China’s senior officials constantly rebuked the U.S. president for seeking an international resolution in accordance with international law.

This Community Reinvestment Act commitment should be very substantial since China’s drilling off the Spratly Islands near Palawan and within the 200-mile exclusive economic zone of the Philippines is estimated to secure $50 billion worth of oil annually.

By Loida Nicolas Lewis, chair, and Rodel Rodis, president

 U.S.Pinoys for Good Governance

Following was sent to Federal Reserve chair Bernanke, vice chair Yellen, governors Duke, Raskin and Tarullo, and president Dudley:

On behalf of the more than four million-strong Filipino American community in the United States, we file this protest against the Industrial and Commercial Bank of China’s (ICBC) plans to expand into the United States[1].  Our chief concern is that the ICBC is funding the trespass and illegal drilling of oil in the Kalayaan Island Group (KIG) of the Spratly Islands that is within the 200 mile radius of the Exclusive Economic Zone (EEZ) of the Philippines under the United Nations Convention of the Law of the Seas (UNCLOS).

Because of the critical impact of the People’s Republic of China government-owned ICBC, which by most financial criteria is the world’s largest bank, other Filipino American organizations and individuals, over the next 30 days, will also be expressing to the Federal Reserve, to President Barack Obama, to the State Department and to the Congress our deep concerns about this impending transaction. We are also likely to be joined by other American immigrants from other nations affected by ICBC’s financing of oil drilling in territorial waters belonging to Vietnam, Taiwan and Malaysia.

Due to the likelihood of thousands of protests being filed with the Federal Reserve from these groups, we urge you to support the original complaint filed by the Black Economic Council, Latino Business Chamber of Greater LA and the National Asian American Coalition, which was filed on January 27, 2011, that formally requests Public Hearings in both New York and San Francisco. We request that Public Hearing be held before the ICBC is permitted to acquire the FDIC-insured bank known as Bank of East Asia with 13 branches in New York and San Francisco.

Since this protest is of concern to the entire U.S. government, we urge that all of the concerns and remedies set forth below be carefully examined before any approval is given to ICBC to use its $3 trillion financial prowess to affect U.S. financial and international policies.

We call your attention to the U.S. Senate’s unanimous approval on June 27, 2011 of a resolution deploring the use of force by China against Vietnam and Philippine ships in the West Philippine Sea, also known as the South China Sea. This bipartisan resolution was led by Senators Jim Webb and James Inhofe. It reaffirms the position of the U.S. to peaceful resolution of maritime disputes in the South China Sea and pledges peaceful actions to resolve these disputes in accordance with international law.

In a nutshell, China’s contention is that it does not have to adhere to international law because it has territorial rights to all the islands in the West Philippine Sea based on a questionable Han Dynasty map from 2,000 years ago (120 A.D.) that identifies the area as the Nansha Islands.

We also call to your attention the unsuccessful meeting that President Obama set up through the head of the U.S. Joint Chiefs of Staff Chairman Admiral Mike Mullen in Beijing between July 7^th and 10^th. At the Beijing meetings, China’s senior officials constantly rebuked the U.S. President for seeking an international resolution in accordance with international law.

Specific Concerns

In order to explore oil within the 200-mile exclusive economic zone in the Philippines off the Spratly Islands, the Chinese government created and financed a state-of-the-art $1 billion ($892 million) semi-submersible drilling platform which is reportedly the world’s most advanced super oil rig capable of operating to a depth of 10,000 feet and drilling at depths of up to 40,000 feet or 8 miles. We believe that ICBC, both directly and indirectly, played a role in financing the construction of this billion-dollar oil rig. It is therefore acting in a capacity in violation of the U.S. Senate resolution of June 27^, 2010 and in violation of President Obama’s stated policy as set forth by Admiral Mullen recently in Beijing.

As a first step, we request that ICBC be compelled, as an instrument of the Chinese government, to divulge all funding, directly or indirectly, for any ships or other instruments that are engaged in activities in conflict with the June 27^th U.S. Senate resolution and/or President Obama’s stated position to the Beijing authorities though Admiral Mullen. (We would urge consultation relating to the appropriate questions with the U.S. Joint Chiefs of Staff, the U.S. Defense Department, U.S. State Department and U.S. Senate leadership on the Senate Committee on Foreign Relations, including Chairman John Kerry, as well as the authors of the June 27^th U.S. Senate resolution.)

Secondly, because of the growing concern (which we were unaware of until July 12^th) of inappropriate, inaccurate and fraudulent accounting practices by Chinese businesses in China, we urge that once the above information on ICBC is received, the Federal Reserve hire, with costs to be assumed by ICBC, an independent Big Four CPA firm to conduct a comprehensive audit. Please note the Wall Street Journal article of July 12,2011, “Challenges Auditing Chinese Firms,” describing the growing concern of the Big Four CPA firms as to fraudulent practices and the decision of Big Four firms to no longer provide audits for a number of Chinese Mainland businesses.

Thirdly, our organizations support the position previously taken by the protestors Black Economic Council, Latino Business Chamber of Greater LA and National Asian American Coalition that ICBC be required to submit a Community Reinvestment Act plan that will ensure that all minorities, including Vietnamese Americans, Malaysian Americans, Taiwanese Americans and Filipino Americans, be direct and substantial beneficiaries of ICBC’s expansion in the U.S.

This Community Reinvestment Act commitment should be very substantial since China’s drilling off the Spratly Islands near Palawan and within the 200-mile exclusive economic zone of the Philippines is estimated to secure $50 billion worth of oil annually. Therefore, should for any reason the Federal Reserve approve the Chinese government’s acquisition of Bank of East Asia, it should require major Community Reinvestment Act commitments to all underserved communities, including those whose families live in countries affected by the Chinese government’s violation of international law and U.S. policy. Specifically, that 10 percent or more of the annual revenue by the Bank of East Asia be allocated for Community Reinvestment Act purposes. Please note, for example, that the nongovernment-owned Bank of America has a $1.5 trillion Community Reinvestment Act commitment over 10 years, largely for minority communities.

In conclusion, the acquisition of the Bank of East Asia is contrary to U.S. policy and in violation of the June 27^th U.S. Senate resolution. It is also likely to bring financial harm to the American public and all nations that support U.S. policy regarding the supremacy of international maritime law.

We therefore respectfully urge that no action be taken to permit the acquisition until there are full Public Hearings at the Federal Reserve Banks of New York and San Francisco. In addition, because of the international implications of this acquisition, we also urge that an unprecedented Public Hearing be held at the Federal Reserve headquarters in Washington D.C. This will permit all Americans and all governments supporting peaceful resolution of the conflict to fully participate.

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