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foreign companies and governments accountable in 2020 the holding foreign companies accountability accountable act was signed into law by President Trump which mandated that if companies in communist China did not comply with US auditing standards for three consecutive years they must not maybe they must be delisted and banned from trading on American exchanges this law was amended in 2022 reducing the consecutive years of non-compliance from three years to two years but unfortunately under the last administration the SEC failed to enforce this law and today many Chinese companies including Yum China Alibaba and BU are still listed on American exchanges in clear violation of US law this is a perfect example of why your money is not safe when investing companies tied to communist China i plan on holding holding the SEC accountable to enforce the law and I hope to work with Chairman Molnar Ranking Member Gillibrand and Ranking Member Gisha Morphe to make sure laws intended to protect Americans from threats posed by Communist China are fully enforced we're also fighting to fill gaps in current law and strengthen US enforcement authority with multiple pieces of legislation that will hold Communist China accountable these bills will take the necessary steps to secure our markets protect consumers demand transparency and accountability and ensure investors especially seniors who are the most vulnerable are protected we need to stop putting Americans retirement at risk with investments in the corrupt businesses and practices of communist China and I believe new the new chairman of the SEC will and I know he's committed to me that he is going to enforce this act stop putting Americans retirements at risk due to their involvement with prop with propping up the agenda of the CCP americans work way too hard to have their financial security destroyed by communist China today we are going to learn more about this problem and come up with a policy plan to stop it before it is too late and Americans retirement stability is wiped out by communist China i now like to recognize Chairman Mullenar for his opening statement thank you Chairman Scott and uh thank you for hosting us today and uh I just appreciate all the colleagues from the House and the Senate uh for being part of this this is a unique hearing not only because it's by camel but because it reflects growing momentum in Congress to confront the growing risk to American investors and our national security let me start with a simple point the future of American capital markets and our national security are deeply connected they're inseparable for decades the United States has led the world in innovation and investment but today that leadership is being challenged not just by market forces but by a foreign adversary the Chinese Communist Party the CCP is actively using its financial system and state controlled companies to infiltrate American capital markets and while some might see that as just another investment risk it's much more than that we've already seen the damage in 2021 the CCP abruptly imposed sweeping regulations on China's private education sector banning profit-making foreign capital and public listings that decision wiped out billions of dollars in US investments almost overnight devastating major companies like TAL Education and New Oriental it was a wakeup call not just for what can happen in a single sector but for the broader reality that when the CCP maintains ultimate control no company is truly independent and I look forward to the hearing from today from the witnesses on how the CCP control creates systemic risk for US investors regardless of industry mr olirri has pointed out something in his written testimony equally concerning the golden share the CCP holds in many Chinese companies on paper these firms may look like private enterprises but the reality is that party influence runs deep when political control overrides fiduciary responsibility even the smartest investor can be left in a losing position that issue has also shaped policy decisions here in Washington the Tik Tok bill for example was crafted to require full devestature of CCP control because anything less would leave the door open to the same risks we've seen this at play time and time again congress has acted before to safeguard American investors through the public company accounting oversight oversight board and the holding foreign companies accountability act but the reality is this the CCP's opaque regulatory regime its disregard for the rule of law and its willingness to use financial tools for political gain present ongoing and significant dangers to American savings so the question becomes this what more can Congress do to protect US investors from companies effectively controlled by a hostile regime that's what today is about we'll hear from experts who understand how the CCP uses its influence to mask risk suppress transparency and undermine shareholder rights and we'll look at what happens when American money flows into companies tied to surveillance censorship military buildup even human trafficking americans deserve to know whether their capital is being used to fuel the very threats we're trying to guard against and they trust us to take action to keep their investments safe this hearing isn't just the end of the conversation it's just the beginning thank you Mr mr chairman and I look forward to today's discussion thank you Chairman Molinar now I'd like to recognize ranking member Jill Brown for her opening statement thank you Chairman um it's a delight to be here thank you to our witnesses this is a very hot topic in New York i want to thank my