J. Kyle Bass Texas Senate Testimony April 19, 2021

J. Kyle Bass
Chief Investment Officer
Hayman Capital Management
Testimony before the
Senate Committee on Business and Commerce
Of The 87 th Session of The Texas Senate
April 19, 2021
Chairman Hancock, Vice-Chairman Nichols, my name is Kyle Bass, Chief Investment Officer of Dallasbased
Hayman Capital Management and I would like to thank you for the opportunity to share my views
on the grave security concerns I have for the State of Texas, the United States of America, and our
critical infrastructure in relation to the ownership by Guanghui Group America (GH America Investments
Group Inc.) and its leader, former Chinese People’s Liberation Army Officer, Sun Guangxin, of multiple
Texas land (at least 10 Texas ranches) and business holdings (spanning at least 130,000 acres and
including Blue Hills Wind Farm in Val Verde County). I am a founding member of the Committee on the
Present Danger: China and have lectured at our top universities (Harvard, Yale, Georgetown, Stanford,
University of Texas, etc.) on the Chinese financial system and the immediate threat that the Communist
Party of China (CPC) poses to the United States and the rest of the developed West. I currently sit as a
Trustee of the Texas Wildlife Association Foundation and am a member of the Board of Directors of The
Texas Department of Public Safety Foundation. I care deeply about the security of our state and our
country.
I am here in my personal capacity as a deeply concerned Texas resident and I support SB 2116 to
prohibit contracts and other agreements with certain foreign-owned companies in connection with
critical infrastructure in the State of Texas.
To begin, last week, the US Director of National Intelligence released our Intelligence Communities’
Annual Threat Assessment for 2021 1 of the largest threats to US national security. In this report, China is
1
https://www.dni.gov/files/ODNI/documents/assessments/ATA-2021-Unclassified-Report.pdf
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listed as the single largest threat to United States national security. In the report, there is a focus on
how the Chinese government and their companies intend to use cyber attacks to disrupt critical
infrastructure of the United States.
“We assess that China presents a prolific and effective cyber-espionage threat, possesses
substantial cyber-attack capabilities, and presents a growing influence threat. China’s cyber
pursuits and proliferation of related technologies increase the threats of cyber-attacks against
the US homeland, suppression of US web content that Beijing views as threatening to its internal
ideological control, and the expansion of technology-driven authoritarianism around the world.
We continue to assess that China can launch cyber attacks that, at a minimum, can cause
localized, temporary disruptions to critical infrastructure within the United States.”
FBI Director Christopher Wray stated in his July 2020 speech 2 that China represents the greatest threat
to our national security. Wray went on to say:
“We’ve now reached the point where the FBI is opening a new China-related
counterintelligence case about every 10 hours. Of the nearly 5,000 active FBI
counterintelligence cases currently underway across the country, almost half are related to
China. And at this very moment, China is working to compromise American health care
organizations, pharmaceutical companies, and academic institutions conducting essential
COVID-19 research.”
GH America, Sun Guangxin, and Guanghui Group are closely connected to the Chinese military and the
Communist Party of China. Sun is a former member of the 8 th , 9 th , and 11 th sessions of the Xinjiang
Chinese People’s Consultative Conference (CPPCC). SUN maintains close and positive relations with
current and former Communist Party leadership. These relationships are likely the key to his business
success in China. Guanghui Group’s website emphasizes the conglomerate’s determination in supporting
Communist Party of China’s leadership, as well as prioritizing “Party-building” amongst its employees. As
of 2018, Guanghui Group operated 40 internal Communist Party committees, 227 local grassroots CPC
branches, and employed more than 6,000 Communist Party of China members. Sun’s closest advisors,
Yang Tiejun and Shang Jiquiang are also former Chinese military officers. After thorough analysis of local
information sources, press, social media, and business records, it appears that Guanghui Group is much
more embedded in the Communist Party-State apparatus than most other “private” sector businesses.
