Yesterday, President Donald Trump struck what is arguably the single most important blow for freedom since Ronald Reagan took down the Soviet Union. Interestingly, one of the architects of the latter victory played an indispensable role in informing and encouraging the former.
Roger Robinson served as the Senior Director for International Economic Affairs on the Reagan National Security Council during four critically important years, from 1981-1985. In that role, Robinson drew upon his previous career as an international banker with Chase Manhattan Bank, which included serving for several years as a special assistant to its chairman, David Rockefeller, and as the vice president responsible for lending to the Soviet bloc. In short, he knew where the proverbial “bodies were buried” in the USSR and deftly exploited his understanding of the Kremlin’s limited sources of cash-flow to help President Reagan knock the pegs out from under its Communist regime.
For the past two decades, Roger Robinson has applied those same skills to countering our time’s existential threat to freedom: another totalitarian enemy, this one doing business as the Chinese Communist Party (CCP). In the early 2000s, Robinson organized and led the PetroChina Coalition, a pick-up team of national security professionals, environmentalists, trade union leaders and human rights activists determined to block the CCP’s first effort to raise unrestricted funds in the U.S. capital markets. It took the form of an initial public offering for the Chinese National Petroleum Company’s subsidiary known as PetroChina. In the face of the Coalition’s effective opposition, the IPO ultimately was issued in Hong Kong instead and pulled in a small fraction of what it had expected to command in a Wall Street debut.
For the following decade, Roger Robinson served as a member of the congressionally mandated U.S.-China Economic and Security Review Commission, for much of that time as its Chairman or Vice-Chairman. He ably led the Commission in providing Congress and the public with an invaluable second-opinion on Communist China, sanity-checking official thinking and intelligence assessments of the CCP’s capabilities and ambitions.
Subsequently, Robinson’s private sector company, RWR Advisory Group LLC, developed a product called IntelTrak, aimed at monitoring Chinese (and Russian) foreign investments in this country and around the world. Knowing what these adversaries were buying up and trying to corner helps U.S. and foreign government agencies and private sector clients understand the economic warfare being waged against us, and how it might be parried.
In recent years, Roger Robinson has focused on the cash-flow that makes possible both Chinese foreign investments and other threats to this country and its vital interests. Research conducted by the Prague Security Studies Institute, which he founded and chairs, has demonstrated that much of Communist China’s walking around money for its oppression at home and aggressive behavior abroad is underwritten by us through massive wealth transfers (by some estimates as much as $3 trillion) from Wall Street investors.
Since March of last year, Mr. Robinson’s analyses have found a champion in the Committee on the Present Danger: China (CPDC). Like the PetroChina Coalition and several previous Committee on the Present Danger franchises — including one that played a critical supporting role in shaping the policy battlespace for one of its members, Ronald Reagan, before, during and after his successful 1980 campaign for the presidency — the CPDC is a pick-up team, brought together by a shared concern about the enemy and a common desire to defeat it.
Matters came to a head when Mr. Robinson discovered last summer that the federal government’s retirement system, the Thrift Savings Plan, was poised to begin in 2020 investing the pension savings of military personnel and civilian government employees in a fund that would hold in portfolio Chinese companies. Worse yet, his research established that a number of those companies had been sanctioned by Washington for human rights violations and the proliferation of various lethal weapons. Still others build such weapons for the People’s Liberation Army to use against our servicemen and women and the rest of us.
Since then, in myriad public presentations (for example, here and here), briefings for executive branch officials, legislators and business leaders and interviews with domestic and foreign media outlets, Roger Robinson has tirelessly raised the alarm — and prompted action. Ultimately, with the help of a growing chorus of CPDC members and other patriots (notably, in this open letter), the incipient Thrift Savings Plan scandal finally got President Trump’s focused attention. When he learned recently of this impending decision, Mr. Trump reportedly declared: “We can’t allow this to move forward. This needs to stop.”
To the President’s great credit and that of his administration, the order to stop was dispatched in powerful letters on 11 May from no fewer than three of the President’s top subordinates: National Economic Council Chair Lawrence Kudlow, National Security Advisor Robert O’Brien and Labor Secretary Eugene Scalia.
The reasons given in the respective letters are extraordinarily compelling — as is the unmistakable direction they collectively provided to the outgoing chairman of the Federal Retirement Thrift Investment Board, Michael Kennedy. For example, Messrs. Kudlow and O’Brien wrote in a joint letter to Secretary Scalia:
It has come to our attention that billions of dollars from our federal employees retirement fund will soon be invested in Chinese companies. This action would expose the retirement fund to significant and unnecessary risk. And it would channel money from federal employees' money to companies that present significant national security and humanitarian concerns.
Further, the Federal Retirement Thrift Investment Board (Board) is set to implement these plans during a time of mounting uncertainty concerning China’s relations with the rest of the world including the possibility that future sanctions will result from the culpable actions of the Chinese government with respect to the global spread of the COVlD‐l9 pandemic. In view of these considerations, we do not believe that proceeding with the investment of the retirement savings of hardworking federal workers in Chinese companies is prudent. (Emphasis added throughout.)
Citing the Kudlow-O’Brien letter, Secretary Scalia wrote Chairman Kennedy that:
The attached letter, which is authored by the President’s principal economic and national security advisors, establishes that linking the [TSP International or] “I” Fund to the MSCI ACWI ex USA IMI would place millions of federal employees, retirees, and service-members in the untenable position of choosing between forgoing any investment in international equities, or placing billions of dollars in retirement savings in risky companies that pose a threat to U.S. national security. Moreover, because the federal government “matches” TSP contributions, selecting the MSCI ACWI ex- USA IMI would result in the federal government funding activities that are diametrically opposed to US. military interests.
At the direction of President Trump, the Board is to immediately halt all steps associated with investing the I Fund according to the MSCI ACWI ex-USA IMI, and to reverse its decision to invest Plan assets on the basis of that international equities index.
What makes President Trump’s decision so momentous is not just that he prevented a debacle involving the Thrift Savings Plan’s funds. He has sent a powerful message to the government regulators in the Securities and Exchange Commission and the Public Company Accounting Oversight Board that they must stop ignoring CCP companies’ failure to conform to U.S. securities laws, accounting requirements and regulations— to the detriment of investors. And Mr. Trump has put the denizens of Wall Street on notice that they can no longer ignore national security by underwriting, enriching, enabling and emboldening our enemies. And last, but hardly least, he has ruled out business as usual post-pandemic with its perpetrator, the Chinese Communist Party.
Frank J. Gaffney acted as an Assistant Secretary of Defense in the Reagan administration and is the Vice Chairman of the Committee on the Present Danger: China.