Republican House members and my Democratic House members for joining us this is so much fun we should do this more often i'm grateful you're here um and I'm sure all of us have been hearing from our seniors quite a bit um this has been a very tough time for seniors uh the stock market's ups and downs uh losing over a trillion dollars of wealth over the last few weeks it's very um anxietyprovoking for so many seniors they worry about the fact that when they go to the Social Security Administration they can't make a phone call to them their phone calls aren't returned they're on hold for five hours multiple stories problems with getting online access just the list of worries go on but the one issue that has provoked and uh upset and concerned my seniors the most over the many many years that I've been on this committee is these online scams the scams that are coming out of criminal networks worldwide are unbelievable are heartbreaking are horrific highly complex international criminal networks are going after our seniors because they know they're soft targets they know that they are worth trillions of dollars and if they can get underneath their skin if they can get them to click on the right button if they can get them to open a certain piece of mail if they can get them on the phone and pretend they're their grandchild they will be able to steal thousands and thousands of dollars and the PRC there's criminal networks in China that are so sophisticated that know this is where they can make millions and millions of dollars and so I think this hearing is essential i'm so grateful that we have bipartisan bicamel support for figuring out how can we help law enforcement crack down more effectively on these international criminal networks that are targeting our seniors the FBI indicates that seniors are disproportionately affected by frauds and scams with over $3.4 4 billion B with a B billion with a B in scam related losses for individuals 60 and over in 2023 alone so we must understand the scope of this problem and when I've talked to my local law enforcement and asked them what can you do they basically have a tough time crossing borders and crossing countries to be able to actually get to the bottom of these scams and these uh criminal networks so they need resources they need support they need uh far more help um we know that these PRC organized crime networks are operating in Southeast Asia they're operating in countries around the globe um and they are able to create massive scams uh one of the ones that uh Mr krishna Mory and I were talking about was I didn't ever heard this term the pig butchering scam so they are looking at our seniors like animals that they are fattening for slaughter they will scoop them into a scam get them to trust them get them to get more and more access to their accounts to the point where they feel like they can get all of the money and then they steal it that is a disgrace that is disgusting that is something that we have to do something about um the GAO just issued a report we asked for this report on uh that we requested and it outlines the actions of the federal government and what they can do to improve complaint reporting consumer education and federal coordination to counter scams that is just the beginning of what we should be doing but I just want to thank you Mr chairman for caring to have this hearing i want to thank the Republicans and Democrats from the House and Senate for being here and shining a light on this outrage that's happening in our country that we have done insufficient amounts about we need more tools we need more resources we need a laser-like focus on how we can make our seniors whole thank you Ranking Member Jill Bren now we'd like to hear from Ranking Member Christian Morphe thank you Chair Scott thank you Chair Molinar thank you Ranking Member Gillibrand for con convening us today i'd like to address three things first a scamming practice called pig butchering which Senator Gillibrand just uh referenced second the impact of China backed organized crime syndicates scams on older Americans and third China's culpability in these scams first pig butcher pu pig butchering is a scam named for the way it lures victims in fattens them up gains their trust and then drains their finances in many cases a scammer poses as a family member or friend urgently in need of money in others a scammer uses fake identities to get romantically involved with unsuspecting victims such as older adults once the victim's trust is earned the scammer asks for money or suggests investing through a fake app that drains the victim's finances take this story uh if you look at the video from just outside my district of a woman who lost almost $1 million to a scammer using pig butchering her husband passed away decades ago and recently mask met a man online he said he loved me the second time I sent 35,000 over time that money sent reached nearly $1 million damas says the scammer told her she would get double her money back in his investments instead she now owes money back to her bank cash which she took from her home equity loan now my second point this is not just a financial issue it's a human rights issue and a national security concern according to the US Institute of Peace cyber scamming in Southeast Asia mainly Burma and Cambodia is driven by Chinese gangs and generates almost 44 billion dollars annually weak law enforcement and corruption in this region have also allowed gangs to traffic people from 70 countries including Americans into this illegal scamming industry as USIP has pointed out this scamming industry is so vast and so lucrative that it now parallels fentanyl as one of the top threats posed by Chinese