New Bipartisan Warnings about Expected Federal Investment in Chinese Atrocities and Military Buildup

With a federal agency enabling the likely investment of federal tax dollars in companies implicated in Beijing’s genocide of Uyghurs, a bipartisan group of lawmakers is calling for a reversal of that move.

Earlier this month, Republican lawmakers warned that the Thrift Savings Plan, which is a retirement investment fund available to millions of federal government employees, planned to allow investments in mutual funds linked to a leading Chinese Communist Party entity in Xinjiang.

National Review reported on a letter sent by five GOP representatives, the first public effort to dissuade the Federal Retirement Thrift Investment Board — the independent agency that oversees the TSP — from making that move. Representative Jim Banks, the Republican lawmaker who led the effort, pointed out that the TSP’s pending decision to allow its investors to select unvetted mutual funds could inadvertently use U.S. funds to boost companies involved in forced-labor abuses.

In a pair of identical letters sent this week, lawmakers from both houses, and on both sides of the aisle, have now joined the campaign against TSP’s decision to open a “mutual fund window.”

“Such a move could expose billions of dollars in retirement savings of U.S. federal employees and service-members to Chinese companies, including ones currently sanctioned by the U.S. government for human rights abuses or otherwise blacklisted for the threat they pose to U.S. national security,” wrote Senate and House lawmakers, in letters to FRTIB acting chairman David Jones.

That carries considerable risk, given that Chinese firms are currently exempted from U.S. audit standards.

Senators Marco Rubio, Rick Scott, Josh Hawley, Tom Cotton, Roger Marshall, and Rob Portman signed on to the Senate letter. A House version earned bipartisan support from Representatives Gregory Murphy, Jimmy Panetta, Chris Stewart, and Chip Roy.

With the mutual-fund window expected to open at the start of next month, there’s limited time to block FRTIB from moving forward with its decision. However, the lawmakers this week cited a precedent: TSP has previously moved to, and been blocked from, investing the retirement savings of federal civil servants and U.S. service members, in Chinese surveillance companies.

In addition to the possibility of investing in companies linked to mass atrocities, the lawmakers warn that FRTIB’s move could result in U.S. investment in Chinese firms that pose a threat to Americans.

“Given the vast number of Chinese companies implicated in this decision and the FRTIB’s past efforts to include such companies in the TSP, it is unlikely that your Board would be able to ensure that the approximately 5,000 mutual funds are all free of Chinese firms that pose a direct threat to American national security, enterprises implicated in Chinese Communist Party (CCP) human rights abuses, or companies that otherwise lack the requisite financial transparency and fiduciary responsibility to qualify as prudent investment opportunities,” wrote the lawmakers in the two letters that went out this week.

Although FRTIB has said that its investors will be able to select from 5,000 mutual funds, it has not specified which funds those are, and it has said that vetting them would be too costly.

It is likely, however, that some of those funds include companies that have been blacklisted by the U.S. government.

The Coalition for a Prosperous America identified more than 30 Chinese firms listed on the top five market mutual funds that should raise alarm. Several of those firms are known to be implicated in forced-labor abuses or have been blacklisted by the U.S. for their role in China’s military-industrial complex.

If this bipartisan pressure campaign fails, a federal agency will direct U.S. tax dollars toward Beijing’s mass atrocities and military buildup.