A report released Tuesday by Republican members of the Senate Committee on Homeland Security and Governmental Affairs contained bombshell information on Communist Chinese Party links to the Federal Reserve.
According to the Republican senators led by Sen. Rob Portman, R-O.H., the Communist Party of China has targeted officials in the U.S. Federal Reserve since at least 2013.
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China has deliberately “used a variety of tactics to recruit U.S.-based economists to provide them with knowledge and intellectual capital in exchange for monetary gain and other benefits,” the report said.
The report details how many of these officials have managed to keep their positions at the Fed despite being identified as “persons of interest.”
“This investigation makes clear that China’s malign efforts at influence and information theft are not limited to science and technology fields — American economic and monetary policy is also being targeted by the Chinese government,” Portman said in a statement.
“The Chinese government makes no secret of wanting to be the world superpower,” the report said. “No sector or institution is off limits, and China has shown that it will use any means necessary to achieve its goals.”
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- For over a decade, China has engaged in a sustained malign influence and information theft campaign against the U.S. Federal Reserve System, taking advantage of America’s open and collaborative research practices. Efforts by Beijing include talent plan recruitment, offers of academic positions, and—in at least one instance—forcible detainment and threats of imprisonment of a Federal Reserve employee.
- The Federal Reserve has been unable to counter China’s malign influence and collection campaign effectively. The investigation found that the Federal Reserve lacks sufficient counterintelligence expertise and cooperation with U.S. law enforcement and the U.S. Intelligence Community. As a result, the Federal Reserve is unable to obtain timely and fulsome intelligence or identify intelligence threats quickly, hindering investigations into potential talent recruitment activities.
- The Federal Reserve lacks policies and procedures sufficient to prevent many of these malign influences and collection attempts. Similar to many other science and technology research ventures in the U.S. Government, the Federal Reserve appropriately relies on foreign collaboration to “share their thinking, compare analyses, and stay informed of developments around the world.” After the initiation of this investigation, the Federal Reserve took steps to address this by prohibiting officials from accepting compensation from restricted countries, including China. However, these new policies are insufficient because they do not require Federal Reserve employees to disclose membership in a talent recruitment plan.
- Despite known ties to talent recruitment plans, Federal Reserve employees retain access to confidential information. The Federal Reserve maintains a program meant to protect its most sensitive nonpublic information, Federal Open Market Committee restricted controlled information. Continued access requires that employees adhere to Federal Reserve ethics and other code of conduct policies. Despite known ties to talent plans or relationships with known members, the Committee found that certain Federal Reserve employees retain access to this confidential information.