Washington is spending billions of your tax dollars every year to hypothetically achieve technological dominance over Communist China, but the ultimate beneficiary of that effort may just be the CCP.

That is the shocking conclusion of a Department of Defense (DoD) review that found China was stealing technology developed in the U.S. by exploiting the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The report explicitly states, “China, not the U.S., is the ultimate beneficiary of DoD and other [U. S. Government] research investments.”

This is how it works: American companies receiving taxpayer assistance for technology development from DoD and other agencies are recruited by China to continue their work at institutions associated with China’s military, the People’s Liberation Army. The U.S. company is then dissolved and the research and intellectual property paid for with U.S. tax dollars is transferred to a subsidiary in China.

Just like that, American-made ingenuity is shipped overseas to our leading adversary, and we, the American taxpayers, are funding it!

This isn’t just another case of intellectual property theft. This ongoing scheme has national and economic security implications according to the Pentagon.

A researcher and the co-founders of a now-dissolved company that received four grants to develop technology for spacecraft and drones, for example, were allegedly recruited by the Chinese government and now work for institutions affiliated with the communist regime’s defense agency.

Tens of millions of your tax dollars were spent on the development of other technologies, including broadband, biohazard detectors, solar energy, designs for military devices, and pharmaceuticals, that were all transferred to China.

In an effort to end this insanity, I gave my September 2022 Squeal Award to all of the government agencies that have allowed these double-crossing companies to take your money and run off to China with the breakthroughs that rightfully belong to the U.S.

I also introduced bipartisan legislation, that swiftly passed the Senate unanimously last week and the House just yesterday, that will require government agencies to do background checks on businesses seeking federal support while having ties to foreign countries of concern like China. The bill allows the agencies to take back taxpayer dollars from any business found to be a risk to U.S. national security. And I’m thrilled to report, this bill was signed into law by the president today.

No matter how much of your money Washington spends to “win” the global tech race, we will never win by surrendering American-made innovation and subsidizing our adversaries. This cycle will continue until these grant programs are both required and empowered to hold unscrupulous recipients of taxpayer funds accountable for selling out to China. Thankfully, the new law I helped make will put an end to this cycle!

Senator Ernst – Official Portrait