Lawmakers are studying the possibility that Russian hackers tried to impact the November, an issue that has been dominating headlines. But they should be careful not to forget about China, a country that has done much greater damage to American interests over the last several years, and they could start by blocking the sale of a financial services company that offers the Chinese everything they need to perpetrate more serious attacks in the future.
The Chinese-owned Ant Financial Services Group is in the process of purchasing MoneyGram International for $880 million. The price is far above prospective earnings for the company, and the purchase would give Ant Financial a strong foreign presence in the American financial services sector. Ant Financial is the parent company of Alipay, formerly known as Alibaba, a company embroiled in controversy over e-commerce in counterfeit goods.
{mosads}This deal would not only cause harm to President Trump’s trade agenda, it would also create a serious national security and cybersecurity threat to the American economy. But a deal like this must be reviewed and approved by the Committee on Foreign Investment in the United States (CFIUS). CFIUS has the power to refer a final decision to the president who can block the transaction on national security grounds. Congress can play a role in conducting oversight hearings.
China is still one of the few communist nations in the world. China’s high level of bureaucratic control of private industry and coordination among Chinese intelligence agencies should immediately set off alarm bells, especially as it pertains to the acquisition of MoneyGram, a company that has integrated access to key parts of our national financial electronic infrastructure. The acquisition would result in China’s hackers and intelligence agencies having massively enhanced access to American’s financial information.
The U.S.-China Economic and Security Review Commission’s 2016 Report to Congress even noted that “despite repeated pledges to let the market play a ‘decisive role’ in resource allocation, Beijing continues to use state-owned enterprises (SOEs) as a tool to pursue social, industrial, and foreign policy objectives, offering direct and indirect subsidies and other incentives to influence business decisions and achieve state goals.”
The implications of that dynamic go without saying. If for no other reason, the U.S. would be justified in stopping the MoneyGram sale as a response to China’s 2015 hack of the Office of Personnel Management, which resulted in the theft of data on more than 21 million people who applied or were connected to those who applied for security clearances. In its monumental incompetence, the Obama administration never got around to responding to that act of espionage, an oversight that the Trump administration could now correct.
Additional examples abound. Chinese hacking also resulted in the theft of plans for the F-35, a national security secret that took years and billions of dollars to develop, and hackers linked either to the People’s Liberation Army or to state-owned companies stand accused of breaching a range of American companies including Alcoa, Allegheny Technologies, SolarWorld, U.S. Steel, and Westinghouse Electric.
Allowing China to purchase MoneyGram would give the country access to sensitive international financial information, including Americans. It would be akin to inviting a gang of known cyber pilferers into our national financial electronic infrastructure.
CFIUS should refer a final decision to President Trump so he can properly vet this deal. Allowing Chinese interests to own MoneyGram would mean handing it over to their military and intelligence apparatuses, a horrific prospect for American security. It cannot be “business as usual” when it comes to granting them the leverage they need to keep stealing our advances.
Dan Perrin is the founder of the Council to Reduce Known Cyber Vulnerabilities.
The views expressed by contributors are their own and are not the views of The Hill.