ACTORS AND APPROACHES IN LOCAL POLITICS

ACTORS AND APPROACHES IN LOCAL POLITICS

Department of Political Science/Centre for Development and the Environment & Department of Sociology and Human Geography, University of Oslo

October 17-19, 2002

CRIME, BUSINESS AND POLITICS IN ASIA

By

Bertil Lintner

GPO Box 79, Chiang Mai 50000

Thailand

Tel. and fax (66-53) 399 135

Mobile (66-1) 530 3001

e-mail lintner@loxinfo.co.th

website www.asiapacificms.com

INTRODUCTION

In the current debate about democratisation, governance, human rights and globalisation in Asia — and the world — one cast of characters has almost always been overlooked: the region’s organised crime syndicates. Or, if they have been analysed, the conclusions have been seriously flawed. Some analysts have argued that the absence of any lage-scale inter-gang warfare suggests that the various cartels co-exist and perhaps even cater for different markets and needs. The existence of such a symbiotic relationship was indicated by then Central Intelligence Agency (CIA) director, James Woolsley, who told the US Congress in April 1994 that “organised criminals from Russia, China and Africa are forging ties with old European and Latin American crime groups to threaten national economies and world security…Violent drug traffickers and other criminal groups are spreading and co-ordinating their activities throughout the world.”

This interpretation of the nature of the globalisation of organised crime which we have seen over the past two decades is also supported by American writer Claire Sterling, who suggests that “the Sicilian and American Mafias, the Turkish arms-drugs Mafia, the Russian Mafia, the Chinese Triads, the Japanese yakuza” are coming together under the informal rules of a new, international Pax Mafiosi.ⁱ

Michael Chossudovsky, professor or economics at the University of Ottawa, offers a leftist perspective on the problem: “Contrary to Hollywood stereotypes and the sensationalism of investigative journalism, much or organised crime’s activities do not imply a ‘breakdown of law and order.’ In fact, the vast sums of money handled by the international banking system are routinely concealed with great order and in accordance with laws designed precisely to protect the assets of the legally and illegally wealthy alike from the scrutiny of tax collectors and law enforcement agencies.”ⁱⁱ

Criminal networks, Chossudovsky argues, have long been operating as bona fide business entities in the global marketplace and are regarded as part of the system. At the top, the Mafias have abandoned the black bag for a computer, the machine-gun in the violin case for the stock portfolio in the briefcase. Moreover, transnational criminal cartels are well connected with the international business community and with local politicians in China, Italy, Japan, Russia and Latin America. Even neoliberalism and free-market reforms guided by the World Bank and the International Monetary Fund (IMF), says Chossudovsky, “amount to nothing less than the legalisaton of money laundering.”ⁱⁱⁱ

In this writer’s view, the arguments both of Woolsey and Sterling, on the one hand, and of Chossudovsky on the other, have serious shortcomings. The first fails to take into consideration the vast extent of official complicity in organised crime, while the second turns the entire free-market system into a criminal enterprise. The situation is far less clear-cut and much more complex than either interpretation of the relationship between organised crime, the banking and business community, intelligence agencies and governments, whether corrupt or not. To express it in American terms, it is not “the good guys versus the bad guys,” nor are “all guys bad.”

While criminals may live outside the law, they have never been outside society. In Asia especially, there has always been a symbiosis between law and crime — but only with respect to a particular kind of criminal underworld. Organised crime helps the authorities police more unpredictable, disorganised crime, for instance, to keep the streets safe. There are also certain things that governments — and big business — just can’t do. A certain company may want to eliminate a competitor, but is unable to do so by normal, legal means. An organised crime gang can then be employed to make life difficult for the other party. When in 1984 the Guomindang’s security services in Taiwan wanted to get rid of a dissident, troublesome journalist in exile, Henry Liu, they delegated the task to hitmen from the island’s most powerful crime syndicate, the United Bamboo gang. The gang was more than willing to carry out the killing, not on account of any concern about Liu, but because in exchange they would get unofficial protection for their own businesses: gambling, prostitution and loan sharking.

With Taiwan developing into a democratic — and therefore more transparent — society, the United Bamboo thugs are clearly on the defensive. But as chaos prevails in the Southeast Asian nation of Cambodia following decades of civil war and genocide and an extremely fragile democracy, the Taiwanese mobsters found a new haven for their activities. But, somewhat surprisingly, on 9 July 2000, Chen Chi-li, “spiritual leader” of the United Bamboo gang and nick-named “Dry Duck,” was arrested in Phnom Penh, and charged with possessing firearms, including hand-guns, assault rifles, M-79 grenade launchers and thousands of rounds of ammunition. And this transpired even though Chen had managed to be awarded both an honorary royal Oknha status — usually acquired through contributions in excess of $100,000 — as well as an official advisor’s position to Cambodian Senate President and security chief Chea Sim.

Whenever new investors from Taiwan came to Cambodia to set up a business, a visit to Chen’s luxury villa in Phnom Penh was obligatory. Investors would offer the mobster a generous gift as “a gesture of their respect,” ^iv His downfall was due to some unusually vigorous local law enforcement officers, but the case soon disappeared from the headlines of the local press. Chen’s high-level connections were too powerful for any one in the government — or business — to challenge. A year later, he was released from custody.

Chinese gangs from the mainland have also established themselves in Cambodia, and turned the country into a base for illegal immigration of Chinese nationals to the West, drug smuggling, illegal capital flight through the country’s many shady banks, and weapons trafficking. But in order to police the gangsters in Cambodia, the Chinese authorities turned to an even more bigger Godfather-type to police the petty criminals: Teng Bunma, the unofficial head of the local Chinese business community. In late October 2000, Guo Dongpo, director of Beijing’s Office of Overseas Chinese Affairs, met Bunma in Phnom Penh and asked him to help control the unruly gangs in the Cambodian capital. Bunma was at the time not only the honorary president of both the Chinese Association of Cambodia and the Phnom Penh Chamber of Commerce — he was also on Washington’s blacklist of suspected drug traffickers, and has been denied entry to the United States.^v

In Hong Kong, certain business tycoons have always used Triad gangs to enforce their will on ordinary people who cannot be “persuaded” to cooperate by legal means. In early 2000, young men dressed in black T-shirts, with their chests and biceps adorned with tattoos of dragons and phoenixes, suddenly appeared in the quite village of Pak Tin in the New Territories. They would swear and kick doors as they demanded exorbitant rents from local residents. A car was parked in the village, with a sign on its dashboard clearly indicating that its owner belonged to the Sun Yee On Triad Society, which is well-connected in high places both Hong Kong and China proper. When that message was not clear enough, a funeral van, an obvious sign of bad luck, was parked in the Pak Tin.

