Ex-spy takes on CSIS review body Says security agency squelched report on threat posed by Chinese triads

Ex-spy takes on CSIS review body Says security agency squelched report on threat posed by Chinese triads

ANDREW MITROVICA
Tuesday, October 24, 2000

Straddling his high-powered motorcycle and clad in leather pants and jacket, Michel Juneau looks more like a pinup boy than a veteran spy.

But for 16 years, the articulate and highly educated French Canadian worked inside the shadowy world of intelligence, first with the RCMP's Security Service and then its successor agency, the Canadian Security Intelligence Service.

"I loved and was devoted to the work," said the bilingual 41-year-old former intelligence officer and policeman.

Now, Mr. Juneau, who left the espionage agency earlier this year to set up his own security firm, has reluctantly emerged from the shadows not to spill secrets but to forcefully fire back at CSIS's watchdog, the Security Intelligence Review Committee, for a contentious report that it issued last week.

"Unfortunately, SIRC's report does a profound disservice to the men and women at the RCMP and CSIS who have dedicated their working lives to the protection of Canada and Canadians," Mr. Juneau said in an interview.

At issue is a sensitive probe of Chinese espionage activity in Canada, code-named Project Sidewinder, that was the product of years of joint analysis by CSIS and the RCMP.

Mr. Juneau, who worked in CSIS's research and analysis branch, co-authored a draft of the Sidewinder report with an RCMP intelligence analyst in May of 1997. It concluded that China posed the single largest threat to Canada's national security.

Ample evidence exists that senior RCMP officers found that the original report went a long way toward proving its overarching thesis and wanted to vigorously pursue its findings. But CSIS unilaterally shelved the report because it believed the study was based on inneundo.

SIRC has acknowledged that a tense schism percolated for years between the RCMP and senior CSIS managers over the fate of the original report. Despite that, in its annual report, SIRC dismissed the original Sidewinder report as "deeply flawed in almost all respects" and "rich with the language of scare-mongering and conspiracy theory."

Mr. Juneau, who was the chief analyst on the original Sidewinder team, which included three other intelligence analysts from CSIS and the RCMP, insisted that it is SIRC's report that is wrong, shrill and "silly."

"My colleagues at CSIS and the RCMP devoted a great deal of time and energy to the report, and I know that our findings, although disturbing and unsettling, were based on concrete evidence," Mr. Juneau said.

"We were not in the business of promoting or conjuring up conspiracy theories and any suggestion that we were is silly, wrong and betrays a profound misunderstanding of how we went about our work."

Rather, Mr. Juneau said, the Sidewinder analysts worked hard to identify an intricate web of connections between Chinese intelligence services and criminal gangs, which they were convinced posed a threat to Canada's national security.

"The original report was thorough and backed up by substantive and tangible evidence," he said. "Their [SIRC's] attack was, regrettably, insulting and deflected attention from the real issue. The report concluded that China posed a multifaceted threat to Canada, and the RCMP analysts agreed."

Indeed, Mr. Juneau said that the original Sidewinder team (it was only the second time the two agencies had collaborated on a major analysis) culled some of its information from a Chinese intelligence officer who defected in 1997.

The man, who was a member of the United Front Work Department, one of China's five espionage arms, went public with allegations that he had been ordered to go to Hong Kong to engineer a pact between Beijing and criminal gangs known as triads.

Mr. Juneau also pointed out that at the RCMP's request, the original Sidewinder team produced a binder, brimming with what is known in the intelligence business as facting. It provided documented evidence, culled from secret CSIS reports, other government departments and agencies and foreign intelligence agencies, that supported every single line in the original report, he said.

Mr. Juneau noted that other Western intelligence organizations and a bipartisan U.S. congressional committee have since produced reports that echoed many of Sidewinder's conclusions. "We were ahead of our time and that's what probably killed our report."

He also flatly rejected a suggestion in the SIRC report that his departure from the Sidewinder team was voluntary and simply the result of a internal reorganization.

"The implication is that I left the Sidewinder team willingly and voluntarily; that is simply untrue," Mr. Juneau said. "I wanted to see the project through to its end."

To his chagrin, CSIS brought in another intelligence officer to complete the report, renamed Project Echo. CSIS told its watchdog that the RCMP agreed with the report's tone-downed findings. But the RCMP informed SIRC that it was "not fully satisfied with the final report" because unlike the first draft it "fails to raise key strategic questions."

