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The Clinton Jobs Record: Sell Out Michigan To Aid China, Then Complain About It

- August 10, 2016

Clinton Will Give Lip Service To Jobs In Michigan Today, But Her Department Signed Off On A Chinese Company And Clinton Donor Buying Out A Taxpayer-Backed Michigan Company With Sensitive Technology


TOP TAKEAWAYS

  • On the campaign trail, Clinton decries the sale of American companies with advanced technologies to foreign competitors, and singled out the 2013 sale of Michigan-based A123 Systems as a "very unfortunate" incident.
  • But as Secretary of State, Clinton allowed a Chinese company with ties to her State Department to buy A123, after it had received hundreds of millions of dollars in federal stimulus funds to develop sensitive battery technology.
  • As a member of the Committee on Foreign Investment in the United States (CFIUS), Clinton could have requested an investigation into A123's sale given concerns that the sale "might constitute a potential threat" to national security brought to the attention of CFIUS, but her disregard resulted in the deal going through.
  • Wanxiang Group hired a formed Clinton White House staffer for "lobbying related to Wanxiang's acquisition of A123" and had previously contributed $4.5 million to a State Department initiative launched by Clinton.

four years after allowing a chinese company to ACQUIRE a federally funded michigan battery company, CLINTON WILL DELIVEr a vision of her economic plan in michigan

Today, Clinton Will Give A Speech At An Automotive And Defense Industry Manufacturing Facility In Warren. "Democratic presidential candidate Hillary Clinton will outline her plans for helping working-class voters in a midday speech Thursday at an automotive and defense industry manufacturing facility in Warren." (Chad Livengood, "Clinton Set To Talk Economy At Warren Firm Thursday," The Detroit News, 8/9/16)

Clinton Claims "It's Very Unfortunate" When Chinese Companies Buy American Companies That Have Advanced Technology

Asked About The Failure Of American Advanced Technology Companies, Including A123, And Their Sale To Chinese Firms, Clinton Expressed Concern That "Foreign Companies, Particularly Chinese Companies … Are Looking To Buy American Companies Particularly With Advanced Technology," And Added It Was "Very Unfortunate." QUESTION: "A lot of the venture funds that have traditionally been doing renewable energy are ceasing to exist because they performed so poorly backing companies like Solyndra and A123 and just can't raise additional capital. Also all the companies that we're looking at now for funding are foreign companies. They just are in environments where they can see the value proposition of new technology." CLINTON: "Well, and that does concern me because a lot of foreign companies, particularly Chinese companies, but not exclusively, are looking to buy American companies particularly with advanced technology." QUESTION: "It's unfortunate." CLINTON: "It's very unfortunate." QUESTION: "And it's happening. It's very real." (Hillary Clinton, Remarks At A Campaign Event, Hampton, NH, 5/22/15)

Click To Watch

A123, a battery company in michigan once lauded by obama as "the birth of an entire new industry in america," declared bankruptcy three years after receiving over $200 million in federal stimulus funds

A123 Is An Example Of "Massive Government Investments In New Energy And Technologies In Michigan And Across The Nation Beginning Around 2009 That Promised Thousands Of Jobs But Which, In Many Instances, Failed To Materialize." "The back-and-forth is the latest chapter in the continuing political fallout from massive government investments in new energy technologies in Michigan and across the nation beginning around 2009 that promised thousands of jobs but which, in many instances, failed to materialize." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

Obama Touted The Success Of A123 In The 2012 Campaign, And His Failed Stimulus Plan Provided The Company With Hundreds Of Millions In Federal Funds

In A Phone Call With A123 CEO David Vieau And Former Michigan Governor Jen Granholm, Obama Lauded A123's Success Saying "This Is About The Birth Of An Entire New Industry In America." "'This is about the birth of an entire new industry in America -- an industry that's going to be central to the next generation of cars,' Obama said in a September 2010 phone call with A123 Chief Executive Officer David Vieau and then-Michigan Governor Jennifer Granholm. The call was played over loudspeakers during an event celebrating the opening of a plant in Livonia, Michigan. 'When folks lift up their hoods on the cars of the future, I want them to see engines and batteries that are stamped: Made in America,' Obama said, according to a transcript provided by the White House." (Craig Trudell, "A123 Shows Risks As Battery Science Meets Government Cash," Bloomberg, 10/18/12)

