U.S. SENATE – U.S. Senator Martha McSally (R-AZ) on Tuesday pressed Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell about the measures the Administration is taking to prevent CARES Act provisions from financially benefitting China and Chinese state-owned enterprises.
Watch McSally’s testimony before the Senate Banking, Housing, and Urban Affairs Committee HERE and see excerpts below:
SEN. MARTHA MCSALLY: Chairman Powell, Secretary Mnuchin, good to see you virtually. I want to talk about China. As we know, they unleashed this virus on America and the world with their classic communist coverup, deception, continued propaganda campaign, costing now over 90 thousand American lives, 35 million Americans losing their jobs so far. We don’t know who patient zero is, they destroyed samples, they silenced doctors, they kicked out journalists, they impacted international travel to seed this and their reckless behavior continues to be the root of all this. As you know, this is why we’re here today. We’re talking about the economy, which was very strong. Now we’re really struggling, people all over Arizona are really struggling because of the calamity that’s come from this virus.
I don’t think either of you think there is any reason that we should be rewarding China or Chinese state-owned enterprises, or individuals, or entities that want China to prosper as we implement these massive initiatives to support the American economy. Is it fair to say that neither one of you want that to happen?
STEVEN MNUCHIN: That’s correct.
MCSALLY: So, I want to talk about a company called Blackrock. On March 24, the Federal Reserve Bank of New York (FRBNY) retained Blackrock as the financial agent to operationalize and transact with primary dealers in the primary market corporate credit facility (PMCCF) and the secondary market corporate credit facility (SMCCF). As you know, these facilities serve as markets for companies to sell bonds and obtain loans during this situation, this downturn. Typically, there’s a competitive bidding process, but Blackrock was selected for this one.
As you probably know, Blackrock is one of the leading investing banks in Chinese funds, including helping Chinese companies list and go public on American stock exchanges. Chinese companies listed on American exchanges prohibit the Public Company Accounting Oversight Board (PCAOB) from reviewing their audit reports. On Blackrock’s website they have a page titled “Five Myths and realities about investing in China.” According to Blackrock, one of the biggest myths about China is that Chinese state-owned enterprises don’t control their economy, and Blackrock even tries to back that up with data—I won’t go into all of it, but it’s ridiculous.
Blackrock’s ode to China doesn’t mention anything about human rights abuses, military responses to the Hong Kong democracy protests, or even that the country is ruled by a Communist party. Ironic that one of the world’s largest investment banks and allegedly a staple of free markets neglects to mention the fact that Communists actually run China – and all while refusing to invest in a number of legitimate and legal industries here in America, but that’s a separate issue…What, if anything, can we do to prevent any of their profits from this to actually benefitting China and Chinese state-owned companies, which they’re severely invested in?
JEROME POWELL: I would just say this: All large asset managers buy Chinese securities. These are global asset managers—I’m not here to defend or criticize them for that, it’s just not really relevant to the work that we want them to do. What we’re trying to do is create conditions in which U.S. workers can keep their jobs or return to them and that’s what our sole focus is. We’re not trying to reach out from other policy objectives or deviate from that. We have a laser focus on that and we concluded that this company was the right one to be our fiscal agent in this place. Their views on anything else are really not important, what’s important is that we do everything we can to support employment in the United States.
MCSALLY: Let me just say, it’s important to all of us, and thank you for all your leadership on all of this, to support our economy, to support jobs, to get our economy back on track. But it’s also important that we wake up as Americans and that we hold China accountable and that they’re not allowed to profit because of these investments that taxpayers made, so I’m going to follow up on these issues. I really think Blackrock and others need to also wake up and do their patriotic duty, see what’s going on here: Communist China should not be profiting off of unleashing this calamity on the world and that is something that should unite all Americans, even if they work at Blackrock.