The suggested substitute language for Senate Bill 559 that would require basic national security checks on foreign investments in the state was eliminated by Senate Democrats in committee on Wednesday.
According to two former U.S. ambassadors, the elimination of the language was performed at the behest of Gov. Gretchen Whitmer and members of the Michigan Economic Development Commission.
Joseph Cella and Peter Hoekstra, the former ambassadors, have expressed concerns regarding the MEDC’s approval of taxpayer-funded state grants to two electric vehicle battery facilities in Marshall and Mecosta County. The Marshall BlueOval plant, a cooperative effort between Ford Motor Company and Chinese-owned Contemporary Amperex Technology Company Ltd., was put on hold by Ford earlier this month. Plans for the Chinese-owned Gotion Inc. in Mecosta County are proceeding as of now.
The suggested SB 559 substitute language would have required the MEDC’s Strategic Outreach Attraction Reserve to perform a perfunctory investigation on foreign companies seeking MEDC/SOAR grants for the purpose of locating facilities in Michigan. The provision included an internal assessment by MEDC/SOAR. If a national security threat were suspected, the company seeking state grants would be required to file Committee on Foreign Investment in the U.S. forms and cross-check whether principals in the proposed transaction appear on the U.S. Department of Commerce’s Bureau of Industry and Security entity list.
The suggested provisions were stripped from the bill during Wednesday’s meeting of the Senate Committee on Economic and Community Development.
In a statement from Hoekstra and Cella, the former ambassadors remarked: “Overnight, at the request of Governor Gretchen Whitmer and the MEDC, a substitute to Senate Bill 559 stripped out national security provisions for future deal applicants, and then on a party-line vote in committee, rejected the amendment to restore the provision.”
The former ambassadors referenced a report from last Sunday’s CBS “60 Minutes” broadcast to bolster their opposition to removing the cautionary procedures from SB 559.
Intelligence leaders from the U.S., Canada, United Kingdom, Australia, and New Zealand are issuing a stark warning about China’s corporate espionage that targets the country’s trade secrets. https://t.co/tEhOlckvkb pic.twitter.com/TDcioJswjn— 60 Minutes (@60Minutes) October 22, 2023
“In the same week the Five Eyes national intelligence partners met in the United States to present a whole of society warning of subnational incursions, influence operations and espionage threats by the PRC and the CCP, and despite earlier warnings our national security and intelligence agencies have given, Governor Whitmer, the MEDC and some leaders in the Michigan Senate have doubled down and refused to require due diligence be performed on CCP-tied companies seeking deals with the MEDC who present national security threats.”
Hoekstra and Cella additionally claimed that the elimination of the national security provisions render the MEDC/SOAR process “gutted and toothless, leaving our national security threatened.”