Citing a 1950s-era law that allows him to stop foreign investments and acquisitions, Obama issued his executive order September 28, saying that the wind farms posed a threat to national security.
“There is credible evidence that leads me to believe that Ralls Corporation (Ralls), a corporation organized under the laws of Delaware, and its subsidiaries, and the Sany Group (which includes Sany Electric and Sany Heavy Industries), a Chinese company affiliated with Ralls…might take action that threatens to impair the national security of the United States,” Obama said in his executive order.
Because of this determination, Obama ordered Ralls to sell any commercial interest it might have in developing the wind farms and allow the government to inspect the sales.
“In order to effectuate this order, Ralls shall divest all interests in [the wind farms],” Obama ordered.
At issue are four wind farms Ralls had planned to build outside Naval Weapons Systems Training Facility Boardman in Oregon – one of which was within the restricted airspace of the naval base.
The Committee on Foreign Investment in the United States (CFIUS) – which determines whether foreign investments might harm national security – was alerted to the involvement of Ralls in the wind farms by the Department of Defense, according to court filings. Ralls had sought an injunction against CFIUS when the panel ordered it to halt construction on the wind farms in July.
According to those same court filings, Ralls had failed to inform the government of its acquisition of the rights to develop the wind farms – which is typically the case when foreign companies make such investments in the United States.
Ralls is owned by two Chinese nationals – Dawei Duan and Jialian Wu – who also control the Sany Group, which manufactures wind turbines. Ralls was going to install the Sany turbines at the wind farms.
The Treasury Department – which oversees CFIUS – would not comment on why Ralls and Sany were singled out as national security threats, nor would it explain why the wind farms had been deemed national security threats.
Obama ordered Ralls to remove all property including anything it had constructed at the sites within two weeks
According to Reuters, Ralls has sued the Obama administration over the order Monday. In its complaint, the company alleges that the government deprived it of due process by forcing it to sell the wind farms.