Flynn case update, China in Hollywood
Judge in Flynn case ordered to dismiss charges, producer Chris Fenton tells us how China has infiltrated Hollywood.
John Solomon 0:06
Hello, America and welcome to a new edition of John Solomon Reports the podcast from Just the News, where over the last 24 hours, we've had some great earthshaking news on the Russia case. Yes, the appeals court has ruled that Judge Emmett Sullivan must dismiss immediately the case against Michael Flynn. This would be the largest highest profile rebuke of the Russia investigation and Robert Mueller. And at the same day that that occurred when the appeals court ruled two to one in favor of Mike Flynn in the Justice Department, who both agree the case should be dismissed. We got new notes from the disgraced former FBI agent Pete Strzok. We're going to talk about why those are so important, and how they put former President Barack Obama and former Vice President Joe Biden, the guy running against Trump this fall, in a new light as sort of at the head of an effort to get Mike Flynn very Important, groundbreaking information on both of those. In addition, we'll cover all the other breaking news and then we have an extraordinary interview. One you're not going to want to miss Hollywood movie mogul Chris Fenton who ran one of Hollywood's big studios for a long time. He's going to give us the inside dish on how Communist China has infiltrated Hollywood and all the ways that that relationship is now so complicated by the coronavirus, by the trade war, by all the things that President Trump has done to try to rebalance the relationships between Beijing and Washington. Chris Fenton is a pretty strong critic of China. Pretty strong critic of the way America has ceded it to so many of the requests and efforts by China to gain influence to gain ownership to gain an upper hand in the U.S. - China relationship. He's going to give us the inside story of how it affects Hollywood what really was going on in Hollywood. Why actors sometimes go and do things for the Communist Chinese party just to get their movies distributed. This is a must listen to interview, you're not going to want to miss it, Chris Fenton. But first, we're going to go to a commercial break. And when we come back the very first thing we're going to talk about the bombshell ruling that came down yesterday that orders Judge Emmett Sullivan to dismiss the Mike Flynn case and the new evidence, the Pete Strzok notes. We're going to dissect those notes and why they are so important to unraveling the Russia collusion narrative that was falsely foisted upon not only the Trump administration, but the entire American public. We'll be back right after these commercial breaks.
John Solomon 2:41
Alright folks, welcome back from the commercial break. And as promised, we're going to talk about the historic day that was yesterday. Let's start with the breaking news or midday yesterday, the district Court of Appeals in the District of Columbia ruled that udge Emmett Sullivan must dismiss the charges against General Flynn, Michael Flynn. These are the charges that were brought against Flynn lying to the FBI, by special prosecutor Robert Mueller. And as you remember, the Justice Department after finding misconduct in the case, went to the court and said we no longer believe Judge Flynn's conviction. His guilty plea was warranted. And we asked you to dismiss the case. And, of course, we know that Sidney Powell, the lawyer for Michael Flynn agreed with that she had been arguing for that for more than a year. So they thought that it was going to happen, but then Judge Sullivan pulled the rug out from both the Justice Department and the Flynn team and insisted that they have a hearing and then he called it an outside judge that argued against the dismissal calling it an abuse of power. Well, the appeals court settle that problem. They called out a bunch of blarney, and said that it's the rightful duty of Judge Sullivan, to dismiss the charges. Now it's interesting 24 hours later, he still hasn't done it. He has ended or suspended the calendar that he had to continue to play out the game he was going to do with with the outside Judge Gleason and have these hearings. But he still hasn't dismissed the case 24 hours later. And that may be a signal that the Judge might be fishing for the full court to take a look at this, or for himself to appeal to drag this out. But no matter what happens in the next step, it clearly was a big victory for Flynn for the Justice Department for Bill Barr. And Michael Flynn is one step closer to being a free man, an innocent man once again. So we're gonna keep an eye on that. Now, at the same time that'll happened, we got these notes that I first told you about on Tuesday's podcast that the government had discovered that there were some notes that Pete Strzok took of conversations affecting Flynn in the January 3 to January 5, 2017 timeframe. That was a very, very crucial time in the Russia collusion investigation. Because it was that weekend, those three days it was two weeks before Trump took office. The Obama team was in for just two more weeks in office they were about to leave. And the FBI agent who had investigated Flynn and his Russia ties for five months came in that weekend and said, there's no reason to continue investigation. I've written a close case memo, because we found no derogatory information on Michael Flynn that suggested he was involved in criminality suggested that he posed a counterintelligence threat. He was not an agent of Russia. He was doing the normal work that a National Security Adviser for an incoming administration would be doing, and that should have been what happened. That should have ended the Michael Flynn case then in there.
John Solomon 6:05
But as we know, because you've all read my stories and listen to this podcast, the FBI leadership, Pete Strzok, James Comey, Andrew McCabe, they put a hold on that agent's recommendation and instead pivoted to an interview where they tried to catch plan in a lie, which they said they did. And they prosecuted him and got him fired. And as you know, there was an FBI executive bill pre staff that wrote notes questioning what are we doing? Are we playing games? Is our effort here to get the truth? Or is it simply to catch him in a lie so we can prosecute him and get him fired from his job? Well, that's what happened. Well, the notes were released about a few hours after the appellate court came out with its ruling. These are pretty significant, extraordinary notes. They were taken by Pete Strzok, the idea that they weren't found until just recently is in and of itself amazing because they were in the FBI system. They were in the... marked in the date and timeframe with the right case. But somehow the FBI overlooked these for a long time. And it was only the special prosecutor Jeff Jensen, who was able to recover these for the first time and make sense of them as to why they're so important.
