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A former Department of Commerce official has warned legislators that the federal government is blind to who funds corporate and critical technology acquisitions in the United States, making America vulnerable to external threats from China.
Nazak Nikakhtar, formerly assistant secretary of the Commerce Department in the Trump administration, told lawmakers that companies have not adequately researched the sources of funding for their work, and the US government sometimes does not do its due diligence.
Ms. Nikakhtar was the chief representative of the Department of Commerce’s Committee on Foreign Investment in the United States (CFIUS), which reviews business transactions for national security risks.
“As the former head of CFIUS in the Commerce Department, yes, we were in complete darkness, our intelligence community didn’t have enough information, and I was in the office frequently until three in the morning and was using any open source information I could find. To reach the final beneficiary,” Ms Nikakhtar said. to the Senate Intelligence Committee at a hearing this week.
Ms Nikakhtar, who is now a partner at law firm Wiley Rein, said in her written statement that American data and technology transfer has allowed China to take the lead in artificial intelligence, and China will use American production against the United States.
“We’ve had decades of unregulated supply chain and technology transfer. [People’s Republic of China] This has systematically eroded our own supply chains and made us dangerously dependent on the enemy,” he wrote. “This is not a good national security strategy. We need a new strategy.”
The Directorate of National Intelligence did not immediately respond to a request for comment.
CFIUS includes White House officials as well as representatives from seven different federal departments, and its scope was expanded with the 2018 Foreign Investment Risk Review Modernization Act (FIRRMA). Ms Nikakhtar, who was confirmed by the Senate in March 2018 and served until 2021, said the federal government has not yet fully exercised the power afforded by the law.
“As Joseph Stalin said, ‘We will hang the capitalists with the rope they sold us’,” Ms Nikakhtar said. “Whether this quote is true or not, it explains what’s going on today.”
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