FIRST ON FOX: Michael Lucci, CEO of State Armor – a global security watchdog group – issued a cautionary letter to governors and state fiscal leaders, urging them to reconsider investments in China-based companies due to heightened geopolitical risks and the likelihood of increased U.S. restrictions.
“In addition, the Chinese Communist Party’s (CCP’s) extensive control over companies prevents fiduciaries from accurately assessing China-based investments,” Lucci wrote. “Indeed, the CCP has taken steps to prohibit accurate audits, and prevent firms from conducting due diligence. The CCP has repeatedly interfered with its stock and bond markets, and places CCP and militia cells within companies.”
Lucci noted that many states lost pension fund value due to similar oversight with Russian investments before the Ukraine conflict. As tensions rise over Taiwan and the U.S. imposes tighter controls on Chinese financial interests, Lucci advised that states re-evaluate their fiduciary duty to pensioners, suggesting divestment from China-based companies as a proactive measure to protect state assets.
In a statement to FOX Business, Lucci said in part, “State and local pensions lost billions on Russian investments after Russia’s invasion of Ukraine.”
“Since then, they have made the tremendous mistake of pouring tens of billions of taxpayer dollars into China even as China threatens to invade Taiwan,” Lucci said. “There is no reason to have any public funds invested in China, and the argument to divest is backed on the strongest grounds of fiduciary duty, national security, and human rights.”
The letter comes as China-hawk Sen. Marco Rubio, R-Fla., has been tapped to be President-elect Donald Trump’s secretary of state. Rubio’s appointment still needs to be confirmed by the Senate.
