Business Law Prof Blog

"Capture" Still Matters

In the wake of the financial crisis, with its emphasis on "USA, Inc.," some may be tempted to think that issues of regulatory capture are so 2005.  But not according to Simon Johnson, who writes that "What we have now is not a free market.  It is rather one of the most complete (and awful) instances ever of savvy businessmen capturing a state and the minds of the people who run it.”  This is at least in part because the bailout favored a limited number of banking players, thereby created a playing field that is now “massively tilted in favor of these banks.”  This is precisely what I envisioned when I wrote my forthcoming Temple Law Review article, “Finding State Action When Corporations Govern” (Why blog, if not to occasionally shamelessly self-promote?):

The financial crisis of 2008 is blurring the lines between the State and the private sector. While painful, this process may facilitate a re-examination of the state action doctrine. This Article argues that corporations have for some time been increasingly taking on roles as pseudo-governmental actors without incurring the accountability to the people generally associated with state action. This is happening via new governance, and while the recent financial crisis may suggest that the problems associated with new governance are waning, the reality is that the corporate consolidations likely to follow in the wake of the downturn - together with the government's oft-stated desire to divest its bailout stakes in private companies as soon as possible - will result in even more powerful corporate actors with an even greater ability to govern.

By the way, I have to recommend another Johnson post—this one on Goldman allegedly going “rogue” in Europe by helping governments there hide their debt—if for no other reason than the quotes.  Here are two of my favorites:

“When the data are all lies, the outcomes are all bad – see the subprime mortgage crisis for further detail.”

“If [Goldman] is to be allowed back into this arena, it will have to address the inherent conflicts of interest between advising a government on how to put (deceptive levels of) lipstick on a pig and cajoling investors into buying livestock at inflated prices.”

SJP

Protectionist Canada: Ohio has a new shinning example

Canada invoked the rarely used Investment Canada Act of 1985 to block a negotiated acquisition of a Canadian company, MacDonald Dettwiller, by an American company, Alliant Technsystems.  The Canadian company is in the satellite business.  On the announced of the block, the stock in the Canadian company dropped immediately about 9 percent on the Toronto stock exchange.  The Investment Act allows the Canadian government to block any foreign acquisition of a Canadian company worth more than $295 Canadian dollars if the acquisitions does not provide "net benefits'' to the Canadian economy, such as increased productivity and research and development. This is a version of the first generation state anti-takeover statutes that first appeared in the United States in 1969.  Ohio was second in line to adopt one.  The United States Supreme Court declared them unconstitutional in Edgar v Mite in the early eighties.  Ohio still has it, in a substantially diluted form so as to satisfy the opinion.  We are moving in the direction of the Investment Act, with new modifications of our foreign anti-takeover legislation and rules, but our federal system is light years away from the Canadian act (we have more stringent requirements for a threat to "national defense" or "critical infrastructure").   The current Congress, of course, would pass the Canadian language it if could get away with it.  The Canadian Act is very, very shortsighted, making every foreign acquisition a political question handled by a government bureaucrat. The Act has sat on the books usued for twenty-five years and now has been rediscovered by Canadian politicians.  We, of course, must now threaten to block all Canadian acquirers of United States companies until we get reciprocity.  Wonderful.

Treasury, Abu Dhabi and Singapore Agree to Basic Principles for SWFs

The Treasury Dept. and two of the largest and mosty active SWFs have agreed on some basic principles for sovereign wealth investment.  The press release from Singapore is here.  The principles are essentially the those of the framework set out by Treasury Undersecretary Robert Kimmitt in his recent Foreign Affairs article "Public Footprints in Private Markets".  I think the Treasury has struck the right tone with SWFs thus far, and demonstrates that at least some SWFs are willing to act more like fiduciary investors as long as they are treated like other investors.  The key investor that must come to the table, however, is China.  While Singapore and Abu Dhabi are important SWF investors, China's SWF is the bigger concern because of China's greater economic and political importance.

Posted by: Paul Rose

Globalization and Prosperity

Amid the discussions about the detrimental effects of NAFTA on Ohio (see Dale's post on "Ohio's Economy" below), a soon-to-be published study of globalization's effects on the European Union states that "the European Commission estimates that at least a fifth of Europe’s income gains since World War II can be attributed to globalization, and that every EU household would gain over €5,000 annually if Europe seized the opportunities offered by the present phase of globalization." 

