US Steel Review Targeted by Republicans for Potential Probe

(Bloomberg) -- Republican lawmakers are calling on President Joe Biden’s administration to preserve documents related to the proposed sale of United States Steel Corp. to Japan-based Nippon Steel Corp., expressing “serious concerns” that politics have tainted an ongoing national security review of the deal and raising the prospect of a congressional probe.

Most Read from Bloomberg

Four House Republicans wrote to Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo on Nov. 22, saying that recent developments related to the Committee on Foreign Investment in the United States “have called into question the integrity of its decision-making process,” and demanding the preservation of records related to the steel transaction.

The matter raises “broader issues about whether the statutory mandate of Cfius to prioritize national security considerations has been subordinated to political interests,” the lawmakers wrote, according to a copy of the letter obtained by Bloomberg News. The documents should “remain intact and available for any forthcoming oversight needs,” the letter, from some members of the House Financial Services Committee, adds.

The Treasury Department declined to comment. The Commerce Department did not immediately respond to a request for comment.

“I don’t have a comment on the process, and we are careful to follow all rules and regulations when it comes to the preservation of records,” White House spokesman Andrew Bates said Monday.

The GOP letter suggests that the political firestorm over the proposed sale of an iconic American firm — a transaction which became a flashpoint during the 2024 presidential campaign — is unlikely to subside even with Biden signaling opposition to the deal and Republican President-elect Donald Trump pledging to block it. Trump’s opposition to the deal could complicate Republican attempts to make political hay of Biden’s efforts to block its consummation, with the current and incoming president politically aligned.

The deal has faced heightened scrutiny, touching on questions about union jobs and wages, which were at the centerpiece of an election that largely revolved around voter anxiety about the economy. US Steel is based in Pennsylvania, a state that was fiercely contested by Trump and his general election opponent Vice President Kamala Harris.

Biden has opposed the deal for months but deferred to a review by the secretive Cfius panel, which scrutinizes proposals by foreign entities to buy companies or property in the US. The transaction is barreling toward another deadline in December when the panel must present a recommendation and can refer the case back to the president for a decision. Even as he has awaited the review, Biden has pledged that US Steel will remain domestically owned.

The letter was signed by Republican Representatives Bill Huizenga, Andy Barr, Dan Meuser and John Rose. Huizenga chairs the Oversight and Investigations Subcommittee of the House Financial Services Committee. Republicans will also control the House in the next Congress.

The lawmakers are demanding the preservation of communications between the White House and Cfius, as well as communications between federal agencies and other stakeholders, such as the United Steelworkers, who oppose the sale, and Cleveland-Cliffs Inc., a rival domestic bidder.

Rose, in a statement, alleged that the Biden administration had “politicized CFIUS in an attempt to score cheap political points.”

“It is important to national security that during the transition CFIUS keeps all records,” he added.

The high-profile case is unusual, with Cfius reviews more commonly reserved for acquisitions by adversarial nations, like China, and not allied ones, like Japan. They also typically are aimed at technology companies or other sensitive sectors.

Biden’s administration has argued that steel is a strategically important industry. The Cfius panel granted a request in September to refile the submission, effectively approving a delay.

(Adds Bates comment in fifth paragraph)

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.