WASHINGTON, D.C. – Today, Congressman Stephen F. Lynch (D-Boston) and Congressman Peter King (R-New York), the co-chairs of the Task Force on Anti-Terrorism & Proliferation Financing, introduced bipartisan legislation, H.R. 2426, the Secure Government Buildings from Espionage Act of 2017. In response to concerns about the ability to mitigate security risks without knowing about foreign ownership of government-leased real estate, H.R. 2426 would ensure that beneficial ownership information is collected as part of the government leasing process for buildings with high-security leased space.
In January of 2017, the Government Accountability Office (GAO) released a report, “GSA Should Inform Tenant Agencies When Leasing High-Security Space from Foreign Owners,” which noted 20 instances of the General Services Administration (GSA) leasing high-security space for government agencies in buildings that were foreign-owned. These spaces included six Federal Bureau of Investigation field offices and three Drug Enforcement Administration field offices located in buildings owned by companies based in Canada, China, Israel, Japan, and South Korea. In addition, the GAO report noted that the GSA did not have ownership information for about one-third of the GSA’s 1,406 high-security leases as of March 2016. The GAO also highlighted the risks of anonymous companies and hidden beneficial owners in commercial real estate. Without beneficial ownership information, the GSA may not be aware of the source of funds to finance the building and cannot track potential money laundering connected to the foreign-owned building.
“Protecting the physical security of government office spaces as well as improving the cybersecurity of confidential and potentially classified government information is of the utmost importance. By improving the GSA's record keeping of the owners of the buildings in which they lease high-security space, we will help prevent potential lapses in security and protect government agencies from potential data breaches or incidences of espionage,” said Congressman Lynch. “I thank Congressman King for joining me to introduce this important legislation. It is critical to our national security that we have beneficial ownership information for buildings in which sensitive government information is kept.”
Under current law, the GSA is required to determine whether the prospective lessor is a responsible party, but they are not required to consider foreign ownership of the building. H.R. 2426 would correct this gap and ensure that beneficial ownership information is collected as part of the GSA leasing process to ensure that the federal government is aware if foreign owners have a stake in the buildings it leases.
H.R. 2426 is supported by Global Witness, an international non-government organization focused on increasing transparency and exposing potential conflicts in the global political and economic system.
“The federal government is the biggest spender in the global economy, so it’s no surprise that secretly owned companies doing business with the U.S. are used to rip off taxpayers and jeopardize national security,” said Eryn Schornick, Policy Advisor of Global Witness’ U.S. office. “This legislation is essential to equip the government with the information it needs to ensure that it knows exactly who it’s doing business with.”
The text of H.R. 2426, the Secure Government Buildings from Espionage Act of 2017, is available here.
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