Johnny Cracker'Barrel Chrétien hooks up with shady Chinese firm

Johnny Cracker'Barrel Chrétien 

hooks up with shady Chinese firm

By Asian Pacific News Service

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After 10 years of building Canada as Beijings biggest western ally, former prime minister Jean Chrétien went to China this month to reap what he has sown on the taxpayers coin.

Less than two months after stepping down, Chrétien was hosted by the state-owned China International Trust and Investment Corp or CITIC which is the communist regimes most politically connected financial and industrial conglomerate.

According to a report from China, Chrétien was to meet CITICs top executives, travel to Shanghai and Shenyang, near the North Korean border under a veil of secrecy in a completely private visit.

The CITIC officials he met are expected to visit Canada later this year.

There is no doubt that he is trying to capitalize on his close relationship with China, said a B.C. based political analyst.

But there is something wrong with at least the optics here - he has gone to China at least six to eight times with Team Canada and as PM to facilitate huge business deals between China and Canada including some with CITIC and its subsidiaries.

The ink is hardly dry on his retirement papers and he is back there to do business again this time for himself, he said.

Chrétien's last visit to China was last November and among his last official duties was a formal meeting with Chinese Prime Minister Wen Jiabao on his final day in office on Dec. 12.

Wen sits on the Chinese executive body that oversees CITIC, whose operations have been the subject of intelligence reports in the U.S., U.K., Australia, and Canada.

CITIC's top dog is Wang Jun, a Chinese princeling who has been linked to everything from illegal arms shipments to illegal campaign donations in the United States.

With an estimated asset base of C$48 billion, CITIC is among the worlds largest corporations with 44 subsidiaries and banks including those in Hong Kong, the United States, Canada, Australia, New Zealand.

It has close links to the Peoples Liberation Army, counts among its advisors Chrétien's son-in-law Andre Desmarais of Power Corp and answers directly to Chinas top ruling echelon.

CITIC states its core business ranges from the financial industry, industrial investment to service industries and that it is a window to Chinas opening to the outside world.  The respected U.S. based Rand Corporation, a non-profit research and analytical think-tank has another view.

In a 1997 report entitled, Chinese Military Commerce and U.S. National Security, the RAND Center for Asia Pacific Policy reported that CITIC acts as a shell or front operation on behalf of Chinas Peoples Liberation Army.

The report on CITIC noted that the Beijing-based investment firm had acted as a front for Poly Technologies Inc., an arms manufacturer owned directly by the Chinese army.  According to the Rand Corporation report, Poly Technologies, Ltd., was founded in 1984, ostensibly as a subsidiary of CITIC, although it was later exposed to be the primary commercial arm of the PLA General Staff Departments Equipment Sub-Department.  Throughout the 1980s, Poly sold hundreds of millions of dollars of largely surplus arms around the world, exporting to customers in Thailand, Burma, Iran, Pakistan, and the United States.

The report sponsored by the Clinton administration said CITIC is an investment concern under Chinas governmental State Council. CITIC became identified with the PLA as a result of the scandal surrounding Wang Jun and his visit to the White House on 6 February 1996.

The Rand report concluded: CITIC does enter into business partnerships with and provide logistical assistance to PLA and defense-industrial companies like Poly Technologies Inc.

Poly's U.S. subsidiaries were abruptly closed in August 1996, after federal US authorities in California concluded a lengthy sting operation by arresting seven people linked to Poly and another state-run Chinese arms firm for allegedly smuggling 2,000 AK-47 or Kalashnikov rifles into the country.

Had the sting operation continued, federal officials said at the time, more powerful weaponry and at least one senior Chinese official might have been lured to the United States.

After the operation Clinton said he made a mistake linking up with CITIC boss Wang Jun.  Wangs background was apparently not scrutinized by the White House because he was brought there by long-time Clinton friend and campaign donor Charles Yah Lin Trie.  Trie raised hundreds of thousands of dollars for Clintons Democratic party and for a legal defense fund established to help defray costs associated with several legal proceedings against the president.

Thousands of dollars for the legal defence fund, which came from Asian tycoons, ostensibly seeking to be friendly with the Clinton administration, were returned after an investigation into the origins of the money.

Another U.S. think-tank, The Center for Security Policy in a report to the U.S. Congress stated that CITIC - the corporate flagship of Chinas military-industrial complex with the wrong leadership, corporate history and agendas been attracting large sums of totally undisciplined cash from a wide spectrum of American investors.

