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Judicial Watch, Inc., a conservative, non-partisan educational foundation, transparency, accountability and integrity in government, politics and the law.

Judicial Watch, Inc., a conservative, non-partisan educational foundation, transparency, accountability and integrity in government, politics and the law.

Because no one
is above the law!


JW Sues Obama Treasury Department for Records Detailing Authorization of Chinese Corporate Takeover

(Washington, D.C.) – Obama influence peddlers are evidently at it again.  This time, a very curious and potentially threatening decision to approve a deal that puts China in control of drilling interests in the Gulf of Mexico and puts cash in the pockets of Obama campaign donors and bundlers.

On February 14, 2013, Judicial Watch filed a Freedom of Information Act (FOIA) lawsuit against the U.S. Department of the Treasury to obtain records relating to the Obama administration’s approval of the acquisition of the Canadian energy company Nexen Inc. by the Chinese government-owned Chinese National Offshore Oil Corporation (CNOOC).

This acquisition will allow CNOOC access to drilling in northern Canada and the Gulf of Mexico, but that is not all.  The deal will also provide a windfall of financial returns to major Obama campaign contributors.

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On November 13, 2012, Judicial Watch sent the FOIA request to the Obama Treasury Department. By a letter dated November 16, 2012, Treasury acknowledged receipt of the Judicial Watch FOIA.  Though required by law to respond within 20 days, to date, Treasury has not done so and we are now in court to compel a response.  The Judicial Watch FOIA lawsuit was filed in the U.S. District Court for the District of Columbia on February 14, 2013.

And why is this acquisition so concerning?

CNOOC’s July 2012 acquisition of Nexen drilling interests in northern Canada and the Gulf of Mexico allowed the Chinese government a partial takeover of a vital strategic asset (accessible crude oil in the Western Hemisphere).  The acquisition is the largest Chinese takeover of a foreign company in history.  And it could have been blocked by the U.S.

Because of Nexen’s holdings in the Gulf of Mexico, the CNOOC takeover required the approval of the Committee on Foreign Investment in the U.S. (CFIUS), which is chaired by the secretary of the Treasury and includes the attorney general, the U.S. trade representative, and the secretaries of the Department of Homeland Security, Commerce, Defense, State, and Energy.

And China got exactly what it wanted.  On February 12, 2013, the CFIUS announced its approval of CNOOC’s takeover of Nexen.  As a state enterprise, CNOOC is owned by the Chinese government and is managed by Communist Party officials.  CNOOC offered Nexen 60% premium over the stock’s trading value at the time of the takeover, prompting analysts to describe the terms as “a fantastic deal for Nexen” and raising questions as to whether the Chinese government’s interests were more strategic than economic.

It certainly appears that the Obama administration’s interests were strategic.  The acquisition will apparently provide a windfall return to Obama-connected investors who profited heavily from Treasury’s approval of the takeover and Chinese expansion into the hemisphere, including:

  • Taconic Capital, which reported in its third quarter filing that it had acquired 6 million shares of Nexen between July 1 and September 30, 2012.  Taconic’s founder and managing director is Frank Brosens, an Obama bundler who has raised more than $1 million for Obama.  Brosens was Timothy Geithner’s first choice to run the TARP (Troubled Assets Relief Program).
  • Farallon Capital Management, LLC, which bought 8.7 million shares of Nexen (1.65 percent of the company) between July 1 and September 30, 2012.  The founder of Fallon Capital is Thomas Steyer, a long-time Democratic fundraiser who spoke at the Democratic National Convention.
  • D.E. Shaw & Co., which increased its position by 5.8 million to 6.5 million shares, or 1.22 percent of the company.  D.E. Shaw was founded by David E. Shaw, an Obama bundler in the $200,000 to $500,000 range.  He also sits on the President’s Council of Advisors on Science and Technology, as he did under the Clinton administration.

“With one ill-chosen action, the Obama administration has managed to undermine our strategic interests and reward its corporate cronies,” said Judicial Watch President Tom Fitton.  “It’s little wonder that the Treasury Department is defying open records law to stonewall accountability. And Americans may want to compare and contrast the quick approval of this Chinese strategic initiative – which benefits the Communist Chinese – with the Obama administration’s scandalous delay of the related Keystone XL oil pipeline project, which would bring energy independence, jobs and resources to America.”


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