Washington, D.C. - In case you missed it, Congresswoman Elise Stefanik and Senator Marco Rubio (R-FL) published an op-ed in Newsweek discussing their work to increase transparency into how U.S. investments are increasing the capabilities of Communist China and undermining our national security.
Read Rep. Stefanik and Senator Rubio’s full op-ed below.
Newsweek: It's Time to Shed Some Light on U.S. Investment in Communist China | Opinion
By Rep. Elise Stefanik and Senator Marco Rubio
“Do you know where your retirement savings are being invested? If you're like most Americans, the answer is likely no. Once a dollar enters an index fund, few people have the time, knowhow, or resources to track it to its final destination.
That is all well and good so long as we can trust regulators and investment firms to align with our values and financial interests. But increasingly, we can't. A recent investigation revealed that hundreds of millions of dollars from U.S. index funds are going to companies tasked by the Chinese Communist Party to weaken America—and whose accounting is dangerously opaque.
Over the years, Congress has passed laws to mitigate this. It has required the U.S. Departments of Treasury and Commerce to record the recipients of outbound U.S. investment. More recently, via the passage of the Holding Foreign Companies Accountable Act, which we worked closely on, Congress has required foreign companies listing on U.S. stock exchanges to follow the same auditing standards as their American competitors. But these efforts are no longer enough.
For one, the Treasury and Commerce reports are frequently inaccurate. Treasury usually lists the Cayman Islands as America's top foreign investment destination. But when the department issues its annual correction for shell firms, China takes the Caymans' place.
This is compounded by the fact that Treasury doesn't track which Chinese industries receive more U.S. investment than others, while the Commerce Department issues no shell-firm corrections at all. In short, there is a great deal going on that regulators, lawmakers, and investors are completely blind to.
Moreover, the Chinese Communist Party is doing everything in its power to prevent rigorous auditing of Chinese companies. Last year, Beijing retaliated against U.S. financial investigations by raiding the China-based offices of Western auditors, like Deloitte and Mintz, and pressuring Chinese companies to only use more firmly state-controlled Chinese auditors. Beijing also cut all Western access to the Wind Terminal, which contains crucial Chinese business data, and it banned negative comments about China's regulatory environment from entering Chinese firms' offshore listing documents.
Congress can't respond to this obfuscation and resistance with complacence. To the contrary, we must increase the pressure on Wall Street and Beijing. It's what the national and financial security of the American people demand. Accordingly, we have introduced two new bills to shed more light on U.S. investment in China.
Our American Investment Accountability Act would require the Treasury and Commerce Departments to issue more accurate quarterly reports for shell firms, break down outbound investments by industry, and disclose particular investments in sanctioned entities. Our bill would also require the U.S. Securities and Exchange Commission (SEC) to report all joint ventures, mergers and acquisitions, spinoffs, and green-field investments in countries of concern, like Communist China.
Additionally, our Trusted Foreign Auditing Act builds on the Holding Foreign Companies Accountable Act to require publicly traded companies that are vetted by the Public Company Accounting Oversight Board to retain independent auditors who are free from Beijing's influence. If a company will not comply with this requirement, then our bill would remove them from all U.S. stock exchanges.
Neither of these is a silver bullet to the problems facing our financial system, but each is a worthwhile step. Americans trust their system to work for them, not for their greatest adversary. We need straightforward legislation to keep dangerous Communist Chinese companies from swallowing the hard-earned savings of American teachers, first responders, and military service-members.”
Click HERE to read the op-ed.