criminal networks to the United States my staff actually received a scam text this week i'm not joking which we can see here and it starts with a simple hello many of us just delete or not respond when we get texts like this one in this case though we decided to respond to better understand how these scams work within minutes we received a WhatsApp link and pictures of a woman who said her name is Daisy here she is and she says "These are all my travel photos from different countries every time I travel I can meet all kinds of people and things." Daisy then goes on to compliment us saying "You're welcome you give me you give me the impression of a kind friendly polite and well-mannered man i can feel the warmth when chatting with you." Over the course of just 7 hours our dear friend Daisy asked for an investment and my staffer asked how much she needs she responded "Approximate investment of 10 million to $30 million money that Daisy would happily walk away with it's dangerous scams like these that are preying on older Americans." Third and my final point there's more to the story than just Chinese gangs operating in the shadows these groups these gangs are directly tied to the Chinese Communist Party this is Juan Quac Koi aka Broken Tooth a Chinese businessman or more accurately a mafia boss who is behind a scam compound tied to the CCP broken Tooth's public motto is quote "I used to fight for the triads and now I fight for the Communist Party." Wow another gentleman behind another scam city seen here with a Burmese warlord is Shuh Jang he is wanted in China for financial crimes but his ties to the CCP allowed him to operate freely for years before being detained by Thai authorities china now seems to be taking some steps to reckon with this issue but it's too little too late like the fentanel issue the CCP turned a blind eye and has allowed this to happen the CCP must recognize its role in allowing gang bosses and scam centers to absolutely run rampant the financial and human cost of these scams is enormous and we must act now to protect older Americans thank you and I yield back thank you thank you thank you rank member i'd like to welcome our witness here today uh before I introduce our fir first witness I'd like to ask each of you to be mindful of our limited time together today keep opening statements to 5 minutes first I'd like to welcome Kevin Olirri mr olirri is also known as Mr wonderful he's a business leader investor and known to millions of Americans for his role in the hit TV show Shark Tank most important to today's hearing Mr olirri understands the risks and threats posed by Communist China and why investing your retirement there is a bad deal for any Americans even though he was born in Canada I'm proud that he has now called cause the sunshine state his own mr larry thank you for being here today you may begin your testimony chairman Scott Molinar ranking members Jillant and Kishna I'm get this right kishna Morphy members of the Senate Special Committee on Aging and the House Select Committee on the Chinese Communist Party thank you for inviting me to participate in today's important hearing i want to use my opening statement to shine a light on an issue that impacts millions of American investors many of whom have invested their retirement funds in the equity markets the threats posed by the Chinese Communist Party I will discuss today impact anyone and everyone like me who has tried to do business in China everyone that invests in the stock market anyone that invests in passive investment vehicles like international index funds or mutual funds any retail investor that invests in Chinese companies anyone who invests internationally in emerging markets like China and everyone with a 401k plan or pension invested in international index funds i have nothing against the Chinese people their contributions to science and art over the millennia are well documented it's their government I take issue with in my opinion since joining the WTO in 2000 the Chinese government has never played by its rules this has led to the CCP to passing various laws in the realm of cyber security espionage intelligence and beyond and other mechanisms to control its corporations industries and business partnerships all to the detriment of US investors this is not a new phenomenon it has been part of the long game china's been playing for decades let me just elaborate briefly on a few reasons why the time for us to address this matter is today in its desire to reduce state-run companies and their holdings in them the Chinese government divested itself from them however in return for taking a 1% share in the company the government is granted a seat on the board voting power and influence over all business decisions it's effectively a super voting right this is the so-called golden share that she is using today to control the potential sale of Tik Tok if China maintaining control of companies wasn't bad enough for investors China prevents foreigners from owning Chinese companies instead they're cleverly exploiting the US financial system creation of variable interest entities VIEs to approximate the ownership of corporate shares if you own stock in a company like Tencent Alibaba or ICB ICBC you don't actually own stock in a company you own a share of a contract of something in the Cayman Islands that is trying to approximate stock ownership the US has given China preferential treatment for over a decade through its own special memorandum of understanding that governs accounting standards and oversight this sweetheart deal with the public accounting oversight board the PCAO has allowed China to continue to game the US financial system via their special treatment