Commerce secretary's husband exercises stock options in tech company linked to Chinese government

Commerce Secretary Gina Raimondo's husband has deepened his financial investment in the artificial intelligence company PathAI, a business that has raised eyebrows as it is backed by a company with deep ties to the Chinese Communist Party (CCP).

Andy Moffit, who sits as strategic adviser for PathAI, exercised his stock options and purchased at least $50,000 worth of stock in December after part of his shares vested in May 2021, a transaction first reported to the Office of Government Ethics in January. 

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But PathAI’s financial backing by venture capitalist firm Danhua Capital (DHVC) has been scrutinized as Congress looks to fend off U.S. trade dependence on China, as well as CCP attempts to "obtain foreign expertise and intellectual property" – a strategy that helped contribute to the U.S.-China trade war started under the Trump administration. 

Since 2016, DHVC has been involved in at least two multimillion dollar investments to fund PathAI for artificial intelligence and is listed as one of 18 active investors, according to Crunch Base.

The report found that DHVC was one of five companies to provide $4.2 million in seed money for the AI startup. It renewed its investment in 2017, when it helped the company raise another $11 million to sponsor research in diagnostic technologies. 

Though it does not appear DHVC has invested in the AI company since 2017 – prior to when Moffit took up his post in 2020 – its financial ties to the CCP have caught the attention of GOP lawmakers. 

The California-based venture capital firm was founded in 2013 by Andrew Gu and the late Shoucheng Zhang, and it primarily invests in startups that focus in high-tech areas. 

Zhang was reportedly recruited by the Chinese government for a secret program first launched in the 90s that targeted scientists and technology officials, intended to bolster China’s advancement in the tech sector.

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Reports further suggested that in 2009 he was tapped for China’s "Thousand Talents" program, which U.S. security agencies have deemed an espionage program that facilitates "the legal and illicit transfer of U.S. technology, intellectual property and know-how to China."

In 2018 DHVC was flagged by the government in a U.S. Trade Representative (USTR) report that said the firm was linked the China’s controversial "Made in China 2025" scheme. 

The report – released on Nov. 30, 2018 – found that the program allows China to access top U.S. technologies by acquiring and investing in American startups.

Zhang reportedly committed suicide the day after the report was released. 

Reports later surfaced that suggested foul play could have been involved in his timely death, but Zhang’s family has rejected these theories and said he struggled with depression.

PathAI did not respond to Fox News Digital's request for comment on DHVC investments. 

Despite making it through Senate confirmation hearings in 2021, Raimondo has been scrutinized by members of the GOP who have questioned the secretary regarding her knowledge of the CCP-backed investments into her husband’s employer.

Following a December report by The Washington Free Beacon that first revealed the financial backing of a company with CCP ties, lawmakers sent the commerce secretary a litany of questions.

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"When did you first become aware of PathAI’s direct ties to the CCP?" is among the questions posed by House Energy and Commerce Committee Republican Leader Cathy McMorris Rodgers, R-Wash, Consumer Protection and Commerce Subcommittee Republican Leader Gus Bilirakis, R-Fla., and Oversight and Investigations Subcommittee Republican Leader Morgan Griffith, R-Va.

The letter, a copy of which was obtained by Fox News Digital, went on to inquire about whether she was aware of the PathAI’s funding during her confirmation process and whether she disclosed it.

Raimondo has yet to formally respond to the lawmakers' questions, but a source close to the matter told Fox News Digital that the secretary is working on her responses and will answer the questions imminently.

"Secretary Raimondo is committed to ensuring America’s engagement with China protects our national and economic security," a Commerce spokeswoman said, adding that the department has imposed export restrictions on "over 80 Chinese entities" since she took up the post.  

 "The Secretary’s husband’s employer – and the matters she would recuse from because of where he works – were disclosed to Department of Commerce career ethics officials, career officials at the Office of Government Ethics, and the U.S. Senate prior to her confirmation," the spokeswoman added.  "The ethics officials approved the arrangements and a bipartisan majority of the U.S. Senate confirmed the Secretary."

Since her confirmation to the top job, Republicans have voiced frustration with what they deem pro-China policies.

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Raimondo faced GOP ire following a September 2021 interview with The Wall Street Journal in which she said her aim was to improve U.S. business ties with China and suggested that "robust commercial engagement" could help mitigate existing geopolitical tensions. 

Despite her comments, she also backed the House-passed Competes Act last month which aims to strengthen U.S. economic competitiveness by reducing reliance on China-based trade. 

Though the House bill is in response to the bipartisan Senate-passed U.S. Innovation and Competition Act (USICA), it has proven more controversial and Republicans in the upper chamber are already gearing up for a flight to include tougher stances when it comes to curbing competition with China.