Federal tax officials should conduct forensic audits and investigations of more than 125 U.S. companies with significant ties to the Chinese Communist Party (CCP) that allegedly received as much as $420 million in Paycheck Protection Program (PPP) loan funds last year, according to the founder of a citizens’ group that works for greater government transparency.
“Adam Andrzejewski, founder of Open the Books, said on May 3: “Communist defense contractors exploited legal loopholes to swindle as much as $400 million during the height of the pandemic. billion in loans that should have gone to small businesses on the street. Now it’s time for a forensic audit of these companies.”
Anzejewski said, “For the sake of American taxpayers and mom and pop businesses everywhere, the IRS must investigate and recover any ill-gotten gains.”
“Open Books, an Illinois-based foundation, filed more than 40,000 Freedom of Information Act (FOIA) requests in 2020 for spending documents from all levels of government to further its goal of ensuring citizens have “real-time, online access to every dollar.
Anzejewski was referring to a report published in August 2020 by Horizon Advisory, a strategic consulting firm, which found that a significant amount of U.S. tax money was going to companies with known ties to the Chinese Communist Party.
Sen. Marco Rubio (R-Fla.), who was chairman of the Senate Small Business and Entrepreneurship Committee at the time, included provisions designed to prevent the Small Business Administration (SBA) from issuing such PPP loans.
Rubio’s provisions were adopted when Congress awarded the second round of PPP funds, and the relief bill was signed into law by President Trump (R-Texas) in December 2020.
The report said much of the PPP money ended up going to companies with ties to the Chinese Communist Party, and that the money was easily available from sources other than U.S. taxpayers.
“Many of these companies, with the support of their Communist governments and ties to large Chinese conglomerates, were able to access funding sources from public or private markets to support their U.S. operations,” the report said.
Even so, the report did not receive much attention from most of the mainstream media when it was first published, but it caused a huge response among other news outlets, including Just the News.
The press awarded the U.S. Treasury and the Small Business Administration the Golden Horseshoe Award on May 1, which designates a weekly example of waste, fraud and abuse in federal spending. The award is given weekly to illustrate waste, fraud and abuse in federal spending.
Anzejewski mentioned the report in an April 19 column for Real Clear Policy, naming three companies that received PPP loans linked to the Chinese Communist Party.
The first is Nanjing Xinbai Pharmaceuticals (Nanjing Xinbai). This is a state-owned investment company with ties to the Chinese Communist Party, and one of its controlling shareholders acquired the California biotech company Dendreon Pharmaceuticals, which received a PPP loan worth $5 million to $10 million.
Next is Aviation Industry Corp. This company is a Chinese military company that also owns Continental Aerospace Technologies. The latter received $10 million in funding under the PPP program.
The third is China’s HNA Group. This is a Fortune Global 500 company that combines real estate, aviation and financial services, and owns HNA Group North America LLC and HNA Training Center NY, both of which have received loans of up to 1 million in loans.
Rubio said May 3 that he also supports aggressive enforcement and prosecution by the Department of Justice (DOJ) of these companies that used PPP loans and obtained funds fraudulently.
“Last year, the Paycheck Protection Program saved tens of millions of jobs and allowed countless small businesses to survive the worst of the economic blockade. Any entity that fraudulently obtains PPP loans should not be condoned and prosecuted.” Rubio said.
He added, “Every federal agency and every member of Congress, needs to take the threat from Beijing seriously and ensure that Chinese companies, which already have an unfair advantage over small American businesses, do not receive U.S. tax dollars.”
The anti-Chinese investment provision that Rubio added last December states that any business that is established in China, has owners in China, has corporate directors who are Chinese residents or is classified as a foreign agent is ineligible for PPP loans.
Earlier this year, Rubio reintroduced a more comprehensive bill designed to prevent China from using any SBA funds.
Other members of Congress, who did not immediately respond to The Epoch Times’ request for comment, include Ben Cardin (D-Md.), who became chairman of the Senate Small Business Committee in January, and Rep. Rand Paul (R-Ky.), the highest-ranking Republican on the committee.
On the House side, there was also no immediate response from House Small Business Committee Chairwoman Nydia Margarita Velazquez Serrano (D-Calif.) and the committee’s highest ranking Republican, Blaine Luetkemeyer (D-N.Y.).
Earlier this year, the Justice Department announced that at least 120 individuals or entities, have been charged with fraud and other related crimes since the PPP program began in 2020. However, the 120 alleged cases so far do not include the 125 companies with ties to the Chinese Communist Party.
According to a statement from the Department of Justice, these cases involve a range of criminal conduct. They include exaggerating payroll expenses to obtain more loans, using defunct companies and shell companies to apply for multiple loans, and even organized criminal networks that submitted loan applications in the names of different companies.
The statement said, “Most of the accused defendants, misappropriated loan funds for irregular purposes, such as: purchasing homes, cars, jewelry and other luxury items.”
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