Sen. David Perdue Led Dollar Tree’s Outsourcing Effort into China

In the pivotal Senate race between Republican Sen. David Perdue of Georgia and his Democratic challenger Jon Ossoff, the candidates have traded accusations around financial connections to China.

But previously unreported business disclosures show that Perdue, during a touchstone period of his business career, expanded aggressively into China to import cheap products into the United States.

Before entering the Senate in 2015, Perdue spent much of his career advising and managing large corporations, including serving as the chief executive of Dollar General from 2003 through 2007. Investor reports and earnings call transcripts from that period show that as chief executive of the variety goods giant, Perdue pushed to increase profitability by importing products made by factories in low-wage overseas markets.

Shortly after taking over at Dollar General, Perdue told an analyst with JPMorgan Chase that the company was “light in sourcing relative to some of our competitors” and pledged to “redouble” the effort to tap into markets in Asia. In 2004, Perdue opened a Chinese affiliate, Dollar General Global Sourcing Holdings, which maintains offices in Shenzhen and Hong Kong, to integrate the company’s import strategy.

“We have opened a sourcing office in Hong Kong, and I can tell you we have had a dramatic impact on our business by having direct contact with our manufacturers,” boasted Perdue during a talk to a group of investment bankers the following year. Subsequent investor reports noted that Dollar General’s focus on “utilizing our Hong Kong Office” improved profitability by increasing the amount of goods “manufactured overseas” at low cost.

Hong Kong, which became part of China in 1997, has long served as the regional hub for international buyers seeking to source low-cost manufactured goods and raw resources for U.S. companies.

The outsourcing record contrasts sharply with the Georgia Republican’s rhetoric on the campaign trail. Perdue has swiped at Ossoff, claiming that his Democratic opponent has financial connections to China.

“You took money from the Chinese government that originated this virus in the first place,“ said Perdue at the Atlanta Press Club debate last week. “Jon Ossoff won’t hold China accountable. He works for them,” exclaims the narrator in Perdue’s latest campaign advertisement.

The comments reference Ossoff’s work as managing director of Insight TWI, an investigative television production company. The company sold documentaries to a number of film networks and television stations, including to PCCW, a Hong Kong-based telecom and media firm — a transaction the Perdue campaign has pounced on in the closing weeks of the election.

PCCW is a publicly traded corporation. The chairman of the company is Richard Li, one of the wealthiest residents of Hong Kong. The Perdue campaign has cited Li’s criticism of the Hong Kong pro-independent protest movement and PCCW’s ties to the Chinese state-owned firms to suggest that the documentary sales reveal undue influence from the Chinese government.

The Ossoff campaign has stated that the payments were for “two investigations produced by Jon’s company of ISIS war crimes against women and girls,” representing “one of dozens of TV stations and distributors in more than 30 countries that have aired Jon’s work.”

“Jon strongly supports Hong Kong’s pro-democracy movement and condemns the brutality and authoritarianism of the Chinese Communist Party,” the campaign said previously in a statement to the press.

“As CEO of Dollar General, which is an American Fortune 500 company, David Perdue created tens of thousands of American jobs, a claim that has been verified by independent fact checkers,” said John Burke, a spokesperson for the Perdue campaign, in a statement to The Intercept.

The Perdue campaign did not directly address the Chinese outsourcing effort led by Perdue at Dollar General. Instead, the campaign claimed “Jon Ossoff has never created a single American job” and noted that Pierre Omidyar, the philanthropist who provided the funding to launch The Intercept and still funds it, also helped underwrite an Insight TWI investigative series on corruption in Africa.

“Given Omidyar’s financial backing of Ossoff’s personal business, it’s no surprise to see The Intercept try to spread false narratives to prop up his candidacy and distract from the fact that his ties to the Chinese Communist government continue to raise serious ethical questions,” said Burke.

The Intercept maintains full editorial independence from all donors.

Ossoff’s campaign has pledged to “expose and attack unfair and unethical trade, labor, and environmental practices by overseas competitors that disadvantage American workers and businesses.” He has campaigned to reduce U.S. dependence on Chinese supply chains and work to “strengthen domestic producers.”

Despite the echo of President Donald Trump in the latest campaign barbs about China, Perdue has been a staunch supporter of globalized free trade for much of his career. Perdue worked for Kurt Salmon Associates, a management consulting firm, where he helped footwear companies import shoes from Taiwan, Korea, China, Indonesia, and Malaysia. He later worked with Sara Lee Corporation in Hong Kong to improve the firm’s sourcing strategies.

The issue of outsourcing came up during Perdue’s previous Senate race, during which comments he made during a deposition were unearthed. The comments, taken during a lawsuit over his role as chief executive of a company called Pillowtex Corporation, showed Perdue explaining under oath that he had “spent most of my career” outsourcing jobs. During the deposition, Perdue discussed his focus on foreign sourcing operations while he worked at Reebok, as well.

Perdue’s business outlook on the need for cheap labor extends to other policy areas. The Georgia Republican opposes raising the federal minimum wage, which has been $7.25 since 2009. The Intercept previously reported that Perdue privately lobbied the Trump administration to increase the number of H-2B visas to allow businesses to bring in low-wage migrant workers this year.