On the negative side, the report notes that, like Ohio, a number of workers have seen their jobs move out of the EU.  However, on the whole, incomes, wages, and the employment rate are all higher.  The report notes that semi-skilled, assembly jobs are moving to countries like China and India, while the EU has gained considerably in "knowledge economy" jobs.

The report also notes that a crucial determinant of whether a country will benefit from globalization is the sophistication of its "human capital"--EU countries with higher education levels and "strong innovation frameworks" are the big winners from globalization.  As Dale suggested below, if we apply these lessons to Ohio (and "Rust Belt" states generally), smarter investment in education and incentives for local talent to stay in the state would seem a better solution than renegotiating NAFTA.

Posted by: Paul Rose

London Again the Most Competitive Financial Center . . .

according to the third in a series of reports commissioned by--you guessed it--the City of London.  The rankings, which have New York second and Hong Kong a distant third, are based on surveys of professionals.  The surveys focus on 14 factors categorized into 5 key areas:

People involving “the availability of good personnel, the flexibility of the labour market, business education and the development of ‘human capital’.”

Business Environment covering “regulation, tax rates, levels of corruption, economic freedom and the ease of doing business.“

Market Access covering “the levels of securitisation, volume and value of trading in equities and bonds, as well as the clustering effect of having many firms involved in the financial services sector together in one centre.”

Infrastructure, focusing mainly on “the cost and availability of buildings and office space, although it also includes other infrastructure factors such as transport.”

General Competitiveness covering “the overall competitiveness of centres in terms of more general economic factors such as price levels, economic sentiment and how centres are perceived as places to live.”

NB: the rankings presumably were compiled before the announcement that the UK intends to crack down on favorable tax rules for non-domiciled foreign residents (non-doms).

Update:  Apparently, some of the responses to the survey came back before the tax changes were announced, "[b]ut the 411 replies since last September show New York with a big lead over London."

Posted by: Paul Rose

CFIUS on the Table Again: China Buys a 9.9% Stake in Morgan Stanley

A Chinese Sovereign wealth fund, China Investments Company, has bought stock rights in Morgan Stanley that will enable CIC to own 9.9% of the equity of the company by 2010.  The agreement apparently gives no "management power" to CIC.  [What does this mean? Now? Or just until 2010 when CIC is a 9.9% shareholder.] CIC is flush with dollars from China Central Bank currency purchases of dollars for yuan, designed to keep its peg of the yuan to the dollar in place.  So we now have the hard case.  The CIC fund is not "investor" driven, nor will it be.  The fund acts on government initiatives.  The CEO of Morgan Stanley, in announcing the sale admitted as much when he noted that the investment would enable Morgan to "pursue" opportunities in China.  Read between the lines:  A condition of the sale is that Morgan Stanley operates in China.  This is not a request from an investor interested purely in the highest return, nor is it a decision from Morgan interested purely in a highest return on its new funds.  CFIUS should take a close look at this.      

NASDAQ's Bid for LSE

The Nasdaq's bid for majority control of the London Stock Exchange has journalists trying to figure out the takeover code in London.  Nasdaq cannot raise its bid unless the LSE agrees or another bidder shows up; the bid must be held open tuntil Jan. 11; Nasdaq can lower "terms" until Jan. 27 and extend the offer until Feb. 10.  If the offer fails, Nasdaq must wait one year to make another offer.  All these rules, and many others in the background(if Nasdaq gets 90% control,it can cash out the remaining 10%), make any open auction negotiation with target shareholders very difficult.  The Nasdaq bid is a case study in whether the rules make sense.   

China Gets Tough on Foreign Investment

China has adopted a serious of measures to discourage foreign direct investment in China.  China's securities regulated has a new takeover code, for example, that stops acquisitions that "harm national security or the public interest."  The Chinese Ministry of Commerce has also declared that it will stop foreign acquisitions that "affect economic security" or involve "key" domestic industries.   Ironically, China's chief economic planning agency is considering further restrictions, patterned after Congressional proposals to expand the power of CFIUS (Committee for Foreign Investment in the United States)  to block foreign investment in the United States.

Globalization

Bernanke's lecture on globalization is in the news.  He takes the economists' view that globalization is healthy and remarks that the pace and size globalization of the last 30 years is without historic precedent.  Anti-globalization advocates will not like the implications of his talk and redouble their efforts to "control" international trade to limit "outsourcing."   His talk lacked a last, necessary argument that globalization is an inevitable economic force (like gravity is a physical force) that we cannot control or even manage -- we can only work within its pressures and effects.    