The problem was that the local villagers, who had lived in Pak Tin for generations, had refused to give up their homes to a Hong Kong “developer” who wanted to turn the rural area into a complex of 600 flats in four high-rise towers. Thanks to the brave efforts of Law Yuk-kai, a local human rights activist and law graduate, the villagers resisted both the initially formal request from the “developer” — and the more forceful methods of the hired hoodlums, when “normal” means did not seem to work. Law had the courage to assist his fellow villagers to prepare to fight for their homes.^vi

Given the Sun Yee On’s well-placed connections, Law’s chances of success are difficult to determine. It is those connections that enable the Sun Yee On, and other Triads, to run prostitution, illegal gambling rackets, and “protection” of street hawking, minibus services, and the film industry, which often idealises the “secret societies” and their mythical origin. Yiu Kong Chu, a professor in the Department of Sociology at the University of Hong Kong, argues that the Triads are an integral, rather than a merely predatory, element of many sectors of the local economy.^vii

1. CRIME, BUSINESS AND OFFICIALDOM

Chu’s argument proves the point that there is no clear-cut division between the law and crime, and, as Chossudovsky also correctly points out, “in order to thrive, criminal syndicates, like legitimate business, need friends in high places.”^viii The rise and fall of the most prominent mobster in Macau before the Chinese takeover of the Portuguese enclave in 1999, Wan Kuok-koi, or “Broken-Tooth Koi,” serves as a typical example of how this relationship works. For decades, tiny Macau has derived most of its revenue from gambling, which until last year was controlled by one single concern, Sociedade de Turismo e Diversões de Macau (STDM) headed by an immensely wealthy Eurasian businessman, Ho Hung-sun, better known as Stanley Ho.

Although he was head of the local branch of the notorious 14-K Triad, “Broken Tooth” certainly had many friends in “high places,” ranging from the wealthy gambling tycoons whose VIP rooms in the casinos he protected for a fee, to local police officers and officials from China’s Public Security Bureau. In return for turning a blind eye to his more nefarious activities, such as loan sharking, extortion and prostitution, “Broken Tooth” could prove useful to the officially recognised entrepreneurs in Macau: by collecting a gambling debt using more unorthodox methods than the law would permit, by eliminating business competitors, and similar tasks. The problem with “Broken Tooth” was that he had become a flamboyant public figure and even started giving interviews to the press. He was out of control and his wings had to be clipped. On 1 May 1998, he was arrested and later sentenced to ten years in prison.^ix

But having connections like those “Broken Tooth” had before his downfall does not necessarily turn his businesspartners into Triad members or even gangsters. A clearer understanding of the nexus between crime, business and officialdom can be gained by looking at some of its component parts:

Street gangs. Any country has its share of waifs, strays and juvenile delinquents who make a living by pick-pocketing, drug peddling in the streets, whoring and pimping. Many are drug addicts, willing to carry out any assignment, no matter how brutal, for financial reward. Triad “snakeheads,” or enforcers, recruit their foot soldiers from this mileu. An especially promising juvenile delinquent is brought to a secret place, where he meets others who have also been recruited, Incense is burned and an oath is taken whereby the new recruits are made to swear lifelong allegiance to the Triad society: “I shall suffer death by five hundred thunderbolts if I do not keep this oath…I will always acknowledge my Hung [Triad] brothers when they identify themselves. If I ignore them I shall be killed by a myriad of swords…If I am arrested after committing an offence, I must accept my punishment and never try to implicate any of my sworn brothers. If I do, I will be killed by five hundred thunderbolts…”^x

The mystique of the secret initiation ritual is meant mainly to discipline the otherwise unruly delinquents, and to give them a sense of belonging to something very special. They are then given perhaps a fancy suit, a pair of expensive sunglasses, or a mobile telephone, which make them feel important — and popular with the girls. The leader of each such gang of young recruits is usually a somewhat older enforcer who once went through the same ritual, survived warfare in the streets, and thus gained promotion from his superiors.

The Triads. There are many different, rival Triad societies, but the main rituals are the same. “If Chinese restaurants are one feature of Chinatown, Chinese secret societies are another,” wrote Shanghai-born author Lynn Pan.^xi The Triads were not, as often surmised, set up in the 17^th century to overthrow the Manchu Qing Dynasty and to restore the more indigenous Mings. Secret Societies have existed for more than a thousands years in China, but the “modern” Triads first emerged in the late 18^th century as mutual-aid organisations in the wild an insecure frontier environment of China’s southern Fujian province. The strongest of these groups, Tiandihui, or “Heaven and Earth,” was first mentioned in official Chinese records in March 1787, when the Qing Dynasty had been in power for more than a century. The society, it transpired, had been founded in or around 1767 by Ti Xi, a monk, who specialised in magic acts and the expulsion of ghosts.^xii This group evolved into the first real “Triad Society.” The number three was of central significance. Numerologically, it was a magic number. Three multiplied by three equals nine and any number whose digits add up to nine is divisible by nine. To the Chinese, three was also the mystical number denoting the balance between Heaven, Earth and Man. From the ver beginning, secret rituals were introduced to bind these tightly-knit brotherhoods closely together to avoid betrayal by fellow members of the group.

Being a member of a strong secret society such as the Tiandihui had many advantages, especially for the dispossessed, the poor and other vulnerable elements of society. Sworn brotherhoods were also used by both the elite and commoners as vehicles through which to wage struggles for economic survival or political resistance, or both. In the early 19^th century, the Tiandihui raised the slogan “Crush the Qing! Restore the Ming!” to gain political legitimacy in southern China, where anti-Qing sentiments were especially strong. The Tiandihui’s ardent desire for self-preservation kept it, and the “anti-Manchu” cause alive for decades, in China itself and especially among the overseas Chinese, who had emigrated mainly from Fujian and other southern provinces.

In the late 19^th century, Dr. Sun Yat-sen, the founder of China’s republican movement, discovered the revolutionary potential of this underground movement. Sun himself was a member of another secret society, the Society of Three Harmonies, but the Tiandihui became his main powerbase — and vehicle for overthrowing the Qing dynasty in 1911. However, the Mings were never restored; China became a republic — but the Tiandihui and other societies emerged as powerful groups which many Chinese ambitious for advancement found it prudent to join. Several nationalist Chinese, or Guomindang, leaders were also Triad members. Sun’s successor, Chiang Kai-shek, relied heavily on the Green Gang in Shanghai during the civil war with the communists at the same time as it and other gangs were involved with drug peddling, gambling, prostitution and extortion.

The Green Gang leader, Du Yuesheng, nick-named “Big-Eared Du” because of his enormous ears dominated the underworld in Shanghai during the freewheeling 1930s — and secretly sponsored Chiang’s political career. To express their gratitude when the civil war was over and all that remained of the “Republic of China” was the island of Taiwan, the authorities there later erected a statue of honour of “Big-Eared Du” in Xizhi village near Taipei. The four-character inscription on the monument praises the dead Godfather’s “loyalty” and “personal integrity.”^xiii

Before the civil war was over, new Triads were also set up by Guomindang officers and the Nationalist government’s secret police to fight the communists. The best known was the 14K Society, founded in 1947 by a Guomindang general, Kot Siu-wong. The gang’s name came from its first headquarters, which had been located at No. 14, Po Wah Road in Guangzhou.^xiv When the communists had won, Gen. Kot fled to Hong Kong with hundreds of his followers. Many of them settled in Rennie’s Mill, a run-down village on Junk Bay east of the old airport at Kai Tak. At Junk Bay, “Republic of China”-flags flew over the shabby looking houses until the entire neighbourhood was “sanitised” just before the Chinese takeover of Hong Kong in 1997.

A report from Hong Kong’s last British government estimated that there were in the mid-1990s 50 different Triad societies in the territory, varying in size from a hundred members to several thousand. At the same time in Macau, there were about 2,500 law enforcement officers — compared to 13,000 Triad members. But of the latter, only 5,000 might have been active. The rest had taken the oath, had normal jobs, but could be called upon if their duties or special expertise were needed.^xv

But the fact that many of the Triads use the same name in Macau, Hong Kong, London, Amsterdam, Shanghai or San Francisco — “14K,” “Wo On Lok,” “Wo Shing Wo” and so on — does not mean that they are part of a worldwide network. A certain member of, for instance, the 14K may have been sent, or gone on his own initiative, to Kunming in Yunnan to trade in drugs from the Golden Triangle. There, he would gather some local thugs, tell them that “now we’re all 14K,” perform the rites, and then do his business. Using a name like the “14K” is meant to discipline the local thugs and to instil fear in local, unorganised criminal rivals as well as local law enforcement authorities. Most Triads are in fact very loosely organised, and shoot-outs and assassinations between rival factions of several gangs using the same name is not uncommon.

Big business and officialdom. Apart from assassinating a journalist like Henry Liu Liu or to force people to leave a place ear-marked for “development,” there are other things that governments — and big business — just cannot do. A big businessman in Hong Kong, Singapore, Shanghai or Beijing may need to transport a large load of cash to an offshore “financial centre” to evade taxes. The Triads can mobilise their people for such duties, and it is perfectly safe. No one would dare to run off with the money: death by “a myriad of swords” would then follow. A businessman may also be in financial trouble and need some fast cash to cover his debts. He may decide to invest in a heroin deal, which gives enormous returns for a small outlay. A senior Triad snakehead would then be contacted. He, in turn, would mobilise junior snakeheads who would use both their Triad footsoldiers as well as yet unorganised street thugs to carry out the deal.

Illegal-alien smuggling, gun running and similar activities are carried out along very much the same lines. Not all street gangsters are Triad members, and using the Triads to carry out certain assignments does not make big businessmen, or police officers, Triad members either. The Triads are in the middle; they are used by top echelons of society, and they employ thugs who may or may not be members to carry out their jobs. The strength of this system is not that it is especially well organised (it is not), but the strict secrecy under which it operates and the effective brutality with which “traitors” are punished. This makes it almost impossible for law enforcement agencies to penetrate the ranks of the Triads in the same way as, for instance, the FBI managed to infiltrate the Sicilian-American Mafia.

The Japanese yakuza are somewhat similar in their organisation, but, in typical Japanese fashion, far more formal in their ways. At least until a new anti-gang law was introduced in Japan in 1991 Yakuza leaders used to have name cards and pins identifying their respective gangs, they published — and still do — monthly magazines for their members (often including legal columns in which street mobsters can write to resident lawyers to ask for advice) and ran offices perfectly openly in most major Japanese towns. David Kaplan and Alec Dubro in their excellent book about organised crime in Japan have also described how the yakuza for years have been connected with extreme right-wing politics, with the ruling Liberal Democratic Party and major Japanese corporations.^xvi Rival companies often employ yakuza racketeers to spread rumours about their competitors or to disrupt annual shareholders’ meetings. Or they can facilitate pay-offs to corrupt officials, which later puts them in a crucial position to blackmail the erring officials.

Another type of gangster, the jiageya (“land-turners”), exploited the Japanese real-estate boom in the 1980s. When the government in the 1990s moved to bail out Japan’s special housing loan companies, jusen, it was discovered that they owed billions of dollars to yakuza-related outfits, money that no one expects to be repaid.^xvii The jiageyas were largely responsible for the collapse of the bubble economy in the early 1990s. On the other hand, the yakuza are reported to generate some 1.4 trillion yen, or US$10 billion, annually from their various criminal activities.^xviii

The yakuza are active not only in Japan but also in Hawaii, where they own hotels, resorts and golf courses. Working with gangs in the Philippines, they have expanded into gambling, fraud, money laundering and gun-running. Their international connections stretch to Hong Kong, Southeast Asia, Australia — and even to Brazil and other Latin American countries where there are large numbers of Japanese immigrants. Yakuza mobsters have arrived in Los Angeles, San Francisco, New York and Europe and blended in with huge numbers of Japanese travellers and businessmen.^xix

In more recent years, the yakuza has established links across the Sea of Japan—with Russian gangs in Vladivostok and other cities in Siberia. In Vladivostok today, most cars have their steering-wheels on the wrong side, indicating that they have been brought in from Japan across the sea. In return for shipping second-hand Japanese cars to Siberia, the yakuza has taken back hand-guns, assorted machinery, and Russian girls to service the night clubs in Tokyo’s notorious entertainment district Kabuki-cho, and other cities where Japanese salarymen are looking for sexual encounters with a European girl. Russian prostitutes are cheaper — and much more plentiful — than American, Dutch or Swedish ones.

