FCC, Justice Department investigate covert Chinese radio network

The Federal Communications Commission and the Justice Department are investigating a California firm whose US radio broadcasts are backed by a subsidiary of the Chinese government, officials said. Both investigations come in response to a Reuters report that revealed the existence of the covert radio network, which broadcasts in more than a dozen American cities, including Washington (DC), Philadelphia (PA), Boston (MA), Houston (TX) and San Francisco (CA). "Based on reports, the FCC will initiate an inquiry into the facts surrounding the foreign ownership issues raised in the stories, including whether the Commission’s statutory foreign ownership rules have been violated," FCC spokesman Neil Grace said. The California firm is owned by James Su, a naturalized US citizen born in Shanghai.

Su’s company, G&E Studio Inc, is 60 percent owned by a subsidiary of Chinese state-run radio broadcaster China Radio International (CRI). The FCC doesn't restrict content on US radio stations, except for rules covering indecency, political advertising and children’s programming. But under US law, the FCC prohibits foreign governments or their representatives from holding a radio license for a US broadcast station. Foreign individuals, governments and corporations are permitted to hold up to 20 percent ownership directly in a station and up to 25 percent in the US parent corporation of a station.