White House warned on airlines
By Sean Lengell
THE WASHINGTON TIMES
December 1, 2006
The Transportation Department, under orders from President Bush, is proposing to allow foreign investors to increase stock ownership in U.S. airlines from 25 percent to 49 percent.
The proposal wouldn't require congressional approval because it reinterprets -- rather than alters -- a decades-old aviation law, the agency says.
But some lawmakers reject the idea of increasing foreign investment in the U.S. airline industry. They also accuse the administration of using the Transportation Department to bypass Congress' legislative authority.
In a letter sent to White House Chief of Staff Joshua B. Bolten on Tuesday, the House Transportation and Infrastructure Committee says only Congress -- not the administration or federal agencies -- can change laws regarding foreign ownership of U.S. airlines.
"Making the rule final in the face of bipartisan congressional opposition would be a very poor start to the 110th Congress," says the letter, signed by two committee members from each party, including Rep. James L. Oberstar of Minnesota, the panel's ranking Democrat who is expected to become chairman in January.
The letter also was signed by Rep. Jerry F. Costello of Illinois, the ranking Democrat on the House Transportation and Infrastructure aviation subcommittee; Rep. Frank A. LoBiondo, New Jersey Republican; and Rep. Ted Poe, Texas Republican.
The issue centers on a long-standing requirement that U.S. citizens have "actual control" of domestic airlines. Under the plan, which was introduced late last year, Americans would need to control only certain aspects of a U.S. airline, such as safety and security measures. Commercial decisions, including which cities an airline can serve and the purchase of aircraft, could be foreign-controlled.
But any reinterpretation of foreign ownership rules would have difficulty standing up to legal challenge, the committee members say.
"The courts have ruled that an executive branch agency does not have the authority to interpret a law in a manner inconsistent with the plain meaning of the words of the law," the letter says. "We can see no basis for an argument that DOT's proposed interpretation of 'actual control' is consistent with the plain meaning of these words."
Reinterpreting existing laws goes against the spirit in which they were originally written, says Jim Berard, Democratic spokesman for the Transportation Committee.
"To reinterpret this term 'actual control' and limiting it so narrowly to just security and military operations, and leaving everything else that the airline does ... to foreign control totally circumvents what Congress intended when that law was passed," he said.
Mr. Bolten is accompanying Mr. Bush this week on the president's trip abroad and was unavailable for comment.
"The letter has been received, and we are aware of the members' position," White House spokesman Tony Fratto said. "There's nothing to announce at this time."
Another foreign ownership issue created an uproar in Congress earlier this year after a Dubai company, DP World, acquired six U.S. ports from British-owned P&O Ports North America. The controversy was so intense that DP World quickly agreed to find an American buyer for its U.S. properties, which include ports in Baltimore, New York, Philadelphia, Miami, New Orleans and Newark, N.J.
But foreign investment would help boost the ailing airline industry that saw four bankruptcies -- US Airways, Delta Air Lines, Northwest and United Airlines -- in recent years, the Transportation Department says.
Transportation officials also have said the proposal is key to the ongoing negotiations over the Open Skies agreement with the European Union, which would liberalize rules for international commercial aviation between the United States and the 25 EU countries, allowing for more flights to Europe by U.S. airlines.
Europe has threatened to delay the signing of the treaty unless the United States allows for greater foreign investment in U.S. airlines.
The Transportation Department has given no timetable for when it expects to reach a decision and declined to discuss the letter. But some on Capitol Hill think the agency wants to have the proposal in place before a meeting of European transportation ministers later this month
