Fuyao Glass America is back in the headlines as federal investigations have scrutinized the Chinese company’s business dealings.
Its Moraine manufacturing plant makes glass major automakers. A federal investigation is raising questions about its payments to companies prosecutors say violated labor and trade laws.
The Dayton Daily News and WHIO TV recently joined forces for their own investigation into scrutiny of Chinese companies with Dayton ties.
Dayton Daily News' Investigative Editor Josh Sweigart spoke with WYSO’s Jerry Kenney about what they’ve uncovered.
Sweigart: So there have been a lot of questions about Fuyao since the raid that occurred a couple of years ago, a law enforcement raid there into issues concerning human trafficking, among other things.
It's worth noting upfront that Fuyao is not accused of any crimes, but there is an investigation that is apparently focused on some of the businesses that they do business with. And that has been going on for a couple years now, and there's been a lot of questions surrounding that. It represents thousands of jobs, which is extremely important, but it represents more than that. It represents the former GM plant there in Moraine, which was iconic and a big part of our region's culture and identity.
So when WHIO came to us with some information about a separate case in Georgia and some potential local connections. We decided, hey, let's look into that. We have done some investigating into what the federal government is looking at in Fuyao. We've done some reporting around that. What's the larger issue here pertaining to some of these companies? And we found a company in Georgia that was also raided last year, where there are connections to the Dayton area. The company leadership there is facing state charges. We found that months before the Fuyao raid, there was another raid here in Moraine. Just across the street from Fuyao, following allegations of trade violations. So these multiple issues sort of seem tied together. So we talked to industry extroverts and watchers about what this means, what this represents. And the why we did it is because, these companies are part of our community. They employ a lot of our people and they received a ton of money, at least Fuyao, received a ton of money in tax incentives and taxpayer dollars. So there's an element of accountability and making sure that those monies were being responsibly used. And also, making sure that these companies are all acting in the best interest of our state and our region.
Kenney: So that is another component. Are they fulfilling their obligations with these massive tax credits received to do business in the Dayton area?
Sweigart: Yes. So they received over $10 million in tax breaks and financial incentives through Jobs Ohio, through the Ohio Department of Development, through Moraine, through Montgomery County. So there were multiple avenues that they received economic development assistance. In exchange, they promised to create jobs to bring jobs back to this shuttered GM plant, which was obviously an eyesore for our region and a real hit when that thing shut down. We all remember how big of a plant that was and how much it impacted our region when that thing shut down. So these incentives were meant to bring jobs back to that area, to bring manufacturing jobs especially back to the area. And the question becomes, are they living up to their part of the deal?
We obtained reports where they're supposed to report their compliance with these economic incentives. And in those reports, they say, yeah, we created thousands of jobs. Our payroll grew over years to over 3,000 jobs or nearly 3,000 jobs. Our payroll grew. And that's good. That means they're meeting their incentives, the conditions of the incentives. But what we also found was that court records allege that Fuyao paid over $126 million to this network of companies that the federal prosecutors allege was engaged in things, including human trafficking. And so that raises the question. $126 million is a lot of money. And the records that we found or obtained show that it's more than their total annual payroll in some of these years. It's a substantial percentage of their payroll if we compare it to their payroll. And so that, again, raises questions.
We talked to Governor Mike DeWine, who said that, yeah, they appear to be meeting their job obligations. And the question is, what will the federal investigation find? If there is wrongdoing, then the state can claw back some of those funds. DeWine told us time will tell whether they're truly meeting their side of the obligations. But the records we found illustrate some questions.
Kenney: So just to confirm, the federal investigations are dealing with taking a look at the companies Fuyao is involved with because of allegations of some of the operations they may have going on.
Sweigart: Yes, so nobody has been charged criminally, but we have civil federal filings that lay out some of the things that the feds are looking into. They are investigating a network of companies called the Easy Iron Money Laundering Operation. That's what the fed's call it. It's a network of local companies that Fuyao, according to these court records, paid over $126 million to. So Easy Iron appears to be the focus of the investigation, not Fuyao, but the relationship between the two companies has raised some questions.
Kenney: Obviously, there's a lot more details in the direct articles and the collaboration that Dayton Daily News put forth with WHIO TV. But where do you pick up your reporting next? Are you waiting for more guidance or information from the federal investigations?
Sweigart: In our story, we spoke to industry watchers and advocates who say that the federal government needs to be more aggressive in dealing with concerns of trade and labor violations by some of these Chinese companies. At the same time, Trump was in China when our story came out. Our story came up Thursday night, our time, Thursday night in Beijing. The chairman of Fuyao was sitting next to Elon Musk having dinner. So these are very well-connected companies. The next thing that we're looking for, there is, it's kind of hard to explain, but there is a mandate that was put into a federal budget bill that requires the Department of Justice to lay out its investigative steps dealing with Chinese glass manufacturers like Fuyao. That's due actually towards the end of this month. So the House Appropriations Committee is supposed to receive a report as mandated, has mandated the DOJ to provide a report on what they're doing to investigate allegations of misdeeds among Chinese glass manufacturers like Fuyao.