John Solomon 7:16
But I want to tell you why they're so important. Here is what we really learned from them. They essentially raise really serious, troubling new questions about how much President Obama and Vice President Joe Biden were involved in pushing, coordinating, pressing the FBI to continue to pursue Michael Flynn, in the absence of any evidence of wrongdoing. Remember that these are notes of a meeting that occurred between Michael Flynn... I'm sorry, between President Obama, Vice President Joe Biden, the National Security Adviser Susan Rice, the FBI Director James Comey, apparently, it appears Strzok was either they are briefed on it because that's what these notes are about and then they're talking about the Flynn case. And what they really show is that the outgoing Obama era team was trying to find a way to sustain the counterintelligence investigation of Flynn, even though the agent who had worked it for five months who had done his job, the career expert, had decided there was no further reason to continue investigating plan and that they should close down the case. So remember, he concluded there was no derogatory effort, not some, there was no derogatory information about Flynn, and any of the crazy allegations that had been slung against him by Christopher Steele, by Stefan Halpern. Some of the other FBI informants, none of it checked out. And so the right thing to do under the FBI rules was shut it down, but it didn't. And now we know why. Stroke's notes appear to quote Comey, suggesting that Flynn's intercepted call with a Russian ambassador Sergey Kislyak appear legit. So the call If they were leaking to the media, somebody leaked, that had been the basis of a counterintelligence investigation that created all of this scandal and controversy and forced Mike Flynn to step down because the Washington Post suggests that there was something inappropriate, illegitimate about these. Well guess what James Comey tells the meeting with the President, President Obama, the calls between Russian ambassador Sergey Kislyak and Flynn appear legit. In other words, there's nothing wrong with them. Just think about that in real time. Comey said they were legit. And yet we continued investigating and pursuing this man for three years. So that's the first bombshell on the notes. The second bombshell is a suggestion by Strzok in his notes that Biden was so engaged in this conversation that he brought up the Logan act that's that obscure centuries old law that says you can't interfere with the President's foreign activities.
John Solomon 9:54
Nobody, including the Justice Department thought that was a legitimate basis to pursue Flynn. Believe it was a former Deputy Attorney General Sally Yates said it was a stretch to even consider using it. We weren't going to do it at the Justice Department. Well, who's bringing that up in the conversation? According to Pete Strzok's notes if they're accurate, Joe Biden. Now why is that important? Joe Biden went on TV just a few months ago and said, I don't know nothing. I know nothing about this Mike Flynn thing. I wasn't in it. Let me read you the exact quote, I think I got the transcript right here. It kind of makes you wonder what he was thinking, here's what he said. I know nothing about those moves to investigate Michael Flynn. I guess he knew something because he sat in the meeting about Flynn. And if Strzok's notes are an appropriate reflection of what occurred in that meeting accurate reflection, Joe Biden was bringing up the Logan act. He was totally up to speed on what's going on. Now. Later on Joe Biden after he was confronted with the evidence that he had the ask for a declassification of a transcript. One of the phone intercepts between Flynn and the Russians. After he had done that Biden changes his story a little bit...
John Solomon 11:03
I was aware that they had asked for an investigation. But that's all I know about it. I don't think anything else. Well, you seem to know about the Logan act according to these notes. So, Joe Biden's got some explaining to do. He certainly didn't give the media the full story again. And we saw that time and again on Burisma. How many times on Ukraine Burisma has Joe Biden and hunter Biden change their stories? Well, now they're changing their stories on the Russia probe. Joe Biden was on the inside of this discussion, if Pete Strzock's notes are accurate. So that's a second and really more of a very powerful thing about it. Now, here's the third one. President Obama makes a statement... Now keep in mind, he makes a statement as Flynn is telling people, I'm sorry, as Comey is telling people that the Flynn conversation with Kislyak, the Russian ambassador appears legit. And what is President Obama say? Sicc your right people on it. Make sure the right people are pursuing this case, what does that mean? You're an outgoing President. You're not even going to be there in two more weeks. You're telling the FBI to put the right people on this, to keep this investigation going after I leave office? I the President, leave office. You have the President, the United States, the Vice President of the United States, an outgoing administration, not only declassifying and unmasking conversations about Mike Flynn they're not only spying on Mike Flynn, they're openly urging the FBI to pursue Michael Flynn, one of their political rivals, somebody that Barack Obama disliked so much in 2014.
John Solomon 12:35
He fired them disliked so much that in November of '16, he told incoming President Trump, get rid of that guy, and he's no good. And now when Trump doesn't do that, he sticks with Flynn. You got Obama, Biden and the FBI, top brass meeting together, having a conversation, trying to find a way to keep an illegitimate investigation of Flynn going and you got the President of the United States if these notes are an accurate reflection of what went on here, wanting the right people to pursue Flynn, there should have been no pursuit of Flynn. The career people had looked at it This was done in over, it should have been closed out. Instead, you've got political meddling of the Obama White House now telling the FBI what to be doing on a case that should have been closed. Now, the US Attorney's a special prosecutors and Attorney General bar have named John Durham and Jeff Jensen. They're working this, we'll wait and see, I think we need to find out if Strzok remembers these notes, if he stands by them if he has a different interpretation than the original interpretation brought out by Sidney Powell when she disclosed the existence of these notes one day after getting them belatedly from the Justice Department. All of those elements are going on behind the scenes that I think are very important. I want to tell you, I went to someone else. I went to one of the most respected retired FBI executives in recent History. A guy named Kevin Brock. He was FBI Director Muller's first intelligence chief. He's the guy that set up a lot of the rules that the FBI were supposed to be following in the Russia investigation that they didn't. And how you do FISAs how you vet confidential informants, Kevin Brock setvthe gold standard, the best, The Good Housekeeping Seal to how faces and other things were done. And now he looks back at the Comey FBI blowing past all the rules. And I asked him, I went to him yesterday and said, l isten, I hear the notes. Read them. Take a look. And tell me should an FBI Director should James Comey have been in a meeting with President Obama, with Vice President Joe Biden talking about criminal slash counterintelligence investigations of one of their political rivals, as they're heading out the door? Was that the sort of thing any other FBI official would condone or be a part of what prior FBI directors with Bob Muller have attended such a meeting and this is what Kevin Brock said, just listen to this. This is a great quote.
