THE WHITE HOUSE 

WASHINGTON 

July 7, 2020 

Erhard R. Chorle 

Chairman 

U.S. Railroad Retirement Board 

William 0. Lipinski Federal Building 

844 North Rush Street 

Chicago, IL 60611-1275 

Dear Chairman Chorle: 

We write to you in the interest ofprotecting American investors, as it has come to our attention 

that the Railroad Retirement Board (RRB) is permitting hundreds of millions of dollars of 

railroad workers' retirement assets to be invested in companies from the People's Republic of 

China (PRC).i The RRB's retirement dollars are being managed through the National 

Railroad Retirement Investment Trust (NRRI Trust), which has decided to invest in 

companies from the PRC that present a national security risk to our country. 

The NRRI Trust's investment in the PRC exposes the retirement funds ofrailroad workers to 

significant and unnecessary economic risk. Such investment also channels American worker 

funds into PRC companies that raise significant national security and humanitarian concerns. 

Many ofthese PRC companies operate in violation ofU.S. sanction laws and assist the PRC's 

efforts to build its militaryii and oppress religious minorities. The list of companies that 

receive NRRI Trust investment funds includes military contractors that provide military 

aircraft, missiles, and telecommunications support to the People's Liberation Army, 

companies like Hikvision that manufacture surveillance equipment that China uses to oppress 

religious minorities,iv and at least one company, ZTE, engaged in a multi-year conspiracy to 

supply, build, and operate telecommunications networks in Iran using U.S:..;origin equipment in 

violation of the U.S. trade embargo, and committed hundreds of U.S. sanctions violations 

involving the shipment of telecommunications equipment to North Korea.v 

Another key reason why the NRRI Trust's investments in PRC companies expose American 

railroad retirees to substantial economic risk is because the Chinese Government currently 

prevents companies with Chinese operations listed on U.S. exchanges from complying with 

applicable U.S. securities law, leaving investors without the benefit of important protections.vi 

According to the Securities and Exchange Commission (SEC) and the Public Company 

Accounting Oversight Board (PCAOB), Chinese authorities have impeded the PCAOB's ability 

to oversee PCAQB-registered audit firms in mainland China and Hong Kong who serve mainland 

Chinese companies. This has prevented the PCAOB from conducting inspections ofthose firms' 

audits ofChinese companies in violation ofU.S. law. PRC law prevents the PCAOB from directly 

conducting its oversight function inside Chinese territory. This adds to the significant legal and 

practical obstacles to the SEC and PCAOB obtaining infom1ation needed for investigations or 
enforcement actions. 

Further, the NRRI Trust is investing in the PRC during a time of mounting uncertainty 

concerning the PRC's relations with the rest of the world. Such concerns include the 

possibility offuture sanctions or boycotts that may arise from a wide range ofissues, including 

the culpable actions of the Chinese Government with respect to the global spread of the 

CO VID-19 pandemic, the suppression ofHong Kong's democracy, the purchase ofIranian oil in 

contravention of U.S. sanctions, gross human rights violations in the Xinjiang region, the 

militarization ofthe South China Sea, and threats to freedom ofnavigation. 

The financial impacts of all these risks are significant and raise serious fiduciary issues. Scandals 

involving Chinese companies in recent years have cost investors billions of dollars. vii The NRRI 

Trust has available alternatives that avoid the risks of Chinese equities. 

In light ofthese economic, national security, and humanitarian concerns, we ask that you and your 

board carefully consider whether the NRRI Trust is currently acting as an appropriate 

fiduciary for those hardworking Americans and retirees the RRB serves. Ifyou also believe 

that investment in the PRC using American retiree dollars to fund China's military industrial 

complex and human rights violations is inappropriate, or that such investment may violate the 

prudent person rule under the Employee Retirement Income Security Act, we ask that the 

RRB immediately inform the NRRI Trust of its concerns and further demand that the NRRI 

Trust take swift action to protect RRB members. 

We would appreciate a response regarding the RRB's intentions by July 15, 2020. 

Respectfully, 

Robert C. 0 'Brien 

Assistant to the President for National Security Affairs 

Lawrence Kudlow 

Director, National Economic Council 

i https://www.rrb.gov/sites/default/files/2020-04/FY2019 Report with Auditors Report.pdf 


iihttps://web.archive.org/web/20121120094356/http://www. tlightglobal .com/news/articles/airshow-china-a vic­


proposes-stealth-fighter-for-export-3 78944/ 


iv https://www.federalregister.gov/documents/201911010912019-2221 O/addition-of-certain-entities-to-the-entitv-list 


vhttps://www.commerce.gov/news/press-releases/2018/06/secretarv-ross-announces-14-bi 11 ion-zte--settlement-zte­


board-management 


vi https://pcaobus.org International/Pages/China-Related-Access-Chall~nges.asN 

vii See, for example: https://fortune.com/2020/05/20/luckin-coffee-stock-lk-shares-valuaJion-china-nasdaq-delisting/