods, Inc. and Shuanghui International Holdings Limited announced that they have entered into a merger agreement.  Smithfield Foods is a $13 billion company and the world’s largest pork processor and pig producer, while Shuanghui International and its subsidiaries are the majority shareholders of China’s largest meat processing enterprise.

This $4.7 billion transaction, if approved by the Committee on Foreign Investment in the United States, will be the largest to date of a U.S. corporation by a Chinese Enterprise. 

The Committee on Foreign Investment in the United States (CFIUS) is an interagency organization that oversees the national security implications of foreign investment in the U.S. economy.  Under current law, CFIUS has 30 days to conduct a review, 45 days to conduct an investigation, and then the President has 15 days to make his ultimate determination of whether a deal threatens to impair the national security. The President is the only officer with the authority to suspend or prohibit mergers, acquisitions, and takeovers. 

As the largest takeover of a U.S. company by a Chinese buyer, I formally requested a briefing from CFIUS regarding the potential impacts of this merger on national security, the economic market, and international trade, as well as the review and investigative process CFIUS would undertake in such a case. 

Question of the week:  Do you believe that this purchase necessitates CFIUS review and investigation to ensure the safety and security of America’s citizens, as well as the preservation of national economic interests, food safety, and environmental standards?

(  ) Yes.
(  ) No.
(  ) I don’t know.
(  ) Other (leave your comments below).
 
Take the instaPoll here.

