The Biggest Financial Scandal in History—And You May Be Part of It | Roger Robinson | CLIP

Roger, you believe you've discovered what's arguably the largest financial scandal in the history of the world. That may sound a bit melodramatic, but it's big. What is it that you're seeing? Well, Jan, it's hard to know exactly where it fits in the pantheon of scandals You don't, to my knowledge, have an occasion where there's the multi-trillion dollar underwriting by a democracy of a totalitarian police state bent on its destruction and way of life that's aided and abetted by, in our case, Wall Street firms, wittingly or unwittingly, and U.S. government regulators that are sadly conflicted because of the revolving door with Wall Street. So that would be the way I would describe the circumstance we find ourselves in now. You just painted a very big picture here with multiple moving parts. Let's lay it out step by step. You're saying, in a nutshell, that huge amounts of money are coming from the American people into communist China, day after day, right now, to the tune of trillions of dollars. Yes, that trillions of dollars, of course, is over time. This has been going on, Jan, sadly, for at least 25 years. The Chinese have come into our capital markets with as many as 5,000 companies. The exact number isn't known because the government hasn't volunteered any data on this, but our best understanding from research is, again, some 5,000 Chinese companies. Now, the disturbing part, Jan, is that those companies came in without any particular screening, oversight, due diligence, and in a regulatory regime. They were not looked at carefully to see, for example, are they already sanctioned by the United States for egregious national security and human rights violations? The answer to that is no. And so we don't have, as we do in the trade portfolio, for example, a committee on foreign investment in the United States that's certainly imperfect, but at least it makes an effort to vet Chinese efforts to buy into the United States, whether it's American companies, farmland, whatever. There's at least some mechanism to try to get a handle on that. It's never had its parallel in the U.S. capital markets. The same is true, sadly, of private equity funds. I can't speak to exactly the process they go through, but certainly publicly traded companies, these are to be scrutinized. We have investor protection issues. The Securities and Exchange Commission, our Department of Treasury, even the White House National Economic Council should be caring about where the American people's money is going and how it's being used. What kind of companies are we talking about here? Well, we asked that question over the research of a number of years now, and the answer is troubling. You have companies that are, for example, equipping concentration camps, trafficking in slave labor, aiding and abetting genocide in Xinjiang, building out the surveillance state of the country. And on the national security side of the equation, you've got companies that are responsible for manufacturing China's most advanced weapon systems. The last two aircraft carriers come to mind, hypersonic glide vehicles, new generations of ICBMs targeting American families, new sixth-generation fighter aircraft. In other words, all of the areas that you'd be concerned about militarily are in no small part being underwritten and funded by how many? Perhaps 75 to 100 million of us in the international side of our investment portfolios. Most people have diversified portfolios. They have some perhaps international exposure. For those of us that do, I can tell you that the chances of our being in possession in our portfolios of some of these bad actor Chinese companies is extremely high. It's near a certainty. So think about the fact that this is not some esoteric issue here. We're not talking about space-based missile defense here, or something that is more distant from the American people. This is their money, and they have no clue as to the fact that it's being sluiced into some of the most horrific abuses in the world today via Chinese state-controlled, they're all state-controlled entities. The CCP has a lock on every Chinese commercial entity. We must know this by now. So the idea of a private sector is not happening in China. So the state can call on these companies to engage in strategic and even military activities, intelligence gathering, for example, at their whim. As we well know, Article 7 of the National Intelligence Law spells this out in a number of other pieces of legislation. The Chinese are hiding it. So here we are. We're not getting the protections we need. We're not getting the transparency and disclosure we need. And certainly we're not learning that we're funding in some ways our own demise. In my conversations with experts, lawmakers, and so forth, it struck me that the very simple concept of reciprocity, whether it's in terms of how our financial systems treat each other, or for example, access for journalists would be another example that's more close to my particular interests. That would be a great benchmark for evening the playing field, which seems to me to be part of what's motivating the president in his economic approach with reciprocal tariffs, for example, and other things. I'm curious what you think about that. Well, I think it's inspired. I mean, reciprocity would go a long way toward not just resolving our trade problems and the unfairness and our having been taken to the cleaners by so many countries in the world. The president's correct about that. But what about its application to the money? Absolutely. I mean, the Chinese can hold shares of our companies. Why can't we own shares of theirs? We're not able to, until very recently, establish even financial institutions over there. That's a new phenomena. And it's just beginning. There were no similar prohibitions. I mean, we could go down a long list in the financial arena where there's a glaring lack of reciprocity. I mean, the PCAOB case we talked about on audits. I mean, please, how do they get a waiver from the rest of the world? Why are they deserving of preferential treatment when they're an existential threat to our way of life, the likes of which we've never known? So reciprocity, I'm all for the president coming out and saying, hey, this isn't just a trade thing. This is a financial thing as well. And it would start to unearth many of the abuses we've talked about today. And just a quick thought. You seem very certain that President Trump is very clear on the China threat. And the reason I want to touch on this is I've seen a number of, even analysts, people that I follow quite a bit asking questions. Hey, has Trump changed his tune on China? For example, look at this gutting of the USAGM agencies or some of USAID's works. Look, China's going to come right in there and pick up the slack. This seems like pro-China stuff. I mean, I've seen all sorts of things. Okay. I'm just wondering what your response is to that. Well, the president, I would suspect his personal style, as you know, is to try to keep bad guys on side best he can. But when it comes to the overriding national security interest of the United States, I think he's going to be four square. That is, he's going to come down hard on the right side. The Panama Canal is such an example. And he is not hesitating on the tariff side. And he's also just sanctioned a couple of Chinese companies that are responsible, publicly traded, that are responsible for keeping Iran a going concern. And of that 40 companies, every single one of them is somewhere in the investment products of the American people, all 40. And these are military, energy, infrastructure, surveillance. Not good. So the president is now finally picking up on the China dimension, because China is responsible for keeping Iran a going concern. I mean, it's the parent company, for goodness sake. So I'm encouraged by that kind of thing. And not to mention, again, the infrastructure development, the military supplies, taking 87 to 100 percent of their oil. I mean, you've got to have a customer if you're Iran. And they stepped up just the way they have with Russia. This is insidious. It's designed to keep our most virulent adversaries a going concern against us. Let's make no mistake about the Chinese agenda. Yes, they want the cheap oil, which they get on a discounted basis because Iran is more of a pariah. They love that, of course. It's not to say that there aren't real commercial underpinnings to this kind of thing. But what they love most is the fact that this ties us down in knots in the Middle East, or this ties us into knots on the continent of Europe. I mean, they want that Ukraine thing to continue to go on. They want Russia to prosper to the extent that it can and be insulated from the sanctions that have been put on it. So you're going to see what appear to be a mixed bag could well be. And, you know, calling President Xi a good friend and so forth, sometimes I myself say, you know, wince a little because he's not a good friend of mankind. But on balance, this looks a lot more like Reagan country to me. And I was close to the president and worked with him every day. And I was there three and a half years at the National Security Council. I know something about the Reagan presidency. And I was senior director for International Economic Affairs. This was my portfolio under Reagan vis-a-vis the Soviets.