Canadian intelligence flagged Chinese meddling 37 years ago, document shows

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A resident crosses a quiet street near the Central Business District skyline in Beijing, Tuesday, Dec. 13, 2022.


A newly released document shows intelligence officials have been tracking China’s attempts to meddle in Canadian affairs for more than one-third of a century.

The February 1986 intelligence report warned that Beijing was using open political tactics and secret operations to influence and exploit the Chinese diaspora in Canada.

It said China was using new and potentially more potent techniques to accomplish these goals.

The Canadian Press used the Access to Information Act to obtain the report, called “China/Canada: Interference in the Chinese Canadian Community,” produced by the federal Intelligence Advisory Committee.

Much of the document remains secret on the grounds disclosure could harm the conduct of international affairs, the defence of Canada or the detection, prevention or suppression of subversive or hostile activities.

Release of the heavily redacted report comes amid pressure on the Liberal government to hold an inquiry into foreign interference in Canada following a series of leaks to the media about purported meddling by China.

A guide to foreign interference and China’s suspected influence in Canada

A timeline of China’s alleged interference in recent Canadian elections

The 1986 committee report “demonstrates that this issue has been on the radar of Canadian intelligence for decades,” said Alan Barnes, a former intelligence analyst who is now a senior fellow with Carleton University’s Norman Paterson School of International Affairs.

Barnes, who recently came across the title of the document during archival research, said the Intelligence Advisory Committee was chaired by the federal security and intelligence co-ordinator in the Privy Council Office.

“Its reports were sent to a wide range of senior officials across government,” Barnes said.

The 1986 report advised that the People’s Republic of China “has continued its efforts to influence the many large Chinese communities abroad and to exploit those communities for its economic and political purposes.”

“In Canada, as in many other western countries, the PRC uses both overt political activities and covert intelligence operations … to achieve those ends,” the report added. “New, and potentially more effective, techniques are being used to influence the Canadian Chinese communities.”

Cheuk Kwan, co-chair of the Toronto Association for Democracy in China, said he was not surprised by the report.

Kwan said he is aware of Chinese efforts to cultivate individuals and groups to interfere in Canadian affairs dating from the early 1980s, though the activity was at “a very low level” in those days.

“But certainly, they knew what they were trying to do. It was not an accident,” he said in an interview.

“I’m glad that at that time, somebody was aware of it. I’ll bet nobody took any action.”

Retired RCMP officer charged with conducting foreign interference for China

Kwan said Beijing stepped up efforts to influence Chinese communities in Canada following the bloody 1989 crackdown on pro-democracy protesters in Tiananmen Square, with the aim of burnishing its badly damaged image.

Evidence has surfaced from time to time over the decades indicating interest on the part of Canadian intelligence officials in China’s behind-the-scenes actions.

In recent years, the federal government and its security agencies have begun to openly point a finger at Beijing as particularly active in foreign interference activities against Canada.

Representatives of the Chinese government have consistently denied meddling in Canadian affairs.

Leaks to the media from unnamed security sources about alleged Chinese attempts to interfere in the last two general elections have prompted calls for the federal Liberals to explain what Canada is doing in response.

Opposition parties continue to press the government to establish a full public inquiry.

Kwan said while an inquiry could help document the history of China’s interference ploys, it would essentially be “looking backward” but not “going to help you going forward.”

The partial release of the intelligence report, 37 years after it was written, illustrates the need for Canada to adopt a proper system for the declassification of historic intelligence and security records after a specific period of time, Barnes said.

Canada is the only member of the Five Eyes intelligence alliance – which also includes the United States, Britain, Australia and New Zealand – that does not have a declassification process for historic records, he noted.

Election buries SIRC report

By Leo Knight

LOST in the final days of the 36th Parliament was the quiet release by SIRC, the civilian watchdog committee of CSIS, of its report on the demise of the joint CSIS/RCMP Project Sidewinder and the alleged interference by the Prime Minister's Office in the process.  

The report was buried in the Annual Report to Parliament of SIRC and tabled by the Solicitor General to the House on Friday, the last day before an election call by the prime minister.  

Jean Chrétien's premature political ejaculation has effectively buried a week of incredibly bad news, in the feeding frenzy of an election. With the election call he has stifled the criticism of his government in the wake of the damning Auditor General's report. He deflected the public's attention on the equally damning Information Commissioner's report and polished off the criticism on Project Sidewinder by having the report tabled in the final hours of a now defunct parliament.  

