IC Oversight & Policy — 2026-07-18

House Select Committee Hearing Exposes MSS Subnational Operations and Economic Espionage Across US States

BLUFFormalizing United Front subnational operations as a distinct threat category positions the committee to drive state-level counterintelligence referrals, though the civil-liberties fault line will constrain legislative follow-through.

The House Select Committee on the CCP held a hearing on June 25 in the Cannon House Office Building on CCP economic espionage and subnational influence, hearing testimony from former acting DIA director David Shedd, State Armor founder Michael Lucci, and Asian Americans Advancing Justice president John C. Yang 12. Chairman John Moolenaar's opening statement cited the May guilty plea of former Arcadia, California mayor Eileen Wang for acting as an illegal PRC agent, and described CCP United Front Work as exploiting access, coercion, and incentives against state legislatures, universities, and businesses 1. The ranking member's remarks addressed intellectual property theft and coerced technology transfers while warning against profiling Chinese-American researchers, citing a figure that 38 percent of top US AI researchers are of Chinese origin 1. Shedd testified that CCP economic espionage facilitates an estimated $600 billion annually in stolen US wealth and technology under initiatives like Made in China 2025, recommending a targeted "small yard, high fences" approach over broad commerce regulation, while Lucci detailed PRC-linked land acquisitions near Laughlin Air Force Base in Texas and a Fufeng Group grain-silo project 12 miles from Grand Forks Air Force Base in North Dakota that the Air Force deemed a security threat 12. Ways and Means Chairman Jason Smith also addressed the panel, disclosing investigations into US tax-exempt organizations allegedly funded by CCP-linked individuals, including one dubbed the "Singum Network," for spreading pro-Beijing propaganda 1.

Analysis
The hearing formalizes United Front subnational targeting as a defined threat category spanning state legislatures, universities, and local business, shifting committee focus from federal espionage prosecutions toward local-government and academic exposure. Moolenaar's citation of the Arcadia mayor's guilty plea anchors the threat in an adjudicated case, giving agencies a template for state-level referral, while the ranking member's caution against profiling Chinese-American researchers marks an emerging fault line between tightened subnational safeguards and civil-liberties protections. Sourcing rests solely on the committee's own hearing record, secondhand through a recap account with no independent corroboration. The broader United Front framing extends beyond previously reported AI export-control gaps. The hearing may instead function primarily as committee messaging ahead of appropriations season rather than a precursor to enforceable countermeasures.

3 sources

China's Economic Espionage and Subnational Influence in the United States - Small Wars Journal
China's Economic Espionage and Subnational Influence in the United States - House Select Committee on the CCP
China's Economic Espionage and Subnational Influence in the United States (Hearing Transcript) - U.S. House of Representatives