In 2009, A123 Systems Received $249 Million In Federal Stimulus Funds. "Watertown lithium-ion battery maker A123Systems yesterday was awarded $249 million in federal stimulus funds, which the company said will go to build factories to manufacture high-tech lithium-ion batteries." (Sean Sposito, "A123 Gets $249M In Stimulus Funding," The Boston Globe, 8/6/09)

A123 Systems Had Already Received Economic Incentives From The Michigan Economic Development Corporation To Build A Factory In Livonia, Michigan. "A123 previously received $100 million in economic incentives from the Michigan Economic Development Corporation to build a factory in Livonia, Mich., and that will be the first facility built with the federal money, the company said." (Sean Sposito, "A123 Gets $249M In Stimulus Funding," The Boston Globe, 8/6/09)

  • A123 Received "More Than $125 Million In Tax Credits From The Michigan Economic Development Corp" In 2009. "In 2009, A123 received a $249 million grant from the U.S. Department of Energy and more than $125 million in tax credits from the Michigan Economic Development Corp." (Nathan Bomey, "A123 System Lays Off 125 Workers At Michigan Battery Plants," The Ann Arbor News, 11/26/11)

Three Years After Receiving Stimulus Funds A123 Filed For Bankruptcy, Highlighting The Failure Of Obama's Stimulus To Foster A Domestic Market For Electric Vehicles

In October 2012, A123 Systems Filed For Chapter 11 Bankruptcy. "A123, which was awarded nearly $250 million in grants from the Department of Energy in 2009 to build a factory in Michigan, filed for Chapter 11 bankruptcy in October with a plan to sell its automotive-business assets, including the plant, to Johnson Controls." (Patrick Fitzgerald, "China's Wanxiang Wins U.S.-Backed Battery Maker A123," The Wall Street Journal , 12/8/12)

  • A123 Systems' Chapter 11 Bankruptcy Was "A Black Eye The Obama Administration's Efforts To Foster A Domestic Market For Electric Vehicles." "While A123's bankruptcy has been a black eye for the Obama administration's efforts to foster a domestic market for electric vehicles, the entire battery industry in the U.S. is struggling as demand for electric vehicles hasn't lived up to expectations so far. The cars being built still are using Japanese and Korean suppliers that have more manufacturing expertise and bigger scale." (Patrick Fitzgerald, "China's Wanxiang Wins U.S.-Backed Battery Maker A123," The Wall Street Journal , 12/8/12)

AS CHINA'S WANXIANG GROUP MOVED TO PURCHASE A123 SYSTEMs, CLINTON'S STATE DEPARTMENT WAS PART OF A COMMITTEE THAT SIGNED OFF ON THE DEAL

On The Campaign Trail, Clinton Has Decried The Sale Of Michigan-Based A123 Systems To A Chinese Conglomerate

In December 2012, Chinese-Owned Wanxiang Group "Won A High-Stakes Auction … For Assets Of A123 Systems, The Bankrupt American Battery Maker That Was A Centerpiece Of The Obama Administration's Loan Program For Electric Vehicles." "Wanxiang Group, a large Chinese auto parts maker, won a high-stakes auction on Sunday for assets of A123 Systems, the bankrupt American battery maker that was a centerpiece of the Obama administration's loan program for electric vehicles. A123, which filed for bankruptcy in October after chronic losses and a damaging battery recall, said Wanxiang agreed to pay $256 million for its automotive and commercial operations, including its three factories in the United States." (Bill Vlasic, "Chinese Firm Wins Bid For Auto Battery Maker," The New York Times , 12/10/12)

Last Year, Clinton Expressed Concerns Over The Sale Of A123 Systems To A Chinese Company At A Campaign Event In New Hampshire. "At a campaign stop in New Hampshire last month, Clinton, the leading Democratic candidate for president, expressed concerns about the sale of A123 Systems - built with millions in government aid - along with those of other new energy firms, to Chinese investors, calling them 'unfortunate' and a 'serious' problem for high-tech industries in the U.S." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

But Clinton Could Have Called For An Investigation Into The Sale, And Failed To Act As Secretary Of State