The Casey Institute believes that the troubling national security aspects of CITICs established presence in the U.S. bond market should be explored, at a minimum, by the U.S. Senate Governmental Affairs and House Government Reform and Oversight Committees.

Yet another American report, this time by The United States House of Representatives Select Committee on U.S. National Security and Military/Commercial Concerns with the Peoples Republic of China described CITICs Wang Jun as having been directly involved in illegal activities in the United States.

Commonly known as the Cox report, the study described Wang Jun as the son of the late Chinese President Wang Zhen and a notable princeling whose family ties and personal connections are able to cross the lines and accomplish things that might not otherwise be possible.

It was not only the Americans who were sounding the warnings on CITIC and Chinese front companies in the mid-nineties.

In Canada, a small team of RCMP and CSIS officials were also at that time putting together a highly controversial report dubbed Sidewinder, which would be eventually snubbed by Chrétien's China-friendly cabinet as a rumour laced conspiracy theory.  Sidewinder stated: China remains one of the greatest ongoing threats to Canada's national security and Canadian industry.

There is no longer any doubt that the Chinese Intelligence Service has been able to gain influence on important sectors of the Canadian economy, including . . . real estate, high technology, security and many others. In turn, it gave them access to economic, political and some military intelligence of Canada.

The report, whose official title is Chinese Intelligence Services and Triads Financial Links in Canada, was supposed to be destroyed after CSIS officials decided to tone down the conclusions in a revised document called Echo.

CSIS officials have insisted Sidewinder was buried because it was nothing more than conspiracy theories. (See www.asianpacificpost.com, August 7 - August 20, 2003, 3,500 Chinese spy companies identified in Canada and U.S.)

Other intelligence sources say political pressure forced CSIS to hush the Sidewinder report.

Among Sidewinder's case studies were CITIC. It stated among other issues that:

i) The Chinese, state-owned China International Trust Investment & Company        (CITIC), which has a subsidiary in Canada, has spent about $500 million to buy a Canadian pulp mill, petrochemical company, real estate and hotels. CITIC also has connections with at least one large Canadian corporation.

ii) Large amounts of arms manufactured by a CITIC-controlled company have been confiscated on Mohawk reserves.

iii) Chinese tycoons and CITIC own large chunks of real estate and hotel chains in key urban centres, giving them great influence in local politics and development.

CITIC is also closely connected to Chinas state-owned COSCO shipping company, which uses Vancouver as its North American gateway.

U.S. Senate and Canadian intelligence officials have described COSCO as the merchant marine for Chinas military.

COSCO vessels have been caught carrying assault rifles into California and Chinese missile technology and biological-chemical weapons components into North Korea, Pakistan, Iraq and Iran, according to U.S. intelligence reports.

In addition, Canadian law enforcement agencies have warned that Chinese Triad criminal organizations are active in and around Canada's ports.

Another tycoon closely affiliated to CITIC is Li Ka Shing - also a Sidewinder target and Asia's most powerful man. He owns large tracts of real estate in Canada and interests in the country's telecommunications, petroleum and banking sectors.

The Royal Hong Kong Police asked CSIS to investigate Li here in Canada in 1988, just as he was acquiring Vancouver's Expo 86 lands, but the request was officially denied by then Canadian High Commissioner to Hong Kong Anne-Marie Doyle.

U.S. Congressman Dana Rohrabacher said, The U.S. Bureau of Export Affairs, the U.S. Embassy in Beijing and the Rand Corporation ... have identified Li Ka Shing and Hutchison Whampoa (Li's primary business) as financing or serving as a conduit for Communist Chinas military for them to acquire sensitive technologies and other equipment.

Chrétien, during his brief sojourn from politics while John Turner was leader of the federal Liberals, worked for Gordon Securities - one of the many Li-controlled companies in Canada.

Chrétien's connections to the shady CITIC conglomerate is not the only foray by the former prime minister into the world of business.

Among his other ventures include a gig as an international-relations adviser to PetroKazakhstan, a Calgary-based oil company that is trying to expand its oil exports to China.

James Grier, a China watcher, said Chrétien's involvement with CITIC does raise eyebrows.

There is a volume of history with this company that could impact the stature of someone like Chrétien, but from what we know that seems to have little impact on Chrétien, he said.

Grier said, given the current sponsorship scandal plaguing the Liberals, the party could take another serious blow if anyone from their top echelon is found to have a direct benefit in China from their last days in office.