WASHINGTON — The Coalition for a Prosperous America (CPA) today released its findings regarding the Thrift Savings Plan’s (TSP) new Mutual Fund Window. As first reported by The Wall Street Journal, CPA’s deep-dive into the Mutual Fund Window’s offerings document serious exposure to companies owned or controlled by the Chinese Communist Party (CCP). Shockingly, the FRTIB admitted publicly that it has not conducted any due diligence to evaluate whether these mutual funds include Chinese-owned entities that pose national security risks or fund Chinese companies engaged in human rights violations.
Alongside the #NoTSP4CCP Coalition, CPA commissioned a deep-dive into the Mutual Fund Window’s offerings to determine the extent of which bad-actor Chinese companies were receiving capital from the TSP, the federal government’s 401K plan and the largest defined contribution plan in the world.
CPA found that within the mix of the 5,000 different funds offered, at least 22 are China-only funds. The Federal Retirement Thrift Investment Board (FRTIB) has publicly admitted that it does not “evaluate or monitor any of the mutual funds to ensure that they are prudent investments” on behalf of TSP participants. These 22 funds do not carry any specific warnings for potential TSP investors.
“It is unconscionable that among the mutual funds made available via the TSP website are some 22 China-only funds and that zero diligence or material risk disclosure has taken place with respect to these and the hundreds of other funds likely including Chinese companies,” stated Roger W. Robinson, Jr., former Chairman of the U.S.-China Economic and Security Review Commission.
CPA’s research also found that five of the largest international funds in the Window had an average weight of 22 percent toward Chinese companies, and all five funds held companies listed on the U.S. Department of Treasury’s list of Chinese Military-Industrial Companies, the Department of Commerce Entity List, the Commerce Department’s Unverified list, or the Department of Defense Chinese Military Companies list. Companies are placed on these lists because they threaten U.S. national interests, have been involved in serious technology theft, and/or are implicated in the genocide of the Uyghur people.
“CPA’s research raises serious red flags about the TSP’s exposure to mutual funds that are heavily weighted towards Chinese companies — 22 percent on average — including those building aircraft carriers, using forced labor and perfecting the surveillance state,” said Michael Stumo, CEO of CPA. “It is unconscionable that, despite the U.S. government either sanctioning or listing these Chinese companies as national security risks, the TSP board is marketing these funds as a safe investment to federal government employees, including active members of our military and our nation’s veterans.”
Chinese Communist Party-owned companies found in the funds include the Aviation Industry Corporation of China (AVIC), China General Nuclear Power Group (CGN), and COSCO Shipping. The funds also included companies under scrutiny for forced labor practices, as well as those involved in China’s growing surveillance technology state.
To learn more and view CPA’s findings, please click here and the below documents: