In a scathing report, Newsweek exposed how American Federal employees can invest in sanctioned Chinese companies. Money flowing to China, which then strengthens the Communist Party, is unfortunately nothing new. However, this money comes from Federal workers’ paychecks, therefore from the US Treasury itself, and ultimately from American taxpayers.
Federal workers can elect to have a portion of their paycheck go to a 401(k) type account called a Thrift Savings Plan (TSP). In June 2022, the Federal Government switched vendor to BNY Mellon and began changing its offerings. Beyond standard core funds that index on the S&P 500 for example, TSPs now offer over 5,000 specialized funds.
While such variety is welcome for consumers, some of those funds invest in Chinese companies that have been sanctioned by the US Government itself. For example, some companies that these funds invest in produce jet engines for the Chinese Air Force, while others use Uyghur slave labor.
The scope of these investments are huge. The TSP manages $720 billion in assets, covering 6.8 million members ranging from soldiers, intelligence personnel, and Congressional staff. Exact amounts invested in these Chinese companies is unknown, but statistically has to be consequential enough.
This whole debacle seems to point that the US Government is behaving like a patchwork of fiefdoms, each concerned with their own agenda. Instead, the bureaucracy needs a thorough reassessment of its multitude of programs and how they should all work together to achieve the same objectives.
