Navy Secretary, Speaker Gingrich, Leading Legislators Say ‘No Way’
WASHINGTON, D.C.—A board of financial industry insiders charged with managing the federal retirement system decided last Wednesday to double down on its 2017 decision to compel U.S. government employees—past and present, civilian and military—to underwrite PRC corporations that help the Chinese Communist Party oppress, among others, its own people and threaten ours. The next day, the Committee on the Present Danger: China (CPDC) convened a blue-ribbon Threat Briefing on Capitol Hill to condemn this “obscene” action and to join thousands of Americans in calling on President Donald Trump and Congress to oppose and reverse this decision, which is scheduled to go into effect in February 2020.
Among those who joined in this extraordinary event (either in person, via video or by phone) were Navy Secretary Richard Spencer, former House Speaker Newt Gingrich, former Reagan National Security Council official Roger Robinson, the Pentagon’s former China Desk Officer Joseph Bosco, prominent financier Kyle Bass, retired Army Lieutenant Colonel and former Congressman Allen West, economic warfare expert Kevin Freeman, the President and CEO of the American Securities Association Christopher Iacovella and the CPDC’s Chairman and Vice Chairman, Brian Kennedy and Frank Gaffney, respectively.
Highlights of this especially timely and compelling Committee on the Present Danger Threat Briefing included the following:
In a powerful video exclusively provided for this event, Navy Secretary Spencer drew on his career as a highly successful Wall Street executive and recapped concerns he initially expressed in an op-ed article published in the Wall Street Journal on Oct. 23. He warned that it would be contrary to the national security interests of the United States, which are already under assault by Communist China, and the FRTIB members’ fiduciary responsibilities to invest the pension funds of veterans, other military personnel and other government employees in unaccountable and non-transparent Chinese companies. And he expressed his strong opposition to such a step, particularly as long as the Securities and Exchange Commission allows those companies to avoid the sort of risk disclosure and accountability required of others registered in the U.S. capital markets.
Former Speaker Gingrich joined the program by phone and briefly summarized the central themes of his new, bestselling book, “Trump vs. China: Facing America’s Greatest Threat.” Specifically, he warned that the U.S. government was failing to respond as it must to the present—and intensifying—danger from the Chinese Communist Party. He specifically called for the FRTIB decision to be reversed as part of a wholesale course correction aimed at assuring the competitiveness and survival of the United States in response to the greatest threat this nation has ever faced.
Roger Robinson outlined the multi-trillion-dollar stakes associated with China’s access to U.S. capital markets and the seriously problematic nature of many of the Chinese companies now being financed by the Morgan Stanley Capital International All-Countries World ex-U.S. Investment Index (MSCI ACWI). He assessed the implications of expanding that penetration to the Thrift Savings Plan—both in terms of the underwriting of PRC activities that are incompatible with Americans’ human rights values and national security interests and the inadvisability of continuing to allow these PRC corporations to garner trillions of dollars from U.S. public pension funds and other institutional and individual investors without being subjected to due diligence informed by the standards of accountability, material risk disclosure and transparent corporate governance required of their American counterparts.
Robinson also read for the record comments by Republican Sen. Marco Rubio and Democratic Sen. Jeanne Shaheen. As Bloomberg reported, Sen. Rubio called the FRTIB Nov. 13 decision “unconscionable” and warned that the board’s “refusal to act in the best interests of the United States will not go without consequence.” And Sen. Shaheen said, “There’s no excuse for this decision. This should have been an easy call to reverse course, yet the Board has decided to double down on this dangerous proposal.” They have introduced bipartisan legislation designed to block it, along with Senate cosponsors Mitt Romney, Kirsten Gillibrand, Josh Hawley and Rick Scott.
Video clips of interviews conducted by Kevin Freeman for an upcoming broadcast of his Blaze TV program, “Economic War Room with Kevin Freeman,” permitted the CPDC Threat Briefing to benefit from the insights of Rep. Allen West and Hayman Capital Chief Investment Officer Kyle Bass. The former spoke powerfully about his own strong opposition and that of other veterans to the prospect of their retirement funds being used to increase the accelerating threats posed by the Chinese Communist Party. The latter warned of the real material risk that Chinese companies represent and that, far from it being “prudent” to invest in them, as the FRTIB maintains, it amounts to a fiduciary dereliction of duty given that they do not conform to U.S. requirements for true “covered audits.”
Bass’ perspective and recommendations were shared by the American Securities Association’s Christopher Iacovella, who described the FRTIB’s action as “bordering on fiduciary malfeasance.” He argued that the retirement and other U.S. funds benefitting dangerous Chinese companies would be far better spent in highly regulated and transparent businesses in the United States. And he questioned the willingness of Wall Street firms to pander to a totalitarian system in the interest of maximizing profits, calling it “flat out wrong” to be investing in an adversary like China.
CPDC Chairman Brian Kennedy and founding member Joseph Bosco provided excellent historical and geostrategic context for the battle that is now being joined with the FRTIB. And CPDC Vice Chairman Frank Gaffney introduced into the record the names and product lines of specific, malevolent Chinese companies that the Thrift Savings Plan board proposes to have government employees and military personnel fund. He also presented the identities and extensive ties of that board’s members to the deeply compromised U.S. financial sector—associations that should be considered disqualifying “conflicts of interest” in making such a decision.
To view the Nov. 14 Threat Briefing and those that have preceded it, copies of congressional correspondence to the FRTIB initiated by Sens. Rubio and Shaheen, the board’s response of Nov. 13 and a petition to President Trump and legislators urging them to oppose the FRTIB’s initiative with respect to China signed by more than 1,700 Americans, visit www.PresentDangerChina.org.
To interview representatives from the Committee on the Present Danger: China, contact Media@HamiltonStrategies.com, Patrick Benner, 610.584.1096, ext. 104, or Deborah Hamilton, ext. 102.