Find the results of last week’s instaPoll here
Comments
Users are solely responsible for the opinions they post here and their comments do not necessarily reflect the views of Congressman Forbes.
  • Gregg J commented on 6/14/2013
    China has dumped substandard products on this nation for years. Ask parents of children with chinese made toys with lead paint. Ask homeowners suffering with pungent chinese drywall. How many times do politicans have to learn this lesson. China takes shortcuts making their products. American corporations don't regulate these Chinese products properly because their too busy counting profits. China shouldn't be allowed to purchase any food production facilities in the U.S. It's time congress stand up for citizens instead of corporations.
  • a b commented on 6/14/2013
    PLEASE do not allow this merger to take place !!!! We need to STOP giving everything to China !!!! It has been proven time ad time again they are poisoning our food. Rat poison in Reeses cups, needles in candy bars, etc. Please don't do this !!!!!!!
  • Timothy Sharff commented on 6/14/2013
    That would depend on the findings of CFIUS. I understand that Smithfield would operate as before.
  • Richard Speirs commented on 6/14/2013
    Randy, I feel we as American's should be very concerned regarding such a large purchase of American industry by foreign investors. To much foreign money in American industry is not good, the profits do not get reinvested on american soil - money goes to foreign countries. I am very concerned about China's money buying Smithfield. It must be reviewed closely. Sincerely, Richard Speirs
  • Woody Ramsey commented on 6/14/2013
    CFIUS review should be required. This is a huge merger and may also lead to loss of jobs.
  • Donna F Grubbs commented on 6/14/2013
    This merger should require a CFIUS review and investigation. I live in Smithfield and I see the pig trucks going back and forth to the plant on a daily basis. However, if the Chinese become involved with Smithfield Foods, I will no longer purchase their products.
  • Mike Schnekser commented on 6/14/2013
    No big deep thought here. I just don't think it wise to make this sort of transaction. I understand that it was Smithfield's largest stockholder insisting on the sale and calling for the CEO to act or be fired. Sounds like a short-sighted, greedy act by folks who don't really care about how this may affect the US. Smithfield will just lose me as a customer.
  • Jen Y commented on 6/14/2013
    I echo Gregg J & others.... The consistently substandard production from Chinese companies are a financial and public health danger to the United States. This is absolutely a national security issue. Take a lesson from the toxic Chinese drywall situation alone: The ongoing costs to our nation, for which China is taking NO RESPONSIBILITY, has crippled (literally & financially) thousands of families. Smithfield Foods should remain a USA-owned corporation. We cannot sell our very food supply to China. Period. Nothing about that merger is good for America.
  • Ed Marston commented on 6/14/2013
    I live in Smithfield and worked for Smithfiels Foods years ago. I can not see where any good can come from this buy-out. Jobs in Smithfield are hard enough to find without having control of the largest local employer not even in this country where they will see the impact of their corporate decisions on the localities effected. I know the USDA has some oversight, but with budget cuts theytoo are shorthanded and can not keep up with full proper inspections of our food supply. Please let's stop this merger!!
  • Ed Rust commented on 6/14/2013
    We operate in a free-market system, but some things need to be closely scrutinized when they involve foreign entities. There are many good reasons why we don't buy our national defense systems (ships, planes, missles, bullets, etc.) from Communist countries. The potential impact on our economy is just too great a risk. Why not let them buy into another large financial entity like the Federal Reserve? A very large part of that system is privately held. I agree with the general feeling of the posts I have read. This doesn't need to be investigated, it needs to be totally prevented from ever happening. I have heard hundreds of political promises about creating jobs here and improving our economy, yet our own government is furloughing employees. How does sending our money to a private company in a Communist country help us? I don't believe this merger will help us or our economy in any way and will only send our money to a foreign country for their profit. I spent 9 years of my life on active military duty to help protect and defend this country, and all of the elected federal officials in office today had to take the same oath I did. Nancy Reagan was right- "Just say No!"
  • Walter White commented on 6/14/2013
    China owns way too much of the USA as it is. I don't want food from China. They can't even make drywall.
  • J M commented on 6/14/2013
    Quality has been an issue for food produced in China (amongst other products). I avoid Chinese-produced foods at the grocery store for this reason. I think even Chinese citizens have concerns about the quality of food produced in their own country. We need our food to be safe, for the health of our nation.
  • Thomas G commented on 6/14/2013
    Take a look at the deal. I agree with Roger, I want to know about Governor McDonalds involvement here. I am also very very disappointed congressman Forbes that you would announce on your web site that you are delivering a speech to a 501C(4) entity that is clearly NOT in compliance with the statute regarding exclusive involvement in social welfare endeavors. The stated mission of this entity is to register 1 million conservative voters, produce and print voter guides and become engaged in lobby activism. As a member of the judiciary committee to knowingly associate in such a matter is of extreme poor judgment and raises serious ethical questions Mr. Forbes. Your constituents have repeatedly called you to task via this blog for intellectual dishonesty and blatant omission of critical information that impacts perception. To not disclose that this is a 501c(4) organization that demonstrates the absurdity in the intent to rip off the tax payers in your own district is very disappointing. It is similar to reporting that you were receiving awards from a manufacturing organization that opposes an increase in the minimum wage and who also gave you money. You didn't tell us that either. We cannot even trust you will be honest with us sir, and I do not see how we cannot review the Chinese purchase. When the American people by ONLY 1 PERCENT, that is ONE PERCENT believe the congress is doing an excellent job this is telling you sir that you are failing us. Your speech today is another sad example of poor judgment.
  • Gary Thompson commented on 6/14/2013
    A review of the acquisition of any company by a foreign, and specifically China because of their governments owning of many of these large corporations should be reviewed. My concern is that the President has final approval/disapproval power and this is frightening because this administration is so corrupt and what shakedowns and kickbacks will be required from the company for approval or from those who want it disapproved; it will go to the highest political bidder and will not be based upon what is good for America or the people.
