“Question: Do you stand by the statement you made in your SSCI questionnaire that for the previous ten years you had not been involved in any financial or business transactions with any entity controlled by a foreign government? Answer: Yes.”
— Question for the Record (QFR), Senate Foreign Relations Committee hearings on the nomination of Pompeo to be secretary of state, April 12, 2018
A line in a recent lengthy profile of Secretary of State Mike Pompeo in the New Yorker caught our attention: “[David] Murfin named Pompeo president of Sentry International, an oil-services firm that manufactured parts in China and elsewhere and sold them in the U.S. One Sentry joint venture was with a subsidiary of the Chinese national oil firm Sinopec, although Pompeo later told the Senate that he had no business ties to foreign government-owned entities.”
The reference to telling the Senate he had “no business ties” concerned a query in a questionnaire required by the Senate Select Committee on Intelligence (SSCI) when it considered Pompeo’s nomination in 2016 to be director of the CIA:
“During the past ten years [2006-2016], have you or your spouse received any compensation from, or been involved in any financial or business transactions with a foreign government or an entity controlled by a foreign government?”
Pompeo answered: “No.”
But when Pompeo later was nominated to be secretary of state, McClatchy reported that his Kansas business, Sentry International, imported oil field equipment from a company owned by the Chinese government. That’s why the issue was raised in the QFR for Pompeo’s nomination to be secretary of state, though he admitted no error. As shown above, he stood by his statement that he had not been involved with any entity controlled by a foreign government.
But we wondered: Was there anything else missing? After all, Pompeo had recently spoken about his “small joint venture” in India.
The SSCI questionnaire reached back 10 years. There is a similar question on the Senate Foreign Relations Committee questionnaire, but it only goes back five years, or from 2013 to 2018. Pompeo was a member of Congress from 2011 to 2017, so for the purposes of this inquiry we will examine the accuracy of his answers to the SSCI.
Digging through corporate records and archival websites, it turns out there are three possible cases in which Pompeo could have admitted to engaging in business transactions with a company controlled by a foreign government.
When Pompeo was president of international affairs at Sentry International, the company had a major presence in China.
SJ Petro Pump Investment LLC was organized in Kansas in November 2006, with Pompeo as the registered agent. In its 2007 annual report to the Kansas secretary of state, Pompeo is listed as a 5 percent or greater owner of SJ Petro Pump Investment LLC. He also signed the filing.
The investment became an issue in Pompeo’s first congressional race, when his opponent accused Pompeo of creating jobs in China, not the United States.
Pompeo told the Wichita Eagle in 2010 that “the company (SJ Petro Pump) acts as an agent that sells and distributes high-pressure pumps made by the Chinese firm SJ Petro. He said the local firm does no direct manufacturing and shares employees, primarily sales force, with Sentry International. Pompeo characterized the Chinese SJ Petro as a supplier to his company, part of an international supply chain of products that Sentry buys and sells, sometimes under its own name and sometimes under the name of the original manufacturer.”
The Chinese business, SJ Petro or SJ Petroleum Machinery Co., is a subsidiary of Sinopec, one of the world’s largest oil and gas companies. It was majority owned by China Petrochemical Corp., a state-owned enterprise, according to its 2008 annual report.
A former Pompeo aide, the late Tim O’Shaughnessy, was director of China operations at Sentry International, working under Pompeo, and handled relations “with the Chinese government, Sinopec, and CPDTC,” according to his memorial website. CPDTC is the China Petroleum Technology & Development Corp., which along with Sinopec are Chinese government-owned entities.
When McClatchy reported on this investment, a CIA spokesman dismissed the report. “Mr. Pompeo was president of an American company in Kansas that sold products made in many different countries, Canada and China to name just two. In fact, the paper clips the company used were from Taiwan,” the spokesman said. “He would have no reason to know details on the layers of companies that may or may not have had ownership interests in each overseas company that supplied products to his Kansas company.”
But it was not a small operation. Under Pompeo’s direction, O’Shaughnessy “grew Sentry manufacturing partnerships from 3 to 10 plants across China, contributing to a doubling of revenue and making Sentry the second most used pump-jack in the USA,” the memorial website says. A university profile of O’Shaughnessy said he managed “the Shanghai office and its logistics and quality control team of nine people [while] overseeing the operations for a joint-venture gearbox factory in Luoyang, China with around 80 workers.” It strains credulity that Pompeo would be unaware of that.
Shores-Sentry was started in 2008 as a merger between Shores Oilfield Equipment and Sentry Pumping Units International. Shores-Sentry was registered in Kansas as a foreign company (incorporated in Oklahoma) by Pompeo in 2008.
In September 2009 and January 2010, Shores-Sentry purchased equipment from Dagang Oilfield Group, which is a subsidiary of state-owned China National Petroleum Corporation (CNPC). PetroChina, which trades publicly, is controlled by CNPC.
Pompeo was employed by Sentry Pumping Units in both 2009 and 2010, according to his House of Representatives financial disclosures, and served as “president or equivalent” of Sentry Pumping Units International in 2009, according to an April 2010 filing with the Kansas Secretary of State.
As far as we can tell, this foreign-government business transaction has not been previously reported and fell within the 10-year window of the SSCI questionnaire.
Pompeo said in June he was in a joint venture with Hindustan Aeronautics Limited (HAL) when he headed Thayer Aeronautics. HAL is a state-owned company governed under the management of the Indian Ministry of Defense. We did not find records in Kansas related to this joint venture, but we are not going to dispute his memory. (We are not sure why this deal would be so memorable when the later Sinopec venture was not.)
Still, this business arrangement may have just fallen outside the 10-year window by a few months. Pompeo on his SSCI questionnaire says he was employed at Thayer in 2006, but the New Yorker says “by April of 2006, Pompeo was no longer leading the company.” (The article suggests he was pushed out because of poor management.)
Pompeo signed his SSCI form on Dec. 16, 2016, so as a technical matter, the 10-year window could be deemed to have started Dec. 16, 2006. But in keeping with the spirit of full disclosure, it seems any foreign-government business transactions that took place in 2006 should have been listed.
In fact, the Wichita Business Journal reported in 2006 that Pompeo (and the then-president, Brian Bulatao) said “their ownership interests have not changed” even though they had stepped aside. The same news organization reported in 2007 that Pompeo had sold his stake on April 2 of that year. So that would mean the Hindustan deal probably fell even within the 10-year window dating from Dec. 16, 2016.
When we asked the State Department about these foreign-government transactions, we received this statement from a spokesperson:
“This is a recycled story. Before entering public office, Secretary Pompeo successfully ran several great U.S. businesses that sold products with components made in many different countries. He would have no reason to know the details about the layers of companies that may or may not have had ownership interests in the overseas companies that supplied products or components to his Kansas-based businesses—office supplies, computers, tools, valves, pencils, paperclips, you name it. The assertions you make were reviewed during two, intense Senate confirmation processes.”
The Bottom Line
The interesting thing about the State Department’s response is that as far as we can tell, there was almost no review of these issues, except for a QFR that Pompeo dismissed in a pro forma response. We are puzzled why he would maintain that his answer on the SSCI questionnaire was correct when documents and records with his signature related to Sinopec indicate otherwise.
Meanwhile, there was at least one other business transaction with a foreign government-owned business that was not disclosed to the SSCI — which also means that Pompeo’s response to the Senate Foreign Relations Committee appears incomplete. There’s a reason the Senate asks such queries of potential nominees, and a failure to fully answer such questions should not be so easily dismissed.
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