that is not afforded to other countries even our allies this is a completely unbalanced and non-rescrocal situation and why do we allow this how can this be viewed in any way as fair to American investors there should be complete parody between the US and China i believe Congress should act to delist CCP affiliated companies until there is a parody of treatment for Western businesses in China if we can't own stocks in their country they should not be allowed to own stocks in the US unless businesses can operate in China with the same freedoms that Chinese businesses have here we should not let their businesses operate in the US we should exit China's marketplace until the CCP makes significant reforms we should demand that all Chinese companies engage in US markets complied with US accounting standards for decades across multiple administrations we have dismissed we have discussed leveling the playing field with China instead the situation has only gotten worse make no mistake I want to do business in China as so do millions of other investors and companies but we want reciprocal ecosystem in place that is transparent where all parties play by the rules mutually agreed upon i want access to Chinese legal system so trade and IP grievances can be litigated and resolved the Chinese enjoy these rights in the US why do we not have them in China lately there's been a lot of rhetoric about during negotiations globally on who holds the cards quote unquote the US is still the world's largest market supported by the world's largest economy under the rule of democratic law that is why so much of the world's capital is invested here that's a lot of leverage let's fix this Chinese problem while we still hold the cards i look forward to a robust conversation today and answering any questions you may have thank you thank you Mr olirri and I'd like to welcome Christopher Aella he's the president and CEO of the American Securities Association he serves as the leing voice for financial services policy he's worked as special counsel and policy advisor to Commissioner Scott Omalia at the US Commodity Futures Trade Commission uh thank you for being here and I look forward to hearing your testimony thank you i'm grateful to the chairs ranking members and members of each committee for the opportunity to testify today my name is Christopher Ikel and I'm the president CEO of the American Security Association today I will discuss the risk the CCP poses to American investors and to our national security while it was widely believed that the free flow of global capital of communist China would liberalize its political and economic systems that's not what happened in fact the opposite occurred beijing used the openness of the international economic system to exert geopolitical leverage over the US and our allies rather than liberalize the CCP has been engaged in a multi-deade multifaceted political economic and military strategy to achieve quote the great rejuvenation of the Chinese nation end quote the goal is to create a new world order through economic coercion and manipulation while avoiding a hot war this has left the world less open and more authoritarian to implement this strategy the CCP needed capital and that's where Wall Street comes in for over two decades Beijing has used Wall Street to penetrate our capital markets and fund its rise in exchange Wall Street received huge fees and access to the Chinese market it's this quid proquo that directly threatens America's economic and national security the partnership works like this first Wall Street spins a narrative about emerging market returns and the China opportunity then it sells Chinese companies to American investors on our exchanges after the IPO the money goes to China and Wall Street continues propping up these companies by putting them in stock index funds touting them in financial media and lobbying Washington to maintain the status quo to raise money on exchanges companies used a novel legal scheme called the variable interest entity structure this scheme allows a Cayman Island shell company that contracts with a mainland Chinese company to list its shares on our exchanges american investors have no equity or voting rights in the shares of the Chinese company and very little legal protection we joined the select committee and asking Congress to end this legal fiction and delist every VIE from the exchanges after the VIE scheme was scrutinized the CCP needed a way for Americans to buy mainland Chinese companies listed on mainland Chinese stock exchanges so Wall Street used what I call the passive index loophole which allows these companies to be included in international emerging market and China specific index funds like ashares this loophole has funneled billions of dollars in American savings to Chinese companies while allowing them to avoid all of the disclosure financial reporting and audit requirements American companies must comply with to sell stock to American investors as a select committee found this loophole also exposes American investors to Enron-like frauds Chinese military companies and companies that support egregious human rights abuses it must be closed the select committee also found that numerous Chinese companies on our exchanges and index funds are on government prohibition lists a company goes on one of these lists if it's a threat to our national security foreign policy or economic interests there is no policy basis for any company on these list to access our markets and we recommend that an entity placed on one government lists should be placed on all lists and automatically allow the Treasury Secretary to Dellist and de-index these companies from our public capital markets