Aug. 2 (UPI) -- The House Select Committee on the Chinese Communist Party launched an investigation into two lucrative New York-based global investment firms suspected of funneling U.S. dollars into blacklisted Chinese companies.
The committee sent letters to Morgan Stanley Capital International and BlackRock -- two of the world's preeminent financial institutions in the asset management industry -- accusing them of pouring millions of dollars in American pensions and savings into dozens of banned companies throughout China.
Committee Chairman Mike Gallagher, R-Wis., and ranking member Raja Krishnamoorthi, D-Ill., demanded answers from the CEOs of both companies for alleged financial deals that had compromised national security and served to further humanitarian abuses in China, according to a Tuesday statement from the bipartisan panel.
"It is unconscionable for any U.S. company to profit from investments that fuel the military advancement of America's foremost foreign adversary and facilitate human rights abuses," Gallagher and Krishnamoorthi wrote, emphasizing that American money was likely being used to fuel China's military. "We therefore seek additional information regarding this deeply troubling matter."
The lawmakers cited a preliminary probe of both companies' finances that showed "massive flows of American capital" from millions of private U.S. bank accounts, with Americans unwittingly funding the People's Republic of China, the statement said.
Gallagher called on both companies to act with "thorough due diligence" in releasing a full list of their global equity partners, with particular focus on those located in the Far East.
The committee also asked MSCI and BlackRock for a deeper explanation of processes to select foreign companies for their portfolios, as well as a breakdown of U.S. investor exposure as far back as January 2022 and as recently as June 30.
The leaders said they would be on the lookout for barriers to transparency as well as any conflicts of interest while working to ascertain whether any associated Chinese companies had been red-flagged.
The probe comes as Capitol Hill has ramped up legislative efforts to limit Chinese technology and influence in the United States amid increasing fears of espionage.
Last month, Microsoft accused Chinese hackers of breaching the email accounts of several administration officials, including Commerce Secretary Gina Raimondo; U.S. Ambassador to China Nicholas Burns, and Assistant Secretary of State for East Asia Daniel Kritenbrink.
The cyberattack occurred as Washington and Beijing were attempting to reestablish relations after several months of escalating tensions.
