ROBERT SIEGEL, host:
Citigroup is not the only U.S. bank to get cash from foreign governments. Today, Merrill Lynch said that it's received an almost $7-billion investment from a group that includes the governments of Kuwait and Korea. Over the last few months, foreign governments have invested tens of billions of dollars in U.S. banks. The investments have some in Congress worried that foreign governments will gain too much control over the U.S. economy.
NPR's Adam Davidson has been following this story. And Adam, these are big investments, but they amount to a pretty small stake in a company like Citigroup or Merrill Lynch. What's the concern here?
ADAM DAVIDSON: I think it's really easy to portray this process, these large investment funds owned by governments investing in the U.S. financial market in very scary terms. It's an easy thing to do for people of a certain mindset. I mean, these are huge funds. They have trillions of dollars. They're controlled pretty secretly by governments in Asia and the Middle East. We don't know much about who runs them, what their goals are, are they purely financial instruments, or do they have political goals. There's been a lot of, sometimes, overheated political rhetoric. Will these funds be used by malicious foreign governments to hurt the U.S. economy, or worse, hurt our national security? So, so, when you add that to a presidential election season, I think it's a time when this becomes a pretty juicy political issue.
SIEGEL: But if those are the reasons that some people give for saying they're nervous about this development, are there other people who support this kind of investment in U.S. financial institutions?
DAVIDSON: Yes, certainly. I mean, first off, Citigroup, Merrill Lynch, Morgan Stanley, all the huge banks that have gotten money when they desperately needed it, are very happy. But it's more than that. The Bush administration - and not just Republicans, plenty of leading Democrats too - say that these investments by foreign governments are very good for the U.S. economy. They help stabilize our banking infrastructure at a time of real chaos and fear. They increase the share prices of these banks - although today, that didn't necessarily happen…
SIEGEL: Oh, okay.
DAVIDSON: …but in general, they do. So, yes, there's so many, many people who say the good far outweighs the bad.
SIEGEL: Well, is there likely to be some congressional action or some debate over the likelihood of congressional action?
DAVIDSON: Yes. There's been several senators, both Republicans and Democrats, who said they plan to hold hearings looking into this. This heated up a few years ago with the Dubai Ports World. That was a government buying U.S. assets. I think we can pretty much guarantee this will be a hot political issue, especially since we're going to be seeing more and more of these investments in the coming months.
SIEGEL: It's NPR's Adam Davidson in New York. Thank you, Adam.
DAVIDSON: Thank you. You're welcome.
SIEGEL: This is ALL THINGS CONSIDERED
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