because China operates as a party state this raises another important policy question how does the CCP use American money unfortunately American investor money is used to fund the emission of more greenhouse gases than every developed country combined pla weapons systems a cyber army that relentlessly attacks us subsidies for Chinese companies who dump their goods into our market and sickening human rights abuses the people of America want this to stop but unless Congress makes the funding of the CCP illegal it won't the final issue I want to talk about today is fraud which has gone from an individual criminal act to a lucrative business opportunity funded by state sponsored actors across the globe and in China Americans lost 158 billion in 2023 and are estimated to lose billions more as generative AI fraud evolves every day ASA members face scams from China that target their employees their firms and their customers and while millions are spent trying to stop this Americans who've been scammed know that if they can't get their money back before it goes to China then it's gone the government and the private sector have an obligation to work together to stop this avalanche of fraud from continuing to harm Americans to conclude communist China doesn't play by the rules and it's time for us to revoke the privilege we gave them to play in our game this isn't a left-right issue or a red state blue state issue it's an American issue and now we need a united Congress to take action to protect this country and our people from the CCP thank you and I'm happy to take your questions thank you now I'd like to introduce our next witness Brady Finta uh Mr finta is a retired FBI agent the founder of the National Elder Fraud Justice Coordination Center through his work as an FBI agent Mr fenta oversaw cases regarding international scam rings targeting older Americans you may begin thanks for being here good afternoon as you said my name is Brady Finta and the founder of the National Elder Fraud Coordination Center and I'm honored to be here i believe the scale of fraud against America's elders has grown to epidemic proportions and it's time that we as a country treated as such with a proportionate response i spent 23 years as an FBI agent predominantly investigating and supervising transnational organized crime cases and when my assignment exposed me to elder fraud I was comfortable as the cases are essentially transnational elder uh I'm sorry transnational organized crime under a different name what I was not prepared for was the volume just in my limited territory of San Diego County I was inundated with elder fraud complaints without adequate resources to fight the threat no one has those level of resources even after standing up the FBI's elder justice task force alongside the US Attorney's Office and the San Diego District Attorney's Office and bringing forward our very first successful RICO prosecution our ability to make a dent in the crime problem was minimal particularly as we only were only able to address less than 1% of the leads based on my experience I believe only about 10 to 15% of the elder fraud victims ever report the crimes against them even with this low percentage the volume of complaints is still too large to investigate elder fraud and scam cases are not easy they're incredibly timeconuming they literally span the globe combining organized crime groups in foreign countries with regional organizers co-conspirators and mules in the United States laundering the proceeds of the crime runs the gamut from cash to gift cards to wire transfers to digital currencies for the most part the complexity of these cases combined with their innate jurisdictional challenges and resource requirements limit their investigation and prosecution to federal entities further straining those resources in one just very typical case I oversaw we had scammers in India working with regional organizers in the Bahamas mules in the Dominican Republic and the United States and Canadian and Chinese organized criminals laundering the proceeds the international natures of these scams make them extremely difficult for law enforcement and prosecutors alike to hold those criminals accountable it gets more difficult when the country where the crime rate is based is uncooperative while I realize this hearing is intended to focus mainly on China I'd like to emphasize this is a larger and global issue and we currently do not have the resources to properly address it this threat trust uh touches all of us i'd venture to say everyone in this chamber has a story of an acquaintance a co-orker uh or a family member who's been victimized both of my parents were victims my mother didn't want to tell me based on embarrassment and believing that there was nothing anybody could do there is always something we can do the FDC's estimate that the annual loss losses to the scourge are approximately 61 billion and the FBI statistics that show huge increase in these complaints over the last few years further underscore that the time is now for more dramatic response a whole of society response as a country we've created national task forces of state local and federal agencies to combat illegal narcotics gangs child exploitation and terrorism our parents and grandparents deserve nothing less in addition we could make these elder justice task forces more effective by supporting them with the power speed and agility of the private sector beyond continuing education programs information sharing and new preventative efforts a true public private partnership which combines law enforcement and the many robust anti-fraud efforts already in place in so many countries across the United States could create