Press Releases

McHenry Examines Chinese Attempt to Use Complex Financing Scheme to Obtain Restricted Satellite Technology


Washington, February 1, 2019 -

WASHINGTON – Congressman Patrick McHenry (NC-10), Republican leader of the House Financial Services Committee, sent a letter requesting information from Boeing Co. to shed light on a potential attempt by the Chinese government to skirt U.S. laws to obtain restricted satellite technology.

In the letter, Ranking Member McHenry detailed the intended 2016 sale of a Boeing satellite to Los Angeles start-up, Global IP, and the “red flags” that should have been raised when a reported “$200 million in funding was channeled from a state-owned Chinese company through several shell companies, to Global IP” to finance the project.

Due to the serious economic and national security threats posed by China, there are several U.S. laws that have “effectively barred” U.S. companies from exporting satellite technology to the Chinese. However, an aggressive China continues to steal sensitive intellectual property and hack U.S. firms, posing a systemic risk Ranking Member McHenry has previously urged the Committee to examine.

The Congressman states that Boeing can assist the Committee’s investigation to determine whether “a firm with connections to the Chinese government may have used a complex financing arrangement in an attempt to skirt U.S. export controls related to national security.”

Read the full text of the letter below.

Mr. Dennis A. Muilenburg

Chairman, President and Chief Executive Officer

The Boeing Company

100 North Riverside

Chicago, Illinois 60606

Dear Mr. Muilenburg:

In 2016, Boeing entered into negotiations for the manufacture and sale of a satellite to Los Angeles-based start-up Global IP.   Global IP intended to use the satellite to improve internet access in Africa.   Global IP needed to raise capital for the project and, according to reports, about $200 million in funding was channeled from a state-owned Chinese company through several shell companies, to Global IP.   The original source of the financing, however, should have raised red flags. 

Under several U.S. laws, U.S. companies are “effectively barred” from exporting satellite technology to China in the interest of national security.   National security experts are concerned satellites such as the one Boeing proposed to sell to Global IP, which relies on restricted technology, could be repurposed by the Chinese government for military activities.   Indeed, a source close to the project stated “once it’s up there, whoever is the owner can choose whichever customers and whichever uses he wants.”  

Global IP co-founders Emil Youssefzadeh and Umar Javed (the Founders) first conceived of the satellite in 2008 and began seeking financial backing.   State-owned Chinese company China Orient Asset Management Co. (China Orient) contacted the Founders in 2015.   The Founders flew to Beijing to meet with Geng Zhiyuan, the son of a personal friend of Chinese President Xi Jinping, and within days, China Orient pledged to fund the project.  

However, because U.S. laws prohibited China Orient from taking a large share of equity, Global IP and China Orient agreed to use a shell company, Bronzelink Holdings Ltd. (Bronzelink), to funnel money from China Orient through a subsidiary to Bronzelink and then to Global IP.   Bronzelink was not encumbered by the rules that prevented China Orient and other Chinese companies from controlling the satellite technology because the company was set up in the British Virgin Islands, by a businessman who held a passport from Hong Kong.   Bronzelink took a 75 percent stake in the company.  According to the Founders’ counsel, the deal was legal so long as Bronzelink was independent from the Chinese Government.

After a number of interventions on the part of China Orient and its subsidiaries, including attempts to see “hundreds of [restricted] pages of exhibits detailing how Boeing’s technology worked,” Global IP determined it could not certify its independence from the Chinese government, and thus would be ineligible to purchase the satellite.   The attempts to view restricted information came from several new members of the Global IP board, who arrived in Los Angeles from China led by a lawyer who represented China Orient. 

Subsequently, the Founders resigned and wrote to Boeing to express their concerns that Global IP was under control of the Chinese government.   Boeing, however, decided to proceed with the project after Bronzelink’s own lawyers conducted a compliance review of the deal.  Global IP’s co-founders claim they disclosed the Chinese financing to Boeing at the outset of the project.

The Department of Commerce issued Boeing an export license for the project, but subsequently revoked the license.   Boeing canceled the contract to build the satellite in December 2018, citing Global IP’s inability to pay.

The Securities and Exchange Commission, the Department of Commerce, and the Department of the Treasury have each opened investigations into the transaction.   Additionally, the Founders filed suit against China Orient alleging the company fraudulently took control of the satellite project. 

If those allegations are true, a firm with connections to the Chinese government may have used a complex financing arrangement in an attempt to skirt U.S. export controls related to national security.  To help the Committee understand this matter, please provide the following documents and information:

1. Documents sufficient to show when and how Boeing became aware of the financing arrangement between Global IP, Bronzelink, and China Orient, including, but not limited to, all documents and communications referring or relating to the financial backing of Global IP.


2. Documents referring or relating to Boeing’s application to the Department of Commerce for an export license, including, but not limited to, documents that disclose or describe the financing arrangement.


3. Documents and communications referring or relating to any discussion about whether the transaction should be referred to the Committee on Foreign Investment in the United States (CFIUS) or whether CFIUS had reviewed, or was otherwise aware of, an investment in Global IP by China Orient or any other foreign investor.


4. Documents and communications referring or relating to the decision to abandon or cancel the contract with Global IP.


5. Documents and communications referring or relating to concerns about Global IP’s independence from and/or relationship with the Chinese government.


6. All documents and communications referring or relating to the compliance review by Bronzelink.


Please respond as soon as possible but no later than 5:00 p.m. on February 6, 2019.  Produce the materials requested herein to the Minority staff in Room 4340 of the O’Neill House Office Building and to the Majority staff in Room 2129 of the Rayburn House Office Building.  The Committee prefers, if possible, to receive all documents in electronic format.




                                                            Patrick McHenry

                                                            Ranking Member


cc:       The Honorable Maxine Waters, Chairwoman

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