John Solomon 15:02
It was a political meeting about a policy dispute. And the bureau, meanding the FBI, had no business being involved. No other FBI director would ever have attended such a meeting. Comey is quoted in the notes as saying the Kislyak call appeared legit. At that point, he should have gotten up and left the room. The FBI had no business being represented in that meeting. It did not have a counterintelligence interest any longer. Those were extraordinary words Kevin Brock. So I want to work for Robert Muller, the former Russia special prosecutor, he worked for Muller when mother was still the FBI director. He was the very first FBI intelligence director. He is widely respected across many disciplines, the CIA, the FBI, the DEA, the private sector, and he's the guy that wrote the rulebook that the FBI was supposed to be following when they did the Russia counterintelligence investigation, obviously they didn't follow any or very many of those rules. That's why they deceive the FISA court why they deceive the Congress. Why they deceive the American public, that comi FBI in the early Wray FBI, quite frankly. But Kevin Brock is saying, based on the rules he wrote based on the training he had as an FBI executive, Jim Comey didn't belong in a meeting with Barack Obama and Joe Biden talking dirt on Michael Flynn, when in fact the FBI knew there was no dirt there was no quote, derogatory information after a five month investigation. This is the closest proof we've had to what really looks like an enemies list a dirty tricks list. They were going to get Flynn despite the evidence effort now, we should all wait something that the democrats and the media didn't do for President Trump. We should wait until we hear from Peter Strzok. We've tried to reach his lawyer, he hasn't gotten back, but we should find out what Pete Strzok's notes to him, what he intended to write, are these the actual quotes or representations of what people said at the meeting? Why didn't these notes come out earlier?
John Solomon 17:10
But if he substantiates what the Flynn legal team believes, what the Justice Department believes. If it is true that Comey was admitting to President Obama, there's nothing wrong with the Kislyak-Flynn calls, they were legit, everything that happened after that moment is corrupt, illegal, improper, unethical, and a political witch hunt in what was supposed to be a careful counterintelligence investigation. They were going after Mike Flynn in the absence of evidence of wrongdoing. We can't condone that because you know what, if it happened on a Democratic, outgoing president against a Republican, it could happen someday and by Republicans against a Democrat or against any innocent American whom the government, the deep state, a political party, a president wants to get rid of, harm, silence. This is anti American, this sort of behavior, at least as suggested in the Stroke notes. So let's wait and make sure that the other participants in the room remember things this way if there's other evidence that substantiate this, but if the portrait that Pete Strzok's notes, give us is accurate, then Obama gate is a real scandal. It's not just the FBI abuses. It's not just an investigation of the investigators. President Barack Obama and Joe Biden and James Comey were involved in a meeting that had no place, no bearing in the Oval Office. It's a corruption of the law enforcement intelligence process.
John Solomon 18:44
It's a get a political enemy effort. And it was done in the absence of evidence that that enemy had done anything wrong. Mike Flynn was simply having the sort of coordinating conversations and incoming National Security Adviser has when a President is joining. And as Kevin Brock I think so easily captured in his quote. This was really a dispute between Obama and Trump over policy. Obama didn't like the approach that President Trump might take. Well guess what? President Trump won the election. It was his policy to make. It wasn't Barack Obama's policy to meddle with anymore. Barack Obama the lame duck he should be going into the sunset, gracefully allowing for the transition of power. And instead, he is meddling trying to thwart the incoming National Security Adviser from having an early successful relationship with the Russians. And perhaps many more, as many of the guests on this show have said, Iran was another policy that Obama people were apoplectic about. You heard Walid Phares last week talk about that. I'm deeply concerned based on these notes and the other body of evidence. Remember, these notes aren't in a vacuum. They occur on the same weekend that the agent writes the letter saying case file, closed. There's no reason to continue investigating Flynn. And then Strzok as the seventh floor of the FBI all law James Comey, Andy McCabe says don't close it down, hold off. And then they pivot to this idea of an interview, where the agent, one of the supervisors Bill Priestrap is saying in his own notes, what's our purpose here? Is it to get the truth? Or is it to catch him in a lie just so we can get him fired and get him prosecuted? That sounds like entrapment. That sounds like a political dirty trick. That sounds like the things of the Nixon White House and the enemies list. We need more investigation. But I can tell you these set of notes are explosive. They're important.
John Solomon 20:40
Every senator who claims they're investigating right now Lindsey Graham, Ron Johnson, they ought to be digging in on this, the Devin Nunezes and Jim Jordans. They ought to be digging in on this. This is a roadmap that takes the Russia investigation tight to the Oval Office. Right to the President's desk. We need people to be put under oath and find out what really occurred in that meeting? All right, I've spoken enough about Russia. I know you are deeply interested in this because it's really not just about President Trump, not about Russia, not about President Obama. It's about the rule of law and the type of country we're going to allow ourselves to be. Is the FBI an honest counterintelligence and crime fighting organization? Or is it a score settler, a political dirty tricks agency? I fear during the summer, fall of 16, in the early part of 17, it might have been the latter because of some corrupt, wayward, ethically challenged, leadership challenge people. But we need more hearings. We need more evidence to be released. We need John Durham to hold people accountable if this is never to occur again.
