Industry

Congressman asks DOJ to investigate Wanda’s Hollywood investments

A Texas congressman is asking the Justice Department to examine Chinese ownership of entertainment and media companies, citing a rise in foreign investment.

In a letter, Republican Rep. John Culberson sounds the alarm about Dalian Wanda’s recent acquisitions of AMC Theatres and Legendary Entertainment, as well as its bids for Paramount Pictures and Carmike Cinemas. Wanda is also seeking to buy Dick Clark Productions for more than $1 billion. Culberson wrote that he is particularly concerned about Wanda Chairman Wang Jianlin’s close ties to the Chinese Communist Party and the influence they could wield over movies and television shows that Hollywood produces. In the letter, Culberson notes that Chinese investments and acquisitions have grown from $2 billion in 2010 to $20 billion this year.

“These acquisitions, as well as many more co-financing arrangements, allow Chinese state-controlled companies a significant degree of control over the financing and content of American media that raises serious concerns about how this may be used for propaganda purposes,” he wrote.

A spokesperson for Wanda declined to comment.

Culberson was one of 18 representatives last month who sought a review from the Government Accountability Office of existing regulations pertaining to foreign investments in U.S. industries. As part of the letter, the representatives cited Wanda’s acquisitions spree. Earlier this week the office said it would launch a review to see if its legal authority has kept pace with the influx of foreign capital.

The letter comes in a climate of rising interest in Washington in Chinese investment in Hollywood, and in Wanda’s aggressive deals specifically. On Wednesday, the Washington Post editorial board granted some legitimacy to those concerns, drawing a distinction between fear-mongering over Japanese investments a generation ago and uneasiness with China’s genuine record of censorship today.

“It is not far-fetched to assume that China would seek to spread pro-regime propaganda via ownership of U.S. entertainment media,” the editorial board stated.

In his letter, Culberson expressed concern that Hollywood will engage in self-censorship to access the Chinese market. He cited the case of “Captain Phillips,” which did not get Chinese distribution. Some at Sony speculated that the film did not make it past Chinese censors due to its positive portrayal of the U.S. military.

Culberson wants the Justice Department to investigate whether Chinese companies doing business in Hollywood should be forced to register under the Foreign Agents Registration Act (FARA), which regulates lobbying by foreign governments. The act includes exemptions for artistic activity and for “nonpolitical” commerce.

“FARA is an important and significantly underutilized tool the department has at its disposal to address concerns about foreign agents and propaganda in the United States,” Culberson wrote, “but it is clear that the department will need to update its strategy, guidance, and perhaps, seek additional legislative authority to update the law to address new threats.”

Culberson’s letter appeared on the website of China Owns Us, a campaign organized by Richard Berman, a well known D.C. provocateur.