Friday, March 29, 2024

Chinese Infiltration Effort Targeted Federal Reserve for Years

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It's odd that an organization like the U.S. , whose leaders are very, very chatty about monetary policy and whose researchers publish mountains of economic analysis every month, would be the target of a Chinese infiltration effort. (RELATED: Federal Reserve Announces Historic Rate Hike)

But according to a report from Sen. 's office, the Chinese were working on building a network of informants inside the Fed for years:

tried to build a network of informants inside the Federal Reserve system, at one point threatening to imprison a Fed economist during a trip to Shanghai unless he agreed to provide nonpublic economic data, a congressional investigation found.

The investigation by Republican staff members of the 's Committee on Homeland Security and Governmental Affairs found that Fed employees were offered contracts with Chinese talent-recruitment programs, which often include cash payments, and asked to provide information on the U.S. economy, interest-rate changes and policies, according to a report of the findings released Tuesday.

In the case of the economist, the report said, Chinese officials in 2019 detained and tried to coerce him to share data and information on U.S. policies, including on tariffs while the U.S. and China were in the midst of a trade war.

The report doesn't say whether any sensitive information was compromised in what it said has been a decadelong effort that began around 2013. Access to such information could provide valuable insights given the Fed's extensive analysis of U.S. economic activity, its oversight of the U.S. financial system, and the setting of interest-rate policy.

All of which is very strange, because again, the Fed is pretty open about what it does and even if China had infiltrated the Fed, there's nothing to suggest it would give China even the smallest hint of what Fed leaders would do on policy. (RELATED: Amid Pelosi's Taiwan Visit, Chinese Disinformation Effort Goes Into High Gear)

Even so, Portman's office said the Federal Reserve didn't handle the threat well at all. Naturally, Fed Chairman pushed back on the idea that the ChiComs were infiltrating the organization:

In his letter to Mr. Portman, Mr. Powell said the Fed would be concerned about “any supportable allegation of wrongdoing, whatever the source. In contrast, we are deeply troubled by what we believe to be the report's unfair, unsubstantiated, and unverified insinuations about particular staff members.”

While this all looks like it's heading nowhere, fast, one point does shine through: China is not our friend, and it has no problems strong-arming U.S. officials for information. (RELATED: Surprise! Team Biden Wants to Turn Global Anti-Russia Coalition Against Evil China)

Even if, in this case, all the Chinese government really needs to do is sign up for the Fed's mailing list…it's quick and easy and they'll get more info on the economy than they can possibly handle.

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

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Norman Leahy
Norman Leahy
Norman Leahy has written about national and Virginia politics for more than 30 years with outlets ranging from The Washington Post to BearingDrift.com. A consulting writer, editor, recovering think tank executive and campaign operative, Norman lives in Virginia.

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