real impact this is the mission of the National Fraud Coordination Center to bring these efforts together amplifying these investigations with cross- sector data to elevate the most impactful cases and speed up the process to allow for more of them our founding members at AP and Amazon Google and Walmart are dedicated to the idea of pulling these resources together for this worthy cause and our partnership with the National Cyber Forensics Training Alliance offers the opportunity for hundreds of other uh companies to do the same i thank you for your time and attention on this important issue and I look forward to answering your questions all right i want to thank each of the witnesses for being here now we'll go through uh start asking some questions let me start with um Mr olirri so can you explain explain this idea that Chinese companies American can buy into a buy make an investment in a Chinese company and we have no idea whether their financial statements are accurate because they don't have an obligation like American companies do to comply with general accepted accounting principles and our SEC has not enforced um rules get which would require any American company to comply but not for whatever for whatever reason Chinese companies don't have to and what's the risk to an investor no transparency um regulations in the US and the regulatory environment and the bodies that enforce it have created the most successful capital markets on earth more than half or almost almost 60% of the world's capital is invested because of the rules put in place for transparency and appellet courts and everything that makes these capital markets work in the United States and yet somehow and I'm calling foul as a as an issuer of securities that's forced by these regulations that I abide by for obvious reasons and want to i want to be compliant but I also have to bear the escalating costs each year which are millions of dollars to be compliant and yet I look right beside me on a listing and I see a Chinese company that is completely ignoring these regulations and suffers no outcome at all that's I mean that there's no consequences and I understood the law allowed gave them 36 months for compliance and then it was adjusted down to 24 months and still they're listed and still I have to compete with them to raise capital and they don't even have to pay the compliance cost i mean what's wrong with this picture how can this possibly be going on and I'm ab above I'm so excited that finally this is getting national focus this is absolutely outrageous and unfair and we're letting them take this capital they raise in these markets that we can't do the same thing there we can't litigate there we can't protect our IP there they use the courts the American court system to litigate my companies after they steal the IP and knock the product off and I can't do anything about it except come here and say "Wake up." Like this has got to stop it's got to stop and they have to pay the consequences there has to be consequences i would be in a federal jail doing what they do in terms of not being transparent on their quarterly statements there's no way this can go on so the the Securities Exchange Commission requires a company that wants to be sell stock to the public to provide disclosure of anything that's material on top of that they require them to give audited financial statements right right and that's what you have to do and I also have to disclose if I have a super preference share it has to be disclosed that one individual controls the entire outcome of the board in the company who would want to invest in a company like that do you think I could raise any money if I disclose that is I have a golden share in my structure that only I can decide all outcomes on every single issue the board is irrelevant that's basically what that share is could I even compete and I bet you there are hundreds of companies that have not disclosed that listed in America today on the NASDAQ and the NYSC why are they trading i can't do that how come they can they got to be Listen if you think that's okay and you want to invest in a company where there one individual has a super golden share go ahead the chances you go to zero are very high because that person may not have any governance or any momentum or any consideration of the rest of the shareholders that's why we don't allow this here and that's why we're the most successful capital market on earth because investors feel confident there are no golden shares on the balance sheet because the board would enjoy time in a federal prison if they tried that and we don't do that to the Chinese and it's just got to stop so number one they're not complying with SEC rules number two they're not complying with exchange rules and number three anybody that's taken them public all right they can't comply because they can't disclose anything material because there's not enough information right why wouldn't you put consequences on those that facilitate this i would love to pour boiling oil over my competitors that are not being compliant that's why we have competitive markets i know what the rules are if I want to do a listing I want to raise capital I want to do an RTO whatever it is I know what the rules are and I cannot be non-compliant yet I'm competing with companies that go after that same dollar from the investor that are totally opaque that's just wrong and I'm happy to come here and scream about it happy to do that i'm happy that we're having this narrative thank you Mr larry and now I'll turn it over to uh the chairman Molinari thank you Mr chairman uh Mr olyri if I could follow up with you on some things uh you know we're here to explore today