(Adds full name of company (G&E Studio Inc) in paragraph 4.
Adds context in last paragraph.)
By John Shiffman and Koh Gui Qing
WASHINGTON/BEIJING Nov 2 The Federal
Communications Commission and the Justice Department are
investigating a California firm whose U.S. radio broadcasts are
backed by a subsidiary of the Chinese government, officials
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
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
The FCC doesn't restrict content on U.S. radio stations,
except for rules covering indecency, political advertising and
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
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
(Additional reporting by Julia Edwards in Washington. Edited by