Even so, the Japanese police often find the yakuza useful. No one dares disturb the peace in the entertainment districts of Tokyo, Osaka and Kobe, because the yakuza would be there to restore order before the police even arrived on the scene. The yakuza run extortion rackets and strip joints, and they sell amphetamines. But the streets are largely free from pickpockets, bag-snatchers and other petty criminals. Similarly, the Chinatowns of New York and San Francisco are in many ways the safest parts of those cities, thanks to the Triads. Shopkeepers and restaurant owners pay protection money to local gangs. In turn, New York’s Chinatown may appear, at least superficially, much more orderly and peaceful than Harlem or the Bronx. But if a shopkeeper is unwise enough to refuse to pay, his life would be in danger.

2. CRIME INTERNATIONAL INC?

In recent years, we have no doubt seen the increased globalisation of organised crime. Russian gangsters are involved not only with the Japanese yakuza but they are also active in New York, Miami and California. Chinese gangs continue to run Chinatowns in the US and Europe. New Vietnamese gangs have taken over the heroin trade to Australia, and the Japanese yakuza has invested their profits in more stable economies in Hawaii and Australia’s Gold Coast. But Woolsey and Sterling are hardly correct in suggesting that this means that we are observing the emergence of some “Crime International Inc.” Vastly improved communications between continents have no doubt made it easier to smuggle drugs, guns and illegal immigrants all over the world. Modern information technology has facilitated the movement of messages — and black money — across the globe. Computer crime, the only real “global” crime, has been identified by, for instance, the Australian Federal Police as the most important challenge facing law enforcement agencies in the next century.

But the weaknesses of the traditional criminal milieu are also obvious. By nature, a criminal is not really interested inco-operating or sharing his profits with other gangs. Assassinations, betrayals and the crudeness of the players are the very essence of criminal behaviour. Although some of the top leaders may be sophisticated, the foot soldiers on whom they have to rely are basically juvenile delinquents or, at best, over-aged juvenile delinquents, with little or no knowledge of international business works.

That also undermines Chossudovsky’s argument that the free-market system as such is to blame for the worldwide increase in organised crime. The IMF and the World Bank since 1997 have actually been assigned to clean up the financial mess in Asia and also Russia, and to introduce modern, free-market principles which were never fully rooted in the murky and corrupt Asian economies, not to mention the former Soviet Union. The biggest concern, however, is where China is heading, a country that does not take orders from international financial institutions, or anybody else for that matter.

3. CHINA: RETURN OF THE TRIADS

Officially, China’s leaders want to be seen to be moving with a firm hand to crush the resurgence in crime in a country that is still struggling with the difficult task of establishing the rule of law in place of ideologically motivated campaigns against “counterrevolutionaries” — the main enemies of the state over the past several decades. But how deep does the commitment go? And to what extent are other pre-revolutionary phenomena — such as the age-old Chinese tradition of a symbiosis between officialdom and organised crime — also re-emerging?

On 8 April 1993, just as the people of the then still British Hong Kong were starting to get used to the idea of a return to the “motherland,” Tao Siju, chief of China’s Public Security Bureau, gave an informal press conference to a group of television reporters from the colony. After making it clear that the “counterrevolutionaries” who had demonstrated for democracy in Beijing’s Tiananmen Square in 1989 would not have their long prison terms reduced, he began talking about the Triads: “As for organisations like the Triads in Hong Kong, as long as these people are patriotic, as long as they are concerned with Hong Kong’s prosperity and stability, we should unite with them.”^xx Tao also invited them to come to China to set up businesses there.

The statement sent shockwaves through Hong Kong’s police force and there was an uproar in the media. Since 1845, Triad membership had been a crime in the territory, and the rule of law was considered one of the pillars that made it an international city. Claiming to be “patriotic” was no excuse for breaking the law. But the people of Hong Kong should not have been surprised. Deng Xiaoping, the father of China’s economic reforms, had over the years hinted at the existence of connections between China’s security services and some Triads in Hong Kong. In a speech in the Great Hall of the People in October 1984, Deng pointed out that not all Triads were bad. Some of them were “good” and “patriotic.”^xxi

While Deng was making those cryptic remarks in Beijing, secret meetings were held between certain Triad leaders and Wong Man-fong, the deputy director of Xinhua, the New China News Agency, China’s unofficial “embassy” in Hong Kong. Wong told them that the Chinese authorities ‘did not regard them the same as the Hong Kong police did’. He urged them not to “destabilise Hong Kong” and to refrain from robbing China-owned enterprises. But they could continue their money-making activities.^xxii

In the years leading up to the 1997 handover, and especially when the British on Hong Kong’s behalf argued for more democratic rights to be included in its mini-constitution, or when the Hong Kong people themselves demonstrated their support for the pro-democracy movement in China, certain “patriotic” Triads were there as Beijing’s eyes and ears. They infiltrated trade unions, and even the media. Hong Kong — and increasingly even China — experienced a paradoxical throwback to Shanghai of the 1930s, when the former rulers of the country, the Guomindang, had enlisted gangsters to control political movements and run rackets to enrich themselves and government officials alike.

A few days before security chief Tao made his stunning public statement to the reporters from Hong Kong, a new, glitzy nightclub called Top Ten had opened in Beijing. One of the co-owners was Charles Heung of the Sun Yee On — and another was Tao himself.^xxiii Sun Yee On was the first Hong Kong-based Triad to take advantage of China’s new economic policies, and it knew how to win friends who mattered. An entirely new breed of entrepreneurs is emerging on the fringes of the country, and the business-like, pinstriped suit wearing managers of the Sun Yee On have shown where the future lies.

