Major Democratic Group Received $100,000 in Chinese Government-Linked Tech Firm Stock

American Bridge reported the six-figure gift on its most recent tax forms

Baidu headquarters in Beijing / Getty Images
April 15, 2020

A prominent Democratic group poised to spend millions backing former vice president Joe Biden received $100,000 in the form of stock shares in the Chinese technology giant Baidu from an anonymous donor. Baidu, like many Chinese technology companies, is closely affiliated with China's ruling Communist Party.

American Bridge, an opposition research group founded by liberal operative David Brock, reported the receipt of the 450 shares in late 2018, a gift that was disclosed in its latest tax filings. The multinational internet services company acts as China's Google and operates under a degree of state party control. The gift was valued at $101,037, according to the organization's Form 990. It is unclear whether the group sold the stock or opted to retain it in the hope share prices would rise.

American Bridge did not respond to a request for comment.

Brock's group is preparing to spend at least $50 million against Trump. The nonprofit's sister group, the American Bridge PAC, recently partnered with the pro-Biden super PAC to form a $175 million joint venture. The PAC has already poured seven figures into the 2020 elections.

But this six-figure gift to American Bridge is raising concern among experts who argue that Baidu is beholden to China's communist regime to a greater extent than other Chinese companies. An American political group profiting from such a company could pose problems at a time when tensions between the United States and China are high, particularly in regards to the coronavirus pandemic.

"The party calls, you act, or you risk disappearing," said Derek Scissors, a resident scholar at the American Enterprise Institute who focuses on the Chinese economy. "Further, Baidu is under a greater degree of party control than the average Chinese private firm because Baidu's business is basically dissemination of information."

"Moreover, holding Baidu stock automatically involves a bit of rooting for China," Scissors said. "Baidu is a prominent firm that attracts more interest when China is seen to be thriving. A strong American economy is generally considered good for Google. Same thing."

Although the U.S. financial sector has money tied up in Chinese firms like Baidu, Scissors said political groups themselves should not directly accept Baidu stocks as gifts. He said that American Bridge should immediately sell its shares of the Chinese tech giant if it has not already done so.

Founded in 2000, Baidu became a tech powerhouse in China with support from the country's government. Robin Li, the company's cofounder and current CEO, is a delegate to the Chinese People's Political Consultative Conference, the government's top political advisory body.

Baidu provides internet services in China similar to those that Google and Yahoo provide in the United States. The company is heavily censored and "gives priority to advertising rather than relevant search results," according to a 2006 New York Times report.

The Chinese search engine has manipulated searches to hide the communist affiliations of powerful individuals in the country. In 2018, Reuters reported that searching "Is Jack Ma a Communist Party member?" on the Baidu search engine turned up results saying he was not. Ma, a prominent Chinese politician and the cofounder of the Alibaba Group, China's biggest online retail company, is a member of the Chinese Communist Party.

Former U.S. officials have warned of tech companies like Baidu that have connections to the Communist regime. "Whether de facto or de jure, such giants can in some important respects or for some purposes act as arms of the state—or, more precisely, the Chinese Communist Party, to which the Chinese state apparatus is itself subordinate," Christopher Ford, the assistant secretary of state for international security and nonproliferation, has said.

"There is no major Chinese company, whether officially state-owned or publicly traded that does not take direction at a fundamental level from the Chinese Communist Party in Beijing," a senior Trump administration official told the Free Beacon.

American Bridge has been a top political group on the left for years. Its nonprofit arm, which hides its funders, reported receiving $8.2 million in contributions and grants on its 2018 tax forms, as reported by the Center for Responsive Politics. Its funds were primarily gathered from 29 anonymous six-figure donations. In addition to the Baidu stock, it also reported noncash gifts of Sonic Corporation stocks valued at $74,349 and publicly traded stock valued at $743,558.

While American Bridge's nonprofit hides its donors, the group's super PAC is required to disclose its funders. The PAC has so far raised $23 million for the 2020 elections, including $2 million from billionaire financier George Soros. The nonprofit arm has passed $4.3 million to its PAC this cycle.

The PAC has spent at least $6.3 million on attack ads slamming Trump's response to coronavirus in the battleground states of Michigan, Pennsylvania, and Wisconsin. It also recently announced that it will partner with pro-Biden super PAC Unite the Country to form a $175 million effort against Trump. The groups will collaborate on research, polling, and ad buys. Unite the Country's founders also established Future Majority, a Democratic dark money strategy center that plans to spend $60 million on the 2020 elections.

Confidential documents obtained by the Free Beacon in early 2017 showed that American Bridge planned to cement itself "as the standard bearer of opposition research" by being at the "epicenter of Democrats' work to regain power."

"With 20,000 hours of video, 289 candidate research books, and the largest available archive of Trump research in the Democratic Party, we are uniquely prepared to take on the Trump administration, defeat Republicans who enable it, and rebuild progressive power in the states," Brock's memo states.