John Solomon 21:51
All right. I've spoken enough. Let's go to commercial break. And when we come back, I'm telling you, you won't want to miss this interview with Chris Fenton. One of the big dogs in Hollywood, talking about Hollywood's addiction to Communist Chinese party, and how Hollywood's access and cash reliance on the China market has corrupted the relationship, how we've made two and three decades of bad concessions to Beijing that now put American national security at risk. This is a man who does business with China, but who's willing to speak the truth about what's really going on. You do not want to miss this interview. We'll be back in a few minutes after a commercial break from our great sponsors and advertisers.
John Solomon 22:41
Alright, folks, welcome back from the commercial break. And as promised a very special guest joining us Chris Fenton, the CEO of media capital technologies and the former President of DMG entertainment Motion Picture group, one of the big Hollywood movie studios. Chris, great to have you join the show.
Chris Fenton 22:58
Hey, thanks for having me. It's an honor.
John Solomon 23:01
Oh, it's my pleasure to see you. You've done a lot. I've seen you on television and Tucker Carlson on Bloomberg even heard you I think once once or twice and Voice of America, you've been a very eloquent voice in looking at the relationship between America and China, and specifically Hollywood in China. And I wonder if you could give us a quick handicap of where you see that relationship. At this very moment. I've seen some writing you've done recently suggesting that we might be headed for a bad breakup.
Chris Fenton 23:31
Yeah, well, it's a it's a complicated question. And I've been trying to analyze it myself pretty intensely. I mean, the way I see it is that there is a very difficult relationship that was created in the mission of globalism. Probably back, I would say probably 1990 is when it really sort of kick started, but you could argue it goes all the way back to 1979, and possibly even 71 during ping pong diplomacy. When Nixon and Kissinger first got over there that following year. And the idea was that there's, I call them Fentons five forces of diplomacy. But the idea was that over time, US and China would enter these nuptials and slowly become agreeable on on five big forces. And those are national security, politics, human rights, commerce and culture. And when all those are working on full, you know, in full gear, there's a fantastic relationship that goes on between any countries. The problem is, is that over time, we've realized on the human rights issue, China's never really coming our direction on the politics issue, the CCP has never been more steadfast in their resolve. And in the national security issues, I mean, you could just look at the South China Sea and see that we're just not seeing eye to eye there. So we're sort of left with commerce and culture. And recently, I wrote an op ed For Real Clear Politics, which said, hey, look, let's give up on this marriage of that globalists put together with these two superpowers. And let's divorce. And let's keep an amicable relationship in some parts of the forces which are commerce and culture in order to keep us away from cold war because even though I'm a hawkish individual when it comes to China, I in no way want to see us go to war with China. And I in no way want to see us enter a cold war with China. And I know there's different arguments of what stage we are in that relationship. But I truly believe we are on the verge of a Cold War, but we're not there yet.
John Solomon 25:42
And when you look out what was the miscalculation that the globalists had, I mean, you had obviously George HW Bush, you know, had gone to China for Nixon in the 70s. It was during his presidency that the sort of the modern day relationship with China was born and then you had most favored nation status changed under President Clinton so that we'd have normalized trade relations with China. What were the wrong assumptions? What made this a bad or forced marriage?
Chris Fenton 26:10
Well, I just think the assumption that eventually the East will come to the side of the West was the biggest issue. I mean, I even saw that... I'm a trustee with U.S. Asia Institute, which I'm not speaking on behalf of today in the interview, but it's a fantastic organization. And we brought over three congressional members in late August to China and also to Hong Kong. And when we were in Hong Kong, we met with protesters, and we met with Carrie Lam, and they're sort of a microcosm of the way I think the West interpreted in a misguided direction of what globalism would eventually do. Because if you look at 1997, and that agreement that that the Brits and the Chinese made in regards to Hong Kong and the rest of the world, the idea was over 50 years, eventually, China would become more like the West. So Hong Kong would just maintain the way it had always been. The problem is that was received, China has no interest in coming towards the west. So now that we see this Hong Kong dispute flaring up, we realize that Hong Kong is going to become more of what China is today, rather than what the West is today. And I think that's sort of the biggest misconception we had when we first tried to forge this relationship and moving forward in the direction that we wanted it to go.
John Solomon 27:32
And when you look out you described yourself as sort of hawkish in general on China, do you see what a lot of the security experts see today sort of a patient long term consistent effort to spy on America, steal technology try to supplant the United States as an economic superpower. Is that truly China's motive or is that trumped up in some way?
Chris Fenton 27:58
Well, I'm a little conflicted on the answer to that I do have lots of good friends that are Chinese, that live in China. And I've also made friends with members of their government over the years. And even though I am very suspicious of a lot of the agenda that many individuals have in the government there, I'm never quite sure exactly how I mean if people want to call it evil or, or how sort of disruptive they are to America's principles and values and national security, they actually are, I am led to believe that we should always keep our antennas up and be very aware of what's happening. And then if you look at what history is showing us over time, they have gained a lot of advantages on us on the backs of a lot of the trust and goodwill that we have put in their hands. They have taken advantage of things and part of the reason I wrote this business memoir was to showcase the fog of war of falling out this mission that I wholeheartedly believed in, which was globalist, which was opening up that market to free trade to the ability for American companies, particularly Hollywood in the sports industry, to open up that market and make money there and create jobs and increase our GDP here in the United States as a result, but to do that, there were lots of compromises we had to make along the way. And in terms of Hollywood, we actually did lots of talent exchanges, skill set programs, different situations where we implemented their local film industry into the movies we were making, so that they could learn our process and quite frankly, they've gotten really good at it to the point where 10 years ago, we were making 80 cents of every dollar in the box office in that market. Now, we are seeing a much less of a market share drawn by Hollywood films in that market. We're down to 35 cents on the dollar last year.
