Among California's public pension system's (CalPERS) $3 billion investment into Chinese companies, more than $450 million were spent on investments in 14 blacklisted China state-owned enterprises, an explosive report revealed on Friday.

These China state-owned companies have been blacklisted by the Trump administration because they were closely linked to the communist Chinese government.

The Washington Free Beacon reviewed several records that showed how the California pension system invested more than $450 million in the 14 blacklisted China state-owned enterprises and another $490 million in seven other companies that were owned by the Chinese government, which is funding the massive Belt and Road Initiative. These seven companies were not blacklisted by the Trump administration, but the 14 were, raising questions as to how it was approved by California government given former President Donald Trump's executive order on the issue.

According to Fox News, one of the 14 blacklisted China state-owned enterprises is the China Communications Construction Company (CCCC), which has "flouted international agreements by building military installations in the South China Sea." Records show that the California pension system invested up to $6 million in the company, sparking criticism from former Secretary of State Mike Pompeo back in August of 2020.

Pompeo argued at the time that the company and its subsidiaries had "engaged in corruption, predatory financing, environmental destruction, and other abuses across the world." The former State Secretary added that "The PRC must not be allowed to use CCCC and other state-owned enterprises as weapons to impose an expansionist agenda."

The California pension system's almost $500 million worth of investments was also spread across two more China state-owned enterprises, namely China Merchants Port, in which they invested $3.7 million and CITIC, in which they invested $110 million. China Merchants Port and CITIC both reportedly own ports that are used by the People's Liberation Army for military exercises.

"Some of the CalPERS investment policies are incredibly concerning," U.S. national security adviser Robert O'Brien told Reuters back in March 2020, when the Trump administration was reportedly "looking at" investments in Chinese military companies by CalPERS. "It's something we are taking a look at and it's concerning and, moreover, OK, why are we sending American capital to a country and supporting a defense industry that is popping out a couple of destroyers and frigates a month and threatening to have total over-mass against us in the Indo-Pacific."

O'Brien added, "It's an issue of security for American investors." The California state executive agency is the largest U.S. public pension fund and manages the pension and health benefits for over 1.5 million public employees, retirees, and families in the East Coast state.

Several California government leaders have now come under fire for the exposed $500 million worth of investments into blacklisted China state-owned enterprises, including Governor Gavin Newsom, who is nearing a recall election on September 14. San Diego Mayor Kevin Faulconer called upon the governor to provide "immediate answers" with regards to the investments, which he believes is evidence that Gov. Newsom "can no longer be trusted to lead."

CalPERS chief investment officer, Yu Ben Meng has also come under fire for his involvement with Beijing. Meng, who is a U.S. citizen born in China, worked for CalPERS twice and became CIO in January 2019, during which he managed $400 billion in investments. CalPERS CEO Marcie Frost came to his defense, saying that he had a "stellar international reputation."