The Senate Finance Committee is probing the Obama administration’s 2015 decision to approve the sale of a U.S. company with insight into “military applications” to the Chinese government and an investment firm run by former Vice President Joe Biden’s youngest son, Hunter Biden.
Sen. Chuck Grassley (R-IA), the committee’s chairman, sent a letter to the Treasury Secretary Steve Mnuchin on Thursday requesting documents relating to the sale of Henniges, a Michigan-based automotive company, to Aviation Industry Corporation of China (AVIC) and Bohai Harvest RST (BHR). The latter was formed in 2013 by a merger between a subsidiary of the Bank of China and Rosemont Seneca, a firm started by Hunter Biden and Chris Heinz, the stepson of former Secretary of State John Kerry.
Since AVIC was a subsidiary of the Chinese government and Henniges, the producer of “dual-use” anti-vibration technology with military application, the deal required approval from the Obama administration’s Committee on Foreign Investment in the United States (CFIUS). The panel — made up of representatives from 16 different federal bodies, including the departments of State, Treasury, and Defense — is required to review any transaction that could lead to a foreign person gaining control of an American business.
In question is whether CIFUS was influenced by Obama administration officials, most notedly Joe Biden and John Kerry, who had an interest in seeing the deal move forward.
“The direct involvement of Mr. Hunter Biden and Mr. Heinz in the acquisition of Henniges by the Chinese government creates a potential conflict of interest,” Grassley wrote.
The senator noted in his letter that AVIC’s bid for Henniges should have immediately set off alarm bells in the Obama White House. In 2007, AVIC “reportedly involved in stealing sensitive data regarding the Joint Strike Fighter program,” which it later “reportedly incorporated … into China’s J-20 and J‑31 aircraft.”
Even more troubling, however, is that bid was facilitated at the same time China was staking out a more adversarial role in global affairs. At the time, Beijing was suspected of undermining U.S. cybersecurity by underwriting hackers stealing governmental data. There was also simmering tension over disputes in the South China Sea.
Despite the threat to national security, the $600 million deal was approved by CIFUS, with AVIC purchasing 51 percent of the company and BHR taking ownership of the other 49 percent. Upon purchase, an industry newsletter stated the deal was the “biggest Chinese investment into US automotive manufacturing assets to date.”
In his letter to Mnuchin, Grassley compared the deal to the Uranium One scandal, which arose when former Secretary of State Hillary Clinton approved the sale of a Canadian mining company to Rosatom, the state-owned Russian nuclear energy conglomerate. It later emerged that both investors in the company and Russian energy officials had donated heavily to the Clinton Foundation.
“As with the Uranium One transaction, there is cause for concern that potential conflicts of interest could have influenced CFIUS’ approval of the Henniges transaction,” Grassley wrote. “Accordingly, Congress and the public must fully understand the decision-making process that led to the Henniges approval and the extent to which CFIUS fully considered the transaction’s national security risks.”
This is not the first time that Hunter Biden’s ties to China have caused grief for his father’s political career. As Peter Schweizer, a senior contributor at Breitbart News, revealed in his bestselling book Secret Empires: How the American Political Class Hides Corruption and Enriches Family and Friends, Hunter Biden signed the $1.5 billion deal creating BHR in 2013 only ten days after visiting China aboard Air Force Two with his father.