Ohio lawmaker blasts foreign investment in Wall Street

Ohio lawmaker blasts foreign investment in Wall Street
17 Jan 08

Ohio Democratic Rep. Marcy Kaptur, a long-time free trade skeptic, warned on Wednesday that the United States may come to regret allowing major Wall Street banks to sell sizable ownership stakes to foreigners.

“These big bankers and fund managers will stop at nothing for a profit, even at the price of our national security. They are selling out America,” said Kaptur, a 13-term lawmaker who is now the senior female Democrat in the House of Representatives.

Many U.S. banks are recording big losses on subprime mortgage market investments. To patch up their books, some are turning to overseas sources for capital injections.

Just this week, Citigroup Inc and Merrill Lynch & Co Inc announced raising $20 billion in capital from investors and sovereign wealth funds, some affiliated with foreign governments in Asia, the Middle East and elsewhere.

Last month, Morgan Stanley said it sold a $5-billion stake to China Investment Corp. Citigroup earlier sold a large stake to the Abu Dhabi Investment Authority.

“We’re raising money from foreign governments to pump into U.S. banking institutions?” Kaptur said on the House floor.

“Foreign capital indebts us more than the face value of the transaction,” she said. “This kind of borrowing means America is no longer free. We owe, and our children will owe … And they won’t owe Uncle Sam. They’ll owe the premier of Communist China, the king of Saudi Arabia, the emir of the United Arab Emirates, the bank of Singapore.”

Kaptur said: “These creditors won’t forget what we owe. They like the influence they are wielding. They will call in their favors to Wall Street, as they are calling in their favors as our troops are staged all over this globe.

“To those candidates who were elected with Wall Street’s help and their enormous financial support, they will call.”

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