Political Fight Underway Over Trump Pick for Navy Secretary

Former Hong Kong-based financier raises concerns for pro-China policies

Hong Kong US Navy
The U.S. amphibious assault ship USS Bonhomme Richard is anchored during its port call in the Hong Kong / AP
January 25, 2017

A political battle is underway in the Trump administration over whether the president should pick a former Hong Kong-based financier with extensive business ties in China to be the next Navy secretary, according to U.S. officials.

Senior Trump advisers in New York and Washington are considering whether the financier, Philip M. Bilden, a private equity manager with no government experience, should get the plum Navy secretary post, or whether it should go to an early Trump backer, former Rep. J. Randy Forbes (R., Va.).

Forbes until recently headed the seapower subcommittee of the House Armed Services Committee and specialized in naval policy and procurement.

Military and defense experts are lobbying for Trump to pick their respective candidates.

Forbes was an early favorite for the job based on his extensive congressional experience. If nominated, he is expected to be a key player in the Trump administration's announced plan rebuild the Navy, depleted by tens of billions of dollars in defense cuts under former President Obama.

Forbes views China as a threatening regional power that is seeking to drive the United States out of Asia. He has pressed for building a 350-ship Navy and adding $20 billion a year to the defense budget for shipbuilding.

According to one U.S. official, Bilden has high-level support for the Navy secretary job based on his donations to the Trump campaign. Bilden also is known to new Defense Secretary James Mattis, who he met after the four-star general retired from the Marine Corps in 2013.

Bilden also is said by officials to be backed aggressively by retired Adm. James Stavridis who announced during the presidential campaign he favored Democratic nominee Hillary Clinton for president.

Bilden's military experience is limited to serving as a captain in the U.S. Army Reserve. An official said he may have avoided fulfilling his active duty military service after graduating from Georgetown University in 1986 where he was enrolled in Reserve Officers' Training Corps (ROTC) for four years.

The Army discovered the lapse and forced Bilden to report to a military duty station while he was attending Harvard Business School.

The U.S. Naval Institute blog reported Bilden was a military intelligence officer from 1986 to 1996. But officials disputed the claim that Bilden served for 10 years.

Bilden's selection would be a setback for China hands in government and the private sector who are urging the new administration to reverse course from the Obama administration's conciliatory policies toward China.

A second U.S. official involved in Asian affairs questioned whether Bilden was qualified for a key Pentagon post.

"The question is whether a donor who spent 20 years in Hong Kong should get the job when we are talking about he largest naval buildup in 30 years," the official said.

Under former President Obama, China sharply expanded its conventional and nuclear military forces. Beijing also launched a multi-year covert effort to take over the strategic South China Sea by building islands that are now being militarized. The Chinese also have sought to take control over Japan's Senkaku Islands in the East China Sea and imposed an air defense zone over the region that is not recognized by the United States, Japan, and South Korea.

Trump has taken a hard line on China, upsetting Beijing by taking a phone call from Taiwan's President Tsai Ing-wen and questioning the decades-long U.S. policy of not formally recognizing the independence of island state Beijing claims as a renegade province.

"China has been taking out massive amounts of money & wealth from the U.S. in totally one-sided trade, but won't help with North Korea. Nice!" Trump stated in a Tweet Jan. 2.

Earlier he criticized Beijing for stealing a Navy underwater drone in an "unprecedented act" but later said the Chinese should keep the unclassified monitoring vessel.

Trump also has criticized Chinese maritime encroachment and vowed to push back against expansive territorial claims by Beijing. He accused China of building a "massive military complex" in the South China Sea.

Trump's pick for secretary of state, former Exon Mobile chief Rex Tillerson, has said the United States will seek to stop Chinese island-building in the South China Sea and will block Beijing from claiming the newly-created islands.

The U.S. plan to block Chinese access in the South China Sea was restated this week by White House spokesman Sean Spicer.

Bilden was a managing director of HarbourVest Partners, a private equity firm, and was based in Hong Kong since 1996. He helped the company open its Beijing office in 2012.

According to an online biography, Bilden was in charge of large investments in Asia several years ago, and has served on advisory boards of several large hedge funds.

Those investments included deals with Chinese state-run corporations and banks.

China's communist government does not allow its state-run companies to conduct business with foreign businesses unless the companies are considered "friends of China"—a euphemism for those who hold pro-China views and do not challenge Beijing's policies.

The website Breaking Defense reported earlier this month that Bilden currently resides in Newport, R.I., and has been a large donor to the Naval Academy Foundation, Naval War College Foundation and the Republican Party.

Bilden has two sons; one is currently attending the Naval Academy in Annapolis and a second son also graduated from the academy.

Bilden could not be reached for comment. A White House spokesman did not return emails seeking comment.