Search

 

Cablegate: Senator Shelby Meets Temasek's Ho Ching, Gos

VZCZCXRO3854
RR RUEHNZ
DE RUEHGP #0936/01 2470126
ZNR UUUUU ZZH
R 030126Z SEP 08
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 5694
RUEATRS/DEPT OF TREASURY WASHDC
INFO RUEHWL/AMEMBASSY WELLINGTON 1452
RUEHBY/AMEMBASSY CANBERRA 2168
RUEHHI/AMEMBASSY HANOI 1541
RUEHKO/AMEMBASSY TOKYO 5927
RUEHNZ/AMCONSUL AUCKLAND 0035
RUEHBN/AMCONSUL MELBOURNE 0263
RUEHDN/AMCONSUL SYDNEY 0775

UNCLAS SECTION 01 OF 02 SINGAPORE 000936

SENSITIVE

SIPDIS

DEPT FOR EEB/OIA
TREASURY FOR CBERRY

E.O. 12598: N/A
TAGS: EFIN OREP PGOV SN

SUBJECT: SENATOR SHELBY MEETS TEMASEK'S HO CHING, GOS
OFFICIALS; EMPHASIZES U.S. OPENNESS TO FOREIGN INVESTMENT

REF: STATE 83989

1. (SBU) Summary: Senator Richard Shelby (R-AL) used
meetings with Temasek CEO Ho Ching, GOS officials and
others on August 25 to emphasize that the United States
remains open to foreign investment. The Senator, Ranking
Member of the Banking, Housing and Urban Affairs
Committee, also stressed the importance of strong anti-
money laundering (AML)/counter financing of terrorism
(CFT) enforcement. He acknowledged the U.S. business
community's competitiveness concerns arising from high
U.S. taxes on expatriate Americans. End Summary.

Meeting with Ho Ching
---------------------

2. (SBU) Ranking Member of the Banking, Housing and
Urban Affairs Committee Senator Richard Shelby (R-AL) met
with Temasek CEO Ho Ching and emphasized that the United
States remains open to foreign investment. Ho mentioned
that Temasek has filed a new Committee on Foreign
Investment in the United (CFIUS) application to expand
Temasek's stake in Merrill Lynch. If approved, Temasek
could receive shares rather than cash for a USD2.5
billion reset payment stemming from Merrill's recent
capital raising, thus allowing Merrill to conserve its
cash in this time of market turmoil. The Senator noted
that he had worked to establish the CFIUS framework under
the leadership of the Department of the Treasury in order
to promote foreign investment in the United States, while
leaving the U.S. Government the means it needs to address
rare cases of a foreign investment that might involve
genuine national security issues.

3. (SBU) Ho expressed concern about the U.S. financial
turmoil but also an admiration for the way American
policy makers actively work to address problems quickly.
The United States always, sooner or later, gets to the
right solution. The U.S. "underlying capacity for
innovation is strong," she said. Senator Shelby
recounted his past efforts to address the systemic risks
at Freddie Mac and Fannie Mae, and his hope that these
two companies would end the crisis smaller in size and
with more private sector involvement in the securitized
mortgage market.

4. (SBU) Ho told Senator Shelby that Temasek would
announce its annual results the following day. In the
press conference that took place on August 26, Temasek
reported that its overall assets had grown to USD134
billion from USD109 billion the previous year, thanks in
part to an injection of S$10 billion (USD 7.1 billion) in
fresh capital from the Ministry of Finance and the
appreciation of the Singapore dollar. While Temasek
announced a doubling of group (consolidated) net profit
to S$18 billion (USD12.8 billion) and total share holder
return (on mark-to-market basis) of seven percent, the
group made a loss of S$6 billion in group wealth added
above their risk-adjusted cost of capital. In other
words, the SWF missed its relative return benchmark for
the year. Temasek did report, however, that it had
earned S$60 billion above its benchmark over the past
five years.

Meeting with Finance PermSec Teo Ming Kian
------------------------------------------

5. (SBU) Permanent Secretary for Finance Teo Ming Kian
outlined to Senator Shelby Singapore's strategy for
safeguarding its fiscal surpluses for future generations.
Ongoing budget support from Singapore's sovereign wealth
funds, Temasek and the Government Investment Corporation
(GIC), is limited to a maximum of half of that year's
interest and dividends and any further withdraws must be
approved by a directly elected President.

6. (SBU) Senator Shelby welcomed Singaporean SWF
investments in the U.S. financial sector. Teo noted that

SINGAPORE 00000936 002 OF 002


Singapore "has no problem with CFIUS," having navigated
the process dozens of times.

Meeting with MAS Managing Director Heng Swee Keat
--------------------------------------------- ----

7. (SBU) In a meeting at the Monetary Authority of
Singapore (MAS), Managing Director Heng Swee Keat
mentioned many challenges facing Singapore, including
remaining relevant to its neighbors and trading partners,
increasing the fertility rate, and attracting
international talent. Senator Shelby expressed his
belief that the U.S. financial regulatory structure would
change as a result of the current crisis, and mentioned
his support for an Optional Federal Charter for
insurance. Senator Shelby reiterated the importance of
strong AML-CFT regimes and urged stronger enforcement
measures.

Lunch with U.S. Business Representatives
----------------------------------------

8. (SBU) In a lunch with private sector representatives,
U.S. businessmen asked the Senator to examine the adverse
impact arising from high taxes on foreign-earned income
of American expatriates. They argued that changes to
Section 911 of the tax code which increased the amount of
tax charged on housing benefits provided by companies to
their employees overseas were making American employees
uncompetitive. They expressed concern that these
disincentives to hire American expatriates will create
competitive problems for U.S. companies in today's global
economy. The Senator acknowledged these concerns.

9. (U) Senator Shelby's staff cleared this cable.
HERBOLD

© Scoop Media

 
 
 
World Headlines

 




UN Agriculture: Helps Protect Against Threat Of Locust In Yemen

Following heavy widespread rains in Yemen, the Food and Agriculture Organization (FAO) remains on high alert... More>>

UNFCCC: Simon Stiell Appointed New Executive Secretary
UN Secretary-General António Guterres has appointed Simon Stiell as the new Executive Secretary of the United Nations Climate Change Secretariat based in Bonn, Germany...
More>>

Binoy Kampmark: Europe Dries Up
Scenes and pictures have been circulating of broken earth, lacking moisture, cracked and yearning. But these are not from traditional drought-stricken parts of the planet, where the animal carcass assumes near totemic power... More>>

Afghanistan: One Year On From Regime Change And Children Face An Unimaginable A Crisis
On the one-year anniversary of regime change in Afghanistan, a new World Vision report highlights the grave risk the country’s children face from starvation, forced child marriage, and child labour... More>>


Somalia: ‘We Cannot Wait For Famine To Be Declared; We Must Act Now’
Rising acute food insecurity in Somalia has caused more than 900,000 people to flee their homes in search of humanitarian assistance since January last year, the Food and Agriculture Organization (FAO) has warned... More>>

UN: American West Faces Water And Power Shortages Due To Climate Crisis
Two of the largest reservoirs in the United States are at dangerously low levels due to the climate crisis and overconsumption of water, which could affect water and electricity supply for millions in six western states and Mexico, the UN Environment Programme (UNEP) warned on Tuesday... More>>