Editor's Note Oct. 11, 11:01 a.m.: The Washington Free Beacon recently learned that senior editor Bill Gertz entered into a previously undisclosed financial transaction with an individual or an affiliate of that individual whom Mr. Gertz had covered in some of his reporting.
Upon learning about this transaction, the Washington Free Beacon promptly asked Mr. Gertz for his resignation and that resignation was received and accepted. The Washington Free Beacon has appended this disclaimer to all of Mr. Gertz’s affected news stories.
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A large Spanish-language radio station in Mexico will soon begin broadcasting in Chinese in a deal critics say will bring Beijing propaganda to Chinese Americans throughout Southern California.
A Federal Communications Commission filing on the sale of radio station XEWW AM 690 radio near Tijuana reveals the buyer has ties to Phoenix Satellite Television US, a subsidiary of Hong Kong's pro-Beijing Phoenix TV.
According to government sources, signs that Phoenix is involved in the purchase of the radio station prompted the Trump administration last week to begin an investigation into the national security implications of the sale.
Phoenix TV has been identified by U.S. intelligence agencies as a major overseas outlet used to spread propaganda and promote the policies of the communist government in Beijing. The Hong Kong television station also has close ties to China's intelligence service and military.
The deal for XEWW, a 77,500-watt station capable of reaching all of southern California, was brokered by a New York financial company, H & H Capital Partners.
The sale, if approved by the FCC, will turn the AM radio station from a Spanish broadcaster into a Chinese-language outlet capable of reaching over 600,000 Chinese Americans living in the San Diego-Los Angeles area with Beijing's propaganda themes.
Sen. Marco Rubio (R., Fla.) voiced concerns about the sale and urged the FCC to investigate.
"The FCC must protect American security and economic interests, and deny any attempt by the Chinese government to broadcast Communist Party propaganda and other programming into the United States," Rubio said.
Rubio added that he will soon introduce legislation requiring all media outlets owned, directed, or otherwise controlled by the Chinese government and Chinese Communist Party to register as foreign agents.
Even though the sale involves a foreign broadcaster, the FCC has a role because the Mexican radio station broadcasts into the United States. Under a 1992 U.S.-Mexico agreement limiting foreign broadcasts from Mexico that can reach the United States, the FCC can block the sale if the agreement will be violated.
The FCC granted temporary authority for the station to continue Spanish broadcasts on July 20, pending a final review by the commission.
The station was sold by GLR Southern California. GLR, or Grupo Latino de Radio, is the U.S. subsidiary of PRISA Radio, the world largest Spanish-language radio group.
XEWW is located in Rosarito, Mexico, about 10 miles from the U.S. border.
The FCC application by GLR states the new ownership will provide "a full range of Mandarin Chinese programming on station XEWW-AM including music, entertainment, weather report, local (LA) traffic report, and local Chinese community news."
The new owners plan to produce programming in Los Angeles and transfer to programs to XEWW through the internet for broadcast by the radio's transmitters.
H & H Managing Director Vivian Huo denied the company brokered the radio deal for Phoenix. "We purchased the radio station ourselves and there is nothing to do with Phoenix," she said in an email to the Washington Free Beacon.
H&H has not operated a radio station in the past. According to Huo's LinkedIn page, the company "brings value to investors through its talent for obtaining the best possible strategic partners for its corporate clients, including cross-border M&A deals."
Huo, a U.S. citizen, is H&H's founder and owns a 97 percent interest in the company.
The FCC filing does not mention Phoenix and also states no foreign entities are involved in the purchase.
However, a section of the FCC filing that requires identifying the location of where radio programing for the Mexican broadcasts will be produced lists the address in Irwindale, Cal., of Phoenix Satellite TV US.
Asked about the listing of Phoenix's address, Huo said: "We have a rental office in Phoenix building. That's it."
Additionally, a long-time Phoenix television reporter, Jackie Pang, was recently hired by H&H as a senior adviser.
Ms. Pang said she is not involved in the radio deal, but she did not respond when asked if she is still employed by Phoenix, as indicated on her LinkedIn page.
Huo said Phoenix will not be involved in producing programing for the radio station.