John Solomon 30:11
Wow, no kidding. That's a big that's a big depletion.
Chris Fenton 30:14
Well, it's a big depletion. And keep in mind that market since we really got into it, which was post, the 2008 Olympics, barely had 5000 screens. Now they have 70,000 screens and their box office revenue has grown at that same sort of level. So it's an amazing market. It's a huge opportunity for Hollywood, but we've been losing it quickly.
John Solomon 30:40
You've talked about in the big big picture sense now when you get down to your own industry, there's been just so many concerted efforts between Hollywood in China to try to make the relationship work to bring know how and culture to China, and then obviously open up a market for Hollywood movies in China, but it's run into a lot of roadblocks. For instance, I think they have a cap on the number of movies that... American movies that can come into the Chinese market every day. Isn't that correct?
Chris Fenton 31:06
That's correct. In fact, when we first started distributing movies in 2000, January 2009, when they hit 5000 screens, and that meant there was actually a business there... They only allowed 20 movies in internationally. And by the way, that wasn't just Hollywood movies that could include French films or Bollywood films from India. So it was 20 total. And the amount of revenue that you received from the box office, if you were a Hollywood studio back then was a whopping 13.7%. In 2012, they did increase what that quota was to roughly 34 titles, which by the way, also includes international titles in there, and they increased the revenue proportion that Hollywood Studios got to 25% which by the way, if you compare that to other markets, which don't have quotas, there are some that do. But most don't. You're getting roughly 45 to 50 cents of every dollar. So they're still roughly half of what the market norm is.
John Solomon 32:12
Wow. And since 2012, has the relationship gone down a little bit, they become more constricted, more restricted. Is Hollywood frustrated or have they given up on this as a marketplace of great value?
Chris Fenton 32:25
Hollywood has not given up on it. It's too valuable a market to give up on and I think that's where a lot of the gripes from I think a very woke public here and in the United States is coming from. Hollywood needs that market to work. They need the capital from China to come into these movies. Remember the moviemaking business, particularly at the studio level where you're making sometimes $300 million dollar movies with $250 million dollars of marketing spend to distribute the film around the world, are massive cowboy aggressive investment plays, and sometimes there's huge flops involved. So if there's a way to get willing capital from outside partners into these movies to mitigate risk, it benefits Hollywood. But the problem is to get that capital and this is something I've been voicing quite a bit, and I'm very nonpartisan on this issue. And I'm trying, I'm trying with everything I got to get the democrat side into this issue too. But in order to get that capital and to get access to that market, we are doing quite a bend over in Hollywood when it comes to CCP agendas. So if you look at Senator Ted Cruz and what he brought to life in the latest Top Gun movie, than the fact that the CCP pretty much put a directive out to remove the Taiwanese flag from Tom Cruise's jacket. That's something we just can't stand for anymore. And if we don't stand for it, we need to back up the studios that say, hey, you know what, that's wrong. We're not going to remove it. We need to back up. That studio up as a nation so that retaliation in the China market and elsewhere does not occur from the CCP.
John Solomon 34:08
Give some other examples. That's a fascinating one. So beyond censorship, what are some of the other things that the Communist Party has been doing that inflicts on the First Amendment or free speech rights of Hollywood?
Chris Fenton 34:21
Remember the the ccps directive is to hold power, and they have 1.4 billion people there, and there's not enough resources on earth to make them all happy. So their directive is to make them just happy enough that they don't revolt. And that's a very difficult equation.
John Solomon 34:37
I've never heard it said that way. That's interesting. Yeah.
Chris Fenton 34:40
Well, you know what I try I, I don't look Chinese. I can speak Mandarin, when it comes to karaoke in but I'm not fluent in Mandarin. And I never actually believed I would get to know China as deeply as the Chinese and it's so true. And so the way I look at it As as the top part of the onion, and try to avoid peeling away all the peels because they just keep going endlessly. So if you understand that the CCP directive is to hold power, you can't make 1.4 billion people happy because there's just not enough resources on Earth. So you need to make them just happy enough, which involves giving them all of what they want and all of what they need and some of what they want. And part of that is pulling a large portion of that into the middle class and giving them great jobs and the ability to make income that gives them that sort of ability. But on top of that, you got to give them messaging that makes them feel happy, makes them feel content with the power there. And we're seeing that with the COVID crisis and the way the CCP is trying to direct narrative so that they look like they handled COVID way better than everybody else. But in the Hollywood business, you see it quite a bit in other ways.
Chris Fenton 35:56
For instance, we did a Johnny Depp movie that wasn't very successful, called Transcendence. And when we brought him over in order to get that movie released in China, we had to do the premiere in an area of Beijing called 798, which was an old ammunition factory area outside of Beijing, that they turned into what they call an artist colony, a place where people have individual creative expression freedoms. So we did it out there and we had Johnny Depp play guitar with one of the top bands and we had them do calligraphy with an amazing calligraphist and we had them do art and we had them do a sculpture with a sculpture is all of that to put on display the fact that the CCP was now allowing artistic freedoms in a country that never had that. And that was part of the messaging of them showing hey, we're opening we're giving you what you want as leaders of this country, and that's just one example of the various other areas that we had to fill out directives on their narrative in order to make sure that they were getting the messaging to their populace that they were doing a very effective job.
