WASHINGTON (NYTimes) - Just over a year ago, two senior executives from the giant Chinese conglomerate HNA landed a meeting with Steven Mnuchin, the U.S. Treasury secretary, at his office.
The executives, Adam Tan and Guang Yang, snapped a photo with Mnuchin, holding a model plane of the HNA-owned carrier, Hainan Airlines.
Officially, they wanted to discuss the state of the U.S. economy. But HNA had other urgent business: It was trying to buy the New York investment firm SkyBridge Capital.
The deal had been languishing for months while the Treasury Department and other agencies reviewed it for potential national security concerns.
Other acquisitions, too, were on hold, putting pressure on a spending spree that had turned HNA into a global behemoth with US$100 billion in annual revenue and stakes in Hilton Hotels, Swissport and Ingram Micro.
HNA executives were eager to complete the deal, as was SkyBridge's co-founder Anthony Scaramucci, who was hoping to be appointed to a White House post.
They held a second meeting, in June last year, with Treasury officials involved in the SkyBridge review by the Committee on Foreign Investment in the United States, the highly secretive, multiagency board known as CFIUS.
The meetings were part of a major campaign by HNA to win over Washington power brokers.
It hired leading lobbying firms like McLarty Associates. It bought splashy advertisements to position HNA as an emerging global brand and a good corporate citizen.
Top executives visited Capitol Hill, and in February one met President Donald Trump at the Trump International Golf Club, near his Mar-a-Lago estate in Florida.
But in late April, HNA scrapped its bid for SkyBridge Capital. Both companies realised that they would not get the green light from regulators.
Chinese companies, once among the most prolific deal-makers in the world, are increasingly running into regulatory roadblocks, particularly in the United States.
A slew of deals by Chinese buyers have been thwarted for national security reasons, including the acquisition of MoneyGram by Ant Financial, the electronic payments company controlled by internet tycoon Jack Ma.
Regulators will soon be more emboldened.
Congress has just passed new rules on foreign takeovers of US companies, to strengthen the national security reviews and give more authority to CFIUS. Trump is expected to sign them into law.
HNA, in many ways, has embodied China's global vision. In recent years, company executives jetted around the world, investing overseas in airports, shipping lines, office towers and international logistics operations.
The company had long-standing ties to leaders in both China and the United States. Its executives have struck business deals with former Governor Jeb Bush of Florida as well as the family of former Chinese prime minister Wen Jiabao, according to records obtained by The New York Times.
But global regulators started to ask questions about its debt-fuelled buying binge, as well as its ownership structure.
Like other large Chinese conglomerates, HNA is a vast network of public and private companies, subsidiaries and affiliates under a single corporate umbrella.
In the United States, regulators asked HNA about its links to the Chinese government, according to court documents.
HNA has since reversed course, selling off billions of dollars in assets and restructuring its operations. The company also realigned its management team after the death of its co-chairman Wang Jian, who the company says fell off a wall in a tourist accident in the south of France in early July.
Tan was recently named head of HNA International, a post formerly held by Wang, while Yang is stepping down as president of HNA Group North America with plans to leave the company.
"The problem with HNA is not that they're a Chinese company. It's about transparency," said Derek Scissors, a scholar at the American Enterprise Institute in Washington. "They say, 'Who is HNA?' No one knows who owns this company."
After the election of Trump, Scaramucci started laying the groundwork to sell SkyBridge, a New York firm that invests clients' money in hedge funds. Scaramucci, a former Goldman Sachs executive who had served as a Trump campaign adviser, was positioning himself for a role in the administration and wanted to be free of potential conflicts.
In December 2016, he hired Greg Fleming, a respected investment banker, to find a buyer for the firm.
Within weeks, Scaramucci said, there were four bids, although he would not identify the other potential buyers or the price HNA agreed to pay.
HNA stood out, Scaramucci said. A fast-growing Chinese conglomerate, it had US$100 billion in annual revenue and 400,000 employees.
The company, he said, pledged to retain the vast majority of SkyBridge staff, many of whom had been with him from the start.
But HNA was politically toxic for Scaramucci. As speculation swirled that HNA was buying SkyBridge to curry favour with the administration, his appointment to become the business liaison was rescinded.
Scaramucci, who later served briefly as the White House communications director, said such rumours had been spread by aides who opposed his joining the new administration.
HNA has strongly denied such motivation was behind its agreement to buy SkyBridge, saying its interest in the firm dates back to the summer of 2016, before the election.
HNA proactively decided to seek regulatory approval for the SkyBridge deal from CFIUS, an interagency body that includes, among others, representatives from the Treasury and the Department of Homeland Security.
HNA had gone through the process before, including in early 2016 for its $6 billion purchase of Ingram Micro, a California electronics distributor.
Back then, HNA was relatively unknown in the United States. By early 2017, perceptions of the company had changed.
Heavily indebted companies like HNA came under scrutiny as Chinese authorities pressed banks to rein in deal-making.
