The Department of Defense (DOD) should not hire people to an extremely sensitive position that deals with advanced military technology who have strong business connections with the United States’ near-peer competitor, the People’s Republic of China.
Washington, DC: Hiring Michael Bloomberg, former New York City mayor, to be head of the Defense Innovation Board (DIB), is an embarrassing public blunder.
The Department of Defense (DOD) should not hire people to an extremely sensitive position that deals with advanced military technology who have strong business connections with the United States’ near-peer competitor, the People’s Republic of China (PRC). In polite audiences, this is called a “conflict of interest.” In more direct terms, this is called the potentially greatest major national security disaster since Julian Assange’s WikiLeaks.
What is the DIB? According to its website, the DIB was “established in 2016… provides independent recommendations to the Secretary of Defense and other senior DoD leaders on emerging technologies and innovative approaches that DoD should adopt to ensure U.S. technological and military dominance. Recommendations are designed to be concise, actionable, and high-impact. To date, the Board’s recommendations have been used to inform DoD leadership strategy and action, as well as congressional legislation… Peer and near-peer competitors are challenging U.S. primacy across a number of domains and technologies, and DoD must navigate shifting economic and industry environments to meet these challenges and achieve mission success…The DIB has previously weighed in on key focus areas for the Department, including AI, software, data, digital modernization, and human capital.”
In other words, the DIB recommends to the Secretary of Defense areas where the DOD should invest for the future against “peer and near-peer competitors,” and DIB members have complete access to unclassified and classified technologies on which the DOD is working, as well the capabilities of systems that are deployed. Some of the DOD programs are highly classified and only a few people have security clearances sufficiently high to be able to discuss them.
Many might know Michael Bloomberg as the former mayor of New York City for 12 years (2002 to 2013) and who ran for President of the United States in 2019 where he spent over $1 billion on his unsuccessful campaign.
How did Bloomberg become so rich? In 1981 he began Bloomberg LC, headquartered in New York City, which became a major financial information and media company focused on economic, financial and computerized information as well as legal regulatory, compliance news and research. The company currently employs about 19,000 people, and is composed of four divisions: Bloomberg Professional, Bloomberg News, Bloomberg Radio and Bloomberg Businessweek.
The main method that Bloomberg LC makes money globally—and in the PRC—is by selling Bloomberg data and reports via their special computer terminals, called a Bloomberg Terminal, which is a dedicated computer loaded with proprietary software that allows Wall Street traders, buyers, and sellers to see financial transaction data in real time. The World Bank and the US Federal Reserve Bank use these terminals. In 2014, news reports claimed that a former Bloomberg executive estimated that Bloomberg LC had about 2,000 to 2,500 terminals in the PRC out of 300,000 terminals worldwide and that subscribers paid $20,000 annually per terminal. According to the National Review, Bloomberg makes more than 80 percent of its $8.5 billion 2014 annual revenue from financial-data terminals.
Josh Rogin noted in a 2019 Washington Post article titled “Opinion: Michael Bloomberg’s China record shows why he can’t be president” that “Bloomberg LP doesn’t make money in China only by selling terminals. Through its massive Bloomberg Barclays Global Aggregate Bond Index, Bloomberg LP is helping finance Chinese companies by sending billions of U.S. investor dollars into the Chinese bond market. This year [2019], the index began a 20-month plan to support 364 Chinese firms by directing an estimated $150 billion into their bond offerings, including 159 controlled directly by the Chinese government. Bloomberg, along with other Wall Street firms, is effectively supporting the Chinese government’s efforts to resist the U.S. government’s economic pressure, while exposing American investors to increased risk.”
How rich is he? According to the most recent Forbes report, his estimated wealth is estimated to be slightly over $70 billion, and he is ranked the 17th wealthiest person in the US. Interestingly, he doesn’t list himself on Bloomberg’s Billionaires list of the global top 100 billionaires.
However, many might not recall his comments and his long-term relationship with the People’s Republic of China (PRC) and its current leader, Xi Jinping. Let’s review the known knowns, as former Secretary of Defense Rumsfeld used to say.
* Clive Hamilton and Mareike Ohlberg note in their new book, Hidden Hand: Exposing How the Chinese Communist Party is Reshaping the World (2021) that in 2009, Chinese premier Wen Jiabao created the China Center for International Economic Exchange (CCIEE). The government’s central planning agency oversees the CCIEE, and its “personnel office serves as the office of its Party Committee’s Discipline Inspection Committee—which should tell you everything you need to know about who controls the organization. CCIEE organized ‘a major international conference’ with Bloomberg, and Henry Kissinger served as the conference’s advisory board chair. In Kissinger’s words, the purpose of the meetings was to make compatible ‘the national goals of China and the United States.’”