the risky business of investing in Chinese companies and it's an area where you have some experience as a potential purchaser of Tik Tok and uh Tik Tok as you know is one of the most prominent Chinese companies on the planet and when you were putting together your Tik Tok bid what sorts of national security and legal risks were you most concerned about and how did those risks affect the bid that you constructed the truth about Tik Tok is and I'm aware of this and many others in the social media industry and the software and AI industries know this Tik Tok is weaponsgrade spyw wear period it's one of the best propaganda machines I have ever seen and if you want evidence of it go on in the last 24 hours and look at the videos generated there through AI of overweight Americans at sewing machines even the president himself depicted here or over iPhones screwing in screws with the message let's make America great again i have never seen such blatant propaganda and that's why in this situation this law was written and it's very specific and this is before the Supreme Court 9 to0 ruling about redefining what these laws said regarding the algorithm what it says is we cannot any interested syndicate that wants to buy this cannot use the algorithm that's the plain language and then further defined with higher resolution on the top paragraphs of page five of the nine-page ruling from the Supreme Court 9 to0 very definitive no algorithm now many syndicates have been formed with the idea of leasing the code leasing the algorithm buying the algorithm fixing it putting it on an American server what everybody was looking for in the capital markets was a definition of whether this was even possible would you write indemnification would you put that indemnification in the reconciliation act and attempt to get 51 votes would you go back to Congress to change the law and get 60 votes to allow an indemnification for the buyer to survive into the next administration because the penalty is $5,000 per 24 hours per account that's 80 plus billion dollar a quarter nobody's going to do that unless they're indemnified and I've understood today from Senator Cotton that's off the table now we have clarity whoever is going to buy Tik Tok is not going to buy the algorithm period that's clear and I think that's great that you've done that cuz it makes the competition much much more in focus and do I want Tik Tok to survive yes i'm an advocate as you know for small business in America companies between 5 and 500 employees very successful platform over 7 million families make their living on Tik Tok it's the lowest customer acquisition cost vehicle in America it's great competitive product when it's used properly i'd love to be part of the syndicate that buys it there's no question about it but I'm also an advocate for these small businesses because they create 62% of jobs in America they are the American economy i'd like to see this product survive happy to play by the rules 100% can I can I just follow up with you you talked about the golden share and I'd like to hear a little bit more about that and relative to Tik Tok does Xi Jinping have a golden share in Bite Dance ask yourself why when we're talking about buying Tik Tok we're not talking about the shareholders of the company that own it called Bite Dance they seem to be irrelevant in this negotiation there is only one narrative that matters every buyer knows this what is Trump President Trump going to do withQi on Tik Tok 100% he has a golden share there's no other way this deal is getting done and I think that's the case for hundreds of companies that have raised capital in the American markets he will personally decide you may not like that i certainly don't but I respect it to be a fact and I know I can't do this deal or anybody can without his decision on what the structure is going to be and the laws currently here allow for the Chinese to own up to 19.9% of this is a media company these laws are already in place i'm happy to work with this deal as as every syndicate would be as long as it's compliant but does does Chi have a golden share 100% he alone will decide thank you very much and uh with that I'd like to call on Senator Gillibrand thank you very much Mr chairman appreciate you very much um for Mr finta during your career as an FBI agent you worked on a case that uncovered a multinational organized fraud ring that targeted elderly victims in the United States your testimony notes that it is extremely difficult for law enforcement and prosecutors to hold these transnational actors accountable due to the lack of coordination and resources what do you think should be and could be done to combat and investigate these frauds and scams that target our older Americans that are per perpetrated by these international criminal networks i appreciate the question Senator when I said before there is something we can do I genuinely and truly believe that we have amazing power here in the United States and opportunity not just within law enforcement in our government but in our private sector um truly even during those transnational organized crime cases and pretty much every single one of them involved criminal enterprises overseas with co-conspirators in the United States our private sector holds the data that we need for that evidence for the investigation for the intelligence now of course it's available by subpoena it's available by a lot of hard work and a lot of agents coming together over sometimes years to work these cases which essentially defeats from getting a lot of progress against a threat like that not enough cases not enough agents now if if we got to the point where we have in in other instances for example