MADISONVILLE, La. – Sen. John Kennedy’s (R-La.) Accelerating Holding Foreign Companies Accountable Act became law today as part of a package of bills. Kennedy’s legislation will increase accountability for Chinese companies that refuse to submit to U.S. financial oversight and close a loophole that Chinese companies use to avoid such oversight.  

“Companies that are beholden to the Chinese Communist Party have been flouting America’s security laws and putting Americans’ retirement savings at risk. Because Beijing is determined to exploit American investors, I’ve been fighting for more accountability for foreign companies that use American capital. The SEC finally has the power it needs to kick fraudulent Chinese companies off U.S. exchanges more quickly and remind China that playing by the rules isn’t optional,” said Kennedy. 

In December 2020, the president signed into law Kennedy’s Holding Foreign Companies Accountable Act, which prohibits foreign companies from listing their securities on any of the U.S. exchanges if the company has failed to comply with the Public Company Accounting Oversight Board’s (PCAOB) audits for three years in a row. The law protects the interest of hardworking American investors by ensuring that foreign companies traded in America are subject to the same independent audit requirements that apply to their competitors in America and other countries. 

The Accelerating Holding Foreign Companies Accountable Act will build on this progress by putting additional pressure on China. Kennedy’s legislation requires foreign companies to comply with PCAOB audits within two consecutive years instead of three. This would help remove fraudulent and non-compliant companies from U.S. exchanges more quickly so they cannot continue to put hardworking Americans at risk.  

Background: 

Congress established the PCAOB to inspect audits of public companies, ensuring the information companies provide to the public is accurate, independent and trustworthy. 

Historically, China’s communist government has refused to allow the PCAOB to inspect audits of companies registered in China and Hong Kong. Such companies represent a keen risk to American investors as nearly 11 percent of all securities class action lawsuits in 2011 were brought against Chinese-owned companies accused of misrepresenting themselves in financial documents. 

According to the Securities and Exchange Commission, 224 U.S.-listed companies are located in countries where there are obstacles to PCAOB inspections. These companies have a combined market capitalization of more than $1.8 trillion. 

In the last 10 years, the number of Chinese companies listed on U.S. stock exchanges has increased significantly, as those firms take advantage of the capital available in America. 

MADISONVILLE, La. – Sen. John Kennedy’s (R-La.) Small Business Mergers, Acquisitions, Sales and Brokerage Simplification Act has become law as part of the annual funding bill. Kennedy’s legislation will help small business owners by allowing them to be bought and sold more easily. This legislation does this by removing the need for a registered middleman to oversee these sales.

“At a time when Americans are struggling under Pres. Biden’s bad economic policies, this legislation will give small businesses more flexibility to create and sustain jobs. Getting rid of this bureaucratic ball-and-chain will support individual workers, job creators and the overall economy,” said Kennedy.

The current requirement disadvantages small- and medium-sized job creators, and that discourages growth across the American economy. The legislation will remedy this by allowing small business merger and acquisition (M&A) brokers to organize sales and purchases of ownership, as well as the control of private companies, without the burden of registering as “broker-dealers” with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). 

When building and selling companies becomes easier, investors are more willing to dedicate resources to them. That, in turn, creates jobs and grows the value of individual businesses and the economy as a whole.

Madisonville, La. – Sen. John Kennedy (R-La.) today joined Sens. Linsey Graham (R-S.C.), John Barrasso (R-Wyo.) and Tom Tillis (R-N.C.) in urging Pres. Biden to re-consider visiting the U.S.-Mexico border to address the influx of illegal immigration and drug and human trafficking. The senators’ letter comes in anticipation of the end of Title 42.

“The ongoing crisis at our southern border is a national security nightmare and a humanitarian disaster, and the amount of illegal drugs flowing through our southern border, particularly fentanyl, is at an all-time high. With the looming end of Title 42 deportation authority, the problems at the border are getting exponentially worse,” the senators wrote.

“You are the Commander in Chief, and you owe it to those working on behalf of our nation to secure our border to hear from them directly about the conditions they face. In many cases, seeing is believing, and it is now time for you to see,” they continued.

“We hope you will reconsider your decision to not visit the border before it’s too late,” they concluded.

The full letter is available here.

WASHINGTON – Today, Sens. John Kennedy (R-La.), ranking member of the Senate Committee on the Judiciary, Subcommittee on Federal Courts, Oversight, Agency Action, and Federal Rights, and Sheldon Whitehouse (D-R.I.), the subcommittee chair, released a report entitled: Overprivileged: A Closer Look at Congressional Oversight, Executive Privilege and the Separation of Powers.

The new report breaks down the logjam of information disputes between the executive branch and Congress, which is challenging Congress’s constitutional authority to conduct oversight. The senators found that the executive branch’s compliance with the traditional “accommodation process” has waned under recent administrations of both political parties. They urged Congress to take up legislation to restore its constitutional oversight authority on a bipartisan basis. 

“The accommodation process developed as a way to balance the competing, legitimate needs of Congress and the executive branch, allowing each to carry out its constitutional responsibilities while respecting those of the other branch. That process served the country and the American people for more than 200 years, until recent developments disrupted it. The new process, fueled by the executive branch’s overreaching interpretations of executive privilege and the separation of powers, serves recalcitrant executive branch officials, not congressional oversight,” wrote Kennedy and Whitehouse.

For more than 200 years, Congress and the executive branch overwhelmingly engaged in good-faith compromise to settle disputes between Congress’s oversight authority and the executive branch’s authority to maintain confidentiality of sensitive information. In recent decades, however, the executive branch­—largely through the Justice Department’s Office of Legal Counsel (OLC)—has increasingly deployed hardball tactics and novel legal theories to obstruct congressional oversight in violation of the Constitution’s separation of powers.  

While OLC could end this obstruction by reevaluating its opinions related to congressional oversight, OLC has indicated that it is unlikely to do so voluntarily. In their report, Kennedy and Whitehouse lay out the breadth of legislative proposals to revitalize congressional oversight authority, ranging from sharpening existing enforcement tools to speeding up judicial resolutions. The senators urged their fellow lawmakers to take up bipartisan reform efforts to strengthen Congress’s hand in the accommodation process. 

“Without a robust oversight power, Congress cannot serve the vital function of exposing misconduct and providing accountability that our Constitution and our democracy demand. Accordingly, members of all parties should agree on the urgent need for reforms that would revive Congress’s oversight authority and restore Congress’s coequal position in the separation of powers,” concluded the senators.

The report comes after the Federal Courts, Oversight, Agency Action, and Federal Rights Subcommittee held two hearings on the process and substance of executive privilege determinations during the 117^th Congress. At the first hearing in August 2021, the subcommittee heard from a bipartisan panel of experts about the executive branch’s increasing use of executive privilege and related doctrines to withhold vast amounts of information and stymie oversight requests from Congress. At the second hearing in October 2022, the subcommittee heard from Christopher Schroeder, Assistant Attorney General for OLC, to better understand OLC’s perspective on executive privilege and the accommodation process. That hearing marked the first time in 20 years that a sitting, confirmed Assistant Attorney General for OLC had appeared before Congress.

The full report is available here.