That this symbiotic relationship between China’s military establishment and gangland figures went beyond such mutually beneficial business deals — and even further than low-level espionage on pro-democracy activists in Hong Kong — became clear when a major scandal broke in the United States in the late 1990s: the so-called Donorgate saga, the revelation that mainland Chinese interests had used shady “businessmen” in Macau to channel funds to the Democrats and former president Bill Clinton’s election campaigns in 1992 and 1996, leading to suspicions that Beijing was trying to buy its way into the White House to gain political influence and acquire advanced technology.

The figure at the centre of the controversy, Yah Lin Trie, better known as Charlie Trie, seemed an unlikely candidate to be the link between organised crime, Chinese intelligence agents and American politicians. First of all, his family had fled the mainland after the communist takeover and Trie was born in Taiwan and grew up there. But in 1975 he moved to Little Rock, Arkansas, where he opened first one and then another fairly popular Chinese restaurant, Nan King and Fu Lin. That was when he met Clinton, who was going to become the governor of Arkansas and the president of the United States.^xxiv

It is still uncertain when, and how, Trie linked up with mainland Chinese business circles and security services, but in 1984, another Chinese — Sino-Indonesian tycoon Mochtar Riady alias Li Wenzheng — had put US$16 million into the stock of Arkansas’ Worthen Bank. His son, James Riady, or Li Bai, was sent over to learn the ins and outs of American banking.^xxv The Riadys already owned one of Indonesia’s biggest banks, the Lippo Bank. At about the same time, the Riadys took over the old Seng Heng Bank in Macau — together with Jackson Stephens, the director of Worthen Bank — and turned what had been an old money changer and gold-dealing front into a proper financial institution. Seng Heng was later sold to Macau’s famous casino king Stanley Ho, but the partnership with Stephens was important. The Little Rock lawyer was considered the kingmaker of Arkansas, a position that became very important when in 1992 Clinton launched his first election campaign. A former employee of the Lippo Bank, John Huang, took over fund-raising tasks for the Democrats, who did not have nearly as much money as George Bush and his Republicans, whose power they were challenging.

Clinton won convincingly and was sworn in as the forty-second President of the United States in January 1993. The saxophone-playing president was young and popular, a fresh breeze in the White House after years of stifling influence by old-style politicians. He revitalised the American economy, initiated social welfare programmes and seemed to be doing quite well — until one scandal after another began to rock his presidency. His enemies managed to dig up details about shady land deals when he was the Arkansas governor. There were allegations of drug abuse and numerous infidelities.

And then came the bombshell. In July 1994, fund-raiser John Huang joined the Commerce Department as a senior official with top-secret clearance to oversee foreign trade.^xxvi He was dismissed during Clinton’s 1996 re-election campaign — after growing reports of “improper campaign solicitations.” It was also discovered that his former employer, Lippo Bank, had served as a conduit for donations to the Democrats from an intricate web of Chinese interests in the Far East.^xxvii The foreign money had been funneled through US residents of Asian origin, which is illegal. Alleged linkages between the Riadys and their Lippo Bank and China’s intelligence agencies exacerbated the confidence crisis that hit Clinton.^xxviii On 16 December 1996, Clinton’s legal defence fund announced that it had returned US$640,000 in suspect donations — from Charlie Trie.^xxix

But, for a change, Trie’s money did not come from Lippo Bank. He had left his Chinese eatery in Little Rock and moved to Washington. Using an apartment in Watergate as his base, he was busy maintaining contacts with his old friend Clinton, and introducing visiting dignitaries from China to the White House. On 6 February 1996, he had escorted Wang Jun, chairman of Poly Technologies, an arms company owned by the Chinese People’s Liberation Army (PLA), to a White House reception for donors.^xxx

Investigators began to look into Trie’s bank records and tax returns, to discover that he received almost no income other than remittances from a little-known businessman in Macau called Ng Lap Seng.^xxxi Born in China, Ng’s diverse business interests included ownership of one of Macau’s hotels in the territory, the Fortuna, whose night club featured “table dancing” by strippers, a massage parlour and a karaoke room with “attractive and attentive hostesses from China, Korea, Singapore, Malaysia, Vietnam, Indonesia and Burma together with exotic girls from Europe and Russia.”^xxxii Its karaoke lounge was regularly frequented by “big brothers” from the Shui Fong, a local Triad, as well as high-ranking PLA officers. The mother company of Ng’s various enterprises, San Kin Yip, was incorporated in Little Rock in October 1994 by his friend and partner Charlie Trie.^xxxiii Ng also paid the rent for Trie’s Watergate apartment. US investigators discovered that more than a million dollars had been transmitted by Ng, who also turned out to be a frequent visitor to the White House, and an honoured guest at several fund-raising dinners for the Democrats, hosted by the President.^xxxiv

Other shady players in the Donorgate saga soon emerged, all of them contacts of Trie’s in Macau. Chen Kai-kit, who also used the name Chio Ho-cheung, was a prominent Macau politician, who owed his 1996 election victory to the 14K Triad, whose goons intimidated voters or bought their votes for US$195 each.^xxxv Obviously, Chen was no ordinary businessman. He was actually not a native of Macau, but a Hainanese born in Thailand. But his influence in Macau was based not only on his political muscle in the Legislative Assembly; he was also president of the local association of people of Hainanese descent — and the proud owner of a local “no hands” restaurant, where waitresses feed the customers to enable them to use their own hands to explore the bodies of the young ladies while gulping down the Chinese delicacies which are put in their mouths. His wife, Elsie Chan, had in 1986 been a runner-up winner of the Miss Peace prize of the Miss Asia beauty contest. She later made a mark in the local television and film industry by introducing more full-bodied women on the screen. In married life, she continued supplying Macau’s various “entertainment” centres with women from her husband’s native Thailand. Chen, Elsie and Trie sat at the head-table with Clinton at a fund-raising dinner at Washington’s Sheraton Hotel on 13 May 1996.