CFIUS and Dubai in the News Again

President Bush approved a CFIUS recommendation to approve a takeover of a British company by a Dubai stated owned company.  Sound familiar?  The Dubai company is Dubai International Capital and the British company is Doncasters Group, which owns nine United States facilities.  Several of the United States factories supply critical parts for military vehicles and aircraft; high-tech turbine fan blades for engines, for example.  CFIUS did the full 45 day review and the President, per the formal review, informed Congress of his decision.  Congress did not balk.  Those in Congress, who criticized the Dubai Ports World acquisition of a British company that operates several United States port facilities, approved this deal and took pains to justify their lack of opposition.  Sen. Charles Schumer, for example, noted the difference in procedure and that this was " a product" not a "service."  "The opportunity to Infiltrate and sabotage is both more difficult and more detectable,"  he noted.  Both distinctions do not make much sense.  Procedure did not matter in the Ports World acquisition -- a offer to do a 45 day review was met with derision and a House resolution to block the deal regardless.  The supply of turbine fan blades could be constricted and the technology stolen.  I suspect that members of Congress recognize that they cannot seriously upset a valuable global trading partners such as Dubai;  a little grandstanding for the folks at home will be tolerated by Dubai as long as Congress does not make a habit of it. 

DP World Controversy Continues

The Dubai Ports World acquisition of Peninsular & Oriental Steam Navigation Co. closed in London last week.  Both companies operate port terminals all over the world.  DP World is controlled by the government of Dubai, one of the United Arab Emirates, and P&O is based in London.

Only ten percent or so of the P&O business is located in the United States.  It operates terminals at five American ports, including New York and New Orleans.  The purchase of the American operations ignited a grass-roots bushfire that enveloped Washington, D.C.  Irate callers clogged the lines of radio talk show hosts and then of their congressmen. 

Undeniable evidence that the controversy had gone white-hot appeared when Jay Leno disparaged the acquisition in his nightly monologue on the Tonight Show.  He noted that it was like “putting Bill Clinton in charge of Hooters.”

Congress refused an offer of a forty-five day formal investigation of the national security implications of the deal.  Members of Congress from both parties rushed to propose over two dozen bills aimed at halting the acquisition.  After a quick 62-2 vote by a panel in the House of Representatives to block the transfer of port operations in the United States, DP World threw in the towel. 

On March 9th, DP World announced that it would “transfer” its new United States operations to a “United States entity.”  In other words, DP World will incorporate a United States corporation and drop the United States terminal operations into the newly created subsidiary.  The United States subsidiary will either resell the assets or implement a corporate structure that isolates the assets from any management control by its parent, DP World.  If DP World takes the latter tack, as it probably will with some of the terminals, Congress will find itself in the business of evaluating the merits of “Chinese wall” parent/subsidiary corporate structures.

The discontent remains.  Jay Leno deadpanned in response to the DP World announcement that “the good news is that Congress forced Dubai to sell the ports… the bad news is that the sale is to Iran.”

The public learned late three salient facts about our ports:  First, terminal operators do not own the ports, government port authorities do.  The terminal operators lease space to run loading cranes and dock ships.  Second, eighty percent of the terminals in the United States are already run by foreign-owned operators.  Some of the port operators are state-owned (China and Singapore), some are publicly traded and others are privately owned by families.  Third, port security is in the hands of federal customs officials and the Coast Guard, not the terminal operators.  Moreover, the laborers the terminal operators must use to load and unload ships are unionized dock workers.

The dispute has also bought focus on the otherwise obscure Committee on Foreign Investment in the United States (CFIUS), an interagency group delegated with the responsibility for reporting to the President on foreign acquisitions that threaten national security.  A 1988 act, known as the Exon-Florio Amendment, empowers the President to investigate and, if necessary, to block foreign acquisitions that “threaten to impart the national security.”  Investigations are voluntary if the foreign-buyer is privately owned and mandatory if the foreign buyer is state-owned and the acquisition “could affect the national security.” 

The President delegated investigating authority to CFIUS, which had been created in 1975.  CFIUS conducts the necessary investigations and makes recommendations to the President on whether the President should block the acquisition.  CFIUS is chaired by the Secretary of the Treasury and has eleven other members.  It is composed of representatives of the Departments of Treasury, State, Defense, Commerce, and Justice, the Offices of the United States Trade Representative and of Management and Budget, the Council of Economic Advisors, and the Assistants to the President for Economic Policy and for National Science Affairs.  CFIUS acts in confidence because it receives confidential and sensitive business information from deal participants.

