Committee on Small Business Holds Hearing to Examine the Threat of the CCP on Main Street America

WASHINGTON, D.C. - Today, Congressman Roger Williams (R-TX), Chairman of the House Committee on Small Business, held a hearing titled "Defending Main Street: Combating CCP Threats to America's Small Businesses" to examine the growing threat of foreign adversaries-like the Chinese Communist Party (CCP)-on American small businesses and identify practical solutions to protect them.

"Defending Main Street from emerging threats is pivotal to preserving our economic strength and national security," said Chairman Williams. "The CCP is actively working to undermine and exploit America's small businesses-posing serious risks for entrepreneurs and threatening American innovation. This Committee will continue to work with Administrator Loeffler to ensure that small businesses have access to safe, trusted capital and the resources they need to secure and strengthen supply chains. We must remain vigilant in safeguarding Main Street and the entrepreneurial spirit that drives our nation."

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Watch the full hearing here.

Below are some key excerpts from today's hearing:

Chairman Williams: "As you know, Main Street is increasingly vulnerable to Chinese Communist Party efforts to target America's small businesses and steal intellectual property. So, my question would be: based on your experience, what was the most common method used to obtain intellectual property from American small businesses?" Mr. Lyons: "Mr. Chairman, thank you for the question. It's a great question that should be studied further. In my experience, cyberattacks are the most prevalent. The second, I would say, is insiders, and it's leveraging programs such as Thousand Talents. Following that, engagement through venture firms, and even the due diligence process a venture firm uses when learning about a start-up, is a siphon of intellectual property. So, small businesses today are-it's multi-vector-it comes through coercion at times on insiders as well. Under the 2017 Chinese Intelligence Law, PRC nationals must cooperate when they're asked to, so that threatens American workers who happen to be PRC nationals."

Rep. Bresnahan: What can we be doing in Congress to prevent things like this from happening in the future to other entrepreneurs and other businesses?" Mr. Murphy: "Yes, Congressman, we've heard a lot of those good ideas and testimony today, but I think it goes back to this Committee and the SBA, right? That's where entrepreneurs right now-as an entrepreneur, I wouldn't even have thought to go to the SBA to get a loan, to get a ten-million-dollar debt loan, doesn't make any sense. But for that to be a resource that entrepreneurs and small businesses can turn to that actually helps with capital and diligence across all these pieces. That, I think, makes the difference."

Rep. Meuser: "You were outlining, and we really want to get those 10 items that you had, as well as the four that you included in your testimony, but what can Congress do? And perhaps advice on recognizing, if you would." Mr. Pahutski: "So, I think it starts with accountability. The Executive Branch has the authority to execute the intent and everything that's been discussed here, but shifting away from offices that concentrate on small businesses and policymakers, and shifting that to action doers. When instances occur like Mr. Murphy's, they need advocacy at the point of the problem, and that's a long problem span. The far left is-hey, where can I find trusted capital? If you're working with the DOD or the DOE, potentially in this instance, that would have an advocacy role, they should have a list of trusted capital providers that he could have access to, so he doesn't have to guess and blindly navigate that course. That was a policy and an instrument that had started in the DOD about eight years ago and has since slowed. That's something that needs to pick up pace, and it has not slowed during the current Administration; it slowed over time because it's lost priority and focus to other things. But having trusted capital programs do an amazing job to avoid what he did. The other part I'd advocate for is understanding the supply chains. If you're not being bartered and traded through trusted capital to undermine your company, it's through the supply chains that make you less attractive to the DOD or other institutions that you'd work with. So, illuminating those supply chains, not just identifying the bad ones, but providing a list of trusted vendors and sources, is also a critical step in this."

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