Congressman who oft attacks China does business with it, selling t-shirts to U.S. soldiers

U.S. Rep. Pat Fallon, the freshman Texas congressman, wasted no time making his mark in Congress as a China hawk. Just a few weeks on the job, Fallon sent a letter to President Joe Biden warning the Democrats' Green New Deal would make America dangerously reliant on "countries with no environmental or labor standards like Communist China, Russia, and the Congo."

Just 10 days after the letter, though, the Recon Sportswear company that Fallon and his wife Susan have owned for more than two decades received 75 containers of baseball caps from the Yiwu Qimo Clothing Company in Zhejiang province, China, according to U.S. import records reviewed by Just the News.

The shipment, and scores more like it, unmask a well-kept secret in Washington: One of the Republican Party's fiercest new critics of China also has done and continues to do business with that communist country. And some of that apparel ends up sold to American troops on bases like Fort Benning in Georgia and Lackland Air Force Base in Texas.

In all, Just the News reviewed more than 100 import shipments from Chinese apparel companies covering tens of thousand of pieces of clothing that were imported by Recon Sportswear, just one of the t-shirt and apparel companies owned by the Fallons.

In an interview with Just the News, Fallon acknowledged his apparel firms, including those selling wares on military bases, import slightly more than half of their products from China, saying that it's the cost of working in the apparel business dominated by cheap labor in China. 

Fallon said he stopped playing a role in the day-to-day operations of his company starting in 2009 but has pressed to lower its reliance on Chinese products. "I wanted to divest from China completely," he said. "And I said that a few years ago. It takes some time to do that, to find new sources and new products that have the quality that American consumers demand."

Fallon's company has continued to heavily import from China, with more than two dozen of the imports occurring since he joined Congress in January.

Fallon's first financial disclosure report in the U.S. House was filed belatedly in August after he got an extension. It revealed he owned several apparel companies and partnerships that generated millions of dollars in revenue, including Recon Sportswear.

Just the News last month matched the company names on his financial disclosure form to contracts on military bases to sell t-shirts. Fallon's form, covering his assets through Dec. 31, 2020, showed he still owned Recon Sportswear and the others.

But in an interview, Fallon said he actually transferred control of the Recon franchise to his wife last December and did not know why his form didn't show that transaction. Military officials told Just the News that Fallon's company made a switch in February 2021 to make his wife the responsible party for the t-shirt sales at Fort Benning.

Fallon, an Air Force veteran, has faced questions since the Just the New story because he accepted a position on the House Armed Services Committee, which oversees military policy, while his family does business with the military, a situation a congressional ethics expert said was a conflict of interest.

Fallon said he never discussed his military t-shirt business with House Minority Leader Kevin McCarthy or the Democratic committee chairman, Adam Smith, before accepting the committee assignment. "It never came up in the discussions," he said.

Fallon also is facing legal action in Texas from retired Army Maj. Gen. Tim Haake, one of his business partners in the t-shirt sales on military bases. Haake has asked a judge to compel Fallon and his wife to sit for a deposition and reveal financial records for the business. Fallon is contesting the case.

Fallon has kept up his criticisms of Beijing. On Tuesday, Fallon was asked on Newsmax about China's first military base in the Atlantic, and said, "This is just another indication that China is the preeminent threat of — not just for the United States, but for the world, and for, you know, rule-of-law democracies."

Fallon addressed the appearance of bashing China while also doing business with it in an interview with Just the News.

"I understand the problem that exists, in that the Chinese communist regime has been an incredibly bad actor, particularly since COVID, you know, in 2020 and beyond," he said. "Right now, we live in [a] time where nearly every American's mode of personal communication is made in China — the iPhone. Nevertheless, early last year I told the other owners I don't want to have anything to do with China anymore."

He explained that "something like only 4% of apparel is made" in the U.S., while nearly half of their clothing is made domestically, in addition to the printing and dyeing.

"The pandemic opened so many eyes, mine included, to the dangers of doing business with China and why we need to build our own base of manufacturing here," Fallon said. "And that includes the apparel business. While I'm proud of the record we had for the companies I started, I'm also eager to see them do more to move away from China."

Military officials told Just the News they have no prohibition on vendors receiving supply from China.

Buying apparel from China and selling to troops has, nontheless, been a lucrative business for Fallon. 

Another of Fallon's firms, PC Gear LLP, was awarded a contract for five years at Lackland that started in June 2019 and is estimated to make $13,980,000 in sales over that period, according to documents obtained by Just the News through a Freedom of Information Act request to the Pentagon's Army & Air Force Exchange Service (AAFES).

According to AAFES contracts, in addition to Fort Benning and Lackland Air Force Base, Fallon's other businesses with military forts include:

• Fort Jackson: Recon Jackets (same address as Recon Sportswear), an original contract period of July 13, 2017 to July 12, 2019, with an extended expiration date of July 12, 2022; gross sales average $9,094 per month, with an estimated total of $218,256 for the first two years.
• Fort Jackson: Recon Sportswear, contract period July 12, 2019 to July 11, 2024; estimated average monthly regular sales $85,741 per month, totaling $5,144,460 over the five-year period. On June 8, 2021, Fort Bragg is added to the contract, with estimated monthly sales of $25,000 per month.
• Fort Leonard Wood: Fast Break Sportswear LLC, contract period Aug. 1, 2019 to July 31, 2024; gross sales average $124,168 per month, totaling $7,450,080 over the five-year period.
• Fort Sill: Fast Break Sportswear, Inc., contract period March 19, 2021 to March 18, 2026; historical monthly gross sales average $87,000, totaling $5,220,000 over the five-year period.

Fallon told Just the News that he transferred ownership of his companies to his wife, Susan, in December 2020, just before entering Congress in January. There is no record of these transactions in his periodic transaction reports to Congress. However, he explained that "the transfer of these businesses to my wife was completely approved by [the] House Ethics Committee."

He added that he and his wife "have active intentions of selling" the company.