Ken Griffin Reshaped Law Banning Chinese Real Estate Purchases

(Bloomberg) — When Florida Governor Ron DeSantis pushed through an anti-China crackdown in his state earlier this year, he won praise from populist Republicans across the country.

But to Ken Griffin, the state’s wealthiest man, the effort represented an ideological affront. In its most extreme version, the proposed legislation would have essentially prohibited citizens of seven nations, including China and Venezuela, from buying property anywhere in South Florida, even if they had work permits. Those limitations also posed complications for Griffin’s plan to relocate hundreds of employees to Miami where he’s planning to build a headquarters costing at least $1 billion.

So the Citadel founder assembled a network of influence to rework the proposed law, according to people familiar with the matter. The scope of the restrictions was then narrowed geographically to those with work permits.

The episode demonstrates the power Griffin has amassed in Florida roughly a year after moving from Chicago, becoming a force in local politics, philanthropy and real estate. It also shows the tensions between him and DeSantis as the governor pursues an increasingly right-wing and populist agenda as he runs for the Republican presidential nomination.

“Florida is defined by its promise of freedom and economic opportunity, and our State government must continue to reflect and uphold these ideals.” Griffin, 54, said in an emailed statement. “We support the freedom of individuals who are lawfully working in the US to purchase homes and we will continue to advocate for those rights.”

Griffin declined to comment directly on his role influencing legislation.

The property crackdown went into effect in July, one of the most extreme efforts in the US targeting Chinese citizens. The governor hailed the law after its signing as a “stand against the US greatest geopolitical threat — the Chinese Communist Party.”

The US Department of Justice has said the law violates the constitution, groups like the American Civil Liberties Union have questioned it in courts and real estate brokers have argued it could depress sales. Still, at least 18 states have either looked at or passed restrictions on Chinese ownership of property.

Early drafts of the Florida legislation called for barring all Chinese citizens and others from buying real estate within 20 miles (32 kilometers) of military bases and critical infrastructure, such as ports, airports and power substations.

That encompasses most of South Florida, including desirable Miami neighborhoods that would likely be a destination for Citadel employees such as the Brickell financial district, Coconut Grove or Miami Beach, where Griffin has spent hundreds of millions on property.

Citadel’s lobbyists persuaded lawmakers to carve out an exception for lawful workers and others, according to people familiar with the process. So in the final version of the law, those with US visas — excluding tourists — are free to purchase a single property in the Miami enclaves, with restrictions only within a 5-mile radius of military bases.

Citadel has about 250 employees in Miami and only a handful could have been affected by the harsher version of the law, one of the people close to the situation said. Globally, the business employs some 4,500 people and has diverse leadership, with key employees from China, India and Ecuador, among others.

Read more: Griffin Brings Billions to Miami With Political Wind at His Back

“Citadel and Citadel Securities hire exceptional talent from all over the world, including for our Miami headquarters,” Griffin said, declining to provide figures of how many workers would have been impacted or name specific employees.

Substantial Taxpayers

One of Griffin’s most trusted deputies is Peng Zhao, a US citizen who was born in Beijing and is now chief executive officer of Citadel Securities, which generated $2.7 billion in revenue in the first six months of this year.

Zhao, a math prodigy who’s active in Asian-American philanthropic groups, is one of the “key architects” of Citadel Securities, according to its website.

Citadel turned to Capital City Consulting, tapping one of the most influential lobbyists in Florida, which has worked with clients including BlackRock Inc. and Citigroup Inc. Co-owner Nicholas Iarossi is also a long-time fundraiser for DeSantis.

Iarossi and partners, Maicel Green, a former Olympian, and Christopher Schoonover, worked to secure changes by persuading key legislative figures, including House Speaker Paul Renner and the bill’s Republican sponsor, David Borrero, people familiar said.

Capital City declined to comment on its work for Citadel.

The potential impact of the law was laid bare by an email the wife of a senior partner at Citadel Securities sent to a lawmaker in the state capital of Tallahassee. The couple, both Chinese immigrants now living in Miami, warned of the hate they could encounter.

“We are proud to become substantial taxpayers and residents of Florida,” she wrote this year, urging lawmakers to reconsider the bill.

She recalled a grueling episode of racial prejudice at the Miami International Auto Show in 2022 and pleaded with them not to pursue the full measure.

“This bill will incentivize hate and crime against our daily life, our community, and our children at school,” she said. “Racism and hate crime have already been a problem in the society and this bill will worsen the situation.”

DeSantis Connection

While Griffin initially supported DeSantis financially — he donated $5 million to his re-election campaign for governor last year — and said in March “he would love to see” the governor run for president — there are growing signs of tension between the two since DeSantis launched his bid for president.

While DeSantis has continued attacking Walt Disney Co. and BlackRock, as well as touting his record on restricting abortion, Griffin, who’s worth almost $37 billion, hasn’t given money to DeSantis’ presidential bid and continues to weigh his options.

“As the presidential campaigns unfold, I am assessing how the policies of each candidate will address the challenges facing our country,” Griffin said in a statement. “I care deeply about individual rights and freedom, economic policies that encourage prosperity and upward mobility, all children having access to a high-quality education, ensuring our communities are safe, and a strong national defense.”

DeSantis, who’s slipped in polls since announcing his candidacy in May and is now significantly behind former President Donald Trump, didn’t respond to multiple messages seeking comment.

Read more: DeSantis Replaces Campaign Manager in Latest 2024 Shakeup

The Florida law is now less restrictive than originally planned, but it could still impact private companies with real estate in Florida that have any Chinese investors, said Joseph Hernandez, a real estate lawyer at Bilzin Sumberg, a Miami-based law firm.

To address concerns about its scope, the law could be tweaked further, people with knowledge of the discussions said.

Song Jian, the founder of brokerage Multi-Choice Realty, is a plaintiff in a federal case trying to overthrow the bill. He said it’s causing widespread concern in Florida’s Chinese community.

Almost 99% of his clients are Chinese, and some have decided to leave the state, he said: “They don’t know what direction Florida is going to go.”

–With assistance from Guillermo Molero.

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