Its debt mushroomed, and global banks pulled back from advising the company last year. Regulators in Switzerland said HNA had given "untrue" information about its ownership structure when the company sought approval for a takeover of Gategroup, a Swiss catering firm.
Several deals were in limbo as HNA waited for approval from U.S. regulators. In addition to SkyBridge, HNA had agreed to buy a division of Ness Technologies, a New Jersey software firm, for US$325 million in early 2017.
Regulators reviewing the Ness and SkyBridge deals for national security purposes wanted more information about HNA's ownership. But they began discovering discrepancies in documents that the company had submitted about its corporate structure and ownership, according to court documents filed by Ness in a lawsuit against HNA. (Ness sued HNA for breach of contract, accusing it of obstructing the regulatory approval process.)
According to the lawsuit, HNA filings did not make clear who ultimately controlled the company.
In regulatory filings, for instance, the company made inconsistent and contradictory statements about who held a large stake in the HNA Group, Ness said.
The company later revised its filings to say a large portion of the shares had recently been donated to a New York charity controlled by HNA's top executives.
Regulators also pushed for months for a better understanding of the company's ties to the state, the suit said.
Eventually, HNA disclosed to U.S. regulators that its other co-chairman, Chen Feng, was a member of the Communist Party, according to the lawsuit.
In a statement, HNA disputed the account given by Ness but declined to elaborate. "We respect the confidentiality of the CFIUS process and therefore will not comment on it," the company said in a statement.
Lawyers representing Ness said HNA had botched the acquisition by making "false and misleading" statements, undermining the regulatory review.
"We terminated based on a breach," said Paul Werner, an attorney representing Ness.
"We tried to obtain CFIUS approval. But ultimately it became clear that they poisoned the process and frustrated the CFIUS review."
With HNA facing more pressure in the United States, top executives sought to polish the company's image.
The company hired Sard Verbinnen & Co., a firm known for its crisis communications division, to help manage press coverage. It placed full-page advertisements in Bloomberg Businessweek and The Wall Street Journal, touting HNA as a global brand, symbolized in print by an image of a whale floating over city skyscrapers.
It enlisted McLarty Associates, started by Thomas F. McLarty III, who served as chief of staff under President Bill Clinton, and another powerhouse lobbying and consulting firm in Washington, the Cohen Group, run by former Defense Secretary William S. Cohen. One firm organized a Washington round table on Chinese investment and invited reporters. The other arranged for HNA executives to meet Senator Rand Paul.
The company spent lavishly on extravagant parties and corporate events held in New York, London and Paris.
In New York, HNA held a gala event for 300 guests at Lincoln Center, capped by a ribbon-cutting and an appearance by Christopher Nixon Cox, a grandson of President Richard M. Nixon. In London, HNA promoted itself with a "DNA of HNA" symposium featuring paid appearances by former Prime Minister David Cameron of Britain and former President Nicolas Sarkozy of France.
"There have been very few Chinese companies that have tried to engage the Washington policy community directly," said Scott Kennedy, a scholar at the Center for Strategic and International Studies in Washington.
"But once HNA realized they were hitting a brick wall on regulatory matters, that began to change."
To help lead its charm offensive, HNA turned to one of its executives, Yang, a former Franklin Templeton investment manager who has a Harvard MBA and a résumé with a mix of business and political endeavors.
Yang - a naturalised US citizen who was born in China - once accompanied Tony Blair, the former British prime minister, on a business trip to China that involved meetings with government officials.
He raised money for Jeb Bush's presidential campaign in 2016 and, before that set up a partnership between HNA and Bush.
Corporate records reviewed by The Times show he also had business dealings with golf legend Jack Nicklaus and the son of Wen, the former Chinese prime minister.
With Yang's aid, HNA executives met Vice President Mike Pence at an Atlantic Council dinner.
In early June 2017, with the CFIUS review underway, they went to Treasury. Yang also met with Trump at Trump International Golf Club on Presidents Day weekend. And the photo opportunities with US leaders also played well back in Beijing.
The company said Yang's meeting with Trump had been an "unplanned and impromptu greeting," adding that its meetings with US officials were "common for companies of our size and economic impact."
In the United States, HNA emphasized its role in creating jobs and buying US goods. It was essentially making the case that Chinese investment in the United States was beneficial to Americans.
"New flight routes to the US by Hainan Airlines will undeniably contribute to U.S. economic growth through tourist spending, international business deals and the purchase of American-made aircraft," Tan, the company's vice chairman, said in one speech aimed at an American audience.
By early spring, it was clear HNA's deal for SkyBridge was doomed.
Two other HNA deals had failed to win CFIUS approval. And in Washington, the mood toward Chinese investment was souring, as trade tensions mounted.
In an interview, Scaramucci said that in March the two firms agreed to cancel the SkyBridge acquisition. Instead, they decided to create a joint venture that might seek new opportunities in China.
"We just decided we didn't want to go forward," Scaramucci said.
"It's unfortunate because these are great guys. But we'll do something in China." David Barboza and Michael Forsythe.