Threats to Texas’ Critical Infrastructure (Specifically to ERCOT)
The Blue Hills Wind Project in Val Verde County, TX is owned by Chinese owned GH America and Sun
Guangxin. Given that the Blue Hills wind turbines will be generating electricity, the project involves
critical Texas infrastructure as it will plug directly into the Texas power grid. There is complete Chinese
2
https://www.fbi.gov/news/speeches/the-threat-posed-by-the-chinese-government-and-the-chinese-communistparty-to-the-economic-and-national-security-of-the-united-states
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control over this project and these interconnections. This will increase the imminent threat to the Texas
power grid THAT ALREADY EXISTS as a result of the current direct connections being made by yet
another company associated with Sun Guangxin through his Rocksprings Val Verde Wind Farm. The
risks of Chinese, Russian, Iranian, and North Korean cyber-attacks on electrical grids in the US are well
documented. According to the US Government Accountability Office’s report to Congress titled “Electric
Grid Cybersecurity” dated March 2021 3 ;
“Nations, including groups or programs sponsored or sanctioned by nation states, use cyber
tools as part of their information-gathering and espionage activities. According to the 2019
Worldwide Threat Assessment of the U.S. Intelligence Community and the 2020 Homeland
Threat Assessment, China and Russia pose the greatest cyberattack threats; of particular
concern, they have the ability to launch cyberattacks that could disrupt or damage critical
infrastructure.”
To the extent that Blue Hills, Rock Springs, or any other projects that are Chinese controlled connect to
control systems or requires other network access that can be linked to U.S. electrical control systems,
grave cybersecurity concerns are obvious and represent a clear and present danger to Texas’ electric
grid.
Our grid here in Texas has just shown all of us exactly how fragile it can be in times of stress. Given that
we in Texas don’t wish to allow the U.S. Federal Government to have control over our state electric
affairs, why would we ever allow malign State-sponsored actors (like China, Russia, or North Korea) to
plug directly into our electric grid? It seems unconscionable to me.
Proximity to Laughlin Air Force Base and the Potential to Provide Clandestine
Surveillance and Collection of Sensitive Information About How Texas Monitors
its Border with Mexico
Proximity of these windfarms to our largest USAF pilot training base (30 miles from Laughlin Air Force
Base and only 10 miles from its restricted airspace), creates a myriad of potential illegal surveillance
opportunities for the former Chinese military officer Sun Guangxin. With the Chinese owner’s proposed
700ft turbines, their ability to monitor, via line-of-sight, the Texas border, USAF planes and their pilots,
and other technical surveillance capabilities will be greatly enhanced. Wind turbines also provide a
quiet and undetectable power supply for hidden surveillance equipment.
3
https://www.gao.gov/assets/gao-21-81.pdf
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Something Doesn’t Add Up
Sun and GH America’s windfarm project in Val Verde County is their only known renewable energy
project in the United States or abroad. It’s reported that Sun and GH America grossly overpaid for their
land purchases in the Devil’s River area of Val Verde County. I find it curious that the wind values in the
county are amongst the lowest in the entire state of Texas. If truly economic investors (as opposed to
State-sponsored actors with alternative agendas) were to strategically place a windfarm investment, Val
Verde County would be amongst the last places in the State of Texas due to its poor wind values (see
below).
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Sun Guangxin’s Obvious Ties to the Communist Party of China’s Genocide and
Crimes Against Humanity
It has been widely reported that the Chinese Government has created concentration camps in or near
the capital of the Xinjiang region of China. Upwards of three million ethnic Uyghurs 4 have been ripped
from the streets and forcibly placed into these camps. The United Kingdom has determined, through an
extensive Tribunal 5 run by Sir Jeoffrey Nice QC, that these prisoners are having their organs harvested
from their living bodies. Sun Guangxin and Guanghui Group control nearly two-thirds of the real estate
market in Urumqi, the capital of Xinjiang. Some Chinese-language reports estimate that the
conglomerate owns more than 50% of the real estate in the entire region. It is likely that given Sun’s
deep party ties and his vast ownership of the real estate in Urumqi, that he and his company are tied to
what the United States State Department has classified as Genocide and Crimes Against Humanity 6 .
In closing, it’s important to note that I am a major supporter and investor in alternative energy
companies. I’m proud that Texas produces the most wind power of any state and I applaud the state’s
efforts to promote wind and solar. The threats posed by Sun’s windfarms on Texas’ critical
infrastructure are here for all of us to see in plain sight. This is a not a partisan issue, it’s simply a clear
and present danger to the state of Texas, the United States, and our critical infrastructure. I urge all of
you to pass SB2116.
4
https://economictimes.indiatimes.com/news/international/world-news/three-million-uyghurs-detained-inconcentration-camps-by-beijing-activist/articleshow/78343963.cms?from=mdr
5
https://chinatribunal.com/wp-content/uploads/2020/03/ChinaTribunal_JUDGMENT_1stMarch_2020.pdf
6
https://2017-2021.state.gov/determination-of-the-secretary-of-state-on-atrocities-in-xinjiang/index.html
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