Press Releases
TOP JUDICIARY & FOREIGN AFFAIRS DEMS RAISE CONCERNS OVER TRUMP’S CHINA POLICY REVERSAL FOLLOWING CHINESE INVESTMENT IN TRUMP ORGANIZATION PROJECT, DEMS DEMAND ANSWERS FROM COMMERCE
Washington, DC,
May 18, 2018
Today, House Judiciary Committee Ranking Member Jerrold Nadler (D-NY) and House Foreign Affairs Committee Ranking Member Eliot Engel (D-NY) released a letter they sent to Department of Commerce Secretary Wilbur Ross, demanding answers regarding the Department’s involvement in assisting Chinese phone company, ZTE, after President Donald Trump tweeted, “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” Trump’s tweet came just 72 hours after the Chinese government extended a $500 million loan to a state-owned Indonesian construction company building a theme park featuring Trump-branded hotels, golf courses, and residences. Recent reports reveal that China Construction Bank’s Shenzhen branch invited wealthy clients to an upcoming dinner with Trump in Dallas, priced at $150,000 per ticket. According to Bloomberg News, the original invitation for the event stated that “As Sino-U.S. trade frictions have eased recently, Chinese businessmen including representatives from ZTE were invited to Dallas to attend President Trump’s dinner, and thus discuss cooperation and development with U.S. political and business elites.” However, the bank reissued the invitation yesterday, removing references to trade friction and ZTE. In their letter, the Members wrote, “We were surprised to learn that President Trump wants the United States to save ZTE notwithstanding the warnings issued by his own Administration regarding ZTE’s potential threat to our nation’s security. The White House has struggled to explain this about-face in national security policy, which occurred days before trade negotiations with China resumed and, more troublingly, days after the Trump Organization received substantial financial support from the Chinese government…These circumstances raise the specter that the Trump Organization may have leveraged the Office of the President and the diplomatic relationship between the United States and China to advance the company’s private interests in Indonesia and elsewhere.” The Department of Defense banned ZTE and Huawei produced phones and additional wireless products from sale on U.S. military bases because the devices “pose an unacceptable risk to Department's personnel, information and mission.” Earlier this year, FBI Director Christopher Wray raised concerns before the Senate Intelligence and Senate Appropriations Committees about the Chinese company. The nominee for the Director of the National Counterintelligence and Security Center raised similar concerns before the Senate Intelligence Committee this week. Full text of the letter is available here and below. May 17, 2018 Secretary Wilbur Ross Department of Commerce 1401 Constitution Avenue N.W. Washington D.C., 20230 Dear Secretary Ross, We write to express our concern regarding President Donald Trump’s recent and sudden policy reversal on China and its possible relation to a Chinese state-sponsored investment in a Trump Organization project in Indonesia. On May 13, 2018, President Trump tweeted, “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” It has also been reported that, 72-hours prior to the President’s ZTE announcement, the Chinese government decided to extend a $500 million loan to a state-owned Indonesian construction company building a theme park featuring Trump-branded hotels, golf courses, and residences.[1] The President’s announcement came as a shock both to Congress and to Administration officials who have warned us for months to be wary of ZTE. The Chinese-owned telecommunications giant is believed to an arm of the Chinese intelligence apparatus.[2] Earlier this year, FBI Director Christopher Wray testified before the Senate that the FBI was “deeply concerned about the risks of allowing a company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks.”[3] He reiterated his concerns this week in front of the Senate Appropriations Committee.[4] The nominee for the Director of the National Counterintelligence and Security Center reaffirmed this position when he testified this week before the Senate Intelligence Committee.[5] The Department of Defense banned ZTE and Huawei produced phones, mobile internet modems, and other wireless products from sale on U.S. military bases because the devices “pose an unacceptable risk to Department's personnel, information and mission.”[6] In recent weeks, the Commerce Department penalized ZTE for violating sanctions against Iran and North Korea.[7] The penalties included a ban on purchasing American components. ZTE then announced it would close its major operations in the United States.[8] We were surprised to learn that President Trump wants the United States to save ZTE notwithstanding the warnings issued by his own Administration regarding ZTE’s potential threat to our nation’s security. The White House has struggled to explain this about-face in national security policy, which occurred days before trade negotiations with China resumed and, more troublingly, days after the Trump Organization received substantial financial support from the Chinese government. According to reports, the Trump Organization will benefit from $500 million in Chinese government loans and an additional $500 million in financing from Chinese government banks specializing in overseas investment projects.[9] The driving force behind the Trump Organization’s Indonesia-based project appears to be a Chinese state-owned construction firm—a subsidiary of Metallurgical Corporation of China—which has signed a deal with Indonesian firm MNC Land to create an “integrated lifestyle resort” called MNC Lido City.[10] Trump Organization properties are the flagship features of the MNC Lido City project, including a Trump International Resort, Trump International Golf Club, and Trump Residences Lido.[11] Documents show that the Trump Organization and President Trump’s sons were directly involved in planning the project and the Trump Organization was paid almost $3.7 million in licensing and consulting payments by MNC.[12] These circumstances raise the specter that the Trump Organization may have leveraged the Office of the President and the diplomatic relationship between the United States and China to advance the company’s private interests in Indonesia and elsewhere. We note that President Trump never divested his holdings in the Trump Organization, and that the company continues to be managed by members of the President’s family. Any use of public office for private gain may violate both federal law and ethics regulations,[13] and would certainly merit further investigation. MNC’s 2017 Annual Report highlights the importance of the Lido City project’s association with President Trump’s brand. The project is described as “an exclusive community bearing the prestigious Trump name synonymous with quality and luxury” and “a collaboration between MNC Land and Trump Hotel Collection to deliver the first resort in Asia bearing the Trump brand.”[14] In light of these concerns, we respectfully request you provide, in a timely manner and in any event no later than June 14, 2018, answers and supporting documentation to the following questions:
We would appreciate your prompt attention to this matter. ### |
