In the letter sent Thursday, Rep. Patrick McHenry told Boeing that the committee was trying to determine when the aerospace company first learned that its customer in a 2016 satellite deal was backed by Chinese state financing and if the deal violated U.S. export laws.
The North Carolina Republican wrote in the letter, addressed to Boeing Chief Executive Dennis Muilenburg, that the committee wanted to understand whether “a firm with connections to the Chinese government may have used a complex financing arrangement in an attempt to skirt U.S. export controls related to national security.”
In an interview, Mr. McHenry said companies such as Boeing that deal in sensitive technologies require extensive federal oversight.
“Where national security and quarterly earnings meet mistakes can be made, and with serious consequences,” Mr. McHenry said.
Boeing has previously declined to disclose to the Journal what it told U.S. officials about its satellite customer, called Global IP, or whether it disclosed the company’s backing by China when it applied for a license to sell an advanced communications satellite.
Under U.S. laws, exports of commercial satellites are vetted by the Commerce Department, which regulates “dual use” technologies that carry both civilian and potential military applications. The laws effectively prohibit sales to Chinese customers.
In a statement Boeing said the satellite it was developing for Global IP—designed to provide internet service to sub-Saharan Africa—was wholly commercial and contained no classified defense technology.
Boeing said it had worked closely with the Commerce Department on the Global IP issue, “and will continue to consult with and abide by Commerce Department requirements and determinations in this matter.”
The letter, reviewed by the Journal, marks the latest fallout for Boeing over the deal with Global IP, a Los Angeles-based startup. Days after the Journal’s first story about the issue in December, Boeing said it was cancelling the satellite sale, citing nonpayment by its customer.
Global IP’s co-founders, Emil Youssefzadeh and Umar Javed, said they told Boeing executives in 2016 that Chinese money was behind the satellite deal. The founders said Boeing continued to push ahead even after they raised concerns that the Chinese backer was attempting to take control of the entire project in violation of U.S. export laws.
The founders quit Global IP over the matter and sued its Chinese backer in California federal court. They are seeking damages from a unit of the Chinese financier, state-owned China Orient Asset Management Co., and other defendants connected to the deal.
Bahram Pourmand, Global IP’s chief executive officer, has rejected the founders’ allegations, and said the company isn’t controlled by China, as has a lawyer for the unit of China Orient.
The Journal’s revelations about the deal have recently sparked inquiries from the Securities and Exchange Commission, the Commerce Department, and the interagency Committee on Foreign Investment in the U.S., which reviews foreign deals for national security concerns. The status of those investigations is unclear.
