EXCLUSIVE: Murky Chinese Money Trail Links House Oversight Chairman To Trumps
The Curious Case Of The Chinese Company Whose Investments Trickle Down To Washington
Jason Chaffetz, Republican House Rep from Utah, is the Chairman of the House Committee on Oversight and Government Reform. In that Chairmanship, Chaffetz has the most powerful investigative position in the House of Representatives. During the 2016 election, Chaffetz held dozens of investigations into the so-called scandal of Benghazi, which turned into an investigation into Hillary Clinton’s emails. This became one of Congress’s most investigated incidents in history, and Chaffetz found nothing criminal. Chaffetz was the point man in Congress who announced when FBI Director James Comey falsely indicated that the FBI was reopening its investigation of Clinton’s emails. That announcement itself is now under investigation.
So, Chaffetz is no slouch when it comes to using the investigative power of his seat. But while he continues to threaten to investigate Clinton, he is refusing to investigate Donald Trump’s connections to Russia and the Russian effort to undermine the 2016 election, even after they were thrown into relief by the resignation of National Security Adviser Mike Flynn after less than a month on the job. Is this just partisanship gone wild, or is there a deeper conflict of interest here?
Thanks to an interactive network of 1500 known business and political connections to Trump created by Buzzfeed and Kim Albrecht, I discovered a financial connection that links Jason Chaffetz to Donald Trump. And the financial trail runs through high finance in China.
I reported on November 1st about Chaffetz’s cozy relationship with a rather unusual corporate donor, and its financial backing in China:
Chaffetz’s biggest donor by far over the course of his career in Congress is Nu Skin Enterprises. Nu Skin has donated $96,850 to Chaffetz and his PAC since he first ran for Congress in 2008, including $38,500 in the 2016 cycle. Chaffetz has a long history with Nu Skin.
Nu Skin sells cream and pill supplement products that supposedly make the user look younger. According to Nu Skin’s literature about its flagship product “ageLOC,”
“Nu Skin is able to identify critical SuperMarkers called Youth Gene Clusters, which are functional groups of genes that regulate how we appear to age. Only ageLOC’s proprietary science understands how to reset these Youth Gene Clusters to their youthful patterns of activity.”
Nu Skin is worth roughly $1.6 billion and was founded in Provo, Utah in 1984. The company was investigated by the Federal Trade Commission in several states in the 1990s for being a pyramid scheme. Given its rather fanciful advertising and multi-level marketing, Nu Skin learned to spend a lot of money on public relations and lobbyists–just to survive. The first time Nu Skin lived to sell another day was in 1991 when the company “came out swinging” against pyramid scheme charges, the Salt Lake City outlet Desert News reported on July 26th, 1991. And guess who was riding shotgun:
Accused in several states of operating an illegal pyramid scheme, the Provo-based multilevel marketing firm has decided to mount an offensive. Nu Skin takes issue with the way national and local media have portrayed the company.”Enough is enough,” said Jason Chaffetz, Nu Skin administrative assistant for public relations. “We’re frustrated and disturbed that a number of inaccuracies continue to be perpetuated.”
So, Chaffetz was a PR point man for Nu Skin, and the company launched him into Congress. The fact that a hyper-partisan Congressman has a symbiotic relationship with a sketchy business may not be surprising these days, but the questions raised by this relationship potentially go quite a lot deeper.
In 2012, Citron Research, run by activist short seller Andrew Left, published a report claiming that Nu Skin was running an illegal multi-level marketing scheme in China, and that investors should be advised that the company’s assets in China could be seized by Chinese authorities. Nu Skin responded that its business model in China was “kosher” and that it didn’t need to make any changes, Reuters reported.
Fast-forward to 2016, when Nu Skin agreed in February to pay out $47 million in damages for operating a pyramid scheme and lying about it in China. In September, it agreed to pay the Securities and Exchange Commission $765,688 in fines, after the SEC found that the company failed to accurately account for or adequately oversee charitable contributions it made in China. As part of its agreement, Nu Skin neither admitted nor denied the SEC’s charges. This is likely all a polite way of saying that Nu Skin got a slap on the wrist for running a scam and lying about it, and bribing Chinese officials and trying to hide it.
In June, while Nu Skin was still under investigation by the SEC for creative bookkeeping in China, a Chinese company poured a huge $210 million investment into Nu Skin. This is remarkable. After violating Chinese law, Chinese investors breathed new life into its operations in China.
The Chinese company behind the investment was Ping An Securities Ltd., a massive holding company. A firm representing the company also gained a seat on the board of Nu Skin in the deal.
In 2012, the New York Times reported that family members of former Chinese Premier Wen Jiabao were holding hundreds of millions of dollars worth of investments in companies that they reportedly didn’t even know were in their names. This included stocks bought at 40 cents a share at a time when they were worth $1.60 a share. One of the primary vehicles for making the formerly highest ranking communist Chinese official’s family members stupendously wealthy was shares of Ping An.
