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Ernst: Communist China is the Ultimate Beneficiary of Taxpayer-Funded Small Business Research, and I’m Ending That Right Now!

Tens of millions of tax dollars were spent on the development of technologies, including military devices, that were all transferred to China.

WASHINGTON— A Department of Defense (DoD) review found that China is stealing technology developed in the U.S. by exploiting small business research programs, and U.S. Senator Joni Ernst (R-Iowa), a member of the Senate Small Business Committee and the Senate’s biggest foe of government waste, is stopping it.

Ernst recently led bipartisan legislation—that swiftly passed the Senate unanimously last week—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.

“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 be the CCP,” said Ernst. “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 is bound to continue until these grant programs are both required and empowered to hold unscrupulous recipients of taxpayer funds accountable for selling out to China – and my bill will fix this.”

Today, Ernst is awarding her September 2022 Squeal Award to all of the government agencies that have allowed these double-crossing companies to take U.S. tax dollars and run off to China with the breakthroughs that rightfully belong to the U.S.


An internal report by the Pentagon found: “China, not the U.S., is the ultimate beneficiary of DoD and other [U.S. Government] research investments” from the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. 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.

American companies receiving taxpayer assistance for technology development from the DoD and other agencies have been found to be recruited by China to continue their work at institutions associated with the People’s Liberation Army. Tens of millions of tax dollars were spent on the development of technologies, including broadband, biohazard detectors, solar energy, designs for military devices, and pharmaceuticals, that were all transferred to China. All this was made possible due to the lack of vetting by the government agencies awarding these funds.