Hunter Biden teamed with Chinese military supplier to acquire dual-use Michigan auto parts maker
Biden’s investment fund BHR co-purchased Henniges Automotive with Chinese military contractor AVIC, which has been identified as front for China's military and was sanctioned before the Obama administration approved Biden-connected sale.
Just the News
September 11, 2020
As he was sewing up the Democrat nomination this spring, Joe Biden surprised many in foreign policy circles by publishing an essay arguing it was time to "get tough with China" and to stop its "robbing the United States and American companies of their technology and intellectual property."
For Biden, a four-decade advocate of trade and friendly relations with Beijing, it was a stunning turnabout that signaled the Democrat was concerned President Trump was winning the election-year battle over U.S.-China policy as tensions in the South China Sea, a trade war, and growing espionage cases created a Cold War-like atmosphere with China.
But for U.S. security experts, it was remarkable for another reason: An investment fund named Bohai Harvest RST (BHR) partly owned and directed by Biden's son, Hunter, and Secretary of State John Kerry's stepson, Chris Heinz, had just a few years earlier played a vital role in facilitating the sale of the Michigan-based auto parts maker Henniges Automotive to one of China's main military aircraft makers, Aviation Industry Corporation of China or AVIC.
The timing has left many, including Senate Finance Committee chairman Chuck Grassley (R-Iowa), questioning whether the CFIUS decision whitewashed security concerns because the vice president's son was involved in the transaction. Those concerns were heightened this June when the Pentagon listed the entire AVIC conglomerate on a list of companies subject to future sanctions because of its ties to the People's Liberation Army.
Grassley demanded a briefing from Treasury Secretary Steven Mnuchin last year, saying he was concerned because the Obama administration allowed the transaction to proceed even though Henniges possessed "anti-vibration technologies with military applications" and AVIC had a history of ties to China's military aggression dating to at least 2007. Officials said what Grassley learned in a classified briefing only heightened his concerns.
"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," the senator wrote in an Aug. 14, 2019 letter. "Both are directly related to high-ranking Obama administration officials. The Department of State, then under Mr. Kerry's leadership, is also a CFIUS member and played a direct role in the decision to approve the Henniges transaction. The appearance of potential conflicts in this case is particularly troubling given Mr. Biden's and Mr. Heinz's history of investing in and collaborating with Chinese companies, including at least one posing significant national security concerns."
Hunter Biden's efforts to make money in China while his father oversaw U.S.-China policy have caused concern since the author Peter Schweizer highlighted the issue earlier this year in his new book Profiles in Corruption. (Schweizer first exposed the Biden connection to the AVIC-Henniges deal in his New York Times #1 best seller Secret Empires.)
In addition to his role in the Henniges transaction, Hunter Biden also flew aboard Air Force Two in December 2013 with his father to Beijing, where the son engaged in a private business discussion to do private business with Chinese officials that included talk of a $1 billion investment fund.
Michael Pillsbury, a China adviser to both the Obama administration and President Trump, said Joe Biden's long record of downplaying China's threat and his son's efforts to cash in on Beijing while his father was vice president "give reason for journalists to question the sincerity of Joe Biden's recent conversion to China hawk."
"The jet fighter and the aircraft carriers that China deploys to threaten the South China Seas can be traced back to financial transactions involving Hunter Biden's companies," Pillsbury said.
Roger Robinson, a former senior director for international economic affairs on President Ronald Reagan's National Security Council, told Just the News the U.S. government has known for years that AVIC has been helping China's military and aiding U.S. enemies and as such was sanctioned in the past. That record makes the Obama administration's transaction approval for Henniges all the more curious, he said.
"This is anything but a benign Chinese enterprise," Robinson said.
Grassley's letter identified one such security concern dating to eight years before the Henniges transaction was approved. "CFIUS approved the transaction despite reports that in 2007, years before BHR teamed up with AVIC's subsidiary, AVIC was reportedly involved in stealing sensitive data regarding the Joint Strike Fighter program. AVIC later reportedly incorporated the stolen data into China's J-20 and J‑31 aircraft," the senator wrote.
More recently, the Pentagon in June identified AVIC as one of several Chinese state-owned firms assisting the People's Liberation Army in building Beijing's military supremacy.
The tale of China's acquisition of Henniges has many tentacles and is raising questions about where an American-based firm's jobs are going.
During the Obama years, Hunter Biden held an ownership stake in and a board seat on BHR. On Sept. 15, 2015, the hedge firm announced the completion of the acquisition of Henniges Automotive, which gave AVIC 51% control and BHR 49%. The $600 million acquisition was one of the largest Chinese takeovers of an American automotive company in history, topping AVIC's 2010 takeover of Michigan-based Nexteer Automotive for $440 million. The purchase also revealed a pattern of Chinese state-backed takeovers of sensitive American companies which included China's
While Hunter Biden pursued the business deals, the Obama-Biden administration was acquiescing to China's wishes to expand its influence, trade and exchanges in the United States and to lessen the potential for military confrontation. For instance, a Pentagon official disclosed in fall 2015 that the Obama administration had essentially
Far from the political fray in Washington, Henniges was trying to rebound in Michigan from the 2008-09 financial crisis when the AVIC deal emerged.
Henniges' partnership with China dated back to at least December 1995 when Henniges formed a joint venture with Beijing Energine (a subsidiary of a China state-owned aerospace conglomerate). Since then, Henniges has operated at least six facilities in China with at least two new facilities opened after the AVIC deal.
Officials for Henniges did not respond to repeated requests from Just the News for total numbers of employees in the United States and overseas since 2005.
But an analysis performed by conservative website The National Pulse found that "while Henniges had begun outsourcing before Hunter Biden got involved, AVIC accelerated the practice, operating on a considerably larger scale." Henniges only added two new factories outside the U.S. in the ten years before the AVIC takeover, but "it took less than three years following the 2015 deal for AVIC to surpass this number."