In race for open US Senate seat in Missouri, fact-checking a PAC attack on Eric Schmitt over China

Some Republicans running for open U.S. Senate seats are being hit from the right with attack ads that accuse them of cozying up to China.

One of the ads, from a conservative super PAC that is funded by a large Illinois GOP donor, used the Winter Olympics in Beijing as a backdrop to brand Missouri Attorney General Eric Schmitt as "good for China, bad for Missouri."

The TV ad from Team PAC, which is supporting former Missouri Gov. Eric Greitens in the race, is called "Mao Money." It aired Feb. 4 during the broadcast of the opening ceremonies of the Games. 

The ad opened with images of fireworks behind the words "China 2022." The narrator said, "How did China get so powerful? Friends like Eric Schmitt." Then it makes a two-part claim.

"Schmitt sponsored a bill to spend $480 million of your tax dollars to create a cargo hub here for airlines owned by China's Communist Party to flood Missouri markets with cheap Chinese imports," the narrator continued, "and Schmitt voted to let China buy up Missouri farmland."

Both parts of the claim are rooted in bills Schmitt supported in the legislature, but they omit important context about the effect of the legislation.

The first part of the super PAC’s claim centers on a 2011 bill Schmitt proposed as a state senator, connected to what was known as the China Hub Project. 

As reported by the St. Louis Post-Dispatch, the initial bill would have offered up to $480 million worth of tax breaks over 15 years to spur foreign trade through Lambert-St. Louis International Airport. The bill was proposed as St. Louis leaders entered their fourth year of negotiations with Chinese officials over a freight hub at the airport, and two months after the Chinese directed their largest freight carrier — China Cargo Airlines — to begin direct talks with the airport, the story said.

Schmitt argued at the time that the tax credits would be issued only if certain investment and trade occurred. His bill called for $420 million of incentives to build warehouses and distribution centers within a 50-mile radius of Lambert; and $60 million in tax credits for companies shipping exports out of Missouri. Schmitt said facilities built under the bill could be used to store meat that could be sent to China.

Without the bill, Schmitt didn’t see the China hub materializing, the St. Louis Beacon reported.

The Team PAC ad didn’t mention the hub’s potential to handle exports, but one of the articles it cited, a St. Louis Post-Dispatch editorial, said the City of St. Louis was negotiating with China Cargo Airlines "to bring Chinese-made goods to America through Lambert and to take American goods and agricultural products back overseas."

To back its claim that the airline was "owned by China's Communist Party," the super PAC ad cited a U.S. Securities and Exchange Commission filing for 2011 by Shanghai-based China Eastern Airlines, in connection with securities listed on the New York Stock Exchange.

The 2011 filing does not make clear the precise level of Chinese government ownership in China Cargo. Here’s what it does say:

• Most of the major airline companies in China were majority-owned either by the central government or by provincial or municipal governments in China.

• The Chinese government controlled a 59.53% equity stake in a holding company that was China Eastern’s biggest shareholder.

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• China Eastern owned 51% of "subsidiary" China Cargo.

So the filing indicates that the Communist government had at least an indirect stake in China Cargo.

Under the version ultimately approved by the Missouri legislature, Schmitt’s bill would have provided $360 million in tax credits. But the bill was not signed into law, and the project was scrapped.

The second part of the claim alludes to a 2013 state law, which Schmitt voted for, on the ownership of agricultural land by foreign businesses. 

Before the law, foreign businesses generally were prohibited from owning agricultural land in Missouri; the change loosened the prohibition, capping foreign ownership at 1% of Missouri’s total agricultural acreage. The measure was approved over the veto of then-Gov. Jay Nixon, a Democrat.

The law allowed a Chinese company, Shuanghui International of Hong Kong, to buy Virginia-based Smithfield Foods, which owned Missouri farmland at the time, the Post-Dispatch reported. 

But what Schmitt voted for was not approval of any specific land purchases by China.

China is a recurring theme in ads for Senate contests in several states. In a race for an open seat in Pennsylvania, Dr. Mehmet Oz accused fellow Republican David McCormick of giving Chinese companies billions of dollars through the hedge fund he ran. A super PAC supporting Republican Josh Mandel for an open seat in Ohio claimed that Republican Jane Timken’s family business moved jobs to China. Meanwhile, Alex Lasry, one of the Democrats challenging GOP incumbent Ron Johnson in Wisconsin, pledged to "finally stand up to China."

The Missouri race is to succeed two-term GOP Sen. Roy Blunt, who is not seeking re-election. The primary is Aug. 2 for the seat, which is rated as solid Republican.

Greitens resigned as governor in 2018 after facing a felony computer tampering charge, which was dropped, and allegations related to an extramarital affair. Schmitt formerly served as Missouri’s secretary of state and as a state senator. 

The other GOP candidates include U.S. Reps. Vicky Hartzler and Billy Long; Long’s campaign gained attention for running an ad claiming that Democrats "rigged" the 2020 presidential election. Also among the GOP candidates are state Senate President Dave Schatz and attorney Mark McCloskey, who is best known for pointing a gun at protesters when they marched past his St. Louis home. 

Team PAC raised $2.5 million in 2021, according to the Federal Election Commission — all of it from a suburban Chicago billionaire, Republican donor Richard Uihlein. 

Uihlein, who owns a giant shipping supply company, is the second-largest individual donor to outside spending groups for the 2022 campaign cycle, having contributed $10.2 million, according to the nonprofit Open Secrets.

As a super PAC, Team PAC may raise unlimited sums of money from corporations, unions, associations and individuals, then spend unlimited sums to advocate for or against political candidates.

Team PAC said Schmitt "sponsored a bill to spend $480 million of your tax dollars to create a cargo hub here for airlines owned by China's Communist Party" and "voted to let China buy up Missouri farmland."

Schmitt’s 2011 bill initially called for $480 million in tax credits, not state expenditures, for a proposed air cargo hub to support international trade, including exports, with a Chinese airline as a potential partner; the tax credits would have been contingent on investment and trade occurring. The bill did not become law.

Schmitt’s vote for a 2013 bill that became law allowed for foreign businesses to own a limited amount of agricultural land in Missouri.

The statement is based on bills that Schmitt supported in the legislature, but it leaves out important context about his vote and the effect of the legislation. We rate it Half True.