By Jeffrey A. Newman Esq.
A small insurance company, Wright USA which sells liability insurance to FBI and CIA agents was sold to the Fosun Group in 2015. Concerns over this sale to a Chinese company relates to the fact that the personal details of our nation’s secret service agents and intelligence officials were being handed over to a company which, under Chinese laws, is obliged to render the information to the Chinese Communist Party government. The BBC has published an interesting article which describes similar purchase data revealing how Chinese state money is being used to be up private company assets in the U.S., europe the Middle East and Australia. https://www.bbc.com/news/articles/c4g311jn1m9o
New data seen by the BBC shows that money from four CHinese state banks provided a $1.2 billion loan that was routed thourhg the Cayman Islands to allow Fosun to buy Wright USA. Soon after the information was puboished in Newsweek, an investigation was conducted by the US TReasury and the Committee on Foreign INvestment int he U.S. soon after that the company was sold back to the Americans but the existing owners are Fosun and Starr Wright USA, so it is unclear as to whether the internal information is still accessible by Chinese Intelligence.
Several private U.S. companies have been acquired by Chinese firms in the past five years, raising concerns about potential national security threats and risks of private information being accessible to the Chinese government and intelligence units. Some of these acquisitions were reviewed or blocked by regulators due to the sensitivity of the data, technology, or critical infrastructure involved.
Notable Acquisitions and National Security Concerns
- Jupiter (video processing technology): Suirui, a Chinese company, acquired Jupiter in 2020. The Committee on Foreign Investment in the United States (CFIUS) identified significant national security risks, particularly regarding the use of Jupiter’s products in military and critical infrastructure, leading to orders for divestiture due to the risk of Chinese government leveraging data or technology for espionage or cyber attacks.
- Insurers for U.S. Intelligence Personnel: A prominent case involved a Chinese entity purchasing an insurer serving FBI and CIA agents, subsequently leading to rigorous tightening of U.S. investment screening laws over fears that confidential personnel or claims data could be accessed by Chinese intelligence.
- Health Data and Sensitive Personal Information: Over the last decade, CFIUS and other authorities have flagged and, in some instances, blocked or unwound Chinese acquisitions of U.S. health data companies and applications that hold large amounts of sensitive or private personal data, such as the attempt by Ant Financial (Alibaba affiliate) to purchase MoneyGram, and the acquisition of LGBTQ dating app Grindr by a Chinese owner. Both raised concerns about the Chinese government compelling access to the data of U.S. citizens for intelligence purposes, ultimately driving forced divestments or bans.
Major Recent Acquisitions in Strategic Sectors
Other prominent examples from recent years (including both public and private sector contexts) include:
- GE Appliances: Acquired by Haier Group in 2016. While the main risk is not direct espionage, the transfer of supply chain control and data management to a Chinese entity increases theoretical risks for national economic security, especially as regards data on U.S. users.
- Smithfield Foods: Acquired in the agricultural sector, highlighting not just food security concerns but also the transfer of proprietary agricultural data and operational intelligence.
- Henniges Automotive and Cirrus Aircraft: Both are involved in aerospace, automotive, and technology sectors, with direct potential implications for critical infrastructure security and dual-use (civilian/military) technology transfer.
Broader Risks and Trends
U.S. regulatory reviews have found that Chinese acquisitions often trigger security concerns in four main areas:
- Espionage and unauthorized data access.
- Influence operations and information control.
- Cyber vulnerabilities in critical infrastructure and military environments.
- Transfer of dual-use or sensitive technologies that could be repurposed for military or intelligence applications.
China’s laws require that Chinese-owned companies, whether operating domestically or internationally, cooperate with government intelligence and security requests, creating persistent legal and practical risks for U.S. companies acquired by Chinese buyers.
Summary Table of Recent High-Profile Cases
| US Company | Chinese Acquirer | Sector | Security Concern Summary |
|---|---|---|---|
| Jupiter | Suirui | Video Processing | Critical infrastructure |
| Insurer (CIA/FBI data) | Unnamed Chinese Ent. | Insurance/Data | Personnel data exposure |
| Grindr | Kunlun Tech | Social | Sensitive personal data |
| MoneyGram | Ant Financial | Fintech | Transfer of financial data |
| GE Appliances | Haier Group | Appliances | Supply chain, data mgmt |
| Smithfield Foods | WH Group | Food/Agriculture | Food supply/data control |
| Cirrus Aircraft | AVIC | Aviation | Tech/dual-use |
| Henniges Automotive | AVIC/BHR Partners | Automotive | Dual-use tech |
All of these deals have prompted scrutiny due to either the nature of the data handled or the strategic importance of the underlying products and infrastructure, with several eventually blocked or mitigated by CFIUS-imposed security measures.
For ongoing screening, U.S. laws and executive orders remain in force, restricting or unwinding transactions that risk unauthorized data flows to Chinese government or military hands, in part due to China’s Military-Civil Fusion and intelligence laws.
Jeffrey Newman is a whistleblower lawyer, whose law firm represents whistleblowers revealing violations of export controls, tariff evasions, money laundering, healthcare fraud and other kinds of WB cases. The firm represents individuals both in the United States and other countries. Mr. Newman and his firm also represent physicians and other healthcare providers who become whistleblowers in healthcare fraud cases. Whistleblower laws in the U.S. allow individuals anywhere with information about export control violations or tariff fraud to reveal the information under The False Claims act or through the Securities and Exchange Commission’s Whistleblower Program. The Firm’s website is at www.JeffNewmanLaw.com and attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 978-880-4758