What was behind the strange schemes and plots that were being hatched in Macau? Ng and Chen may not have had any personal interest in seeing Clinton re-elected, but in exchange for acting as conduits for money from the mainland they would get unofficial protection from the Chinese military for their own shady businesses. But to agree to help infiltrate the White House was pushing it, even for people with high-level PLA contacts.

In February 1998, Trie returned to Washington to face charges of illegally funneling funds into Clinton’s re-election campaign. As it turned out, he had spent more than a year in hiding with Ng in Macau, but realised at last that he could not escape American justice. In May, he pleaded guilty and agreed to cooperate with the Justice Department’s campaign fund-raising investigation in exchange for federal prosecutors’ dropping the indictments pending against him in Washington and Arkansas.^xxxvi

At the same time, another Taiwan-born Chinese-American fund-raiser for the Democrats, Johnny Chung, told federal investigators that a “large part” of the nearly US$100,000 he himself had given to Democratic causes in the summer of 1996, including US$80,000 to the Democratic National Committee, actually came from the Chinese PLA through an aerospace executive called Liu Chao-ying, the daughter of Gen. Liu Huaqing, a high-ranking Chinese military commander and a member of the Standing Committee of the Politburo of the Communist Party. Gen. Liu was at the time also vice chairman of China’s Central Military Commission and in charge of China’s drive to modernise the PLA by exporting old arms to other countries, and use the money earned in that way to acquire modern Western weapons technology.^xxxvii

The donation was only a tiny part of the US$194 million that the Democrats raised in 1996, but it came at a time when Clinton was making it easier for American civilian communication satellites to be launched by Chinese rockets. This was important for the PLA — and for Liu, whose own company sold missiles for the Chinese military and also had a space subsidiary. Chung claimed that Clinton’s decision — and the fact that he had gained her admission to a fund-raising event in Washington where she was photographed with the President — helped her company to do business with American counterparts.

Liu was also a lieutenant colonel in the PLA and the company she worked for, the Hong Kong arm of China Aerospace Corp., was described as “a state-owned jewel in China’s military industrial complex with interests in satellite technology, missile sales and rocket launches.” But the company had run into trouble when in 1991 and 1992 the US government barred all American firms from doing business with two China Aerospace units that had sold missiles to Pakistan. The company needed to improve its business relations with the United States, and that was, at least in part, achieved. US investigators, on their part, were satisfied with the identification of Liu, which the regarded as a small but important breakthrough in their hunt for more evidence to back up the claim that China was indeed trying to buy influence in the United States.^xxxviii

Ng was one of the most mysterious of the characters in the “Donorgate” saga. He was not born in Macau but in China, and arrived in the territory in 1979 with a few belongings and the equivalent of US$12 in his pocket. He began his business career selling bales of cheap cloth to the local garment industry, and later became one of the most influential businessmen in the territory. But after all the damaging revelations that came out of the “Donorgate” affair, the enigmatic Ng disappeared from sight in Macau. He refused to answer phone calls from journalists and was rarely seen at dinners in the territory, even though his name appeared beside STDM director Stanley Ho’s and those of other local dignitaries on a bronze plaque outside the Clube Militar, honouring benefactors who had paid for the refurbishment of the old colonial institution. Ho and Ng, as it turned out, were also partners in Macau’s most ambitious construction project: the Nam Van Lakes. This massive US$2 billion land reclamation scheme was going to turn the waterway between the peninsula and Taipa into two giant lagoons, surrounded by hotels, apartment blocks and resorts. Launched during the regional boom in the early 1990s, Nam Van Lakes became a favourite site for wealthy Chinese businessmen and officials looking to move “hot money” out of Guangdong into the more stable precincts of Macau.^xxxix

The investments have not yet proven to be wise ones: The building boom has left Macau with a glut of space, and an estimated 30,000 of the apartments remain empty. Yet, oddly, construction of new property continues — though reports abound that much of the money is being filtered back into Chinese pockets through construction subcontractors, including PLA-owned companies.

Chen Kai-kit, the Triad-connected legislator who had dined with the Clintons, published an autobiography in which boasted that many international figures had paid him tribute, including the American president, who presented him with “a signed photograph,” which he hung on the wall of the office of his “import-export” company, called Ang Du, in the Bank of China building in downtown Macau.^xl Such displays may have benefitted Chen in his attempts to build up a network of business associates in the territory, and perhaps also in China. But there was one man on whom it was not necessary to make any special impression: Wong Sing-wa. They were already long-time friends and close partners in the management of a VIP room in Macau’s Mandarin Hotel. Wong, the head of the Talented Dragon investment firm, was in 1990 appointed Pyongyang’s honourary consul in Macau, and the travel arm of his company was authorised to issue visas for North Korea.^xli As such, he worked closely with Zokwang Trading, North Korea’s main commercial arm in Macau. In early 1998, a Lisbon-based weekly newspaper, the Independent, protested Wong’s presence in a delegation from Macau that was being received by the Portuguese president. The paper cited a Macau official as saying that Wong had “no criminal record, but we have registered information that links him to organised crime and gambling in Macau.”^xlii

Wong was also linked to the inner circle of people who had tried to buy their way into the corridors of power in Washington. In 1995, he posed for a photograph outside the White House with Stanley Ho, another local business contact, and two sisters: Anna Chennault and Loretta Fung.^xliii Anna, a Chinese, was the widow of the legendary Claire Chennault, who had raised the famous Flying Tigers in China during the war, and later set up the Civil Air Transport (CAT), his own airline which supplied Chiang’s troops when they were fighting Mao’s Communists. Later, when Deng’s reforms changed China, she became as friendly with the leaders in Beijing as she for years had been with those in power in Taipei. Together with Loretta, she opened a girlie bar in Hong Kong’s racy Tsim Sha Tsui East district called the Volvo Club. It became a famous hang-out for visiting PLA officers, although the Swedish car manufacturer lodged a complaint and the club had to change its name to B.Boss. Being true Chinese patriots, the two sisters had facilitated meetings between their friends in Macau and Washington.