The key term in the statute, “national security,” is undefined in either the statute of the CFIUS regulations.  The background of the statute is in a concern over foreign acquisition of products or key technologies essential to the United States defense industry.  This notion is elastic.  The controversy that stimulated the 1988 Amendment, for example, was the attempted takeover of Fairchild Semiconductor Corporation in 1987 by Fujitsu, Ltd (a Japanese company).  Fairchild supplied semiconductor chips to, among others, the United States defense industry.  A 1992 threatened acquisition of the missile division of bankrupt LTV Corporation by Thompson-CSF, a French company, led to the 1992 Byrd-Exon Amendment that started “mandatory investigations” for state-owned company acquisitions.

In practice, CFIUS has recommended that the President block only one takeover after a formal investigation (the proposed sale of a Seattle defense contractor to a Chinese company) and has threatened to recommend that the President block four or five others.  The CFIUS threat of an adverse recommendation is usually enough to stop, or modify most acquisitions; a formal report to the President is not necessary.  In the DP World acquisition, CFIUS had determined initially that a mandatory forty-five day investigation was not necessary even though Dubai is state-owned.  After the public outcry, CFIUS had started a formal investigation.

Some members of Congress, not content with the CFIUS procedure, have proposed legislation to give Congress a greater say in foreign acquisitions of “critical infrastructure industries,”  which could include everything from water and energy companies to those involved in telecommunications or media.  Such legislation has two dangers. 

First, it could very quickly mix national security concerns with economic protectionism and radically change the position of the United States in the world economy.  International investment is a mutual game; our companies invest abroad because foreign companies can invest here.  We cannot cherry-pick those investments we want in the United States (let Honda own an Ohio automotive plant but not a trucking company, for example) without having our companies excluded abroad.  Second, giving the power to Congress to, in essence, charter foreign companies, will return us to the days of the early 1800s when states chartered domestic corporations one-by-one.  The result was organized graft and corruption and government-sponsored monopolies as state legislatures took payoffs to refuse charters of new companies that would compete with established ones, unless the new company could offer more.

One hopes that the cooler heads in Congress will prevail on these new bills.                  

Count on the French

The French have protected eleven categories of industry from cross-border mergers within the European Union.  In the name of national security they have, for example, protected casinos.  The Prime Minister of France, Dominique de Villepin, has made building "national champion" companies a part of his economic policy.  The European Commission must decided whether to take France to court for illegally blocking takeovers.  If the Commission tolerates the French policy, a tit-for-tat response can be expected from other EU countries, and the EU competitive advantage of economic unity will be in serious question.

Dubai Ports World Deal: The End Game

A threat by Congress to pass legislation stopping the purchase of Peninsular & Oriental terminal operation in the United States by Dubai Ports World has led Dubai Ports, which has closed its acquisition of P&O, to promise to "transfer" its United States operations to "a United States" company.  Congress declared victory and the country's economists and business community worry about the effect of the deal collapse on the position of the United States in the global trading system.  Ah, now the lawyer's take over.  What does it mean to transfer operation to a United States company?  Congress and the press is assuming that Dubai Ports will sell its terminal operations in six United States ports to a United States shipping or terminal company.  Names of purchasers are bantered about (Eller & Co., SSA Marine Inc., Marine Terminals Corp.??).  Not so fast.  The careful language of the press release could mean that Dubai will drop its United States operation into a wholly-owned subsidiary or into a joint venture between Dubai Ports and an American finance company.  The structure of the subsidiary will isolate the board of directors from any influence by Dubai Ports;  Dubai Ports will not "control" the sub.   There is ample precedent for such structure our defense industries.  The Department of Defense has approved acquisitions by foreign companies of United States defense related industries under such structures.  Congress will then have to get into the business of regulating business structure.  Stay tuned.  This is not over.   

My Editorial on the Dubai Deal

For my editorial on the Dubai Deal see...

     Dubai Ports World, owned by a Dubai prince, has purchased a London company, Peninsular & Oriental Steam Navigation Company of London for $6.8 billion.  The deal is set to close this week.  Do we care?  You bet.

     P&O operates port terminals in Philadelphia, Baltimore, Miami, New Orleans and Newark.  Dubai is one of the seven emirates that form the federation known as the United Arab Emirates (UAE). 