  • Ed Pitts commented on 6/14/2013
    Yes! This DEFINITELY needs to be seriously looked at by the CFIUS. I realize the US is a melting pot and a global partner but selling the largest pork producer to China is not smart. Money/business has gotten this country into most of the problems we currently have. I think it should handled just like the Ports. We shouldn't sell for National Security reasons. Our food supply needs checks and balances. We don't get enough oversight now. By the time China moves or opens slaughter houses all over the world, we won't know where the food is being produced or how. Are we willing to sell our food supply away to a nation we have to spy on and block from spying on a daily basis? Something is wrong with this picture.
  • Lee Barrett commented on 6/14/2013
    What I believe is corporate / government from China will have an excuse to be within miles of our highest secured bases on the east coast. The need for an isolated building in the middle of China is no longer needed. Go to Smithfield, VA and place the snooping equipment there. On another issue, quality of product and waste management requires scrutiny.
  • Steve Sims commented on 6/14/2013
    Congressman Forbes; Thank you for offering your constituents the opportunity to respond to your question. Frankly, I am a little embarrassed for you, as this gesture exposes you as the undeniably meddlesome hypocrite that you are on this subject. If I read your words correctly, a Chinese company proposes to invest $4.7B in a US company. According to the Department of the Treasury’s own statistics, China currently holds more than $1.2 TRILLION in US notes, bonds and other securities. This amount, already owed by the US government, is more than 300 times the amount of the Smithfield deal. And yet, I have no recollection of you ever having taken a public stance against the continuing and growing “national security risks” related to this terrible financial burden already owed to China. Debt created on your watch; created by flawed policies you have done nothing to ameliorate, and, to a great extent, you have contributed to. The mere fact that you pose this question to your constituents exposes your anti-free -market stance, your hypocrisy in failing to do anything constructive about deficit spending; and avoids any recognition that your passionate advocacy for deficit spending, in part to support the world’s largest military, has already created a problem orders of magnitude greater than the “emergency” you are trying to manufacture. I’m not, by any means, advocating for the sale of Smithfield Foods. I am pointing out that your concern about the “national security” implications of this deal, now, are diametrically opposed to the positions and actions you have consistently taken during your tenure in Congress. If you were a true patriot, passionate about preserving the security of the United States, you call for CFIUS oversight of every transaction wherein China was involved in the purchase of any US Government securities. You owe your constituents a rational explanation as to why this proposed transaction (involving two commercial entities) is subject to Federal scrutiny and oversight while similar transactions involving the US Government do not. Until you do so, I’ll continue to consider you to be a meddlesome hypocrite.
  • Leonore Cummins commented on 6/14/2013
    Once the sale is final, we will not support Smithfield or any of their products. I cannot believe Smithfield is selling to China. They sold the Americans out just for profit. You and your stockholders should be ashamed of yourselves. You are just like the government betraying the American citizen.
  • Michael S commented on 6/14/2013
    If this deal passes CFIUS then I say do it. For all those crying about the poor quality of Chinese goods, you must not have many years under your belt. At one time the US produced not only the largest volume but the best quality consumer goods. Its more true with hardware than food but all the same true. What happened was the "Consumer Craze." People wanted to be as much as they can for low, low prices and now we have stores filled with cheap junk. The same is true at our grocery stores. Few people look into the situation but I have. Its despicable what people will put into their mouths. You might change your mind if you knew what modern groceries are doing to us. Few people take notice because it happens slowly. To my point, maybe some Chinese folks can do a better job but then again maybe they'll manufacture the same junk food Smithfield has been churning out for nearly two decades now. Its a toss up.
  • Randall Melton commented on 6/14/2013
    If the Chinese love our pork and the way we produce and process it, just let them BUY more of it, while we still own the company. If the USA is foolish enough to let this occur, then we get what we deserve later down the road. The average Joe can't stop this snowball rolling, that's why we have federal overview....if it happens, then we need to look no further than our own gov't for letting it happen... Haven't we learned enough through tainted baby food, dog food, childrens toys and Chinese Drywall?
  • julia Sciotto commented on 6/14/2013
    We already know about China's horrible track record when it comes to the safety of U.S. citizens (AND THEIR PETS)!!! Remember the contaminated & poisonous dog food toothpaste and other unsafe items such as sub-standard building materials like drywall? All under the supervision of Chinese businesses? I still think about that everday when I look at the poor material I bought for my new home which continues to deteriorate. All from China, the country that didn't care about how their poor products and shoddy safety practices affected anyone else. China doesn't even care about the safety of THEIR OWN CITIZENS! Why would we think they'd have any concerns about U.S. citizens? Didn't we just hear about recent thefts, by China, of U.S. technological (?) information? And we should trust them WHY????
  • Janice Spruill commented on 6/14/2013
    I can't believe this sale is even a consideration. What oversight will there be in the pork production/processing? Huge concerns with food quality , as well as health risks. In additional, this sale is a national security risk. Also, if Smithfield is a $13 billion dollar company, why is the proposed transaction $4.7 billion?????
  • Richie Capps commented on 6/15/2013
    Firstly, I have Great Concerns about selling ANY part of our industry to China, especially such a large food producer. But my feelings on The Smithfield Foods sale are tightly wrapped in emotions : I am a native of Smithfield, my Father worked for Gwaltney until COPD forced him into early retirement. Many of my relatives have worked there, some still do & I Just Can't Imagine A Smithfield Ham Made By The Chinese !!! I feel that this sale is a disservice to Smithfield/Isle of Wight & all who live there...They have worked so hard to preserve the town & county as their heritage - Nothing about this sale is in keeping with those traditions ! Or as one cousin still employed At Smfd. Foods said "P.D. Gwaltney must be turning over in his grave I My reply was that if this sale goes through P.D. & Joe Luter ,Sr. MAY RISE AGAIN !!
