NJ: Do you think the financial crisis is influencing how sovereign wealth funds are perceived on Capitol Hill or changing the image of the funds?

Moran: I'm afraid that many members of Congress aren't really tuned in to the role that sovereign wealth funds have played and can play in our economy. The fact that we're talking about $3 trillion, which could multiply many times over if oil stays anywhere close to $100 a barrel -- it's down now, but it will probably go back up again -- so I think it is a very important issue.

NJ: What spurred your interest in sovereign wealth funds and heading the task force? What should the task force's role be going forward? Should the U.S. be doing more right now to encourage sovereign wealth fund investments?

Moran: Sovereign wealth funds are going to be a primary source of investment in capital throughout the world, and it is incumbent upon the United States to compete aggressively to be the recipient of that investment....

We need to communicate in a clear manner to our colleagues that sovereign wealth funds are enormous today and are going to be even larger in the future, dwarfing many sources of capital investment. This is money that we need reinvested in our economy, because much of it is coming out of the United States for two reasons: purchases of fossil fuels of oil and gas, and secondly, for more cheaply manufactured products in the case of Asia. This is money that is willing to be long-term-oriented, and we are notoriously deficient in acquiring long-term investment capital.

We have no evidence whatsoever that any of this money has been invested for any reasons other than commercial.

NJ: What could the U.S. or Congress do to encourage more sovereign wealth fund investments?

In the case of the Middle East, many transactions are made on the basis of personal relationships, so I think that the Congress should travel to the [United Arab] Emirates, to Kuwait, even Saudi Arabia, and get to know the people who are managing these funds, understand what their long-term objectives are. And I think that we should facilitate relationships between the businesses and our constituencies and the wealth fund managers, so that they will be encouraged to invest and so that we can erase the bitter memories of the Dubai ports debacle.

NJ: Should sovereign wealth fund investments be sought by the U.S. as a means of financial stability?

Moran: Our economy is short of cash. A few weeks ago, we experienced a credit seizure; in other words, there was no money to invest. There are several reasons for that. But rather than having the taxpayer have to invest what will be close to $2 trillion by the time we're finished with the FDIC and Treasury's actions, I think it makes sense to have sovereign wealth fund managers do some of that investment in our financial institutions. We don't have to necessarily pay interest if it's equity investments, and every dime that we put into the financial system, we have to borrow much of it from China and these very same countries, so we would be better off selling equity investments to them.

NJ: What is the attitude in Congress concerning the IMF's new sovereign wealth fund principles -- or what should the attitude be?

Moran: For those who have paid much attention to it, I am afraid that the attitude is as much negative as it is positive, because the people who have paid much interest have vested interests. Some of them have an antipathy toward Middle Eastern countries because in some cases they perceive a threat toward Israel, because they are Muslim and Arab countries, many of them; some of them have an antipathy towards China because of China's human rights policies and the fact that it's a communist-controlled state; and many just reflect the attitude of their constituents, which is to some extent xenophobic.

NJ: So you don't think the debate about whether or not the U.S. should welcome investments from these funds is over.

Moran: The debate is not over at all. We will continue to debate whether we want to allow sovereign wealth funds to invest their money in the United States just as we continue to debate whether we want immigrant workers working harder than our own workforce in many cases for less money. Some things that seem obviously beneficial on their face are not helpful from a political standpoint.

NJ: How do you see the growth of sovereign wealth funds influencing economic interdependence among countries down the road?

Moran: I think that this money is going to be invested, and if the United States doesn't wake up quickly and adopt a more receptive attitude toward the investment of sovereign wealth money, then it will be invested elsewhere. It will be invested in China and Russia and Iran and Brazil and Venezuela, and we will lose further influence throughout the world. This is our money, and there's hundreds of billions of dollars of our money going to these sovereign wealth funds because we continue to use oil and we want to continue to buy cheap products. That money is going to continue to undermine the strength of the American economy unless we can get it reinvested.

NJ: What do you think of French President Nicolas Sarkozy's idea of creating sovereign wealth funds in the west and using them to coordinate policy?

Moran: I think it has some merit, but I would rather see the European Union initiate it. There is an aversion in this country toward the government intruding any more than it already has in the private sector. Now, some of that, of course, is out of necessity because of the bailout bill and the massive investment in financial institutions on behalf of the government, but there nevertheless is that attitude. We still have one of the large sovereign funds -- the Alaskan Native American money is a sovereign wealth fund. I think that we could do that to some extent. The bailout package bill authorized a domestic sovereign wealth fund.

I don't blame the sovereign wealth fund managers for shying away from investment in the United States, and that's what they're doing currently, just when we need them the most. And the reasons are several; the principal ones are the very bad treatment that they received when Dubai Ports World wanted to invest in our port facilities.

NJ: Is there anything you would like to add that I haven't asked you?

Moran: I worry for the American economy. It is not so much that we are dependent upon the rest of the world for our solvency because of our deep indebtedness. More than our dependency is our deficiency in terms of understanding how to use that interdependency to our advantage. The investment houses, the investment bankers, understand it, but I don't think the members of Congress are as aware as we need to be.... We're willing to send money abroad but not willing to allow it to come back.

NJ: Others have argued -- even some investment bankers -- it's still hard to predict how sovereign wealth funds will behave in the future.

Moran: But they are not buying more than 10 percent in corporations, they're not interested in participating in voting in terms of long-term direction. What they want to do is buy into American management and defer to American management.

NJ: Could sovereign wealth funds in theory come up with other investment vehicles that are not traditionally defined sovereign wealth funds and therefore not fall under the voluntary IMF guidelines?

Moran: I think that's a concern. It is primarily a concern on the part of the Chinese government. It uses its exchange fund to make investments, and some of those have been cause for concern. But the charters of the sovereign wealth funds -- to the extent there is any transparency, which obviously is a concern -- they don't reflect any cause for concern right now.... That's another reason for the task force, to distinguish one from the other and not to use a simple cookie-cutter approach. Norway, for example, sets a far higher standard than any fund in the United States would in terms of socially responsible investment. We fall in the middle, and then countries like China and so on -- that's not a concern of theirs, being socially responsible, when they invest in Sudan and the like. But we have to distinguish between them; we need to get more knowledgeable and thus more sophisticated as far as how we deal with sovereign wealth funds. And the first thing we need to do is our homework.