Clinton's Campaign Asserted That "She Had No Role In The Review Of The Sale," Which Occurred While She Was Secretary Of State. "Clinton's campaign said she had no role in the review of the sale and referred questions to the State Department, saying only that she 'wants us to be the clean energy superpower for the 21st Century, and that means out-competing countries like China so we can keep those jobs and companies here.'" (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

  • While Denying That She Played A Role In These Deliberations, She Noted As A Presidential Candidate In 2008 CFIUS's Role In "Ensuring That Technologies… Critical To U.S. National Security Are Not Sold Off And Outsourced To Foreign Governments." "The campaign did not respond to a question as to why Clinton didn't play a role in the deliberations, despite her noting as a presidential candidate in 2008, CFIUS's role in 'ensuring that technologies ... critical to U.S. national security are not sold off and outsourced to foreign governments.'" (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

Clinton's Disregard For The Sale Of A123 Highlights "Her Level Of Involvement - Or Lack Thereof - In Foreign Purchases Of American Assets." "It also continues a line of attack against Clinton by her critics regarding her level of involvement - or lack thereof - in foreign purchases of American assets." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

Hillary Clinton, As Secretary Of State, Was A Member Of Committee On Foreign Investment In The United States (CFIUS), Which Was Tasked With Approving The Transaction. "The members of CFIUS include the heads of the following departments and offices: Department of the Treasury (chair); Department of Justice; Department of Homeland Security; Department of Commerce; Department of Defense; Department of State; Department of Energy; Office of the U.S. Trade Representative; Office of Science & Technology Policy" ( U.S. Treasury Department, Accessed 12/13/13)

  • The State Department's Office Of Investment Affairs Within The Bureau Of Economic And Business Affairs Represents State On CFIUS. "As State's representatives on the Committee for Foreign Investment in the United States, we review transactions that could result in control of a U.S. business by a foreign person in order to determine the effect of such transactions on the national security of the United States." ( U.S. State Department, Accessed 12/12/13)

"If Clinton Had Security Concerns About Wanxiang Gaining A123's Technology, She And The Agency Could Have Moved To Investigate It"

"If Clinton Had Security Concerns About Wanxiang Gaining A123's Technology, She And The Agency Could Have Moved To Investigate It." "It does appear, however, that if Clinton had security concerns about Wanxiang gaining A123's technology, she and the agency she led could have moved to investigate it, which, at least according to congressional researchers, typically leads to about half of all transactions being abandoned." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

  • Any Of CFIUS's Member Agencies "Can Request A Deeper Review To Determine If There Are Any National Security Implications." "But any of CFIUS's member agencies - Treasury, Defense, Homeland Security and the others - can request a deeper review to determine if there are national security implications." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

CFIUS Regulations Say That CFIUS Has 30 Days To Identify And Address National Security Concerns Of A Sale, After Which "The Committee May Initiate A Subsequent 45-Day Investigation Or Refer The Sale To The President's Office For A Decision." "Under CFIUS's regulations, parties to a sale typically file notice with the committee, which then has 30 days to 'identify and address' any national security concerns. If it chooses, the committee may initiate a subsequent 45-day investigation or refer the sale to the president's office for a decision." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

  • While It Is Rare For A Foreign Transaction To Be Blocked, Obama Has Done So In The Interest Of National Security. "It is rare for foreign transaction to be blocked, but it does happen: President Barack Obama blocked a sale to Chinese investors in September 2012 of four Oregon wind farm companies located near a site where the military tests aircraft and unmanned drones." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

"A 2014 Report By The Congressional Research Service Found Nearly Half Of Those Investigated 'Were Terminated ... Because The Firms Decided To Withdraw From The Transactions Rather Than Face A Negative Determination.'" (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

Clinton Attempted To Focus On Economic Competition When Discussing A123, Not The National Security Concerns Surrounding The Sale In Remarks Last Year. "In her remarks at a Hampton, N.H., brewery on May 22, Clinton clearly was referring to economic competition, not national security concerns, in discussing the sale of A123 and other American businesses. CFIUS does not get involved in cases only related to economic considerations." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

The Entire Michigan Congressional Delegation, Including Democrats, Disapproved Of The Sale In A Letter To Clinton, Calling It "A Potential Threat"