And now he goes to you, cap in hand, saying "please give me another mandate. You can trust me." He's got some kind of brass neck, this prime minister of ours.  

Not that it matters much, I suppose, in the matter of the SIRC report. I have already explained to you how the report had been compromised, as evidenced by Liberal Solicitor General Parliamentary Secretary Lynn Myers, in his response in Question Period to Alliance MP Jim Abbott. Myers, you'll recall, said the report cleared the prime minister, ostensibly before the report was even done and shortly after the committee chairwoman, Paule (sic) Gauthier, had stated publicly that the report was not yet complete.  

Indeed, reading the relevant sections of the SIRC annual report one can't help but see a smear campaign. SIRC even complained about the grammar and the syntax used by its author.  

So let's get this straight. Project Sidewinder was a joint CSIS/RCMP investigation into inordinate influences exerted on Canada by the Government of the People's Republic of China (PRC). It also examined the ability of elements of Asian Organized Crime to act in concert with the People's Liberation Army (PLA) and the PRC to take control of sensitive Canadian industries and corrupt our politicians through direct and indirect donations.  

The investigators were examining the planned and deliberate attempts to exert significant influence on the sovereignty of this nation and the SIRC committee says there was no political interference and by the way, the grammar, syntax and spelling were bad.  

SIRC also claims in its report that project was never terminated as claimed in "media reports." According to the report, "The project was not terminated; it was delayed when its initial product proved to be inadequate." Huh?  

Oh, and what about all the documents and material ordered shredded by the brass at CSIS?  

No problem, according to SIRC. "CSIS disposed of what is regarded as "transitory" documents related to Sidewinder's first draft in accordance with what it regards as standard practice. The service is unable to locate other related documents the committee regards as non-transitory in nature. The committee does not believe this lapse had a material impact on the events surrounding Project Sidewinder.  

So CSIS destroyed "transitory" documents in what CSIS claims is "standard practise." CSIS is "unable to locate other related documents" and the committee "does not believe this lapse had a material impact." SIRC just accepts this and then makes an absolute conclusion that there was no interference. And on top of that, SIRC claims the project was never terminated, but was only "delayed"! For almost three years, it's "delayed"?  

The SIRC report also reiterated several times the claim that the Sidewinder report was little more than "innuendo" and "provides 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."  

Oh really? I have read the Sidewinder report. It examines specific companies and the individuals who control them. It also examines the history, which led up to the series of events it investigated. It even documents a meeting on May 23, 1982 between Deng Xiao Ping, Li Ka Shing and Henry Fok.  

The author of the Sidewinder report almost seems to have anticipated the criticisms. Consider this sentence from paragraph 2 of the forward.  

"This document does not present theories but indicators of a multi-faceted threat to Canada's national security based on concrete facts drawn from the databanks of the two agencies involved, classified reports from allied agencies and various open sources."  

Later in the next paragraph, it says, "It should be reiterated that this report presents concrete facts, not just ideas or speculation."  

Let there be no doubt in your mind that the SIRC report does nothing to dispel the fundamental criticism and allegations made by the people who worked on Sidewinder.  

In a previous column, I explained the presence on the SIRC committee of Bob Rae, former Premier of Ontario and brother of Jean Chrétien's campaign manager, John Rae. But there is another member of that committee whom we need to have a peek at.  

James Grant is a lawyer with the law firm Stikeman, Elliott. That law firm is the fourth largest in Canada and has extensive links to Li Ka Shing, mentioned predominantly in the Sidewinder report. Several former partners of the firm now work directly for Li and are on the boards of several of Li's companies including Concord Pacific and Husky Oil.

Their Hong Kong offices are literally two floors above Li's in the China building. He is their landlord for their offices in Vancouver. Part of the Sidewinder report dealt with Li's extensive shareholdings in the CIBC. Grant is a director on the board of the CIBC. Given all of this, how is it possible that Grant was part of the review for SIRC? At the very least, he should have recused himself to avoid the appearance of conflict of interest.  

And Chrétien, in calling the election, has effectively dissolved this parliament, the only legal forum which could have examined all of this and demanded answers.  

I hope you remember all of this as you consider where to place your "X" on election day.

 MAY 23, 2017

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
6 Nov 00

(12) The Sidewinder scandal

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

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, human & heroin trafficking and the transfer of economic, high technology and intelligence data to Beijing. Sidewinder points out 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.)

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.)

All 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 and extremely interesting

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."
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29  May '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 claim 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.