our JTFs our joint terrorism task forces where state local federal agencies are working together with representatives from the private sector to share information and to advance these cases to the point where they become effective and we can do more of them the culmination of this across the country if we had more of these task forces would inform those decisions that we're trying to make overseas right we we would have the intelligence we need with with more of those cases with more of those arrests with more of that intelligence it's definitely within our grasp so you're saying you need more personnel and more investigative resources is that what you're saying yes ma'am similar to again uh IAK the internet the the crimes against children task forces which are predominantly staffed with local police departments where we where those local and state resources can be used to support larger federal and international investigations the effect of that is is much greater than the individual investigations in local territories there you're saying you want to deput deputize local law enforcement to Absolutely if there was an EJTF an elder justice task force a what what say it again i'm sorry an EJTF elder justice task force yes in every major city uh in the United States that allows you to deputize local law enforcement absolutely i will work on that with you um what about tech do you have the appropriate technology a lot of these scammers rely on uh voice recognition systems they um do deep fakes for voice deep fakes for photographs deep fakes for bank accounts a letter from your bank saying "Oh you need to update your password." I mean they're very sophisticated do you have the tech you need do you need a technology support and again um I'll remind the chamber that I'm retired from the FBI and the FBI does grow and change every single day but it is it is the government um that's why I think it's it's so important for that relationship and partnership with the private sector to bring cutting edge current tech from those companies in on this fight and I think it's uh it's a good option that that would replace huge results if we brought tech companies um banks retailers and telecoms together stacking that sort of evidence and intelligence um would create an avalanche of positive cases and intelligence um Mr um Illa uh what steps should Congress take to address continue investments by PRC companies by state and local pension funds and are there any scenarios where the fiduciary duty owed to the pension funds may conflict with the national security concerns at a federal level i I think Congress uh should take steps to to ban PRC investments i think that the the fiduciary duty that's owed to the beneficiaries is very difficult to comply with because diligence in that country is non-existent and you don't know whether or not the financial reporting as Kevin said is actually true and accurate because the Chinese Communist Party will assert a state secret or a national security privilege when you try to do an audit so that's why I think they should be banned thank you thank you Mr chairman thank you Ranking Member Gillibrand ranky member Krishna Morphy thank you Mr chair let's first take a look at some of these scam factories in Southeast Asia many of them are in Burma along the border with China mr finta the FBI understands from Thai intelligence that these centers are a haven for Chinese mafia engage in fraud and criminal acts right yes I believe that is true and the CCP could work with local authorities in Burma to shut them down but for years CCP in action allowed the syndicates to flourish right absolutely and as long as these centers these scam factories continue to operate these scammers will continue to target older Americans right no doubt let me turn to my next topic it may not come as a big surprise but the pictures that elderly Americans are getting scam texted every day are not actually of the people texting on the Chinese internet criminals steal hundreds of photos of real people from their social media accounts and then impersonate them with their stolen photos so Mr f Mr finta as you can see behind me you can buy packages of hundreds of these photos for just 80 which is about $11 right on the Chinese internet yes sir and using these fake personas Chinese cyber gangs then target older adults and convince them to drain their savings the CCP says they can't go after the scammers themselves since supposedly the scammers are seeking refuge in Southeast Asia but Mr finta websites like websites like these where scammers sell photos of unsuspecting young women are Chinese websites right i believe that is true sir and it is common among the transnational organized crime groups to sell all kinds of information back and forth between different groups for different levels of exploitation and the CCP could with a flip of a switch take these down right well I don't know the I don't know the technical side behind that sir but I I I think they have great capacity to impact that so the CCP could stop this but they are not and through their inaction they're complicit in the bankruptcy of countless older Americans right i don't disagree with that sir now I'd like to turn to my last topic so I want to turn your attention to a surprise guest witness Daisy who I mentioned in the opening i had the chance to actually v video chat with her yesterday and she even gave me a compliment can you play the video yes can you see me now hi hello hi Daisy how are you doing well it's nice to talk to you as you can see Daisy is pretty convincing and engaging likely enabled by AI live face filters or deep fakes the conversation quickly switched to investment i had a question for