The major US tolling company that was sold to a Singapore-based firm under the Biden administration is reigniting national security concerns over its links to China, after it won the E-ZPass contract for the New Jersey Turnpike for $250 million more than the American company that has operated it for 22 years.
In September, the New Jersey Turnpike Authority awarded TransCore — owned by Singapore Technologies Engineering, known as ST Engineering — the full authority to run the operation for $1.73 billion, beating out Newark’s Conduent Inc., whose final offer was $1.479 billion.
Now, Conduent is crying foul, questioning the reasoning behind TransCore winning the contract it held for over two decades — and the risks the decision could carry.
Conduent filed an appeal over Nashville-based TransCore’s award, voicing concerns that owner ST Engineering’s parent company, Temasek Holdings, is wholly owned by the government of Singapore, with substantial ties to China.
Until recently, Fu Chengyu, a longtime chairman of state-owned Chinese oil companies — whom the protest points to as a high-ranking member of the Chinese Communist Party (CCP) with connections to China’s United Front — was a member of Temasek’s board of directors.
In 2022, the Washington Free Beacon reported Fu “served on the Chinese People’s Political Consultative Conference … a major hub of China’s united front system, which carries out foreign influence operations for the Chinese Communist Party.”
Although Fu stepped down from the board about six weeks after Conduent’s initial protest, he remains influential within Temasek as a director of a China-specific subsidiary of the company, according to the investment firm’s announcement of his departure from the board.
When ST Engineering was seeking approval from the Treasury Department’s Committee on Foreign Investment in the United States to acquire TransCore in 2021, a spokesperson from the company insisted that it operates “without any interference from the government or Temasek,” but national security experts warned that if the deal went through, it could mean TransCore’s data could end up in the hands of Singapore, China, and potentially other nations.
Individuals, businesses and government entities that sign up for automatic payments at toll booths provide sensitive information — including addresses, credit card numbers, driver’s license information and license plate numbers — to tolling operators such as TransCore, which, as of that time, handled some 70% of the tolls paid in the US.
The company has won more US contracts since its acquisition.
Exposing Americans’ data to foreign adversaries has become a greater concern since then.
Last year, Congress passed a law ordering video-sharing app TikTok, owned by Chinese firm ByteDance, to divest or shut down in the US over security risks, given that the CCP requires companies to provide it access to their data.
Former US Sen. Robert Torricelli (D-NJ), who is a consultant to Conduent, said the situation with a foreign-owned company like TransCore having access to America’s tolling systems is “worse” than the threat from TikTok.
“I don’t really understand why this hasn’t gotten a lot, frankly, a lot more attention,” Torricelli told FOX Business in an interview. “I would rather the Chinese knew what I was watching on TikTok than have the Chinese monitoring my car going up and down the New Jersey Turnpike. I don’t really understand why people aren’t more upset about it.”
The New Jersey Turnpike is one of the busiest highways in the US, and is a principal artery between the major cities on the East Coast.
Torricelli warned that every major US government official traveling between New York and Washington, DC, could potentially have their transportation patterns monitored if TransCore secures the contract to run it. He said important cargo like chemicals and even US military equipment and movements could be routinely tracked.
“There has to be some national security concern here,” the former senator said. “It is enormously more important than whatever nonsense is going on with TikTok, but it largely has been under the radar.”
The New Jersey Turnpike Authority (NJTA) declined to comment when asked by FOX Business whether the commissioners were concerned about the potential for E-ZPass customers’ data being obtained by the governments of Singapore and China, and the reasoning behind awarding TransCore a contract that cost $250 million more than their competitor’s lower bid.
A spokesperson for the NJTA noted that Conduent’s protest of the E-ZPass contract award is still being decided, and said the Turnpike Authority is not going to comment before the process is concluded and a final agency decision issued.
TransCore’s president and CEO, Whitt Hall, told FOX Business in a statement that the company has been based in the US for its entire 85-year history.
He said TransCore “has always been absolutely transparent about its ownership structure,” and “is the only toll system provider in the world to manufacture all of its tolling products within the US.”
“TransCore delivers the most secure toll systems in the US through a multi-tiered approach of best-in-class system design, strict compliance with all state and agency-specific data and cybersecurity requirements, and its National Security Agreement (NSA) that is in place with the US Departments of Justice and Treasury to assure that no personally identifiable information or protected data collected is ever accessible by or shared with any foreign entity or affiliate,” Hall said. “Any allegations to the contrary are false.”
When TikTok was trying to convince the US government to allow it to keep operating in the US despite its Beijing-based ownership, the social media company invested $1.5 billion in securing Americans’ data in the US with backups in Singapore, vowing to fully pivot to US-based data storage.
Despite that, Congress passed a law requiring it to divest or be shut down.
Torricelli believes TransCore deserves further scrutiny.
“If, indeed, we ever got to a point of high tension with the Chinese, they would be monitoring our most important internal transportation,” he told FOX Business. “It would be inconceivable that an American corporation would be allowed to have access to the internal travel of Chinese government officials and sensitive information and goods — inconceivable. I don’t blame the Chinese, they’re not at fault. It’s us.”
This story originally appeared on NYPost