Like Ng, Wong Sing-wa, continued to keep a low profile after the Donorgate scandal and subsquent disclosures in the American media — just to re-surface in December 1997, when he had opened a new VIP room in the Lisboa Hotel in partnership with two other local businessmen, Carl Ching Men-ky and Siu Yim-kwan. Carl Ching, who is also an official of the International Basketball Federation was denied a entry to Australia to attend the 2000 Sydney Olympics because the Australian Federal Police claimed that he was associated with organised crime. Siu Yim-kwan had been reported as a business partner of Albert Yeung, the shady wheeler-dealer of the Hong Kong-based Emperor Group, whose gangland connections are well publicised the local and international media. Siu was also a major investor in Pearl Orient Holdings, a company that was widely suspected of laundering money for Deng Xiaoping’s family.^xliv

Chen Kai-kit also resurfaced soon after Donorgate. He landed in the middle of another controversy in early 1998, when it was reported that Ukraine would sell an unfinished aircraft carrier to a “leisure company” in the then still Portuguese territory. Ukraine had inherited the aircraft carrier after the break-up of the Soviet Union, and badly needed hard currency. The registered objective of the Macau company, Agencía Turistica e Diversões Chong Lot Limitada — which in English means “Tourism and Amusement Agency” — was to run “activities in the hotel and similar areas, tourism and amusement.”^xlv

But why would such a company need an aircraft carrier? And where would this obscure company get US$20 million, which was the price that Ukraine wanted for the 67,000-tonne vessel? The plot thickened when local journalists discovered that the company’s official address was on a major street in downtown Macau, Avenida da Praia Grande, but at a street number — 335 — that did not exist. The company had indicated that it intended to use the carrier as a hotel and amusement centre, a kind of floating discotheque. But a Macau government official said he doubted whether a giant aircraft carrier could be stationed near Macau because of the enclave’s extremely shallow waters.^xlvi

The 306-metre long ship was too big to pass through the Bosporus and the Dardanelles Straits, and for months the Turkish authorities forced it to remain at anchor in the Black Sea. In September 2001, however, the Turks finally allowed the aircraft carrier to be towed to China, where it remains. Although Cheng Zhen Shu, chairman of “Agencía Turistica e Diversões Chong Lot Limitada”, denied having bought it for the PLA to enable Chinese engineers to study the secrets of aircraft carrier design, that seemed to be exactly the case. And the Hong Kong media reported that the real boss of the so-called “tourism company” was Chen Kai-kit.^xlvii In other words, a man deeply implicated in an American president’s fund-raising campaign might also have been simultaneously acting on behalf on the Chinese military. One can only wonder how Clinton’s voters might have reacted if the disclosures had come during the actual re-election campaign.

But then, in August 1999, Hong Kong’s Independent Commission Against Corruption issued a warrant for the arrest of Chen and his wife Elsie Chan. They and six others, including Chen’s brother and the accountant of his main company, Ang-Du International, were accused of helping to siphon off millions of dollars from Guangnan Holdings, an insolvent mainland food conglomerate, and of a plan to defraud the Standard Chartered Bank of London of US$13.9 million in bogus loans.^xlviii Eight accomplices were arrested, but Chen could not be apprehended as he was ‘receiving treatment for a heart condition in a military hospital on the mainland’.^xlix

Ng Lap Seng had better luck. He was featured on the August 1998 cover of China Today, a mainland monthly. Not a word was mentioned about his involvement with Charlie Trie’s adventures in the United States. Instead, Ng has received lavish praise from the mainland: “As a successful entrepreneur, Ng hasn’t forgotten his homeland. In recent years, in addition to his large investment [in Macau], he has donated 30 million Yuan to education, transportation, poverty relief and aid for the handicapped on the mainland. Regarding this, Ng says with a smile, ‘That is what every Chinese should do’.” Ng also expressed optimism “about Macau’s future after its return to the motherland.”

4. CONCLUSION

There was actually a time when both Western and Asian pundits asserted that shady deals, and even secret societies, were an Asian way of life. Some even argued that corruption and the flow of illicit funds into the legal economy — the effect of money-laundering — were perfectly normal. They were part of some “Asian value system,” and perhaps even helped drive the Asian economic miracle in the 1980s and 1990s. Connections were more important than the rule of law, making the decision-making process less cumbersome.

The came the region’s financial crisis — and this fairy-tale image of Asia collapsed like the fragile house of cards it had always been. Since mid-1997, shady connections, and to an extent the black economy, have undermined the stability of countries which seemed to be on the threshold of prosperity. Hidden, illicit ventures have distorted many societies in Asia and victimised people — all while hindering the development of a modern, transparent economy and functioning democracy.

China was never really affected by the Asian economic crisis, but it is nevertheless going through perhaps the most difficult period so far in its long history, and all the factors that caused the near-collapse of other Asian countries are definitely there. China is trying to modernise without the necessary institutions in place — and the outcome is a heavy and potentially very dangerous reliance on its traditional social formations, the secret societies. Growing links between Chinese organised crime and the government and its agencies also make it far more dangerous than other criminal gangs in the region, including the yakuza, whose power is no longer what it used to be, and the extremely brutal but loosely organised Russian Mafia.

Somewhat surprisingly perhaps, China’s “renegade province” Taiwan — or the old “Republic of China” — has shown that there is an alternative to the criminal disorder. The old dictator Chiang Kai-shek died in 1975 and after a decade of turmoil, his son Chiang Ching-kuo to the surprise of many agreed to liberalise the old system. Once the floodgates were open, nothing could stop the democratic development of the island, which once ruled by an authoritarian regime that colluded with organised criminals. Today, Taiwan is one of the most vibrant democracies in Asia — which is the reason why groups such as the United Bamboo gang has had to leave for safer havens abroad.

In December 1996, it became possible for the police in Taiwan to arrest anyone who was a member of a so-called hai dao bang pai, or “black society.” “Dry Duck” left for Cambodia and his close associate Zhang An-lo, who is better known as “The White Wolf” — and who was responsible for the murder of Henry Liu — scuttled for cover in the mainland, where he furiously lashed out against Taiwan’s new rulers. “I’m not a criminal,” he said in an interview with the monthly Asia Inc. in April 1997. “Secret societies have been a tradition in Chinese culture for thousands of years.”^l Taiwan’s popular, US-educated then minister of state and later justice minister, Ma Ying-jeou, retorted that “yes, secret societies have been part of Chinese history. They have their own justice. But that type of justice is part of an agricultural society. We are an industrial, commercial society today. You can’t take justice into your own hands. The days of Robin Hood are over.”^li

In Taiwan perhaps, but not in many other countries in Asia, and certainly not in China. Tackling the menace of organised crime, and the centuries-old system of secrecy, “connections” and lack of transparency that comes with it, will be a vital task if the Asian countries — and especially China — are ever going to develop into more prosperous and democratic countries, and if civil societies all over the world are to be protected from the worst excesses of the globalised mobsters.