John Solomon 37:10
Interesting. And so basically the Hollywood actors and others, they play into helping the CCP keep its power as part of the effort to distribute their movies and tap into that market. Is that sort of the dynamic that the Chinese are trying to create here?
Chris Fenton 37:26
Well, I'm not gonna paint actors as evil doers in this process. They're business people, and they're artists, right? But yes, of course, when we're asking them, hey, on behalf of the movies potential of making money in this market, would you do this, most of them are compliant with that. And obviously, we've heard of the Richard Gere's and sometimes Christian Bale going to distant dissidents, houses or whatever that are the exceptions to the rule. But for the most part, these actors are supposed to carry out a mission to help the studio make money, right. That's how they get hired again, and by the way, that has happens over and over in various other industries with various other levels of employees and management. So it's not just Hollywood. But yes, to answer that question, we're sort of in that space of their shareholders, there's investors, there's people that have very big motives when it comes to big uses of capital and investment. And if you have opportunities to figure out how to get a good return on that investment, sometimes that causes us to compromise the values and the National Security principles that we hold dearly as Americans. And we need to figure out as a nation, both red and blue, how we can prevent that, how we can approach China in a much more strategic way.
John Solomon 38:44
When you look out now, do you see a policymaking team in Congress, either party or in the Trump White House or elsewhere that is approaching it in that way? Do we have a strategic lens on China for the first time? Or are we still sort of haphazard?
Chris Fenton 39:01
Well, you know, I've been talking to Congressman Waltz and Congressman Gonzales who are on the China task force, which I think is a fantastic group of individuals that are taking this situation very seriously. I think they showed disappointment in the fact that the Democrats unfortunately decided that the last minute not to stay involved with that, because quite frankly, there is no way we're going to be able to tackle this issue, this challenge with China without having both red and blue involved. I mean, this is a nationwide issue. It's something we need to come together on almost the same way as we came together for World War Two. And I'm not saying this is a war. But this is a very serious situation where we need to back really strong principles and values and a rulebook that companies and industries need to follow in regards to their engagement to that market.
John Solomon 40:01
Given that COVID-19 has sort of been the flashpoint obviously, there's been a lot of things going on that didn't really hit Americans as dramatically as COVID. But we had the South China Sea conflicts, we've had some trade issues. We've had some questions about Huawei and others spying, using technology in the United States or in the Western world. But COVID really focused America on the potential realities with with China and the US relationship. What do you think are the next three or four things that are going to happen as the break up this, as you call that arranged marriage, I love that term in your column. But what are the things that you think are inevitably going to happen over the next few months?
Chris Fenton 40:40
Well, I would really like to see us somehow address the supply chain issue which is both a national security issue as we know in regards to the amount of pharmaceuticals and antibiotics and different supplies that we need for our health care system that are made there. And then on top of it, I'd like to see this supply chain issue addressed in regards to how we farmed out middle class jobs, skilled labor jobs, overseas, a lot of times to China, we have seen the decimation of the middle class, in large part because of our manufacturing push overseas in order to create products and services that are cheaper for Americans here. And I think we need to come together. And I wrote an op ed for the Federalist actually recently, where we need to come up with a better scoreboard than the stock markets, because the stock markets... if we're going to address the disruption that we need to do in order to reset this China relationship, it is going to affect earnings, it's going to affect growth, and it's going to affect stock prices. But in the same respect, it's going to grow our sense of security as a nation and it's going to increase high paid middle class jobs here in America. So if we somehow come up with a a better ticker that we can put in the bottom of every cable news network screen than a Dow Jones Industrial Average, we might be able to put together the resolve to play the long game to get this done because remember, the CCP plays the long game. They're not on quarterly earnings reports they're not on two or four year election cycles.
John Solomon 42:20
That's a great point. And we seem to live by the instant gratification of the victory of the day. And of course when you're up against a strategic ally that has a 20, 40, 50 year plan, we sometimes can can step into a lot of mousetraps. For a long time. The biggest term in America that came to accentuate the relationship was made in China. But more recently, the term owned by China has become increasingly a debate point in for instance, AMC movie theaters where I go a lot of times to watch movies, they're own now by the Chinese. describe a little bit about in phase two as China got into, you know, getting a lot of our jobs overseas and doing cheap labor and returning better investments for American companies on the ROI, how they also began to strategically invest in U.S. assets. And do you have a concern about that? Is that good or bad in the long term as you look at it?
Chris Fenton 43:16
Well, I have a massive concern about it. And in fact, our mutual friend Rick Berman did to back during the AMC Carmike days, we we were starting to find that Chinese money, I guess was slightly dumb money. So a lot of companies and investors took advantage of that in order to get great price to earnings ratios on on the way that they could sell mergers and acquisitions out there to the Chinese. Part of that did involve lots of entities that had national security interest or had soft power interests, AMC and Carmike which both became owned by a company called Wanda are an example of sort of that opportunity where China saw a propaganda soft power play in regards to owning our largest theatrical exhibition business. What was great about that, though, at the time was that the CEO of Wanda guy named Wang Jianlin, he was touting every time he bought these huge assets in the US whether it was the Waldorf Astoria, some prime real estate in Beverly Hills to a massive movie studio like Legendary Entertainment, and it's finally got onto the radar of Congress, which Pittenger on one side, Schumer on the other, really pressed to get CFIUS a lot more teeth in the equation of outside investment in the US, and CFIUS has really stepped it up. They've made it a lot more difficult almost to the point now where we see very little Chinese influence in the m&a activity I'd like to see actually a little more but just in in a in a situation where They're bringing capital that other people might not bring. And maybe it's even better capital because it's on slightly dumber terms. But without any sort of control mechanisms.
