Senator Clinton and the Wall Street Journal editorial board agree on at least one issue: Our government should insist that sovereign wealth funds be more transparent. But their well-intentioned prescriptions do not translate into good results in either finance or regulation.

Sovereign wealth funds are owned and administered by sovereign governments, not private individuals. The political bent of these governments range from the state of Alaska to the government of Iran. By far the largest holdings are those of Abu Dhabi, estimated to be between slightly less and substantially more than $1 trillion.

Collectively, sovereign wealth funds have several trillion dollars of assets that increasingly are finding their way into the securities of publicly traded corporations. Citigroup, Blackstone, Carlyle, Och-Ziff Capital Management Group, Sony, AMD, Nasdaq, and the London Stock Exchange are just a few of the recent investments of sovereign wealth funds. These funds are growing rapidly, possibly more than $1 trillion annually from governments with substantial natural resource holdings.

Our federal government, with its diminishing budget deficit, might well be on the path to owning substantial sovereign wealth funds. In the late 1990s, Congress balanced the federal budget and could see budget surpluses forever. National security concerns since 2001 have overshadowed fiscal concerns. The prospect of a federal sovereign wealth fund was collateral damage in the attacks of September 11, 2001.

Rather than managing our own, we have been reduced to contemplating the regulation of the sovereign wealth funds of others. We already have well-established, burdensome but effective financial regulations that protect investors from fraudulent investment schemes. But more transparency of sovereign wealth funds will not help American investors who simply cannot invest in the Abu Dhabi Investment Authority. We reasonably do not require substantial transparency for those who invest in America. Various laws require disclosures for certain types of investments by foreign governments, foreign-controlled corporations, or foreign nationals. Although we have recordation requirements for investors taking substantial positions in publicly traded securities, we do not require investors to be so transparent as to divulge the entire structure of their wealth holdings or their political views and aspirations. Carlos Slim Helú and other foreign nationals with much less notable wealth can invest in America without divulging their estate planning.

Many investment funds have opaque structures and holdings ranging from hedge funds to private equity funds. Many of these institutions do well and contribute to the success of the American financial markets not because they are fully transparent but precisely because they are not.

Yet “transparency” has become the rallying cry of many well-intentioned Americans as a means of blocking some investments by sovereign wealth funds. Some do-gooders look to the U.N.-affiliated World Bank and International Monetary Fund to advise our Department of Treasury on the best practices for transparency of sovereign wealth funds.

Have we become so intellectually insecure that we must look to the United Nations for guidance on financial and national security regulation? Surely not. And “transparency” is not the relevant issue.

We have legitimate national security concerns about some foreign investments, and we should continue to ensure that national security is not compromised. Public outcry — not federal law or regulation — blocked the acquisition by foreign government-controlled entities of Global Crossing in 2002 and Unocal and P&O’s American port operations in 2005. No one, then or now, would say greater transparency of sovereign wealth funds would have made those acquisitions palatable.

The call for greater transparency is a fig leaf to cover the real concern about sovereign wealth funds: fear of certain governments. Some fear the instability of some governments that manage these funds with restive populations that might one day support militant governments openly hostile to America. Even without regime change, these governments could attempt to use their enormous wealth to influence domestic politics in America. Yet we innocently assume that governments we fear can be expected to comply with transparency regulations recommended by U.N. agencies.

In the coming years, trillions of dollars of foreign investment will flow into America, even as we invest heavily abroad. We must remain vigilant to national security concerns while keeping America the preferred destination for legitimate investments. Increased regulation of the transparency of investors will promote neither goal.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He is organizing a seminar series at the Hudson Institute. He can be reached at hfr@furchtgott-roth.com.