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Tougher rules sought on land sales to China, other adversaries

Proposed legislation would give Committee on Foreign Investment in the United States new powers over deals near military bases

Chairman Mike Gallagher (R-Wis.) gives his opening statement as a special House committee dedicated to countering China holds a hearing Feb. 28. (J. Scott Applewhite/AP)
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The chairman of the House select committee on China introduced legislation Wednesday aimed at preventing foreign adversaries from purchasing land adjacent to military bases and other sensitive sites.

Rep. Mike Gallagher’s bill would empower the federal Committee on Foreign Investment in the United States to block companies controlled by the governments of China, Russia, Iran, Cuba, North Korea and Venezuela from acquiring U.S. land. The proposal follows land sales near Air Force bases in California and North Dakota, involving purchasers linked to China or with undisclosed ownership details.

The legislation from Gallagher (R-Wis.) would exclude residential and urban transactions in an effort to avoid the criticism that broader bans have attracted in states such as Florida. The bill would give the committee final authority over purchases by companies controlled by foreign adversaries and would for the first time give the secretary of agriculture a vote in those deliberations. But it would establish a presumption of denial in deals involving parcels near military bases, acknowledged intelligence sites, national laboratories and critical telecommunications nodes.

“The United States cannot allow foreign adversaries like the Chinese Communist Party and its proxies to acquire real estate near sensitive sites like military bases or telecom infrastructure, potentially exploiting our critical technology and endangering our service members,” Gallagher said.

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The measure is backed by eight of Gallagher’s Republican colleagues, as well as eight Democrats, bipartisan support that illustrates that, even as the Biden administration seeks to stabilize U.S.-China relations, congressional sentiment toward Beijing remains hostile.

Treasury Secretary Janet L. Yellen returned to Washington on Sunday after holding two days of talks with officials in Beijing, part of an administration initiative to revive routine communications with the Chinese government.

Controversy over Chinese purchases of American farmland, which have sparked fears in Congress over potential espionage and threats to the nation’s food supply, has flared over the past year.

The latest furor arose over purchases of land near Travis Air Force Base in Fairfield, Calif. An investment group known as Flannery Associates has acquired thousands of acres in the surrounding area, while making public little information about its partners or plans.

In June, the investment group responded to an inquiry from the Department of Agriculture by saying it was not subject to a law requiring foreign parties to report land purchases to the federal government.

“Flannery does not comment on its investments, but we want to make an exception and set the record straight on this question of ownership. … Flannery is controlled solely by U.S. citizens. Moreover, approximately 97% of Flannery’s invested capital comes from U.S. investors, with the remaining 3% coming from British and Irish investors,” Matthew Martino, an attorney with Skadden, Arps, Slate, Meagher and Flom in New York, which represents Flannery, wrote in response to emailed questions from The Washington Post.

Such assurances have not quelled the political uproar. Rep. John Garamendi (D-Calif.), who represents the area surrounding Travis, which handles more cargo and passengers than any other military air terminal in the United States, said the investment group had failed to provide government officials with proof of its ownership.

“This issue raises serious security concerns for our community and the critical military operations at Travis,” said Garamendi, who backs the Gallagher bill.

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Members of Congress anticipate receiving a briefing from the FBI about land acquisitions near Travis as soon as Thursday, one congressional source said.

Shortcomings in the government process for reviewing land acquisitions by foreign parties became apparent late last year after the committee declined to intervene when Fufeng Group, a Chinese conglomerate, sought to erect a corn-milling plant on land it had purchased 12 miles from Grand Forks Air Force Base in North Dakota.

The interagency committee headed by the Treasury Department did not explain its decision, but analysts noted that the Grand Forks facility was not included on a list of facilities subject to the panel’s authority. After the Air Force labeled the project “a significant threat to national security,” local officials withdrew their support, causing the deal to collapse.

In May, the Treasury Department, which leads the committee process, proposed adding eight military installations — including Grand Forks, a classified Air Force manufacturing facility in Palmdale, Calif., and a base in Texas that is home to the B-2 stealth bomber — to the facilities under its jurisdiction.

The uproar over Chinese ownership of U.S. land is striking, given China’s modest holdings. Chinese entities own fewer than three of every 10,000 acres of privately held American land, according to USDA figures.

Chinese purchases have risen since 2019. But they trail those of Canada, the Netherlands, Italy, the United Kingdom, Germany, and at least nine other countries, according to the Congressional Research Service. All foreign owners combined hold more than 40 million acres of the United States, an area that is larger than Iowa and has grown 16 percent in two years.