Using Buzzfeed/Albrecht’s interactive network, I looked for business connections that would link into this money trail from Ping An to Jason Chaffetz. Lo and behold, Ping An money is also flowing into the Trump family. Ping An Insurance is one of the major investors in Oscar Insurance Corporation, a company founded by Joshua Kushner. Forbes reported in February, 2016, that Ping An had joined several other major investors in a $400 million investment in Oscar led by Fidelity. Internet Health Management reported,
“While the StartUp Health report details investment worldwide, most of the deals involve U.S. companies and investors. In the biggest deal so far this year, Ping An Insurance Group, a Chinese digital health insurance and benefits delivery company, raised $500 million in May from unidentified U.S. investors. Ping An will use the funds to further develop Ping An Good Doctor, a medical mobile app used by more than 70 million Chinese consumers to conduct digital doctor visits and shop online for drugs, healthcare products, cosmetics, and digital and physical gift cards for services such as health exams and gene testing.
“In the U.S. the biggest deal to date was a $400 million investment secured in January by digital healthcare insurer Oscar Health from a group of backers headed by Fidelity Investments, a unit of Fidelity Brokerage Services LLC. Oscar will use the funds to further build up its e-commerce platform that enables plan enrollees to research and buy insurance online and conduct digital doctor visits among other uses Today Oscar, which wants to sell health insurance nationally, covers consumers in California, New Jersey and New York.
Note the phrase “unidentified U.S. investors.” The investment money going into Ping An, then into Oscar, could be coming from anywhere in the US. Americans seeking to send money to a politician’s family could, in theory, structure it using legitimate vehicles like major investments, to run it through a holding company in a country like China, where American campaign finance oversight has no jurisdiction and red tape could easily bog down the SEC. Dark money goes in. Dark money comes out.
Joshua Kushner is the brother of Jared Kushner, husband of Ivanka Trump, son-in-law of the president. Jared has been described as the president’s “consigliere,” a major adviser, strategist and power behind Trump’s throne. Jared and Joshua are the sons of Charles Kushner, a real estate developer and major political donor who was convicted of 18 counts of making illegal campaign contributions, tax evasion and witness tampering in 2005.
There are problems with this link. One is that Oscar was designed to take advantage of the Affordable Care Act, and the Trump administration has promised to work with the Republican Congress to repeal it. So it would seem they are working at cross purposes. Furthermore, it may seem that brother of the son-in-law of the president is too far removed from the Oval Office to be a power broker.
First, it’s not clear that Republicans ever truly planned to repeal Obamacare rather than complain about it, and they face intense political headwinds if they do try to pull the trigger. But in any financial relationship with a politician, the point is to buy access. And structuring that access within a legitimate business could take a number of forms as long as there is a reward mechanism. And there’s no question that access selling is happening, and happening within the family, as expensive bids to go hunting with Trump’s sons or have coffee with Trump’s daughter attest. The question is: could Joshua Kushner provide access?
Here’s a picture of Joshua with his brother Jared in the White House that he posted on January 22nd.
Here’s a picture Joshua posted when he was at the Kremlin in Moscow, Russia, on June 12th, 2015. That was 4 days before Donald Trump announced his candidacy for president.
And here’s a picture Joshua posted when he was in Beijing, China, in May, 2015.
Even though he’s a little further removed, Joshua fits the pattern of the rest of the family in Trump’s orbit. He is a major financier with political ties to two powerful families and financial ties that reach across the globe. It would be very easy to grease his palms in a seemingly totally aboveboard way and have a conversation anywhere on earth that could easily get back to the White House.
To recap, Ping An Insurance enriched the family of the former Chinese Prime Minister, and received a massive anonymous investment from US donors. Ping An is invested in Nu Skin, which has funded Jason Chaffetz’s career. Ping An is also invested in Oscar Health, which was founded by Joshua Kushner, who is the brother of Jared Kushner, and has access to Donald Trump and the White House.
A lot of the financial research has focused on Trump’s connections to Russia. That makes sense, because they are abundant, and growing increasingly problematic. But the international nature of the Trump family’s brave new regime may be even broader than that. During the presidential debates, Clinton berated Trump for using Chinese steel that had been “illegally dumped” into the US market. A Newsweek report detailed how Trump had been using Chinese steel for years, undercutting American steel companies in the Rust Belt and sending “untold millions” in business to China.
Before he even took office, Trump phoned Taiwan’s President Tsai Ing-wen, and seemed to mull the possibility of recognizing Taiwan’s sovereignty. This caused quite a stir in both Washington, which was afraid that Trump would bumble into a war with China, and in Beijing, which considered the One China Policy non-negotiable. A few weeks later, China granted the “Trump” brand trademark rights in China, a decision Trump had been seeking for over a decade, and Trump declared that he would respect the One China Policy.
It’s clear that Trump the man and Trump the Organization have business interests in China. It’s not clear to what extent, if any, the Chinese state benefits from Trump doing business in China. But it is clear that Trump’s leverage worked, China would rather give Trump the businessman a corrupt deal than risk a confrontation with Trump the American president.
Unfortunately, the financial records that it would be necessary to look through in order to pinpoint a definitive financial connection in this money trail are not publicly available. English language publications like Forbes have barely more than a blurb of information on Ping An. Public accountability watchdogs that keep meticulous records on campaign donations in America don’t have records on Ping An. And Trump has not released his taxes. So, while this financial trail running through China that connects Chaffetz with Trump is eyebrow-raising, I will leave it to others with more resources to determine whether it truly constitutes a conflict of interest. I encourage anyone with access to more information on this subject to message me on Twitter.
Photo by Mark Wilson/Getty Images