"If Clinton… Wanted To Raise Concerns About The National Security Implications Of The Sale There Was Plenty Of Support For Her To Do So" Given A Letter That Asserted That The Sale "Might Constitute A Potential Threat." "If Clinton, who resigned as secretary in 2013, wanted to raise concerns about the national security implications of the sale, there was plenty of support for her to do so: In their letter to then-Treasury Secretary Tim Geithner, who served as CFIUS's chair, members of Michigan's delegation said the sale 'might constitute a potential threat' to security since the company's 'core' lithium-ion battery technology was being transferred." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

  • A Bipartisan Group Of Congressmen And Both Of Michigan's Senators Urged A CFIUS Review Of Wanxiang's Acquisition Of A123, Noting That It Would Obtain "91 Patents For Sensitive Military And Space Battery Technology." "Several members of Congress, including both of Michigan's U.S. Democratic senators and a bipartisan group of congressmen, urged such a review; as did the Strategic Materials Advisory Council, a group that noted that though Wanxiang had excluded A123's defense contracts from its purchase, it was still obtaining '91 patents for sensitive military and space battery technology.'" (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

The Letter "Suggested The Sale Might Not Be Appropriate Given That A123… Had Received $133 Million In Stimulus Funds And Was Granted More Than $125 Million In State Tax Incentives." "They also suggested the sale might not be appropriate given that A123, which was based in Massachusetts, had received $133 million in stimulus funds and was granted more than $125 million in state tax incentives and credits to build advanced lithium-ion batteries for its clients. Other members of Congress raised concerns with CFIUS as well." (Todd Spangler, "Sale Of Michigan Company To China May Haunt Clinton," Detroit Free Press, 6/5/15)

  • Letter: "The Possibility That A Foreign Company Might Benefit From U.S. Taxpayer Assistance Is Therefore Deeply Troubling To Us." "Finally, we are concerned that Wanxiang's acquisition of A123 may result in the transfer of U.S. investments already made in A123. As you are aware, A123 was awarded a significant federal battery manufacturing grant in 2009 under the American Recovery and Reinvestment Act and has received investment incentives from the State of Michigan. The possibility that a foreign company might benefit from U.S. taxpayer assistance is therefore deeply troubling to us." (Sen. Debbie Stabenow, et. al., Letter To Secretary Geithner And Members Of The Committee Of Foreign Investment In The United States , 11/20/12)

Letter: "We Believe It Prudent That CFIUS Examine Wanxiang's Bid With The Utmost Scrutiny." "As you are no doubt aware, A123 manufactures lithium-ion batteries and maintains contracts with both the U.S. Department of Defense and the U.S. Department of Energy. A123 has developed cutting-edge battery technology that is integrated into all facts of its business, including its defense, electric grid, telecommunications and automotive sectors. This raises concerns about the potential effect on U.S. national security by the transaction in question. Given the need to preserve the integrity of domestic intellectual property and manufacturing crucial to our national defense, and in light of ongoing Chinese attacks on critical infrastructure in the United States, we believe it prudent that CFIUS examine Wanxiang's bid with the utmost scrutiny." (Sen. Debbie Stabenow, et. al., Letter To Secretary Geithner And Members Of The Committee Of Foreign Investment In The United States , 11/20/12)

The Letter To CFIUS Was Signed By Michigan Congressmen From Both Parties, Including The Following Members, Opposing The Sale:

CFIUS Approved The Sale Despite The National Security And Economic Concerns

CFIUS Approved The Sale Of U.S.-Based A123 Systems To Chinese Wanxiang Group. "Chinese auto parts conglomerate Wanxiang Group Corp. said Tuesday that a federal panel has approved its purchase of most assets of failed battery maker A123 Systems Inc. The approval by the Committee on Foreign Investment in the United States (CFIUS) came more than a month after a Delaware bankruptcy judge signed off on the deal, valued at nearly $257 million." (Randall Chase, "Wanxiang Says Panel Approves A123 Sale," The Associated Press, 1/29/13)

"Critics Of The Deal Repeated Their Concerns About The Economic And Security Risks Of U.S. Technology Acquired By Foreigners." (Randall Chase, "Wanxiang Says Panel Approves A123 Sale," The Associated Press, 1/29/13)

