Federal Retirement Funds Invest in Sanctioned China
One might argue that we're selling the rope to those who would hang us.
Elitists’ contemptible embrace of the globalist agenda is reaching metastatic levels. Despite the Communist Chinese government’s transparent effort to supplant America as the most powerful nation in the world, our Washington, DC Ruling Class and their Wall Street allies continue to abet those ambitions with unrelenting vigor. In a highly enlightening column, Curtis Ellis, a senior policy advisor with both America First Policies and Donald Trump’s presidential campaign, spells out the latest machinations of people who put profit before patriotism — assuming patriotism is even part of the equation.
“The Federal Retirement Thrift Investment Board oversees the Thrift Savings Plan, the retirement fund for federal workers and members of the armed services,” Ellis explains. “In November 2017, the board decided the Thrift Savings Plan’s international stock fund should invest in an index fund known as the Morgan Stanley Capital International — All Country World Index (MSCI ACWI.)”
That would be the Morgan Stanley index that includes companies like ZTE Corporation, Hikvision, and the Aviation Industry Corporation of China (AVIC). All of them are headquartered in China — and all of them are sanctioned by the the federal government because they have committed human-rights violations and engaged in activities antithetical to our national security.
“ZTE is a cyber-espionage arm of the People’s Liberation Army disguised as a telecom company,” Ellis reveals. “Hikvision makes the surveillance equipment used in western China, where over 1 million people have been imprisoned in concentration camps for the ‘crime’ of being Muslim.”
Hikvision’s parent company is the China Electronics Technology Group Corporation. In August 2018, it was added to the Commerce Department’s “entity list” identifying it as a company “acting contrary to the national security or foreign policy interests of the United States.”
What about AVIC? The government-owned company is China’s leading defense contractor. Yet as Ellis notes, “defense” is a euphemism. “It develops manned aircraft, unmanned aerial vehicles, missiles, and other weapons for the People’s Liberation Army Air Force, People’s Liberation Army Naval Air Force, and People’s Liberation Army Rocket Force,” Ellis reveals. “AVIC built its stealth fighter based on plans for the American F-35 jet stolen by Chinese hackers and has been sanctioned for selling weapons to Iran, North Korea, and Syria.”
That hack happened in 2007, and was codenamed Operation Byzantine Hades by U.S. intelligence agencies who characterized it as a large-scale, multi-year cyber program that targeted governments and industry. “Defense officials said the stolen data was obtained by a Chinese military unit called a Technical Reconnaissance Bureau in the Chengdu province,” The Washington Free Beacon reported in 2014. “The data was then passed to the state-run Aviation Industry Corp. of China (AVIC).”
It gets worse. The Pentagon’s Defense Science Board also revealed that Terminal High Altitude Area Defense missile systems and Patriot Advanced Capability-3 (PAC-3) missile defenses, along with many other systems, were compromised by the cyber espionage.
Were there serious repercussions? If so, they weren’t reflected in our trade deficit with Beijing: A $312 billion trade deficit in 2012 skyrocketed to $419 billion in 2018. For perspective’s sake, it should be noted that China’s entire 2018 military budget was $175 billion.
Can we finally admit the decades-long project whereby U.S. politicians in both parties insisted that “opening up” China would “bring them around” is officially dead?
Not by a long shot. As Ellis points out, while “officials at the highest levels of the Pentagon, Treasury, Commerce, intelligence agencies, and the White House have identified these companies as a threat to our national security,” America’s “deep state bureaucracy wants to take money from the paychecks of federal employees and uniformed servicemen and give it to our enemy.”
Some members of Congress are finally coming around to reality. Rep. Jim Banks (R-IN), along with Senate Committee on Foreign Relations members Marco Rubio (R-FL) and Jeanne Shaheen (D-NH) are asking Federal Retirement Thrift Investment Board Chairman Michael Kennedy to stop this unconscionable effort. In a letter sent to Kennedy on Aug. 26, they explained the dangers of doing so and perhaps, more important, requested to be informed as to how such decisions are reached in the first place.
The two Senators pointed out another alarming reality: Despite China’s reputation for fraud and stealing intellectual property, the Securities and Exchange Commission has allowed them to be listed on America’s three largest stock exchanges absent compliance with U.S. accounting and oversight regulations.
It doesn’t get more ideologically bankrupt than that. And China’s excuse that it consider its companies’ accounting information state secrets doesn’t wash — not when the U.S.-China Economic and Security Review Commission revealed there were 156 Chinese companies, including 11 state-owned enterprises, with a combined market capitalization of $1.2 trillion on those exchanges.
Again, some members of Congress have stepped up. On June 5, Sens. Marco Rubio (R-FL), Bob Menendez (D-NJ), Tom Cotton (R-AR), and Kirsten Gillibrand (D-NY) introduced the Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act. It would increase oversight of foreign companies on U.S. exchanges — and delist out-of-compliance firms for a period of three years.
“Beijing should no longer be allowed to shield U.S.-listed Chinese companies from complying with American laws and regulations for financial transparency and accountability,” Rubio declared. “If China-based companies want to list on stock exchanges or access capital markets in the U.S., we should make them comply with American laws.”
Unfortunately, 112 days have passed since the bill’s introduction. Is it too much to expect legislation this critical to get fast-tracked, or are we seeing another effort that will ultimately be buried by the globalist factions in both parties once the attention dies down?
Ellis is pessimistic. “Wall Street financiers, whose highest principle is ‘love for sale,’ make a fortune listing Chinese companies on U.S. exchanges,” he writes. “They justify their treason by leaning on a foreign policy establishment that believes, ‘You never have to say you’re sorry’ or never admit to wrongdoing about anything” [italics original].
Dirty dealings like this are worth remembering the next time one hears another in the seemingly endless number of hand-wringing tales about Trump’s “misguided” get-tough approach with China that inevitably bemoans the deleterious effects of tariffs.
Compared to what? This nation desperately needs a national conversation regarding where multinational avarice ends and patriotism begins. For far too long, America has abided a political and financial Ruling Class that has embraced the hollowing out of America’s heartland, championed the open-borders agenda that exacerbates it, and consorted with some of the worst actors on the planet to enrich themselves, even if it takes embracing double standards to do so.
Ordinary Americans? Buy your cheap consumer goods — and shut up.
Enough. The Thrift Savings Plan divestment request should be a demand, and the Equitable Act should be passed ASAP. Furthermore, America’s sovereignty and security must no longer be compromised to accommodate internationalist-minded kleptocrats who believe “America First” is an anachronism.
It’s not. Not by a long shot.