     Opposition to the acquisition exploded. “We are being played for suckers.  United States buys UAE oil and UAE uses the revenue to buy our ports so Arab terrorists can hide a nuclear device in a shipping container coming from abroad,” they shouted.  The media played on this potent brew of fear over safety, of foreign economic domination, and of Arabs.

     Opposition to the acquisition has attracted bipartisan congressional support.  Members of Congress have proposed a bevy of Congressional bills to halt the acquisition and President Bush has said he will veto any that are passed.  The President has agreed, however, to more fully brief Congress on why he believes the acquisition does not threaten national security.

    After more digging by the press, the public woke up to some potentially distressing facts.  Eighty percent of the terminal operations in the United States are already under the control of foreign operators.  The countries largest terminal operators are from Hong Kong (China), Singapore, Denmark, Germany and Taiwan. If UAE had not purchased London based P&O, a Singapore company (also state owned) probably would have. 

     Some of the port companies are state-owned; some are publicly traded; and some are owned by wealthy families.  All the companies are huge, enjoying the economies of scale from operating efficient, low-cost port operations all over the world.

     Calmer heads noted, however, that the commercial port operators do not own the ports; they lease terminals.  Port management and port security remains in United States hands. The federal customs officials, for example, will remain responsible for inspecting all cargo and for protecting national security.  Terminal operators control when a ship berths, the use of loading cranes, relations with stevedores unions, and contracts with domestic shipping concerns.

     Economists caution that international investment goes both ways.  For our companies to enjoy the opportunity to invest abroad, we must allow foreign companies to invest here.  Blocking local investments is a prelude to a trade war in which all the participants lose economic vitality.             

    The dispute has also bought focus once again on the otherwise obscure Committee on Foreign Investment in the United States (CFIUS).  CFUIS is a multi-agency committee with twelve delegates from other federal agencies, chaired by the Secretary of Treasury, that investigates the national security implications of foreign acquisitions of United States assets.  The President empowered by the Exon-Florio Amendment of 1988 to block acquisitions that impair national security has delegated investigative powers to the committee.

     The role of CFUIS was also much discussed last year in the CNOOC attempted acquisition of Unocal. CNOOC was a Chinese owned oil company.

     CFIUS reviewed the Dubai Port World acquisition and decided that it did not “affect national security” and therefore did not require a statutory “formal investigation.”  Had CFUIS decided that the contrary, that the acquisition “could affect national security,” it would have stayed the closing, conducted a formal 45 investigation, and reported its recommendations to the President. 

     The President decides to block or allow the acquisition to close and must report his decision, with reasons, to Congress.  Congress, if in disagreement with the President’s approval, could, in theory, pass legislation to block the deal that would have to survive a Presidential veto. 

     Several members of Congress are angered by the failure of CFIUS to do the formal investigation, particularly since Dubai Port World is a foreign state-owned company and the Exon-Florio Amendment has special procedures for state-owned company acquisition.

     The problem with Exon-Florio Amendment has always been the lack of a specific definition of “national security.”  This not only affects the ultimate application of the definition, which lies in the hands of the President, but also affects the CFIUS decision to trigger the formal investigation procedure. 

     I believe the cooler heads will prevail and the acquisition will close.  Congress may, however, take the opportunity to revisit and revise the CFIUS approval procedure, which would be a welcome development.  A sensible operation of this procedure is very important to national safety and our economic health as well.              

The Dubai Deal Compromise

The firestorm over the acquisition by Dubai Ports World of a London based port terminal operator that controls terminals at six American ports has entered another phase.  The Dubai company has agreed to delay closing the acquisition until CFIUS has conducted a 45 day "formal investigation."  CFIUS reports a recommendation to the President, who, under Exon-Florio, decides whether to go along and reports his decision to Congress.  Absent significant new data, CFIUS is likely to report to the President that he need not block the deal and the President will agree.  The ball will then be squarely in Congress's court.  Many hope the that delay and new report with help defuse the situation.  Several members of Congress have discovered, after jumping on the public outcry created by the deal, that blocking this deal on raw protectionism will generate a myriad of problems.  At issue now is whether the public protest, once started, will be alleviated by a procedural, political face saving solution.  Can the genie be put back in the bottle?

The Dubai Ports World Acquisition

A very bright newsman from a New York City public radio station, I believe his name was Bob Hendley, asked me yesterday whether the controversy over the Dubai Ports World acquisition was an indication that the American public was waking up late to the the fact that over 80% of the ports in American were already run by foreign companies.  I agreed and answered that the American public must also learn a bit more about the benefits of international trade and investment so as to analyze this information.      

