October 10, 2007

The Weak Dollar and Security [6:59 am]

And I predict that Mitt Romney’s going to see some fallout, somehow: Purchase of 3Com becomes showdown over free tradepdf

Bain Capital’s $2.2 billion agreement to buy networking equipment maker 3Com Corp. of Marlborough is shaping up to be a political showdown over free trade and national security due to the involvement of a major Chinese telecom company, Huawei Technologies.

Huawei, a company with close ties to the Chinese military, will get a 16.5 percent stake in 3Com if the deal goes through. But 3Com makes networking and data security products used by the US government, and critics say Huawei could provide the Chinese government with information that would make it easier to disrupt sensitive American computer and communications networks.

“This deal should not be approved,” said James Mulvenon, director of the Center for Intelligence Research and Analysis, a think tank that does consulting work for the US intelligence community. “I don’t think it’s going to happen.”

A statement issued by Bain Capital said the firm has requested that the deal be reviewed by a special federal organization, the Committee on Foreign Investment in the United States.

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