China’s Shift Towards California’s Gold Mountain

by William Craddick

Jul 12, 2017 5:30 AM

The relationship between China and the West Coast of the United States has steadily grown for more than a century and a half. Chinese immigrants departed en mass to seek fortune in California's Gold Rush and provided the muscle for the Union Pacific during the construction of the Transcontinental Railway. In recent history however, China's involvement in California has taken on a new form. The increased involvement of Chinese funding of politicians, a shift in Chinese organized crime in California towards pro-Beijing factions and an increase in open diplomatic accommodation of the Chinese government all raise questions about China's long term goals in the Golden State.

I. Increasing Chinese Political Investments In California

As China's economy has grown over the past several decades, so too have donations and support for political figures in California. The increase in Chinese financial support has been accompanied by accusations of impropriety, as multiple California politicians have been found to be accepting potentially illegal gifts or donations.

A. San Francisco

San Francisco's mayor Ed Mah Lee has a history of financial support from Chinese interests, as well as the open endorsement of public figures in the city with established ties to the Communist Party of China (CCP). In August 2016, The Intercept reported that Lee was a noted beneficiary of Gordon Tang and Huaidan Chen, a married Chinese couple residing in Singapore. Tang and Chen were also major supporters of 2016 Republican presidential candidate Jeb Bush, donating $1.3 million to Bush's Right to Rise USA Super PAC. A complaint was filed with the Federal Election Committee over the donations to Bush. Tang has a notable history of investments in the United States, but has also fielded controversy as well. When contacted by a journalist from The Intercept, Tang offered a bribe of $200,000 in return for an omission of the fact that Chinese language news sites accuse Tang of participating in smuggling, tax evasion, and bribery in the Guangdong Province of China.

Lee also enjoyed long-time support from recently-deceased San Francisco figure Rose Pak. Pak served as an executive director of the China Overseas Exchange Association, a foreign affairs group under the direction of China's State Council Overseas Chinese Affairs Office. In the past, Pak has consistently advocated for pro CCP policies, including marginalizing Falun Gong practitioners and appearing at anti-Japanese protests during tensions between Japan and China over the Diaoyu Islands. San Francisco Supervisor Chris Daly directly accused Pak of improperly acting as an agent of the Chinese government. Local news source SFGate noted that Daly met with the FBI to discuss Pak's ties to China in 2006. In 2013, SFGate also reported that three complaints were filed over a trip that Ed Lee took with Pak to China where Lee was the benefactor of a number of potentially illegal gifts totaling $18,000 to cover expenses.

Ed Lee raises the Chinese flag with China's consul general over San Francisco's city hall. Credit News.CN

In late September 2016, Lee took part in festivities for China's National Day, the anniversary of the founding of the People’s Republic of China (PRC). As part of the holiday, Lee flew the Chinese flag over San Francisco's city hall alongside Chinese consul general Luo Linquan. Also in attendance at the event was San Francisco businesswoman Florence Fang. Fang has expressed "undying patriotism" for China and has in the past taking strong stances in support of China's claims to Taiwan, labelling the island state a "fake democracy."

While participating in National Day celebrations, Lee was caught on camera making extremely improper gestures of loyalty to the Chinese government. On September 28th, 2016, video posted to Twitter by China Daily (0:20-0:24) shows Lee placing his right hand over his heart during China's national anthem at an event held by the PRC consulate-general in San Francisco. Lee's attendance at the event was not reported by any local San Francisco media outlets, was not mentioned on the mayor's Twitter account. The San Francisco website for the office of the mayor similarly carried no mention of the event and misleadingly stated that Ed Lee would be carrying out meetings at city hall "all day" despite the fact that he attended the event at the Chinese consulate.

Ed Lee holds his hand over his heart for Chinese national anthem alongside consul general Luo Linquan. Credit China Daily

Lee routinely participates in National Day events, including in 2014 when he was criticized by activists for playing a role in National Day celebrations while China's government was cracking down on pro-democracy protestors in Hong Kong. Despite the fact that Chinese Americans of Taiwanese origin also celebrate Taiwan’s “Double-Ten” National Day in the San Francisco Bay Area, Lee does not attend the events or raise the Taiwanese flag above city hall.

Lee is not the only Bay Area politician with a connection to China. Disobedient Media has reported that the mayors of Oakland and Berkeley have ties to groups and individuals who have been the subject of FBI investigations for their ties to the CCP.

B. Los Angeles 

Chinese businesses have also begun to increase investment and financial involvement with Los Angeles politicians as well. The Los Angeles Business Journal has highlighted a dramatic increase of Chinese investment in the film industry as well as LA real estate. China is Los Angeles' largest trading partner, with $164.38 billion in trade to the city in 2013. This increase in investment is welcomed by mayor Eric Garcetti, who has endeavored to court Chinese businesses since his election in 2013. In 2014 and 2016, Garcetti led trade delegations from the United States to China with the stated goal of increasing tourism and encouraging companies to invest in Los Angeles. Garcetti has additionally hosted a number of climate change summits in 2014 and 2015.

