The U.S. Commerce Department is currently reviewing a ban on Chinese Communist tech giant Tencent Holdings Ltd. and Gina Raimondo, who was just sworn in as commerce secretary, and her husband own shares in Tencent Holdings, according to a financial filing.
Raimondo and her husband own between $21,500 and $44,500 in shares of Tencent Holdings, the parent company of WeChat, according to the Jan. 19 financial filing with the Office of Government Ethics (OGE).
The just-confirmed commerce secretary, who has pledged to withdraw from some financial positions because of potential conflicts of interest, did not mention her stake in Tencent Holdings.
“The best course of action for Raimondo would be to have ethics officials identify whether her investments constitute a conflict of interest and, if so, withdraw,” said the nonpartisan U.S. nonprofit The Project on Government Oversight (POGO). Scott Amey, general counsel for the nonpartisan nonprofit Project on Government Oversight (POGO), told the Daily Caller, a conservative website.
The Trump administration issued an executive order last August banning transactions with Tencent Holdings. In February, Biden‘s Justice Department asked an appeals court to stay the case over the ban while the Commerce Department conducted an extensive review of the order, The Washington Post reported.
Raimondo and her husband co-own two emerging-market stocks in an exchange-traded index fund, also commonly known as exchange-traded funds (ETFs), which are made up of several foreign stocks, including Tencent Holdings. The total value of the Raimondos’ positions in the two ETFs ranged from $365,000 to $750,000. The exact amounts were not provided in the documents provided to OGE.
Under OGE rules, government officials who hold shares in ETFs may be found to have a financial interest in “specified matters. Federal ethics laws prohibit government employees from participating in matters in which they have a financial interest, but Raimondo’s shareholding in Tencent may be exempt.
It is unclear whether the emerging market ETFs owned by the Raimondos would be considered conflicts of interest, as diversified mutual funds are generally exempt under conflict-of-interest laws, according to POGO general counsel Emmy.
Unlike health care, energy or pharmaceutical ETFs, emerging markets ETFs are diversified across multiple sectors. The funds in which Raimondo invests, which include Tencent Holdings, may not be subject to the relevant conflict of interest laws.
The emerging markets ETFs owned by Raimondo and her husband also include shares of China Construction Bank Corporation and Bank of China, which are officially controlled by the Communist Party of China.
Raimondo has such close financial ties to Chinese Communist Party companies that it raises concerns. During her Senate confirmation hearing on Tuesday, Senator Ted Cruz, a Texas Republican, warned that Raimondo would be hard-pressed to get tough with the CCP.
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