John Solomon 45:11
Chris, you just talked about the cepheus process for a lot of people who don't know, what the committee on foreign investments in the United States is. Describe a little bit, how important a role it's supposed to play and how it's changed over the last couple of years.
Chris Fenton 45:25
Well, what's interesting is that CFIUS is is guided by how Congress wants it to work, but then ultimately comes down to the executive branch. And and ultimately, the President can direct how it's used in regards to mitigating foreign investment in the United States. And what was interesting is that CFIUS had been pretty quiet on most things that were occurring, possibly because it was very beneficial to capital markets and to investors overall, because there was a lot of incoming investment in various American assets that were seen as beneficial. But as China really started to step up on acquisitions that seemed to have some sort of national security interest to them, or some sort of soft power, propaganda interest, or maybe even location interest, for instance, the Chinese buying the Waldorf Astoria, which was apparently in New York City over some major, you know, fiber optic cable lines, or whatever that was, CFIUS started to say, hey, look, we need to look at this stuff a lot more carefully, and make sure that this is in the best interest of Americans. So they've implemented a lot of very difficult parameters for particularly China to overcome when they're investing in entities like not having controls over various investments, being limited to only a certain amount of ownership percentage, etc, etc. So it's smart. In 2016 CFIUS really woke up. It got passed through the National Defense Act of Couple years later by Congress, and now they've really stepped up their overwatch on this kind of stuff.
John Solomon 47:06
It's funny in my long reporting career, I've had two or three big stories that really touched on CFIUS. One was when the Long Beach California port was going to be sold in both China and Dubai were interested in buying it. And it was Hillary Clinton that came out and oppose the Bush administration for not giving it a more aggressive look and thinking it through more before allowing that sale. And then a few years later, it flipped around and Hillary Clinton was Secretary of State and there was a transaction called uranium one. And then this time, Hillary Clinton's own role in the CFIUS process became the issue. But there's no doubt over the last couple of years that more transactions are being looked at with with a greater degree of scrutiny when it comes to foreigners buying strategic assets in America, then probably had happened in the 80s 90s and early 2000s. So very important body and glad you mentioned it.
Chris Fenton 48:02
Yeah, it's I am so happy that they've actually stepped it up. I mean, it's really to the benefit of all Americans.
John Solomon 48:09
Yeah, no, absolutely. That's true. Very true. Now over the last couple of weeks, or actually last couple months, President Trump has taken some pretty significant actions. One of those was to block the federal retirement fund from investing its monies in Chinese particularly state owned companies. More recently, he's ordered that the SEC enforce the requirement that Chinese companies that trade on our stock exchanges comply with the same accounting rules, the Sarbanes Oxley rules that all Americans companies have they've been basically exempted from having to comply fully with those rules. Do you think we're going to see first, what effect of those early actions taken and do you think we're going to see more of those sorts of actions against China in the next couple of months?
Chris Fenton 48:58
Yeah, I would love to see that. I mean, I I think it's a, it's ridiculous that we don't have them. Now recognize that the WTO as a developed nation, they're still considered developing which allows them so many different freedoms that the developed world does not have when it comes to the free market access and capital access of our US markets. The fact that we don't have them on the same accounting, regulatory principles that US companies have when they access our capital markets is ridiculous. They're hiding behind the SOE, the state owned enterprise or the government owned secrecy laws. I think that's ridiculous. I mean, we need to level the playing field. We need to make this something where everybody can compete at the same level in the free market in the capitalistic world that we have. And quite frankly, part of the problem is, look, I've self reflected, I've looked back at the book, I wrote the notes. I have the things I did over 20 years and I realized I was complicit in a lot of the things that I think we did wrong in regards to the US and China exchange, Wall Street needs to do the same thing. I have lots of friends on Wall Street, I do a lot of business with Wall Street, and they see China as a massive opportunity. It has been it continues to be, but they need to self reflect and say, hey, look, let's continue pursuing it. But let's do it with the interest of America and Americans at first priority. And then let's figure out how we can create business and keep driving it forward. But let's make that a second priority. Let's make America number one. And that's something we need to do in all industries. And I'm not saying that anybody is evil in any particular business. Everybody is a businessman. Everybody's looking at it. Like how do we create good returns for our investors, but we need to now prioritize it as Americans and as patriots and start thinking the long game.
John Solomon 51:04
Yeah, that is an important part. And I think if you look at the last 20 years that many of the experts I've talked to whether it's Michael Pillsbury or, or Peter Navarro, it appears that we played short game and the Chinese played the long game. And the ratio of balance of power ratio of leverage has really changed as a result. You've had some pretty profound thoughts in these columns, the last couple of the two rows.
Chris Fenton 51:26
And by the way, just really quick that Pillsbury... that Pillsbury interview did was absolutely fantastic. And I really enjoyed also your Maureen Moynihan interview, because that showed ability to put red and blue on the same page when it comes to this really tough challenge.