The Justice Department probe into the radio deal reflects stepped up efforts by the administration to counter foreign influence operations.
Deputy Attorney General Rod Rosenstein announced last month that both the department and FBI are targeting foreign disinformation and influence operations, through prosecutions, counterintelligence operations, and other legal measures.
"Influence operations are a form of information warfare," Rosenstein said during a security conference in Colorado. "Covert propaganda and disinformation are among the primary weapons."
Phoenix TV was blocked from an attempt to buy into the U.S. broadcasting market in Southern California in 2013. The Chinese broadcaster tried to purchase radio station KDAY, an FM station in Redondo Beach, Calif., and turn it into a Chinese language broadcaster.
That deal was led by RBC Communications, a group of investors led by Phoenix and its editor, Anthony Yuen. The deal fell through in October 2013 after funding irregularities in the proposed $19.5 million purchase were discovered.
Earlier this week, another Los Angeles radio that broadcasts in Chinese, the Chinese Sound of Oriental and West Heritage, filed a petition with the FCC asking the FCC to block H&H's purchase of XEWW.
The Chinese broadcaster from the low power FM station KQEV said FCC approval would cause economic harm and "might allow the Chinese government to provide its own propaganda programming to air on the station."
"If the programming of XEWW-AM is tainted by, or worse controlled by, the Chinese Communist Party, the Chinese American community of Southern, California could be indoctrinated with CCP propaganda, and the American political and economic community could be damaged," the filing states. "An investigation of this issue is necessary."
Former Chinese insider and billionaire businessman Guo Wengui said Phoenix TV was established under Chinese leader Jiang Zemin in the early 1990s specifically as a government and intelligence tool for overseas influence operations.
All Phoenix personnel are required to undergo some MSS intelligence training, Guo said.
"Phoenix TV is very close to the MSS and Chinese military intelligence," said Guo, who was once close to MSS Vice Minister Ma Jian before breaking with Beijing several years ago.
Sarah Cook, a Chinese expert at Freedom House, said in recent congressional testimony that Phoenix TV is the second most widely viewed Chinese-language cable channel in the United States, and an example of a Chinese propaganda outlet not directly owned by the Beijing government.
"Owned by a former military officer with close ties to Beijing officials, Phoenix TV's coverage is typically favorable to the [Communist Party of China]," Cook told the U.S.-China Economic Security Review Commission.
The chairman of the Hong Kong-based Phoenix Satellite Television Holdings Ltd. is Liu Changle, a former PLA propaganda official who is close to senior Chinese government leaders.
"Moreover, over the past two years, it has been used as an outlet for airing televised confessions by various detained CCP critics, most notably all five Hong Kong booksellers abducted by Chinese security forces in late 2015," Cook said.
According to Cook, China state television, CCTV, holds a 10 percent stake in Phoenix. As a result, Phoenix does not stray in its reporting from official propaganda themes set in Beijing.
China is seeking to expand its influence operations in the United States from Chinese-language outlets to English-language media, she said.
Lianchao Han, a former Senate aide who has studied China's overseas influence operations, said the attempted purchase of XEWW appears to be part of a larger Beijing global propaganda operation.
China began spending over $7 billion 10 years ago to implement a global propaganda strategy, Han said.
The goal of the propaganda is to garner support for Beijing's policies, and to play down or ignore nefarious Chinese activities, such as arms proliferation to rogue states and human rights abuses.
"Today the Chinese government media's presence can be seen everywhere in North America. It has systematically taken control of nearly all overseas Chinese language media, bought English-language radio and TV stations, hired hundreds of American journalists to do their bidding," Han said.
He added: "Phoenix TV's recent purchase of XEWW through H&H Capital shows the regime continues to carry out this strategy of brainwashing people in the free world to endorse Beijing's policy of global expansion and to re-write the current international rules and order."
Phoenix also was linked to the case of Chinese spy Chi Mak who was convicted of illegally exporting defense technology to China in 2007.
Mak's brother Tai Mak was revealed by investigators as a PLA intelligence officer working under cover as a broadcast engineer for Phoenix in southern California. Tai Mak was also convicted as a conspirator in the spy case.