RUTHFULLY YOURS

• Two Chinese companies, Gotion and CATL, are on the verge of building two new battery manufacturing facilities in Michigan. These companies were lured by billions in state and local tax incentives and infrastructure investments, and the environmental requirements buried in the Inflation Reduction Act of 2022.
• [T]he state of Michigan is making a big bet on electric vehicle (EV) technology in concert with the Chinese Communist Party. What could go wrong?
• The answer to that is simple: Plenty. At a time when bipartisan members of Congress on the Select Committee on the CCP are conducting war games simulating a U.S. response to a Chinese invasion of Taiwan, one has to ask is this the right moment to seek more Chinese investment in the state. Especially when one of those projects is just 100 miles from where the U.S. is training Taiwanese troops to defend against a Chinese Communist invasion.
• Already, Virginia, home to numerous military and intelligence facilities, has rejected one of the two projects out of national security concerns.
• As… outlined in the unprecedented joint news conference by the FBI and MI-5, the threat from the Chinese Communist Party is real, dangerous and pervasive.
• Another red flag is the secrecy shrouding the projects. Although the state is in the process of providing substantial sums in taxpayer money to private entities, many of the details have been covered by Non-Disclosure Agreements (NDAs). Members of Congress, state legislators, local elected officials, and state and congressional staff have been forced to sign NDAs so they can access information taxpayers and the media have been prevented from seeing. What is so secret that it requires taxpayers to be shielded from information about the projects that their dollars will fund? Local newspapers have requested information through Freedom of Information Act requests, but they have been denied.
• Not only are the projects shrouded in a veil of secrecy, there are legitimate concerns about various organizations actually adhering to the Foreign Agents Reporting Act (FARA). This act requires individuals working on behalf of a foreign entity to register their activities with the Justice…. Former Ambassador Joe Cella and I have… have jointly submitted a request to the Justice Department to review specific individuals and their compliance with federal disclosure laws.
• [N]ow is the time for both battery projects to be paused. It is time for legislators to engage in their fiduciary responsibility, recognize the changed environment, and reevaluate plans to spend taxpayer dollars to fund two Chinese companies, the CCP, and potentially even the Taliban and the re-emerging Islamic State. It is a new day and US taxpayer money should not be backing potential adversaries.

In 2018, the Michigan Economic Development Corporation (MEDC) celebrated “Michigan-China Week” to highlight the growing economic ties between Michigan and China. At the time, Michigan already had more than 300 Chinese companies located in the state, with more than $4 billion in investment, supporting roughly 6,000 jobs. MEDC wanted to publicize this story in its bureaucratic hopes that more Chinese businesses would follow.

Michigan may be reaping the fruits of this engagement in the coming months as more Chinese money and workers are set to come to the state. Two Chinese companies, Gotion and Contemporary Amperex Technology Co Ltd (CATL), are on the verge of building two new battery manufacturing facilities in Michigan. These companies were lured by billions in state and local tax incentives and infrastructure investments, and the environmental requirements buried in the Inflation Reduction Act of 2022.

Recently, MEDC CEO Quentin Messer stated, “Generational bets are being made, and we want to make sure that Michigan has what it takes. We’ve got to win.” Building on Messer’s thinking, the state of Michigan is making a big bet on electric vehicle technology in concert with the Chinese Communist Party. What could go wrong?

The answer to that is simple: Plenty. At a time when bipartisan members of Congress on the Select Committee on the CCP are conducting war games simulating a U.S. response to a Chinese invasion of Taiwan, one has to ask is this the right moment to seek more Chinese investment in the state. Especially when one of those projects is just 100 miles from where the U.S. is training Taiwanese troops to defend against a Chinese Communist invasion.

Already, Virginia, home to numerous military and intelligence facilities, has rejected one of the two projects out of national security concerns. Additionally, various law enforcement and security agencies within the U.S. government have been warning about the growing threat from China, specifically the Chinese Communist Party (CCP) that controls the government.

In July 2022, FBI Director Christopher Wray and the head of MI-5, Britain’s domestic security agency, held a joint press conference to discuss the threat from the CCP to the business community — the first time in history the two agencies have spoken to the press jointly. As Ken McCallum, Director General of MI5 stated:

“By volume, most of what is at risk from CCP aggression is not, so to speak, my stuff. It’s yours. The world-leading expertise, technology, research and commercial advantage developed and held by the people in this room, and others like you.”