  • Dean Popps, Co-Chair Of The Strategic Materials Advisory Council: "The Approved Sale Marks Yet Another Step In The Coordinated Strategy By Foreign Countries To Acquire Leading U.S. Companies Who Are Researching, Developing And Producing Critical Technologies." "'The approved sale marks yet another step in the coordinated strategy by foreign countries to acquire leading U.S. companies who are researching, developing and producing critical technologies,' said Dean Popps, co-chair of the Strategic Materials Advisory Council, a group of retired military and defense industry officials. 'CFIUS itself has recognized this strategy but it appears they continue to fail to do anything to prevent it.'" (Randall Chase, "Wanxiang Says Panel Approves A123 Sale," The Associated Press, 1/29/13)

Clinton's Campaign Has Claimed She Never Engaged In Any CFIUS Decisions Since "These Matters Did Not Rise To [Her] Level," Regardless Of The Huge Economic And National Security Implications

The Clinton Campaign Claimed That "These Matters Did Not Rise To The Secretary's Level." "The Clinton campaign spokesman, Mr. Fallon, said that in general, these matters did not rise to the secretary's level." (Jo Becker and Mike McIntire, "The Clintons, The Russians and Uranium," The New York Times, 4/24/15)

The Campaign Provided A Statement From Jose Fernandez, Assistant Secretary Assigned To Represent Clinton On CFIUS In Which He Says "Mrs. Clinton Never Intervened With Me On Any C.F.I.U.S. Matter." "He would not comment on whether Mrs. Clinton had been briefed on the matter, but he gave The Times a statement from the former assistant secretary assigned to the foreign investment committee at the time, Jose Fernandez. While not addressing the specifics of the Uranium One deal, Mr. Fernandez said, 'Mrs. Clinton never intervened with me on any C.F.I.U.S. matter.'" (Jo Becker and Mike McIntire, "The Clintons, The Russians and Uranium," The New York Times, 4/24/15)

WANXIANG GROUP HAD EXTENSIVE TIES TO CLINTON WHILE SHE WAS SECRETARY OF STATE, AND EVEN HIRED A FORMER CLINTON WHITE HOUSE STAFFER AS A LOBBYIST for the acquisition of a123

Wanxiang Hired A Former Clinton White House Staffer For Lobbying Related To Acquisition Of A123

In The First Quarter Of 2013, Wanxiang Group Hired Glover Park Group For "Lobbying Related To Wanxiang's Acquisition [sic] Of A123." ( U.S. Senate Lobbying Records , Accessed 12/13/13)

Among The Lobbyists Hired Was Susan Brophy. ( U.S. Senate Lobbying Records , Accessed 12/13/13)

  • Brophy Served As Deputy Assistant To The President And Deputy Director Of Legislative Affairs In The Clinton White House. "Previously, Susan served at the White House as Deputy Assistant to the President and Deputy Director of Legislative Affairs, where she developed, implemented and directed legislative strategy with the White House, Administration and Congress in support of President Clinton's policy priorities." ( Glover Park Group, Accessed 12/13/13)

Wanxiang Group Also Provided $4.5 Million To A State Department Initiative Launched By Clinton

In May 2010, Secretary Clinton Launched The "100,000 Strong" Initiative, "A National Effort Designed To Increase Dramatically The Number And Diversify The Composition Of American Students Studying In China" In Beijing. "Citing the strategic importance of the U.S.-China relationship, in November 2009, President Barack Obama announced the '100,000 Strong' initiative, a national effort designed to increase dramatically the number and diversify the composition of American students studying in China. Secretary of State Hillary Clinton officially launched the initiative in May 2010 in Beijing." (U.S. State Department, Accessed 5/26/15)

As Of February 2012, Wanxiang Group Had Pledged $4.5 Million To The Initiative. "$450,000 in New Pledges from Wanxiang: Since January 2011, Wanxiang Group has independently pledged $4.5 million to programs that support the Initiative's goals, including for the Chicago Public School System, Northwestern University, and the University of Michigan. New grants pledged this week include $150,000 to the Committee of 100, which will send teachers from the San Francisco Bay area on a study tour in China, and $300,000 to ISLC to send students from Los Angeles County to China this summer." (U.S. State Department, "Los Angeles County Students To Study In China Under The 100,000 Strong Initiative More Than $1 Million In New Private Pledges To Further Initiative's Goals," Press Release , 2/24/12)


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