The controversial attempt by Kuwait to take over Santa Fe International Corp. has encountered still another potential obstacle in the form of Defense Department concerns about its "national security aspects."
Richard Perle, assistant secretary of defense for national security policy, said in a letter to Rep. Benjamin Rosenthal (D-N.Y.) that the proposed $2.5 billion acquisition of the California-based oil drilling and equipment firm raises "detailed technical issues that require a full evaluation."
Peale said that the Defense Department's concerns focus on the nuclear engineering activities of a Santa Fe subsidiary, C. F. Braun & Co., which Kuwait also would acquire.
Braun does not work on nuclear weapons, but it has performed important design and engineering work on the Department of Energy's nuclear weapons plant at Rocky Flats, Colo., and at the Hanford Reservation in Washington. James R. Ukropina, Santa Fe's general counsel, has stressed that Braun's nuclear work is only a small fraction of the company's business and has nothing to do with weaponry and, early this week, the Department of Energy said it would not object to the proposed sale.
Perle, however, notified Rosenthal, chairman of the commerce subcommittee of the Government Operations Committee, that "we have to balance the security arrangements administered by the Department of Energy against the possibility these arrangements could prove inadequate and might lead to untoward results in the Persian Gulf region." Perle is a member of the interagency Committee on Foreign Investment in the United States, which has been asked by Rosenthal to investigate the Santa Fe sale.
Kuwait Petroleum Co., which is owned by the Kuwaiti government, announced Oct. 5 that it had agreed to acquire Santa Fe. The transaction has been encountering criticism and challenge ever since, though nothing that has happened so far has deterred either the Kuwaitis or the directors of Santa Fe from their determination to complete the deal.
Santa Fe stockholders are scheduled to meet Tuesday to vote their approval of the sale. The Justice Department already has moved to delay closing of the deal by asking for more information about its potential antitrust implications, which automatically postpones finalization for three weeks. But Santa Fe officials have said they will go ahead with the vote as scheduled.