MyNewsLA reported that Garcetti's 2016 delegation included John Podesta. Podesta has come under fire for improper foreign influence peddling after Wikileaks releases showed that Podesta concealed 75,000 shares he held in Russian-financed Joule Unlimited Technologies, Inc. and a report by the Daily Caller indicated Podesta's lobbying firm failed to disclose lucrative work it did for Ukrainian politicians with ties to the Russian government and former Trump campaign manager Paul Manafort. The report stated that Garcetti also met with Wang Jianlin, chairman of Dalian Wanda Group. Disobedient Media has previously reported on Jianlin's drive to buy up Hollywood media groups as the mogul has increased his rhetoric against the American government and become involved in a scandal involving the mayor of New York, Bill de Blasio.

The efforts to court Chinese investment in Los Angeles have also coincided with an increase in political donations from companies who are have business ventures in China. In 2014, Garcetti announced the launch of the Mayor's Fund for Los Angeles. The Los Angeles Timesreported that while companies who hold contracts with the City of Los Angeles are barred from making contributions to candidates for city office, they are able to support Garcetti by donating to the nonprofit since these funds are not subject to the same legal restrictions. The Mayor's Fund raised over $14 million in its first year of operations, spending less than of that amount on the civil initiatives it says it supports. An examination of the Mayor's Fund's tax records from the fiscal years of 2013, 2014, and 2015 show a pattern of spending less than the amount the Fund raises each year. The documents also reveal that the only one of the Fund's listed officers spends on average more than two hours working for the nonprofit.

The Mayor's Fund website includes a list of supporters which lists corporations such as the Energy Foundation China and multinational engineering firm AECOM, which has previously been involved with major infrastructure projects in China. An examination of the Energy Foundation's website as well as the official attendee list for the 2015 Los Angeles Climate Leaders Summit shows that both companies were in attendance. As the Mayor's Fund does not list the names of its contributors in its tax filings, it is impossible to determine how much support these companies gave to the Fund or what the money was ultimately used for.

Garcetti has previously had brushes with funding scandals involving Chinese investors. In 2016, The Los Angeles Times reported that Garcetti was one of a number of LA-area politicians to receive funding from donors directly or indirectly related to China-born Samuel Leung of Palos Verdes, California between 2008 and 2015. Leung was accused of making the donations to gain approval of a $72 million development in Los Angeles' Harbor Gateway neighborhood. At one critical point, Garcetti invoked a mayoral prerogative (which he had used only twice before) to reduce the number of council votes required to approve the project by changing zoning laws. Although the Los Angeles District Attorney's Office said they would review the case in October 2016, no charges appear to have been filed so far.

II. Chinese Takeover Of California's Asian Organized Crime

China has also begun to exert increasing influence over Californian Chinese organized crime groups, using Hong Kong based Triads who are allied with Beijing's government. This shift has been marked by the murder of a number of organization heads over the past decade.

A. San Francisco

On February 27th, 2006, Chinese American Allen Leung was murdered by a masked assailant in San Francisco. Police described the assassination as "premeditated." Leung was a businessman who also served as the "dragon head" of the Hop Sing Tong, Chee Kung Tong and Chinese Consolidated Benevolent Association, which is traditionally supportive of Taiwan's Kuomintang government. Tongs are Chinese fraternal secret societies originally founded to protect Chinese migrants from harassment and discrimination which continue to provide essential services for Chinatown communities. However, they have also routinely been infiltrated by and affiliated with organized crime groups. The 19th and 20th centuries frequently saw brazen assassinations and gang wars which local Californian newspapers at the time documented as common in cities such as San Francisco, Los Angeles, Seattle and Portland. Though violence between tongs became less overt, the New York Times has noted that it has continued over time.

The Chicago Tribune established that Leung was well known for his opposition to Chinese communists and his funeral was attended by a "Cabinet-level dignitary from Taiwan" who spoke about Leung's loyalty to those who fled China after the communists took power in 1949. The Tribune cited speculation that Leung's death was related to conflict between those who supported Chinese exiles in Taiwan, and younger generation who believes it is time to build relationships with the mainland. Pro-Taiwanese factions had also been growing weak due to decreased financial support. Leung became so concerned about the danger posed to him by younger members of the Hop Sing Tong that he reached out to the FBI for assistance prior to his death (an unheard of occurrence in a community wary of law enforcement).

