Mr. Chair, I have an amendment at the desk. Mr. Chair, I rise in support of this amendment. We are in changing times. The ongoing battles, both in Iran and in Ukraine, have taught us an important lesson. That is that large, long- term…
Mr. Chair, I have an amendment at the desk.
Mr. Chair, I rise in support of this amendment.
We are in changing times. The ongoing battles, both in Iran and in Ukraine, have taught us an important lesson. That is that large, long- term vendors for production of innovative tools don't work together. The lead time is too long. The requirement for us to innovate at the Department of War simply isn't working. We need to have small, innovative companies to be able to come forward and be given small allotments in order to develop. However, those allotments are seldom sufficient to operate a company for 1, 2, or 3 years to develop and get a contract going.
For that reason, like other startups of all sorts, particularly in the technology field in America, they would normally go to private funding, go to venture firms. But there is a problem. If what you are producing for the Department of War or any other part of our government is classified, you have to say: I have a new product. I can't tell you about it. Trust me and invest.
That simply doesn't work.
More importantly, the requirements from within the government often are not available to the investor. Therefore, it is difficult to get.
My amendment deals with this serious problem in a predictable and controlled way. Our 5-year pilot program simply says that with the permission of the Department of War, individuals within qualified investment firms may receive or update their clearances so that they can be part of the investment decision.
It does not preclude their being excluded for any reason, including-- and I particularly want to note this--companies which have a foreign investment profile would have to disclose and may very well be excluded.
However, the American investment community with American funds is more than sufficient to find, seek out, and invest in innovative companies that can give us a low-cost antidrone product or a low-cost drone, or any other number of critically needed and affordable products.
For that reason, we are asking that the Department of War under this pilot program be empowered to allow for these nonoriginal participants to have, on a limited basis, with controls completely in the hands of the Secretary of War and while he retains full authority to revoke participation for any security violation, foreign ownership, control, influence, or any other concern.
With that, I reserve the balance of my time.
Mr. Chairman, I am prepared to close if the other side has concluded.
Mr. Chairman, in closing, I will be brief.
I am not going to address the items that were said by the opposition because they don't go to the safeguards in this piece of legislation.
Without this amendment, there is nothing to stop the administration from providing, without specific requirements to disclose, classifications to any and all individuals, particularly individuals that are, quite frankly, within companies either doing or wanting to do business with the Federal Government.
It doesn't stop the large companies from having unlimited access to programs that may not be widely understood. As a result, they get an advantage of bidding on something no one knows about.
Instead, what it requires is annual reporting, including to this body, to Congress, to ensure that we can monitor this program. It sunsets. It is not for this administration, but for a 5-year period.
Most importantly, it is extremely limited to private equity investing, by definition in private companies. No part of public companies are affected here, just the opposite.
This is an opportunity for private companies to find investors who can only invest if they have a reasonable knowledge of what the product is asked to be and nothing more, and every one of them must still pass the same rigorous application and retention policy for whatever level of clearance is required.
Mr. Chairman, I would hope that these words would help the other side understand that, in fact, Congress gains more control over many of the things being complained about by passing this amendment than by not.
Mr. Chair, I urge support for my amendment, and I yield back the balance of my time.