Dubai Ports Acquisition is not like the CNOOC Acquisition

The argument against the CNOOC acquisition of Unocal is getting lumped in with arguments against the Dubai Ports World acquisition of Peninsular & Oriental Steam.  They are different cases.  The argument against the CNOOC acquisition was based on the lack of reciprocity -- we cannot buy Chinese companies.  Reciprocity is at the heart of bargaining over international trade and investment rights; it is the tit-for-tat bargaining game.  The argument against the Dubai acquisition is old fashioned protectionism in the guise of national security.  National security is a legitimate concern and we should be able to block acquisitions in the name of national security but national security can also be a false front for raw protectionist sentiments.  At issue here is, first,whether the national security concerns are legitimate and ,second, the government's mechanism for deciding such cases.  The latter issue involves the standards of the Exon-Florio amendment and the CFUIS procedures implementing those procedures.  Also in issue is whether Congress wants to play a role in making the decisions. 

Dubai Ports World Acquisition

Dubai Ports World, a Dubai state-owned company, is attempting to purchase, for $6.8 billion, Peninsular & Oriental Steam Navigation Co., a London company.  The acquisition has attracted the attention of Congress and the press.  Peninsular runs commercial terminal operations in 17 ports in the United States, including ports in New York and New Orleans.  The prospect of a Muslim state running operations in major United States ports has aroused fears that the acquisition could facilitate a commonly understood potential calamity, that a terrorist will send a nuclear bomb or some other weapon of mass destruction to the United States in a shipping container.  It has become a political hot potato and once again put CFIUS in the spotlight.  The Committee on Foreign Investment in the United States (CFIUS), a multi-agency committee, has authority over foreign acquisitions that "impair national security", writing reports to the the President and recommend whether the President should exercise his authority under the Exon-Florio amendment to block the acquisition.  Exon-Florio and its rules require a "mandatory investigation" by CFIUS and the President whenever a state controlled entity makes an acquisition that "could affect the national security of the United States".  Apparently CFIUS found, on an informal inquiry, that the mandatory investigation requirement was not triggered by the acquisition.  Several members of Congress disagree and are proposing legislation to force CFIUS to do a mandatory investigation.  The President has threatened to veto the legislation.  Keep in mind that even if CFIUS does a mandatory investigation, the President makes the final decision (and must report his decision to Congress).  Since the President has already declared his support for the acquisition, such legislation, if passed, may not affect the outcome.   If Congress wants to stop the acquisition it would require specific blocking legislation and it would probably have to overcome a Presidential veto. The President's argument has three parts:  First, security at the ports is provided by United States law enforcement officials regardless of who is operating a terminal (t;typically the Coast Guard and the Customs and Boarder Protection).  The quality of this security is neutral of terminal ownership.  Second, Dubai Port World already has purchased a United States company (CSX Corp.) in the port terminal business.  Many other foreign owned companies already own terminal facilities in the United States (a state owned Chinese company owns terminals in LosAngeles, for example).  Dubai, after all, is purchasing a London based company, not a United State based company.  If the deal fails, the most likely new bidder is PSA International, a Singapore, state-backed company.  Third, and most important perhaps, international investment goes both ways.  We invest capital in other countries and they may invest capital in United States operation.  We cannot restrict foreign direct investment in the United States without causing other countries to restrict fore gin direct investments by United States companies within their borders.  In short, pulling out the the reciprocal foreign direct investment business would be an economic disaster for the United States.  In the end, Congress will probably make major changes to the Exon-Florio amendment as a result of this dust-up.  They could start by clarifying the act's open-ended triggering language-- "could affect national security" -- and whose interpretation of the language is determinative.       

Private Buyouts in 2005 Set Records

Globally, private equity firms did $396 billion worth of deals in 2005, a 51% increase over 2004 and an all time high.  Private equity firms also raised a new $261 billion in new equity in 2005, also a record.  The largest LBO of 2005 was the Apax Partners lead purchase of Danish telecom company TDC A/S for $12 billion.  The growth in LBOs was larger than the growth in mergers and acquisitions (39%) and the growth in initial public offerings (20%).

Workplace Diversity

Today's W$J includes a special section on workplace diversity.   It contains a series of articles describing the ways that companies can respond to diversified workforces.  Click here for a post by Rick Bales at the Workplace Prof Blog that summarizes the articles.