Leung's successor, Raymond "Shrimp Boy" Chow, was accused by Federal prosecutors of arranging the assassination of Leung. SF Weekly reported that Chow was born in Hong Kong and immigrated to the United States in his teens after joining the Triads as a nine year old. Once in California, Chow worked with Peter Chong, an alleged crime boss with the Hong Kong Triad Wo Hop To tasked with establishing the Triad as the dominant Chinese criminal power in the United States. Court filings allege that Chong and Raymond Chow were involved in the attempted murder of a rival gang member in Boston, and the Senate Government Affairs Permanent Investigations Subcommitteeacknowledged Wo Hop To as the dominant power in San Francisco by 1991. Briefly jailed in 2000 after an extradition to the U.S. from Hong Kong, reports state that Chong is believed by authorities to have returned to crime and the Hop Sing Tong after his release in 2008.

Raymond "Shrimp Boy" Chow. Credit Jen Siska

A 1997 report by The New Republic has cited statements by Chinese officials, documenting a now longstanding alliance of convenience between the Chinese government and Triad groups in Hong Kong including Wo Hop To. The policy was aimed at drawing the Triads away from Taiwan towards China. In return for their loyalty to Beijing and pledge to not disrupt Hong Kong's stability, China has allowed these groups to operate freely and expand into the mainland. Chinese president Deng Xiaoping made multiple comments in 1983 and 1984 where he spoke positively of the Triads, labelling them as "patriotic." The murder of Allen Leung raises questions about whether or not Chinese supported Triad organizations are now assisting the government by removing ideological opponents in the United States.

Raymond Chow was also implicated in a weapons smuggling plot involving a Californian politician who strongly supported gun control which would keep legal arms out of the hands of citizens. A 2014 FBI press release listed Chow as one of a number of defendants arrested along with California State Senator Leland Yee. San Francisco Magazine revealed that Yee was working with Islamic rebel groups in the Philippines to import firearms and heavier weapons such as rockets.

B. Los Angeles

Opponents of Wo Hop To have also recently met violent deaths in Los Angeles as well. On January 27th, 2017, the Los Angeles Timesreported a double murder in the main hall of the Los Angeles Hop Sing Tong. Though the Times would not mention the deceased by name, Northwest Asian Weekly listed them as the club's president, Tony Young, and club member Kim Kong Yon. A 1994 report by the Los Angeles Times named Young as the head of the Wah Ching (??), one of California's largest Chinese organized crime groups and a major rival of the Wo Hop To, who supplanted them in the Bay Area. Wo Hop To's regional head Peter Chong was questioned for his alleged involvement in the 1991 murder of Wah Ching leader Danny Wong. Wong's death was seen as a significant development in the competition between Wo Hop To and Wah Ching for control of the crime world in San Francisco.

The murder of a Wo Hop To rival gang leader represents a potential expansion attempt by Triad groups who are known to act as foreign policy tools of the Chinese government. NBC News reported in 2013 that Triad groups were responsible for smuggling more than 100,000 Chinese nationals into the United States each year, many of whom were forced to live in economic slavery while they worked off their debt to the gangs who transported them. With Wo Hop To's expansions in California and other parts of the United States, the Chinese government will by default become increasingly involved with groups effectively practicing slave trading in America.

III. Accommodation Of Chinese Government

California has increasingly pushed a number of measures that, whether intentionally or otherwise, stand to benefit China in the long term. Asian American communities have in the recent past protested a number of actions which they felt uncomfortably normalized what they perceived to be communist ideology that was responsible for oppression and suffering in their homelands. In May 2017, a bill sponsored by Assemblyman Rob Bonta sought to remove a Cold War era ban on state employees who were members of the Communist Party. The Sacramento Bee reported that the bill was ultimately dropped and Bonta forced to apologize after facing extensive outrage from Californian veterans and members of the Vietnamese American community.

In June 2017, just days after Donald Trump's announcement that he would withdraw the United States from the Paris Climate Agreement, California signed a treaty with China aimed at reducing greenhouse emissions. Governor Jerry Brown signed the agreement with Chinese minister of science and technology Wan Gang before meeting with President Xi Jinping. Brown also signed similar agreements with leaders from Sichuan and Jiangsu provinces. The actions of California's governor in China amounts to a violation of Article I, § 10 of the Constitution, which specifically prohibits states from entering into any treaty, alliance, or confederation as this power is reserved for the Federal government.

California's pivot towards China is concerning given the increasing amounts of Chinese financial involvement with California politicians. Similarly, the shift in Californian Chinese organized crime from groups aligned with Taiwan to Triad organizations operating with the blessing of the Chinese government creates doubts about Beijing's plans for the West Coast. With California increasingly taking steps to act autonomously of the Federal government, it is likely that China's true intentions will become apparent in due time.