A SIRC spokesman refused to respond to Mr. Juneau's allegations.
======================================================

http://www.report.ca/missed/p15i001106f.html

Report
6Nov00

(12) The Sidewinder scandal

A leaked report makes explosive allegations about links between the Liberals and Chinese agents

by Kevin Michael Grace

RCMP Commissioner Giuliano Zaccardelli gave an extraordinary press conference on September 7. He told startled reporters, "There are criminal organizations that target the destabilization of our parliamentary system." The commissioner refused to give details but insisted he was not "fear-mongering." He concluded, "We don't want to wait until we become, unfortunately, like some countries around the world, where criminal organizations actually run part of the country."

On October 20 the Security Intelligence Review Committee (SIRC), the government agency that oversees the Canadian Security Intelligence Service, issued its annual report. It devotes six pages to a joint RCMP-CSIS operation, Sidewinder, whose secret interim report, "Chinese Intelligence Services and Triads Financial Links in Canada," was issued in 1997. This report was suppressed, and all copies were ordered destroyed, as were all background materials.

Project Sidewinder was abandoned but then restarted in 1998. A secret final report, "Echo," was issued in 1999. Sources close to Sidewinder have alleged that its 1997 report was first killed and then gutted because it revealed Chinese infiltration as a grave threat to Canadian security and sovereignty.

The SIRC report rejects these allegations. It finds "no evidence of political interference" and claims Sidewinder "was not terminated; it was delayed when its initial product proved to be inadequate." The 1997 report is judged "deeply flawed...a loose, disordered compendium of 'facts' connected by insinuations and unfounded assertions. Overall, the document is rich with the language of scare-mongering and conspiracy theory." SIRC concludes that the destruction of "'transitory' documents related to Sidewinder's first draft" was "standard practice." The disappearance of other "non-transitory" documents is described as "disconcerting" but of no "material impact."

The timing of the SIRC report two days before an election call and its pre-release leak to the National Post are suspicious. SIRC said in September that the report would not be released until the end of the year. Even more suspect is the September 25 assertion in the House of Commons by MP Lynn Myers, parliamentary secretary to Solicitor-General Lawrence MacAulay: "I would like to emphasize that I was not reading from or directly quoting the SIRC report, which is a classified report." He was referring to his September 20 statement to Canadian Alliance MP Jim Abbott dismissing the 1997 Sidewinder report as "deeply flawed" and a "conspiracy theory"--phrases identical to those used in the then-supposedly unwritten, unread, classified SIRC report.

Unfortunately for the Liberals, however, all copies of Sidewinder were not destroyed. The Canadian Alliance and various media, including this magazine, now possess them. The report, 30 pages long and badly translated from the original French, makes a shocking allegation--Hong Kong tycoons, triads (gangs) and Chinese intelligence services "have been working for 15 years in concert with the Chinese government, and some of their 'financial ventures' in Canada serve to conceal criminal or intelligence activities."

These activities include money laundering, heroin trafficking and the transfer of economic, high technology and intelligence data to Beijing. Sidewinder alleges the corruption of the Canadian business and political establishments: "The triads, the tycoons and [Chinese intelligence] have learned that [the] quick way to gain influence is to provide finance to the main political parties...China has obtained access to influential figures who are now or once were active at various levels of Canadian society."

Foremost among the Chinese tycoons, according to Sidewinder, is Li Ka-Shing, of whom U.S. Congressman Dana Rohrabacher has testified, "The U.S. Bureau of Export Affairs, the U.S. Embassy in Beijing and the Rand Corporation...have identified Li Ka-Shing and [his company]Hutchison Whampoa as financing or serving as a conduit for Communist China's military for them to acquire sensitive technologies and other equipment." Last year Forbes estimated Mr. Li's family as the eighth richest in the world, with assets totalling US$10.6 billion.

According to Sidewinder, Mr. Li is a director of the Beijing-controlled China International Trust Investment Company (CITIC), which had 1997 assets of US$23 billion. CITIC owns or controls Cathay Pacific Airlines, Hong Kong Telecom, Star TV, Poly Technologies and Norinco, suspected of arms shipments to Mohawk reserves. Mr. Li's company Hutchison owns 49% of Husky Energy. CITIC has invested $500 million to buy Canadian companies Celgar Pulp Mill and Nova Corp Petrochemical. Mr. Li and his son own "at least one-sixth to one-third of downtown Vancouver" and have extensive real estate holdings in Toronto. CITIC has "developed...close business links with Power Corporation." (Andre Desmarais, Prime Minister Chretien's son-in-law, is president and co-chief executive officer of Power Corporation.)