  • arlene holt commented on 6/16/2013
    Considering Chinas background,killing our pets,endangering people with their drywall and endangering babies with their formula,I dont trust them. I don,t think the sale should be allowed and any money they make will go straight back to China. So far the powers that be are doing a good job of letting foreigners take over too much of our business and our country. Where will it stop?
  • Ken Hasprey commented on 6/16/2013
    This merger should not be allowed. There are way to many foreign owners in our country now. Try and purchase land in most countries and see what happens... Please reject this buy out.
  • Thomas G commented on 6/17/2013
    Before looking further into this congressman, could you please answer a very simply question for me? I have contacted your office in Washington 9 (NINE) previous times both by phone and numerous times in written request seeking your position on expanded background checks on gun purchases as an act that can prevent the constant terror and tragedy that comes to the lives of thousands of Americans every year. In my discussion with several different people on your staff this is the question I need answered. Yes/No, please do not qualify this in any way, just yes or no. Do you support expanded background checks on gun purchases to address the significant gap in checks that have allowed thousands of weapons to circumvent the verification process. I just want a simple yes or no answer. Why do you refuse to answer a question that millions of people can answer. This is the 10th time sir I have asked you and I have waited weeks for your response.
  • Bruce Burnett commented on 6/19/2013
    Good Afternoon Congressman Forbes, Not only should this be investigated and disallowed, the 'Looters' should be tarred and feathered and run out of Smithfield, Isle of Wight County, and the Commonwealth! Put the whole 'Looter' family in a milvan on a slow boat to China! Hell, throw in the Adjutant General, the Secretary of State and the whole Imperialist administration to boot. That'll be a good start!
  • Carolyn Worssam commented on 6/21/2013
    The proposed sale of Virginia’s Smithfield Foods, America’s largest Ham producer, to the Chinese Shuanghui company for $4.7 to $7.1 billion (WPost / VA Pilot / NPR) poses economic, food safety and national security perils for Virginians and the United States. Please read the letter I wrote to Smithfield CEO, Larry Pope. If you are concerned please see the ACTION ITEM after the letter. May 31, 2013 Mr. C. Larry Pope President and Chief Executive Officer Smithfield Foods, 200 Commerce Street Smithfield, VA 23430 [Via Fax 757-365-3070] Dear Mr. Pope: News that Smithfield is selling its company to the Chinese Shuanghui International has not been received well by my constituents, nor in my own family. While Shuanghui may purchase your physical plant and property, Smithfield’s former reputation built up from 1936 will not transfer with the sale. Inevitably, the Smithfield “brand” will suffer, and regrettably, so will many Virginians. The International Business Times (5/30/13) reported: In 2011, Shuanghui bought pigs raised on fodder containing clenbuterol, an addictive outlawed in 2002; in 2012, Shuanghui ribs contained maggots, and its sausages had excessive bacteria; in February, 2013 Shuanghui sausages were found to contain black threads, and in May Shuanghui sausages went bad well within the sell-by date. In 2009, two executives at Chinese baby food companies were executed for selling infant milk powder and other products which contained the industrial chemical melamine that killed six children and left about 300,000 ill. Unsurprisingly, recent Chinese visitors to Australia left store shelves bare of infant formula products prompting the NY Times (1/7/13) to note that Chinese consumer’s search “for high-quality products can upend faraway consumer markets, particularly amid concerns about the quality of its food supply.” The Wall Street Journal notes, “ Chinese food product imports to the U.S. are continuing to rise, but inspections in both China and the U.S. aren’t keeping pace, posing a growing danger to consumers. ... Reports on the state of Chinese food processing establishments are discouraging. More than half of food processing and packaging firms on the Chinese mainland failed safety inspections in 2011.” (WSJ 5/21/13) China’s widespread food safety problems are known to American consumers and will engulf Smithfield Food products regardless of the names under which they are sold. My wife, and probably most of her friends, do not buy any food products from China because of significant scandals (dog food, defective tires, baby formula, rat meat sold as lamb, etc.) Smithfield’s sellout to Shuanghui with its bad reputation will harm Virginia job holders, families, small Virginia pork producers unable to compete with a global giant, and yes, even our international Trade Balance as word spreads to homemakers and consumers about your sale of Smithfield to Shuanghui. Additionally,* converting Smithfield from a publicly held company which has to provide CPA audited reports to the US Securities and Exchange Commission into a private venture will heighten suspicion of the food products produced by Shuanghui. Further, although the Chinese Company said it will keep present employees and managers in place, what leverage would Smithfield have over future employment policies if Smithfield’s American shareholders no longer own the company, or Shuanghui decides to change its Virginia corporate headquarters to Delaware which has no corporate income tax? How will individual American consumers who may be harmed by Smithfield/Shuanghui, a Chinese company, sue in court when corporate giants like BMW and Mercedes-Benz were unsuccessful in their suits against Chinese car manufacturer, Shuanghuan, for making clones of their cars? You claimed in the papers that there are no national security concerns from the sale of Smithfield to Shuanghui. I disagree. Armies run on their stomachs. The Chinese government has been accused by the Obama Administration of cyber-theft stealing of sensitive defense secrets. I question whether this purchase by a company the size of Shuanghui is completely independent of the the Chinese Communist government. What kind of background clearances will be applied to Shuanghui employees who come to Virginia? Smithfield can sell its products to China, but you should not sell “The Goose that Laid the Golden Egg.” The sale of Smithfield to Shuanghui is not in the public interest, and I urge Smithfield management to establish priorities consistent with our national interest. Sincerely, Sincerely,
  • Bill Grover commented on 6/25/2013
    The bottom line is more American jobs will be lost and you will do nothing to stop it! China pretty much owns this country now and they will have their way regardless of any bill you may propose or pass.
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