Both investigations come in
response to a Reuters report published on Monday that revealed the
existence of the covert radio network, which broadcasts in more than a
dozen American cities, including Washington, Philadelphia, Boston,
Houston and San Francisco. (reut.rs/1Wrflt4)
"Based
on reports, the FCC will initiate an inquiry into the facts surrounding
the foreign ownership issues raised in the stories, including whether
the Commission’s statutory foreign ownership rules have been violated,"
FCC spokesman Neil Grace said.
The California
firm is owned by James Su, a naturalized U.S. citizen born in Shanghai.
Reuters reported Monday that Su’s company, G&E Studio Inc, is 60
percent owned by a subsidiary of Chinese state-run radio broadcaster
China Radio International (CRI).
The FCC
doesn't restrict content on U.S. radio stations, except for rules
covering indecency, political advertising and children’s programming.
But
under U.S. law, the FCC prohibits foreign governments or their
representatives from holding a radio license for a U.S. broadcast
station. Foreign individuals, governments and corporations are permitted
to hold up to 20 percent ownership directly in a station and up to 25
percent in the U.S. parent corporation of a station.
G&E
does not own any U.S. stations, but it leases two 50,000-watt stations:
WCRW in Washington for more than $720,000 a year, and WNWR in
Philadelphia for more than $600,000 a year.
Through
a different set of limited liability companies, Su owns, co-owns or
leases virtually all the air time on at least a dozen other U.S.
stations. Those stations carry G&E content, which is produced
largely by his West Covina, California studios or by state-run CRI in
Beijing.
The news programming on these
CRI-backed stations sticks closely to the Chinese government line on a
host of issues, including the current military standoff in the South
China Sea between China and the United States.
Su’s
spokeswoman declined to comment Monday. In a Sept. 16 interview with
Reuters, Su said his radio network abides by U.S. law because he leases
air time from stations, rather than owning them outright.
U.S.
law also requires anyone inside the United States seeking to influence
American policy or public opinion on behalf of a foreign government or
group to register with the Justice Department. Public records show that
neither Su nor his companies are registered as foreign agents under the
law, called the Foreign Agents Registration Act, or FARA.
A
U.S. law enforcement official said the Justice Department probe began
last month, after Reuters approached the FBI and prosecutors with
questions about Su's California-based operation. Last month, after
receiving inquiries from Reuters, Su’s companies deleted two web pages
that showcased the relationship between his firms and CRI.
"We
are aware of the media reports and can neither confirm nor deny an
ongoing review or investigation into the matter," said Marc Raimondi, a
Justice Department spokesman. "We are committed to continuing to use the
full range of tools and authorities under the Foreign Agents
Registration Act to ensure proper foreign registration and filings."
In the September interview, Su said that he and his companies comply with all U.S. laws, including FARA.
Su's
network of CRI-backed stations in the United States is one of three
international networks with hidden financial ties to the Chinese
broadcaster. Reuters identified similar networks in Europe and in the
Asia-Pacific region. Reporters found that there at least 33 radio
stations in 14 countries in CRI's global network.
Additional reporting by Julia Edwards in Washington. Edited by Michael Williams.
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