Banks warns many non-profit Chinese “hometown associations” have been co-opted by the Chinese Communist Party for foreign influence purposes.
One of the most prominent China hawks in Congress is urging the Trump administration to remove the tax-exemption for “hometown associations” linked to the Chinese Communist Party and to investigate the front groups for potential violations of foreign influence laws.
Senator Jim Banks (R., Ind.) is writing a letter to Attorney General Pam Bondi and Treasury Secretary Scott Bessent asking them to remove the tax-exemptions for non-profit Chinese “hometown associations” because many have been co-opted by the Chinese Communist Party for foreign influence purposes, National Review has learned.
“Often registered as non-profits, many of these groups now work to surveil and control the Chinese diaspora on behalf of the Communist Party and to use that network to influence U.S. political leaders toward CCP objectives,” Banks asserted.
He cited recent reporting in the New York Times detailing how 19 hometown organizations in New York City have ties to the CCP and appear to have lied on forms sent to the Internal Revenue Service. The groups have also flouted tax laws barring political activity by non-profit organizations and could be acting in violation of the Foreign Agents Registration Act, a law that requires lobbyists for foreign interests to disclose their activities to the public.
In total, New York City has 53 Chinese hometown associations that are reportedly coordinating with Beijing and actively promoting the CCP’s agenda. Several of the organizations have conducted political activities at the request of the Chinese government and others have installed CCP police stations on their premises.
“These activities all strongly suggest that many hometown associations are directly controlled by the CCP and are acting as unregistered foreign agents. It is unacceptable that so many of these organizations are not only advancing the interests of America’s greatest adversary, but that they are abusing the U.S. tax code to get special privileges in the process,” he added.
“I urge you to strip hometown associations who have engaged in prohibited political activity, or are clearly controlled by the CCP, of their tax-exempt status. Exemption from federal taxes is a privilege, not a right. This privilege is certainly not meant for organizations that blatantly violate federal law and undermine U.S. national security.”
Banks is calling for Bondi and Bessent to pursue justice against those acting as unregistered foreign agents for the Chinese government. Chinese espionage is a major threat to U.S. national security, with dozens of cases nationwide having been publicized in the past few years. Federal authorities routinely announce prosecutions of individuals for covertly working on behalf of the Chinese government against U.S. interests.
Since joining the Senate in January, Banks has introduced multiple bills targeting Chinese influence operations and espionage across American institutions. He was previously a member of the House Select Committee on the CCP, Congress’s leading panel on China-related issues.
Others Republican lawmakers have proposed legislation to crackdown on Chinese police stations and the individuals operating them. The Chinese police outposts first became the subject of national scrutiny in 2022, with a lower Manhattan facility in the Chinatown neighborhood gaining the most notoriety. China is believed to be operating more than 100 police stations worldwide to harass and monitor members of the Chinese diaspora.