* In late 2013, Joshua Keating wrote “Bloomberg suspends China reporter amid censorship scandal” for Slate. Keating stated that “award-winning journalist Michael Forsythe has been suspended, a week after the New York Times reported that Bloomberg had spiked an investigation he had worked on looking into the financial interests of China’s senior leadership. According to unnamed Bloomberg employees, that story had been killed over fears that the company, whose news website is already blocked in China, would be expelled entirely. Amazingly, this whole story may have been first broken in a video by Taiwan’s Next Media Animation studio, which in its own inimitable way implied that the whole affair may be tied to soon-to-be-ex-Mayor Michael Bloomberg’s business interests.” The articles, in a series called “Revolution to Riches”, was awarded the Asia Society’s Osborn Elliott Prize and two Polk Awards. The articles reported on the secret corrupt accumulation of wealth of China’s leading Communist Party families including relatives of Xi Jinping.
* Hamilton and Ohlberg in Hidden Hand also note that “The billionaire businessman and former New York mayor Michael Bloomberg was a late entrant in the contest to become the 2020 Democratic Party candidate for US president. He is the most Beijing-friendly of all aspirants. With extensive investments in China, he opposes the tariff war and often speaks up for the CCP regime. His media company has suppressed stories critical of CCP leaders, and Bloomberg himself claimed in 2019 that ‘Xi Jinping is not a dictator’ because he has to satisfy his constituency. The Washington Post’s Josh Rogin argued that ‘his [Bloomberg’s] misreading of the Chinese government’s character and ambitions could be devastating for U.S. national security and foreign policy. He would be advocating for a naive policy of engagement and wishful thinking that has already been tried and failed.’”
* Eric Levitz’s December 2019 article, “In appeal to hard left, Bloomberg praises Chinese Communism”, states that “[i]n a recent interview with PBS—which recirculated on social media on Sunday—the former New York mayor signaled that he intends to run in the ‘unrepentant Stalinist’ lane of the Democratic primary. Asked by Firing Line’s Margaret Hoover about how the U.S. can get China and India to be good partners in the fight against climate change, Bloomberg argued that the Chinese Communist Party was ecologically friendly, democratically accountable, and invulnerable to the threat of revolution.”
* In the same 2019 interview on Public Broadcasting Service (PBS) Firing Line’s Margaret Hoover, Michael Bloomberg states that the unelected Xi is “not a dictator.”
The above references are some of the known knowns. As for the unknown unknowns, we don’t know what other connections Bloomberg has with the PRC and the CCP that could compromise him in his new role. For national security, the danger is since the DOD appears to be unaware of the existence of the risk, it cannot manage the risk, which can result in disaster.
Based on numerous references to Bloomberg’s key business interests in the PRC and his kowtowing to the CCP’s desire to cover up their corruption, Bloomberg certainly appears to have a conflict of interest between his nominated position as director of the Defense Innovation Board and his PRC and CCP ties.
NATIONAL AND INTERNATIONAL SECURITY QUESTIONS
Will Michael Bloomberg be exposed to technologies that could be disruptive to the PLA’s weapon systems? Yes. Will there be technologies that the US military is exploring that could counter the PLA’s ability to attack the US, the US military and our allies and friends? Yes. Will Mr. Bloomberg feel the need to warn his CCP contacts about these technologies so that they can counter them or to develop their own capabilities? When Bloomberg ran for President, he said if he was elected, he would put his company into blind trust and sell it. Would he do that with his new position to avoid a conflict-of-interest concern?
Allies and partners will be working with the US on joint technology development of future weapon systems and current capabilities, many of which are highly classified by their respective governments and extremely sensitive. The DIB will also be exposed to these developments and capabilities.
How would these countries feel about sharing these technologies with the US when the senior official running the Defense Innovation Board, Michael Bloomberg, has close financial ties to the PRC and personal ties with the CCP leadership? With all of these national security and international security concerns, it makes me wonder why Secretary of Defense Austin would even nominate Michael Bloomberg.
Guermantes “G-Man” Lailari is a retired USAF Foreign Area Officer specializing in the Middle East and Europe as well as counterterrorism, irregular warfare, and missile defense.