The Biden-Harris administration's recently proposed national security regulations would, as crafted, give a free pass to Gotion High-Tech, a Chinese government-tied company developing an electric vehicle battery facility just 63 miles away from a sensitive military facility in northern Michigan.
Under the proposed rules, federal officials would be able to conduct increased scrutiny over foreign transactions within 100 miles of more than 50 additional military installations nationwide, including the National Guard's Camp Grayling located in Crawford County, Michigan. The rules, however, will not be enforced retroactively, allowing Gotion High-Tech and its subsidiary, Gotion Inc., to avoid further scrutiny.
American military personnel have trained Taiwanese soldiers as part of annual military exercises at Camp Grayling, the Wall Street Journal reported last year. The training activity heightens the sensitivity of the base as it relates to nearby facilities operated by Chinese entities.
The Committee on Foreign Investment in the United States—a task force overseen by the Treasury Department and tasked with reviewing foreign investments that may pose a national security threat—notably did review Gotion's transaction, but determined in June 2023 that it was not a covered real estate transaction or purchase. Less than two months after the determination, the company finalized its purchase of 270 acres of land in Green Charter Township, Michigan, as part of its plan to construct its $2.4 billion EV battery component plant in the area. The Treasury Department's rules proposed last month would likely make Gotion's purchase a covered transaction.
"It is highly irregular and problematic while Treasury is closely tracking a ‘deal’ in Michigan with PRC-based and CCP-tied Gotion, it would include Camp Grayling on the list of these installations, yet exempts Gotion from the vetting even though its proposed location is well within the extended 100 mile range," former United States ambassadors Joseph Cella and Peter Hoekstra said in a statement to the Washington Free Beacon.
"This is gravely concerning," they continued. "Gotion may have scored a win of an exemption or special treatment by Treasury through its high-powered and well-connected D.C. lobbyists and legal team. This latest development is yet another example of how PRC-based and CCP-tied Gotion is involved in an influence operation and unrestricted warfare."
During the first half of 2024 alone, Gotion spent $2.7 million lobbying Congress, the Treasury Department, and the White House on a slate of issues including "foreign direct investment, trade, and economic development," according to federal disclosures.
While Michigan state officials, led by Gov. Gretchen Whitmer (D.), have enthusiastically supported the project, earmarking hundreds of millions of dollars in subsidies for it, locals, national security experts, and bipartisan lawmakers expressed concern over Gotion's ties to the CCP.
For example, Gotion High-Tech's corporate bylaws state that the company is required to "carry out Party activities in accordance with the Constitution of the Communist Party of China." The company also hosted multiple company trips in 2021 to CCP revolutionary memorials in Anhui Province, China, the Daily Caller News Foundation first reported. During the trips, Gotion High-Tech employees wore Red Army outfits and pledged to "fight for communism to the end of my life."
Gotion Inc. is itself listed as a Chinese foreign principal in recent Foreign Agents Registration Act disclosures reviewed by the Free Beacon. The disclosures were filed on May 30 by Warner Norcross + Judd, a law firm that represents Gotion.
"Gotion Inc. voluntarily submitted all the necessary documents to the U.S. Department of Treasury Committee on Foreign Investment in the U.S. last year, and CFIUS ruled that our proposed land purchase was not a covered transaction," Gotion vice president Chuck Thelen said in a statement. "Gotion then purchased the property and is now actively moving forward with all the necessary site preparation and permitting processes."
"It is our understanding the Department of Treasury’s proposed rule change would not be retroactive, and only apply to new land purchase proposals. Gotion continues to welcome and encourage any additional CFIUS reviews if it does decide to purchase additional property in the future," he added. "We remain transparent, accountable, and excited about our proposed battery components facility in Green Charter Township, and will continue to comply with all laws and regulations in the countries where we do business."
The Treasury Department didn't respond to a request for comment.
Cella and Hoekstra—who have spearheaded efforts to oppose a wide range of Chinese-tied factories through their Michigan-China Economic and Security Review Group—filed comments this week with the Treasury Department, noting Gotion's ties to the Chinese government and urging the agency to reverse the loophole giving the company a free pass.
"Should this rule proceed, we urge you to have the language of rule apply retroactively to Gotion, and any other PRC-based and CCP-tied entity in a similar stage of their transactions, that fall within the 100 mile radius of CFIUS’ real estate jurisdiction," they wrote in the filing shared with the Free Beacon.
"We urge the Department of Treasury to join with the DOD and Congress recognizing the threat of Communist China and address it in coordination with them, providing for our common defense in a congruous and synchronized fashion, and not show division within our government, which will raise red flags to Communist China and further impair our national security," Cella and Hoekstra concluded. "We must never put money over country."