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Judicial Watch Sues Obama Treasury Department for Records Related to Approval of Chinese Government-Company Acquisition of


Judicial Watch Sues Obama Treasury Department for Records Related to Approval of Chinese Government-Company Acquisition of Canadian Energy Company

Treasury Decision Gives Chinese National Offshore Oil Corporation Drilling Rights in Strategic Gulf of Mexico Waters, Provides Apparent Windfall of Financial Returns to Major Obama Contributors

WASHINGTON, DC -- (Marketwire) -- 02/28/13 -- Judicial Watch announced today that it filed a Freedom of Information Act (FOIA) lawsuit on February, 14, 2013, against the U.S. Department of the Treasury (Judicial Watch v. United States Department of the Treasury (No. 1-13-cv-00199)) to obtain records relating to the Obama administration's approval of the acquisition of the Canadian energy company Nexen Inc., by the Chinese government-owned Chinese National Offshore Oil Corporation (CNOOC). The $15.1 billion acquisition will allow CNOOC access to drilling in northern Canada and the Gulf of Mexico, while apparently providing a windfall of financial returns to major Obama campaign contributors.

On November 13, 2012, Judicial Watch sent a FOIA request to Treasury seeking the following information: "Any and all Committee on Foreign Investments in the United States (CFIUS) records regarding, concerning, or related to the proposed takeover of Nexen, Inc. by the China National Offshore Oil Corporation (CNOOC)."

By a letter dated November 16, 2012, Treasury acknowledged receipt of the Judicial Watch FOIA request. Though required by law to respond within 20 days, to date, Treasury has not done so.

CNOOC's July 2012 acquisition of Nexen drilling interests in northern Canada (which includes 1.6 billion barrels in Keystone XL oil reserves) and in the Gulf of Mexico (which includes 100 exploration projects and access to 116 million barrels in reserves) allowed the Chinese government a partial takeover of a vital strategic asset: accessible crude oil in the Western Hemisphere.

The acquisition is the largest Chinese takeover of a foreign company in history.

Because of Nexen's holdings in the Gulf of Mexico, the CNOOC takeover required the approval of the CFIUS, which is chaired by the Secretary of the Treasury and includes the Attorney General, the U.S. Trade Representative, and the secretaries of the Department of Homeland Se curity, Commerce, Defense, State, and Energy. On February 12, 2013, the CFIUS announced its approval of CNOOC's takeover of Nexen. As a state enterprise, CNOOC is owned by the Chinese government and is managed by Communist Party officials. CNOOC offered Nexen a 60% premium over the stock's trading value at the time of the takeover, prompting analysts to describe the terms as "a fantastic deal for Nexen." It also raised questions as to whether the Chinese government's interests were more strategic than economic.

The acquisition will reportedly provide a windfall return to Obama-connected investors, who profited heavily from Treasury's approval of the takeover and Chinese expansion into the hemisphere, including:


 
--  Taconic Capital, which reported in its third quarter SEC filing that
    it had acquired six million shares of Nexen between July 1 and
    September 30, 2012. Taconic's founder and managing director is Frank
    Brosens, an Obama bundler who has raised more than $1 million for the
    President. Brosens was Timothy Geithner's first choice to run the TARP
    (Troubled Assets Relief Program).

 
--  Farallon Capital Management LLC, which bought 8.7 million shares of
    Nexen (1.65 percent of the company) between July 1 and September 30,
    2012. The founder of Fallon Capital is Thomas Steyer, is a long-time
    Democratic fundraiser who ridiculed Romney's energy plans at the 2012
    Democratic National Convention.

 
--  Eton Park Capital Management, which bought 6,737,000 shares (1.28
    percent) of Nexen. Eton Park was founded and is directed by Eric
    Mindich, a bundler who raised more than $71,000 for Obama this cycle
    and has given more than $500,000 to Democratic candidates since 1990.

 
--  D.E. Shaw & Co., which increased its position by 5.8 million to
    6.5 million shares, or 1.22 percent of the company. D.E. Shaw was
    founded by David E. Shaw, an Obama bundler in the $200,000 to $500,000
    range. He also sits on the President's Council of Advisors on Science
    and Technology, as he did under the Clinton administration.

 
--  Covington &Burling LLP, in which Eric Holder was formerly a
    partner, was hired by Nexen to lobby on behalf of the acquisition's
    approval.

"With one ill-chosen action, the Obama administration has managed to undermine our strategic interests and reward its corporate cronies," said Tom Fitton, President of Judicial Watch. "It's little wonder that the Treasury Department is defying the open records law to stonewall accountability. And Americans may want to compare and contrast the quick approval of this Chinese strategic initiative with the Obama administration's scandalous delay of the related Keystone XL oil pipeline project."

Visit www.judicialwatch.org.

Contact: Jill Farrell 202-646-5188

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