Ends

i Claire Sterling, Crime Without Frontiers: The Worldwide Expansion of Organised Crime and the Pax Mafiosi (London: Little Brown, 1994), p. 10.

ii Michael Chossudovsky, “Crime Goes Global: The Criminalisation of the World Economy,” Third World Resurgence, no 80 (April 1997), pp. 13-20

iii Ibid.

iv Phelim Kyne, “Taiwan’s ‘Dry Duck’ gets his feathers clipped,” Phnom Penh Post, 31 July-3 August 2000.

v “China Turns to Cambodia’s Bunma,” Far Eastern Economic Review, 7 Oct. 2000.

vi Glenn Schloss, “Village Law” South China Morning Post, 29 June 2000.

vii See Chu, Yiu Kong, The Triads as Business (London and New York: Routledge, 2000.)

viii Chssudovsky, op. cit.

ix For a fuller description of the rise and fall of “Broken Tooth,” see Bertil Lintner, Blood Brothers: Crime, Business and Politics and Asia, (Sydney: Allen & Unwin, 2000), pp. 73-84.

x See, for example, Dian H. Murray, The Origins of the Tiandihui: The Chinese Triads in Legend and History (Stanford: Stanford University Press, 1994), p. 44.

xi Lynn Pan, Sons of the Yellow Emperor: A Short History of the Chinese Diaspora (Boston and London: Little Brown, 1990), p. 338.

xii For an excellent study of the origin of the Triads, see Murray, op. cit.

xiii Jules Nadeau, Twenty Million Chinese Made in Taiwan (Montreal: Montreal Press, 1990), pp. 271-272.

xiv For an overview of these Triads, see W.P. Morgan, Triad Societies in Hong Kong (Hong Kong: Government Press, 1989).

xv For an overview of Hong Kong’s and Macau’s Triads, see Lintner, op. cit., pp. 70-135.

xvi David Kaplan and Alec Dubro, Yakuza: The Explosive Account of Japan’s Criminal Underworld (Reading: Addison-Wesley Publishing, 1986).

xvii Brian Bremner, “Yakuza and the Banks,” Business Week, 29 Jan. 1996.

xviii McFarlane, John. “The Asian Financial Crisis: Corruption, Cronyism and Organised Crime,” Defence Studies Working Paper No. 341. The Australian National University, Strategic and Defence Studies Centre, Canberra, October 1999.

xix Garry W.G. Clement and Brian McAdam, Triads and Other Asian Organized Crime Groups, (The Royal Canadian Mounted Police, 1994), p. 114.

xx The New Republic, 14 & 21 July 1997.

xxi ibid.

xxii ‘A social contract with territory's underworld’ South China Morning Post, 14 May 1997.

xxiii The New Republic, 14 & 21 July 14 1997.

xxiv This and other details about Charlie Trie's life come from “Exhibit 13: Statement by Yah Lin Trie,” Daihatsu International Trading, Little Rock Arkansas; and “The Money Trie,” Wall Street Journal, 18 Dec. 1996.

xxv “Who is Mochtar Riady-II?,”Wall Street Journal, 10 Oct. 1996.

xxvi Robert L. Bartley, ed., Whitewater, the Wall Street Journal, New York, 1997, p. 505.

xxvii “Lessons From Lippo,” Wall Street Journal, 27 Feb. 1997.

xxviii ‘Findings Link Clinton Allies to Chinese Intelligence’ Washington Post, 10 Feb. 1998.

xxix Bartley, Whitewater, p. 512.

xxx “Lippo's Chinese Connections,”Wall Street Journal, 15 Jan. 1997.

xxxi “US Senate Campaign-Finance Report: Charlie Trie’s and Ng Lap Seng’s Laundered Contributions to the DNC,” Washington, 26 Jan. 1998.

xxxii According to a handout by the Fortuna.

xxxiii Wall Street Journal, 26 Feb. 1998.

xxxiv “Ng Visited White House While Wiring Funds to U,” Wall Street Journal, 1 Aug. 1997.

xxxv Wall Street Journal, 27 Feb. 1998.

xxxvi “Fund-raiser Charlie Trie pleads guilty under plea arrangement,” All Politics, Arkansas, 21 May 1998.

xxxvii Jeff Gerth, David Johnston and Don Van Natta, “Chinese Military Gave Thousands of Dollars Fund-Raiser Says,” The New York Times, 15 May 1998.

xxxviii ibid.

xxxix ‘The Macau Connection,’ Wall Street Journal 26 Feb. 1998, and Far Eastern Economic Review 24 Dec. 1998.

xl ibid., and various personal interviews with people in Macau, December 1998.

xli “North Korea to set up travel company in Macau,” Kyodo News International 23 Aug. 1990.

xlii Wall Street Journal 27 Feb. 1998.

xliii The picture appeared on the cover of Hu Sin, The Biography of Anna Chennault, (in Chinese), Taipei, 1995.

xliv Communication with Hong Kong-based law enforcement official, 29 Dec. 1997. The VIP room deal was also covered by the Hong Kong weekly Eastweek.

xlv Harald Bruning, ‘Mystery Company in Macau reportedly buys Russian aircraft carrier from Ukraine for $20 million,’ Hong Kong Standard 19 March 1998.

xlvi Communication with Harald Bruning, Macau, 18 March 1998.

xlvii Communication with Hong Kong-based criminal investigator, 19 March 1998.

xlviii ‘Eight held over [HK] $200 million fraud on food giant,’ South China Morning Post 9 Sept. 1999.

xlix ‘No-show by wanted lawmaker,”South China Morning Post 21 Aug. 1999.

l Allen T. Cheng, “Taiwan’s Dirty Business,” Asia Inc., April 1997.

li ibid.