Millions in Taxpayer Cash Awarded to Subsidiary of U.S.-Sanctioned CCP ‘Military Company’

US government gave $2.6 million to subsidiary of Chinese gene harvesting powerhouse

Andrew Wong/Getty Images
June 24, 2024

The federal government awarded $2.6 million in taxpayer cash to a biotech company controlled by a Chinese firm that is sanctioned by the American government and designated as a CCP "military company," spending records show.

From 2011 to 2024, the U.S. government awarded $2.6 million over 151 separate transactions to Innomics, a Massachusetts-based subsidiary of the Beijing Genomics Institute (BGI) Group, a Chinese gene harvesting powerhouse that the Pentagon lists as a "Communist Chinese military company" for its alleged role in supporting Beijing’s ongoing genocide against the Uyghur ethnic minority.

Several of BGI’s affiliates are listed on U.S. government trade blacklists for allegedly fueling the Communist regime’s mass surveillance of citizens. Watchdog groups have also raised concerns that Chinese genome companies like BGI are amassing large quantities of private American health care data via their U.S. affiliates.

Innomics was identified by the Wall Street Journal in May as one of several "blacklisted Chinese companies" that rebranded in recent years to avoid a regulatory crackdown in the United States. The company was formerly called BGI Americas but changed its name last year "to avoid regulatory scrutiny," according to lawmakers on the House China Committee, which is investigating efforts by CCP-tied firms like BGI to obfuscate their operations in America. The taxpayer funding to Innomics highlights how the United States is working to crack down on Chinese companies linked to its military and also funding the very firms reportedly linked to this work.

"Biotechnology companies controlled by the Chinese Communist Party collected DNA from millions around the world, and without patient consent, used that data on genomic projects conducted by the Chinese military," Rep. Brad Wenstrup (R., Ohio), chair of the House Select Subcommittee on the Coronavirus Pandemic, told the Washington Free Beacon. "Now, these companies are attempting to change their operating names in the U.S., a thinly-veiled attempt to conceal their tactic of dodging oversight from Federal agencies and skirting the many laws we have to protect patients."

Wenstrup, along with members of the House China Committee, are spearheading legislation, known as the BIOSECURE Act, that would "protect Americans and their health data from exploitation by foreign adversaries like China" by blocking taxpayer funds to a range of CCP biotech firms, including BGI and others, the lawmaker said.

Innomics is registered to conduct operations in Kentucky under its former name, BGI Americas Corporation, and shares the same "attorney of record" as BGI on documents filed with the U.S. Patent and Trademark Office, according to congressional investigators.

"Innomics website makes no mention of its affiliation with BGI or MGI," another CCP-affiliated bio firm, "but its sales materials for genetic sequencing reference product codes for machines produced by BGI subsidiaries, MGI, and Complete Genomics," according to the House China Committee’s ongoing investigation.

The company’s California address is also the same one listed for MGI Americas, as well as BGI’s address for receiving samples collected in America, a Free Beacon review of records found.

Additionally, Zonghui Peng, the head of MS Business Development at Innomics, previously worked for BGI in China from 2010 to 2014, before moving to the United States to work for "BGI Americas," according to his LinkedIn page.

Federal funding to Innomics was awarded before and after the government began its push to isolate BGI as a result of its ties to the Chinese military.

Spending records show that 56 percent of the $2.6 million was awarded by the Department of Agriculture, while 40 percent came from the Department of Health and Human Services. Around 4 percent of the work supported by the federal government was conducted in China, where cutting edge research is often shared with or stolen by the Communist government.

The Agriculture Department reports that it has awarded Innomics around 60 percent of its total award, accounting for $1.44 million in taxpayer cash. The Smithsonian Institution is the third highest ranking government contributor to Innomics, awarding more than $118,000 to the company.

Federal records show Innomics’s federal grants are related to medical laboratory testing, special studies, the analysis of scientific data, and "professional support."

A spokesman for Republican leaders on the House China Committee said it is "well-documented that BGI and its subsidiaries collect genomic sequencing from around the world to share with the Chinese government for malign purposes. The Pentagon has rightfully blacklisted BGI as a Chinese military company." Innomics, the spokesman added, "is just the latest attempt by BGI to disguise its subsidiaries to continue its collection operations in the United States."

Innomics told the Free Beacon the company "has never directly applied or received any federal funding from the U.S. government." BGI did not respond to requests for comment.

Michael Sobolik, a China expert at the American Foreign Policy Council, told the Free Beacon that Innomics’s recent rebrand is part of a pattern with "PRC entities engaged in problematic work within America."

"They can often evade national security prohibitions with a simple act: changing their name," Sobolik said. Confucius Institutes, the CCP-run educational outposts that have been outlawed for spreading Communist propaganda, "have done this successfully, and now BGI Americas has apparently done the same."

"At stake," Sobolik explained, "is its [U.S. government] funding stream. Given the sensitive nature of biotechnology and the ways Beijing is leveraging it at Americans’ expense, Congress and the executive branch should take whatever steps necessary to prevent taxpayer dollars being funneled to malign CCP actors."

BGI Group came under congressional scrutiny during the coronavirus pandemic, when it began sending testing kits across the globe. At that time, the U.S.-China Economic and Security Review Commission raised concerns about BGI’s acquisition of smaller American companies, saying these moves gave the CCP company "access to proprietary sequencing technology in the United States."