Navy Secretary, Senators Weigh in On National Security Risks of Passive Investments in Malevolent Chinese Companies

***PRESS RELEASE***

For Immediate Release
October 28, 2019

CONTACT: Hamilton Strategies, [email protected], Patrick Benner, 610.584.1096, ext. 104, or Deborah Hamilton, ext. 104

NAVY SECRETARY, SENATORS WEIGH IN ON NATIONAL SECURITY RISKS OF PASSIVE INVESTMENTS IN MALEVOLENT CHINESE COMPANIES

NEW YORK TIMES REPORTS ISSUE ‘PITS’ WALL STREET AGAINST WASHINGTON  

Washington, D.C.— An issue given prominence in successive Threat Briefings conducted by the Committee on the Present Danger: China (CPDC) is now garnering attention at the highest levels of the U.S. government and the mainstream press: Communist China is underwriting its repression at home and its increasing capacity for aggression abroad with financing by American pension funds and other institutional and individual investors.

Wall Street is proving indifferent to the serious national security and human rights implications of investing in companies tied to the Chinese Communist Party.  So, evidently, is the Federal Retirement Thrift Investment Board (FRTIB) which declined yesterday to overturn a decision it took in 2017 that would compel the pensions of many government employees and military personnel, past and present, to be invested in highly problematic PRC corporations.

Fortunately, Richard Spencer, a former senior financial executive who now serves as the Secretary of the Navy, has strongly objected to such willful blindness. In an op.ed. article published in the Wall Street Journal on October 23rd, he was particularly critical of what he described as the “insanity” of our funding our enemies’ increasing threat. He concluded: “As Secretary of the Navy, I have a duty to represent the dedicated members of America’s naval forces and ensure that, as investors, they are not unwittingly helping to underwrite the threats China and Russia pose to their lives. For the good of the country and those who serve it, the FRTIB must reverse its decision to adopt the All Countries World Index—and do it before a single dollar from its fund pays for a weapons system aimed in our direction.”

The day before, a bipartisan group of six United States Senators led by Sens. Marco Rubio and Jeanne Shaheen made a similar, urgent appeal. In a letter to FRTIB Chairman Michael Kennedy, the legislators urged the Board to reverse its earlier decision which they said “would effectively invest the retirement savings of America’s civil servants and military personnel in constituent companies of the [Morgan Stanley] All Country World (ACWI) ex-US [index] that assist in the Chinese government’s military activities, espionage and human rights abuses, as well as many other Chinese companies that lack basic financial transparency.”

Unfortunately, as the New York Times reported yesterday in an article entitled “Chinese Investment Pits Washington Against Wall Street,” the FRTIB refused to change its reckless decision at its meeting on Monday. Instead, it heard from the same consulting firm that encouraged it to put some $50 billion of its beneficiaries’ retirement funds in the sorts of Chinese companies decried by Secretary Spencer and the six senators and deferred action on revisiting the decision until at least its November meeting.

It now seems obvious that those responsible for the national security in Washington are going to have to ensure our military and other government personnel are not obliged to fund the Chinese and, for that matter, Russian companies that imperil that security and/or our human rights values. The Committee on the Present Danger: China urges the President and the Congress to join forces to that end.

For more information about the work and recommendations of the CPDC, please visit www.PresentDangerChina.org

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To interview representatives from the Committee on the Present Danger: China, contact [email protected], Patrick Benner, 610.584.1096, ext. 104, or Deborah Hamilton, ext. 104.