McCallum was speaking to the leading businesses in the West that were represented in the room.

The CCP wants to make friends and use those friendships to gather information that otherwise would not be available legally or commercially. They also want to use these friendships to promote the interests of the CCP in Western nations. This is a well-thought-out strategy by the CCP to shortcut its path to global economic dominance. As McCallum outlined in the unprecedented joint news conference by the FBI and MI-5, the threat from the Chinese Communist Party is real, dangerous and pervasive.

Also, in July 2022, the U.S. National Counterintelligence and Security Center issued a briefing statement on the threat from the CCP titled, “Protecting Government and Business Leaders at the U.S., State, and Local Level from Peoples Republic of China (PRC) Influence Operations.” It states:

“The PRC … may press state and local leaders, to take actions that align with their local needs, but also advance PRC agendas, sometimes over national U.S. interests.”

It provides a detailed description of the influence operations conducted by the Chinese Communists to promote the CCP agenda. If successful, the CCP will co-opt and destroy the core of the U.S. industrial and economic base.

For the projects in Michigan, there are all sorts of red flags flying around the roughly $4 billion in economic incentives, tax benefits, and infrastructure improvements the state of Michigan is handing out as incentives to CATL/Ford and Gotion to locate the two projects in Michigan. Ford is “licensing” CCP technology for its plant with CATL while Gotion is a subsidiary of a Chinese-based company subject to Chinese surveillance laws. Both already have seen support from Michigan Governor Gretchen Whitmer and the state legislature, which last week began the process of approving nearly $200 million for the Gotion project in Michigan.

Another red flag is the secrecy shrouding the projects. Although the state is in the process of providing substantial sums in taxpayer money to private entities, many of the details have been covered by Non-Disclosure Agreements (NDAs). Members of Congress, state legislators, local elected officials, and state and congressional staff have been forced to sign NDAs so they can access information taxpayers and the media have been prevented from seeing. What is so secret that it requires taxpayers to be shielded from information about the projects that their dollars will fund? Local newspapers have requested information through Freedom of Information Act requests, but they have been denied.

Not only are the projects shrouded in a veil of secrecy, there are legitimate concerns about various organizations actually adhering to the Foreign Agents Reporting Act (FARA). This act requires individuals working on behalf of a foreign entity to register their activities with the Justice. Violations of FARA can have significant and severe consequences. Former Ambassador Joe Cella and I have been working as citizen activists fighting these projects to highlight these concerns. We have jointly submitted a request to the Justice Department to review specific individuals and their compliance with federal disclosure laws.

The final straw that should end the Gotion project is the recent announcement that a Chinese company identified as “Gochin” is negotiating with the Taliban in Afghanistan to secure the mining rights for lithium, a key component in EV batteries, to the tune of $10 billion. While it has not been possible to make a direct linkage between the Gotion involved in the Big Rapids project and the “Gochin” lithium project, the possibility is one that should be reviewed by the Committee on Foreign Investments in the United States (CFIUS) to ensure taxpayer dollars flowing from Michigan to Gotion won’t be finding their way into Taliban coffers. This review is even more timely and critical given the recent news that Afghanistan has once again become a hub of international terrorism, especially for Islamic State, which is reportedly using Afghanistan for planning attacks, according to classified leaks. Individuals who have reviewed the data believe there may be a connection Gotion and “Gochin,” but at a minimum, as with all Chinese companies, there is the CCP’s military-civil fusion that connects them.

The circumstances and international dynamics have changed drastically since 2021, when these two battery plants were first considered by Michigan. With all of the geopolitical changes since then, concerns over MEDC’s vetting process, and the total lack of transparency, now is the time for both battery projects to be paused. It is time for legislators to engage in their fiduciary responsibility, recognize the changed environment, and reevaluate plans to spend taxpayer dollars to fund two Chinese companies, the CCP, and potentially even the Taliban and the re-emerging Islamic State. It is a new day and US taxpayer money should not be backing potential adversaries.