John Solomon 51:44
It is and you said it, right. We don't solve this problem. If we are an Us and Them nation. This has to be a bipartisan approach to China or we're going to end up in a tipping point that we don't, we don't like I think you've said that so well today. You had some pretty good ideas about as this break up occurs where we should keep our tethers to China so that we don't let this spin out of control. And I wonder if you could talk just for a second, what those tethers? Are you talked a little bit about culture and economics. But even as we break away and did we send a message to China that we're going to take back this relationship in some way, and put it on better terms, where are the places that we shouldn't completely withdraw?
Chris Fenton 52:26
Yeah, I don't like the word coupling because a lot of people sort of believe that means a total turnoff of the relationship between the two countries. You know, we have an east to west and a west to east sort of flow of different exchange that's going on. I like the US to China exchange, where we're opening that market to US goods and services, because there's jobs to create here in the United States. And there's GDP growth and then on top of it every time we get a US product service in that into that country, there is a little spread of soft power that comes from the West, every time a kid is wearing a pair of Nikes. Every time an adult is walking down the street with a Starbucks cup, every time an audience go or sees a Hollywood movie that seeps a little bit of our influence into their market, where I'd like to see more of a decoupling or a total decoupling, if that was even possible, is on the China to US exchange, which is where we're seeing the supply chain issues that have hurt our middle class and our labor economy. And on top of it have been major national security issues that have been disclosed during this COVID crisis.
John Solomon 53:42
Yeah, without a doubt, without a doubt. So let's keep some of the tethers here but trying to recalibrate our relationship. I think that's sort of the message that you've been delivering. Do you find a receptive audience and are you seeing more Democrats and Republicans talking in such a way that you that there's progress on the horizon.
Chris Fenton 54:02
Well, like I said, I mean, I try to be as non partisan in this issue as possible. I'm very frustrated right now that there's not a lot of Democratic Party talk about China yet. I do think that's going to start up as the election season starts to gear. On the Republican side, yes, I find a lot of willingness to talk about it. I think it's way more, you know, approachable a discussion than a lot of people think... I'm hawkish, but I'm not nearly as hawkish as, as a lot of people on the right. You know, I've enjoyed forever, for instance, very much in talking to Steve Bannon about China who quite frankly, thinks, you know, in regards to this book, unrestricted warfare, which was written by some members that were in a war, a hot war with China in three or four disciplines, information, technology and economic, he thinks that we're just simply not in a ... I, you know, I have a great open discussion with him about that where I do think we have issues and all those places we're at in battles with them for sure. But even with a Cold War, I look to 1950 to 1971, which was really a Cold War stage in the US-China relationship. And keep in mind, that was when we had absolutely no trade and no communications between the two countries. We cannot do that today. That would be impossible. And not only that they were a sleeping giant back then. Today they're a dragon spreading their wings. They're exerting their influence around the world. They have a massive economy, and we're totally entangled with them. I just don't see us moving into a cold war without something terrible happening in the process. So my mission is to keep us away from that. And I think people are open to that discussion, no matter how hawkish they are.
John Solomon 55:56
Chris, this has been a fascinating discussion. It's a reared day, at least in Washington where I worked, where someone actually looks at themselves and said, I self reflected. And I realized I had some complicity, and I want to fix it there. So I really appreciate your candor, and your honesty and the, you know, the true frontline wisdom that you bring to this debate, because you've been in China, you've worked with them. You've seen the capital deals, you've seen their strategy, our failings, and I think there are very few people in the world that have been able to articulate the moment we're at with China better than you. And so I'm really grateful that you spent the time with our listeners today. And I hope to have you back on the show because I know this issue isn't going away anytime soon.
Chris Fenton 56:37
Yeah, I would love to come back. My book comes out July 28. Now imagine between now and then we're going to see a lot of very interesting changes in the dynamic between the two countries, so they'll always be something for us to talk about. And I really appreciate you having me on the show. And if any of your audience wants to tweet me I'm always happy to engage in those conversations. I'm at the dragon feeder, and hopefully they pick up a book have a copy of the dragon.
John Solomon 57:06
Tell us a little bit about the book.
Chris Fenton 57:09
Yeah, it was called feeding the dragon inside the trillion dollar dilemma facing Hollywood, the NBA and American business. And I approached this story like, like one of my favorite authors, Michael Lewis would, which is an attempt at writing a really emotional, fun, colorful memoir, where I even bring my wife and kids into it, because quite frankly, there were some crazy China issues that I had to deal with in the middle of the night where it disrupted the family house quite often. But it's sort of an insight on hey, look, there's a lot of us that we're doing a lot between the US and China, that now we look back on and go that wasn't in the best interest of the country. But what I was trying to do in the book is paint how it happened. What our mission and purpose was at the time, how we changed over time, all the good that we actually did, but then also a lot of the stuff that ended up adding up into a lot of bad. And I'm just trying to paint a humanistic look at how we got to this place, and also call out the fact that I think I was wrong and I was complicit in a lot of this stuff. And I want to change things. So the more everybody understands how we got here, the better it will be in regards to all of us coming up with a good strategy moving forward.
John Solomon 58:33
Well after this conversation, as I'm sitting here talking to you, I just went on Amazon and clicked and bought the book right now, folks, you got to get this book because if you enjoyed what Chris said today, he has an insight and wisdom that for you. So you sell them here in Washington, Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA and American Business. It comes out July 28. It's going to be a must read. So go to Amazon today and click and get that book because you're gonna learn a lot more from Chris and you got a dose of it today, just from this incredible interview we had Chris, I can't thank you enough. We're gonna have you back on again as this issue keeps evolving and we wish you very much success with the book.
Chris Fenton 59:14
Hey, thank you so much, john. Pleasure being on.