Senior DOD Official Invested In Chinese Tech Giant Amid Talks To Blacklist The Company: REPORT

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Senior DOD Official Invested In Chinese Tech Giant Amid Talks To Blacklist The Company: REPORT

Micaela Burrow on October 11, 2022

A top Asian affairs advisor in the Department of Defense traded stocks in Chinese tech giant Alibaba while other DOD officials pressured the White House to blacklist the company in 2020, according to an investigation by The Wall Street Journal.

Former Deputy Assistant Secretary of Defense for South and Southeast Asia Reed Werner purchased between $15,001 and $50,000 of Alibaba stock in December 2020 after reportedly participating in high-level sanctions discussions, according to the WSJ. While the former Trump administration considered blacklisting the massive e-commerce and technology firm along with 11 other companies suspected of having close ties to the Chinese military, the White House omitted Alibaba and two others from the final list.

Werner was involved in a months-long dispute between Defense Department and Treasury Department officials over banning Americans from investing in Alibaba, the WSJ reported, citing Pentagon officials and Werner himself. Werner said he did not engage in the negotiations during the period in which he made the trades.

He added that he attended a late 2020 meeting on the matter and was privy to an email chain discussing the eventual decision.

Two weeks after Werner reported the purchase, his records showed, the Treasury Department updated its “Chinese Military-Industrial Complex Companies” list with nine additional companies, bringing the total up to 40, but Alibaba was not included, according to the WSJ.

Alibaba’s stock rose 4% on the day of the update, the WSJ reported.

Three days later, Werner’s financial disclosure forms seen by the outlet show a sale of up to $50,000, according to the WSJ, citing the top number from Werner’s disclosure form. Werner told the outlet he made a $1,556.51 profit from trading Alibaba stock.

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Defense Department officials subsequently met with the Treasury Department to bargain for a blacklist of the company, but Treasury Secretary Steven Mnuchin stymied their efforts, the WSJ reported.

The officials who finally arranged and signed off on the sanctions list did not own stock in the designated companies, a Pentagon spokesperson told the WSJ.

More than 400 individuals throughout the federal government owned stock in Chinese companies despite the former administration’s push to break business ties with China, the WSJ reported. On average, investments reached between $1.9 million and $6.6 million each year.

Officials at the Pentagon, which has made countering Beijing a foremost policy objective, outnumbered other government agencies in investing in Chinese companies, according to the WSJ.

Alibaba’s co-founder, Jack Ma, is a member of the Chinese Communist Party, CNBC reported, but has recently been a subject of investigation under Chinese President Xi Jinping’s alleged anti-monopoly campaign.

The Department of Defense did not immediately respond to the Daily Caller News Foundation’s requests for comment.

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