Mr. Li is the largest (10%) single shareholder of CIBC, and a shareholder and director of the Hong Kong and Shanghai Bank, which in the 1980s acquired the Hong Kong and Shanghai Bank of Canada, Continental Bank and Lloyds Bank Canada. CIBC, in turn, bought the securities firms Wood Gundy and Merrill Lynch. Li Ka-Shing's son Richard bought 50.1% of Gordon Capital in 1985. (Jean Chretien was a senior adviser there from 1986 to 1990.)

None of the above proves that Canada has been subverted by the People's Republic of China, but the linkages and connections revealed between Mr. Li and Mr. Chretien and his family (which are not detailed in Sidewinder but were reported elsewhere) are, as SIRC might say, disconcerting.

But then, SIRC itself is not entirely in the clear. One SIRC member, James Andrews Grant, has a serious unreported conflict of interest. His biography on the SIRC Web site identifies him as a director of CIBC and chairman of the executive committee of the law firm Stikeman, Elliott, which has a long-standing relationship with CIBC's largest shareholder, Li Ka-Shing.

Canadian Alliance MP Jim Abbott, who raised the Sidewinder issue in the Commons, reports that he was immediately denounced by a Liberal MP as a "racist." He adds, "Unfortunately, many Canadians are prepared to buy into these labels, and for that reason they find so much of this  [Sidewinder] unbelievable."

Mr. Abbott takes pains to stress that while he understands "there is a very malicious, a very serious criminal side to triad organizations, there's also the other side within the Chinese culture, where they are part of exchanging power and influence. This is something that we, from our Caucasian, Judeo-Christian basis, just don't comprehend."

Elections Canada loopholes make it easy for gangsters and foreign agents to contribute to Canadian politicians, money which is sometimes received unwittingly. While Mr. Abbott admits his party has "not taken any formal steps" to prevent such occurrences, he explains, "We're very deeply concerned about it and are doing our level best with what information we have to make sure we aren't compromised."
=======================================================

29May'00
(13) Chinese triads sought foothold in Vancouver port operations

 
Fabian Dawson, Staff Reporter The Province

The Vancouver Port Authority ignored warnings about the Chinese business interests it was wooing in the 1990s -- allowing a number of questionable business connections to take root in the port, The Province has learned. In the mid-'90s, as courting efforts aimed at Chinese shipping giant Cosco went into overdrive, intelligence officials -- including local ports police -- sounded alarm bells about the conglomerate's questionable connections. The shipping line is intimately linked to the China International Trust and Investment Corp., a key fundraiser for the Chinese government and a technology-acquiring source for China's military.

U.S. Senate investigators and Canadian intelligence officials have described Cosco as the merchant marine of the Chinese military.

Its vessels have been caught carrying thousands of weapons into California and Chinese missile-technology and biological-warfare components into North Korea, Pakistan, Iraq and Iran, according to U.S. intelligence reports. Last summer -- two years after the ports police were disbanded -- the port signed a deal with Cosco to make Vancouver its gateway to North America. Cosco had chosen the only major port on the West Coast of North America without a dedicated police force.

Port officials maintain they have no evidence Cosco is directly involved in any illegal activity and cannot recall receiving police warnings. Cosco officials have declined interviews.

Police and immigration documents obtained by The Province show that, in the early '90s, Chinese mafia members or triads were attempting to infiltrate port operations.

In one case, a man identified as Chan Chung Hiu applied for a visitor visa at the Canadian consulate in Hong Kong to come to Vancouver on Jan. 14, 1992. Chan said he was an advisor to a company that had concluded a deal with the B.C. government to take over operations at one of the docks.

Background checks conducted found that Chan was a member of the notorious Sun Yee On triad and had served a four-year jail term for armed robbery in Hong Kong.

Chan abandoned the application after being asked to produce a police certificate. In another case, members of the same triad group, who are among the world's biggest heroin traffickers, were seen entertaining a senior officer of the now defunct Co-Ordinated Law Enforcement Unit. The party aboard a yacht was hosted by a Vancouver-based shipping company suspected of having links with the Chinese mafia.