There may be a presidential election afoot in the U.S, but Washington also has some other pressing issues on its mind. In the latest instance of a member of Congress stressing urgency to review Chinese investment in American media companies, John Culberson (R-TX) has written to Assistant Attorney General John Carlin and specifically asked him to take seriously the moves of Dalian Wanda Group in the industry.
In a letter dated today and obtained by Deadline (read it here), Culberson, who is the Chairman of the House Subcommittee on Commerce, Justice, Science and Related Agencies, asks Carlin whether the Foreign Agents Registration Act (FARA) is being “effectively used as a tool to address foreign lobbying and propaganda efforts in the United States, especially by countries like China and Russia.”
FARA requires those acting as agents of foreign countries to make a public disclosure of their relationship with their government. The act was initiated to thwart foreign agents from infiltrating the U.S. government with propaganda. The Congressman is particularly concerned with any lobbying efforts that may have taken place from the Chinese.
Culberson references an audit by the Office of the Inspector General of the National Security Division’s enforcement and administration of FARA which was published in September. The report made 14 recommendations to help improve FARA’s effectiveness. Today, he pointed to recommendation No. 12 which urges a formal assessment of the Lobbying Disclosure Act exemption, along with other current FARA exemptions and to determine whether a formal effort to seek legislative change on any of these exemptions is warranted.” The OIG report is here.
Some in the political arena suspect that lobbyist Richard Berman is funded and motivated against those who are against Wanda’s acquisition of the Carmike theater chain. There is a billboard on Sunset Boulevard that very clearly describes China as a puppet-master.
Culberon’s letter follows the Government Accountability Office’s recent decision to review the Committee on Foreign Investment in the United States following a request by 16 bipartisan members of Congress.
A letter from the lawmakers to the GAO in September also specifically cited Wanda, which owns AMC Entertainment and Legendary Entertainment and is interested in buying additional properties. Today’s letter from Culberson includes Hunan TV’s deal with Lionsgate.
“Concerns” have been raised, the earlier letter said, about Wanda’s “acquisition of major American movie studios, including Legendary Entertainment and Paramount Studios, and the AMC and Carmike theatre chains due to growing concerns about China’s efforts to censor topics and exert propaganda controls on American media.”
That was written before the sale of a portion of Paramount to Wanda effectively became moot. Representative Culberson’s letter also somewhat misguidedly refers to the Paramount deal. However, the GAO is going ahead with a study of CFIUS.
Wanda is not a state-owned entity. However, as with most companies in China, its chairman has a relationship with the government. Just this evening, Wanda’s North American reps released this statement:
“Wanda has and will continue to comply with all applicable US Law in connection with its media and entertainment investments in the United States including without limitation making the appropriate filings with the Federal Trade Commission and the Department of Justice.”
Wanda has been on a roll in the U.S., including in the real estate, insurance, agriculture and entertainment industries. Most recently the Chinese group entered into a plan to partner with Sony on tentpoles with global appeal. It also is contemplating a deal that could give it control of Dick Clark Productions.
One Hollywood film industry exec earlier this week poured water on the idea that Wanda would exercise its muscle in the service of propaganda or furthering Chinese-specific interests via its U.S. deals. That’s not what market forces are going to demand, that source told Deadline.
“The Chinese and Wanda are all about making money,” the exec said. “Look at the kind of movies we’re making now. It’s all about tentpoles, sequels, theme parks. … If Wanda gets part of that and tries to put Chinese people in movies and it doesn’t fit, they’ll realize it’s a bad move.”
But last night, an editorial in the Washington Post noted, “Not only does Beijing seek to impose its censor’s rules on American films, but it also refuses foreign investors the same access to Chinese media and entertainment industries that Dalian Wanda enjoys in the United States. It is not far-fetched to assume that China would seek to spread pro-regime propaganda via ownership of U.S. entertainment media.”
Wanda’s chairman, Wang Jianlin, is due to speak in Los Angeles on October 17. The executive, who’s China’s richest man, is not shy about making grand proclamations. He told Reuters in late August, “My goal is to buy Hollywood companies and bring their technology and capability to China.” He added, “If one of the Big Six (studios) would be willing to be sold to us, we would be interested.” Wanda holds 75% of AMC Theatres in the U.S. and is the largest exhibitor in China with 18% of PROC screens and also owns Australia’s Hoyt’s. With a completed purchase of Odeon & UCI Cinemas Group and Carmike Cinemas, Wanda will control 15% of global box office revenues and could reach its goal of controlling 20% ahead of a 2020 target, Wang has said.
It will be interesting to see how, or if, he addresses the growing questions surrounding his business model.