US radio company under scrutiny, investigation over China gov't ties

gestudios.us

At first blush, it's like any other radio station. On Thursday morning, G&E Studio Inc.'s Washington broadcast was dominated by pop music and Hollywood gossip.

But then it turned to the news, delivering a China-focused digest with its own slant: including a story stating the Chinese government's concern about Defense Secretary Ash Carter's visit to the Asia-Pacific region, and U.S. activity in the South China Sea leading to "aggression."

This is not just any station.

The company behind the broadcast, and others like it across the country, is now under federal investigation over its reported ties to the Chinese government.

The California-based G&E is owned by James Su, a naturalized U.S. citizen born in China. And 60 percent of his company is owned by a subsidiary of the Chinese state-run China Radio International, according to Reuters, which first reported the story.

The Federal Communications Commission confirmed this week it has launched a probe into the company. The concern, legally speaking, is not so much the pro-Beijing content but the financial connections to a foreign government.

"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 agency made clear Wednesday that it does not restrict stations' programming and content -- except in limited cases regarding rules on indecency and political and children's programming.

However, the FCC does have strict rules regarding the foreign ownership of radio licenses.

Foreign governments and their representatives are prohibited from owning more than 25 percent of a radio licensee for a U.S. broadcast station, without FCC approval.

According to Reuters, the Justice Department also began investigating the company last month, after the news service approached the FBI with questions.

G&E reportedly owns none of the stations but leases two 50,000-watt stations in Washington (WCRW) and Philadelphia (WNWR) -- and through subsidiaries Su co-owns or leases most of the air time at other U.S. stations, according to Reuters. Some of that content reportedly is produced by CRI. And as Reuters first reported, the news content on these stations takes a largely pro-Beijing line, including on the military tensions with the U.S. and its allies in the South China Sea.

G&E did not respond Wednesday to a request for comment from FoxNews.com. Su told Reuters in September that his network is operating legally, since he leases air time and doesn't actually own the stations.

American Enterprise Institute scholar Claude Barfield pointed out the Chinese government has a long history of trying to get news to its people in foreign countries and that this setup -- particularly the lease deals and ownership percentages -- is indeed "complicated business."

"There are other ways of doing it," said Barfield, citing the English-language China Central TV. "Or is this just some kind of an underhanded way of covering the fact that these are Chinese government stations? The question is whether it will pass the sniff test."

Barfield, an expert on trade policy in China and East Asia, also pointed out the arrangement might have required the network to register with the Justice Department, which according to Reuters it did not.

Congressional lawmakers are aware of the FCC investigation but have not said whether they will look into the situation.