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U.S. government bulletin raises alarm on Chinese influence, investments

Not all Chinese outreach should be suspect, the bulletin also says; Fufeng USA’s COO notes no Chinese government ownership

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The approximate site of the proposed Fufeng Group project on the north end of Grand Forks. Eric Hylden / Grand Forks Herald
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GRAND FORKS – The Office of the Director of National Intelligence released a bulletin on Wednesday detailing concerns with China’s influence in the United States, and the way the Chinese government seeks to influence state and local officials.

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Grand Forks leaders expressed confusion and frustration over the Republican senators’ decision to oppose the project before the conclusion of a review by the Committee on Foreign Investment in the United States.

The bulletin does not mention Fufeng Group, or the China-based agribusiness’ plans to build a corn mill in Grand Forks. But it does warn that business investments can become important leverage for China’s foreign policy goals, citing the case of a governor who “received a letter from a (Chinese) Consulate threatening to cancel a Chinese investment in the governor’s state if the governor chose to travel to Taiwan.”

“(China) may view the U.S. business community as an especially important vector to influence local, state, and national leaders, given that companies are key constituents of and often contributors to politicians at all levels,” the bulletin says.

Eamon Javers, a D.C.-based journalist for CNBC who recently reported on Fufeng’s Grand Forks arrival, quickly connected the bulletin to North Dakota, posting on Twitter that “some argue (it’s) the type of thing DNI is warning about today.”

But the bulletin also makes clear that not “all outreach from China” should be suspect — and Grand Forks leaders are quick to point out that they’re doing the kind of “due diligence” on Fufeng’s arrival that the DNI recommends.

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“In confronting this challenge, it is important that U.S. state and local leaders not cast blanket suspicion on all outreach from China, given that the threat of exploitation emanates from the (People’s Republic of China) government and the Chinese Communist Party (CCP), not the people of China generally and not Chinese Americans, who themselves are often victimized by PRC aggression,” the bulletin notes.

The COO of Fufeng’s American subsidiary, Eric Chutorash, has previously insisted that his company will not engage in espionage — a key part of critics’ worries, given proximity to Grand Forks Air Force Base — and has repeatedly said his company has no Chinese government ownership.

“As previously stated, Fufeng USA is not owned by the Chinese government and therefore any concerns being raised in the (bulletin) are not applicable to its investment in Grand Forks,” Chutorash said this week in a statement through a spokesperson.

To many, the bulletin will likely offer yet another frustratingly vague piece of circumstantial evidence to weigh claims about Fufeng’s arrival in Grand Forks. In the roughly eight months since the company’s plans were announced, speculation about what it could mean has roiled the community, though no conclusive evidence has yet emerged.

The most remarkable development was a memo penned by a Nevada-based Air Force major, writing of his own volition about the project and warning about the espionage danger the plant could pose to nearby Grand Forks Air Force Base. But it included apparent contextual and factual problems regarding both its proximity to plant resources and a City Council member’s alleged conflicts of interest.

It was also downplayed by Grand Forks Air Force Base commander Col. Timothy Curry, who said in a June 9 email to city leaders that he “did not have any leadership relaying a clear security threat.” When asked his opinion of the Fufeng project this week, Curry said the project is beyond “our base’s authority,” and that “any national security concerns” would come in the future from “members of Congress, a Department entity or law enforcement officials.”

Within weeks, Fufeng is also expected to submit itself to a review process at the highest level of government before the Committee on Foreign Investment in the United States, or CFIUS. That organization carefully watches American business investments from foreign entities and vets them for national security concerns.

An attorney working for the city believes CFIUS will find it doesn’t have jurisdiction over Fufeng’s arrival. But a review might also help more conclusively resolve the question of whether the company is a national security threat. That could be critical to resolving the intense local debate about the company.

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City Administrator Todd Feland points out that the DNI bulletin has advice for cities: do careful research, insist on transparency and stay vigilant. Feland noted safeguards in the city’s development agreement, negotiated and debated over the course of several months, and pointed to its discussions with FBI and Air Force officials, and other communities that have hosted large corn mills.

“Overall, (the bulletin) made me feel positive that, again with the Fufeng project, that we put in place a lot of proactive measures, and as needed, we’ve moved forward with positive action,” he said.

Mayor Brandon Bochenski also pointed out the value that having CFIUS review Fufeng’s arrival could bring. He also noted that Cirrus Aircraft, a major local manufacturer, has had Chinese government ownership for years without any problems in Grand Forks.

“It probably took longer than then some had hoped” for CFIUS to be involved in a review process, Bochenski said. “But ultimately, the company is going to voluntarily submit (to a review), so that's a good thing.”

Related Topics: FUFENG
Sam Easter is a freelance reporter who has been a regular contributor to the Herald since 2019. He covers a variety of topics, including government and politics.

In 2015, he joined the Herald’s staff as City Hall reporter, covering North Dakota politics at all levels and conducting Herald investigations through early 2018, when he began his freelancing career.

Easter can be reached at samkweaster@gmail.com or via Twitter via @samkweaster.
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