[Video] Spies and Influence: The hard edge of China's soft power

“They want to influence Australia. They want a stronger presence in Australia.”

It’s a tale of secrets, power and intimidation.

“ASIO are really quite alive and alert to these issues… of Australian national security.”

China is our most important trading partner, making a strong relationship vital to Australia’s national interest. But there are growing concerns about covert Chinese actions taking place on Australian soil.


Video transcript is blow

“Every government has an interest in promoting itself abroad to extending its soft power, I guess what’s different about China is the way in which its run through these clandestine operations.”

Five months in the making, this joint Four Corners/Fairfax Media investigation uncovers how China’s Communist Party is secretly infiltrating Australia.

The investigation tracks the activities of Beijing-backed organisations and the efforts made to intimidate opponents of the Chinese Communist party.

“The way the Chinese Government operates is effectively to control and silence dissent.”

And investigates the influence of individuals who have access to political and business leaders.

“Even if they’re not receiving any kind of direction, they would feel some sense of obligation, or indeed make the right impression on the powers that be in China, to demonstrate that they’re being good members of the party, that they’re pursuing the party’s interests.”

The findings will be released in a series of stories through Fairfax Media and ABC platforms, reported by Fairfax’s Nick McKenzie and the ABC’s Chris Uhlmann, culminating in the Four Corners broadcast on Monday night, detailing the full revelations.

Power and Influence, reported by Nick McKenzie and presented by Sarah Ferguson, goes to air on Monday 5th June at 8.30pm EDT. It is replayed on Tuesday 6th June at 10.00am and Wednesday 7th at 11pm. It can also be seen on ABC NEWS channel on Saturday at 8.00pm AEST, ABC iview and at abc.net.au/4corners.

Video Transcript

Power and Influence – Monday 5 June 2017

CHRIS UHLMANN: For six months, the world has watched the unfolding story of how the Russian government and its agents sought to subvert the US election, and possibly helped deliver the presidency to Donald Trump.

Extraordinary though that story is, it is not unique. America is not the only democracy to have been targeted in this way, and Russia is not the only country accused of such subversion.

Just ten days ago, the head of Australia’s peak intelligence agency ASIO warned that espionage and foreign interference are occurring here on an unprecedented scale, with the potential to cause serious harm to this nation’s sovereignty, it’s security and, he added, the integrity of our political system.

Duncan Lewis did not name the key suspect. But we can tonight – the Chinese Communist Party.

A joint investigation by a team of journalists from 4 Corners and Fairfax Media has exposed a concerted campaign by the Chinese government and its proxies to infiltrate the Australian political process to promote its own interests.

Its targets include our universities, local student and community groups, the Chinese language media, and – most disturbing of all – some of our nation’s leading politicians.

This investigation reveals that business leaders allied to Beijing are using millions in political donations to the major parties to buy access and influence, and in some cases to push policies that may be contrary to Australia’s national interests.

Nick McKenzie has the story.

NICK MCKENZIE, REPORTER: In the early hours of a cold morning in October 2015, a team of counter espionage officers breaks into a Canberra flat.

Their target is a Chinese born woman, who is married to a former high ranking Australian intelligence official.

ASIO suspects the woman is involved in spying for the Chinese Government.

PROF. RORY MEDCALF, NATIONAL SECURITY COLLEGE, ANU: For such an action to be taken you would assume that it would need the authorization of the Attorney General, it would need a warrant, and it would need essentially a decision involving many parts of the Australian National Security Community.

So it would reflect deep and real concern about Chinese espionage in Australia.

NICK MCKENZIE, REPORTER: The woman’s name is Sheri Yan … a socialite with connections to the senior levels of government, here and abroad.

Did you think she might be a Chinese intelligence operative of some sort?

PROF. JOHN FITZGERALD, THE FORD FOUNDATION, BEIJING, 2008 – 2013: I understand that Sheri Yan is very closely connected with some of the most powerful and influential families and networks in China.

Once you know that you don’t need to know much more.

NICK MCKENZIE: Yan’s husband, Roger Uren, was until 2001 Assistant Secretary at Australia’s Office of National Assessments, the agency which provides secret intelligence briefings to the Prime Minister.

During the raid, ASIO seized computers and documents.

They discovered classified Australian government files on the work of Chinese intelligence.

Uren is being investigated for the removal of these files, which may have been illegal.

PROF. RORY MEDCALF: This material is normally held very tightly held.

Presumably it relies on intelligence sources and methods, which can’t be compromised.

It also could potentially reveal some of the deepest intelligence and analytical judgements of either Australia or indeed of Australia’s allies and partners.

So it’s material that has to be protected at all costs.

NICK MCKENZIE: In the weeks before the raid, ASIO analysts had been tracking links between political donors in Australia and the Chinese Communist Party.

The donations provided access to the most powerful politicians in the land.

ASIO chief Duncan Lewis was so worried, he organised meetings with the Directors of the Liberal and National parties, as well as the Federal Secretary of the ALP, to warn them that the donors could compromise the major parties.

NICK MCKENZIE: How unusual is it for a directed general of ASIO to take such a step?

PROF. RORY MEDCALF: Oh it’s certainly unusual.

If that is indeed the case, it would reflect very real, very real concern.

NICK MCKENZIE: When he briefed the party officials, Lewis said the donors being examined by ASIO were breaking no laws.

But he warned their strong connections to the Chinese Communist Party meant their donations might come with strings attached.

ASIO briefed then Prime Minister Tony Abbott.

PETER JENNINGS, EXECUTIVE DIRECTOR, AUSTRALIAN STRATEGIC POLICY INSTITUTE: I think that this type of, frankly, naked influence buying, is something, which is damaging to Australia’s political system.

I would far rather have a regime in place whereby we, the tax payer, pay for the cost of our elections than relying on parties to get donations from foreign sources, where ever they may come from.

Notably those foreign sources are primarily linked to Chinese business.

NICK MCKENZIE: ASIO singled out two billionaire donors with especially close ties to the Chinese Communist Party.

The first was enigmatic property developer Dr Chau Chak Wing, a man who keeps a low profile except when it comes to his big donations.

PETER MATTIS, FORMER CIA CHINA EXPERT: He sort of appeared out of nowhere.

There’s very little in his biography that predates his appearance and his entry onto the Australian and China business scene.

NICK MCKENZIE, REPORTER: Dr Chau’s extraordinary generosity has given him access to Australia’s political elite.

Dr Chau donated $20 million dollars to build a Frank Gehry designed building at the University of Technology Sydney, which was opened by the Governor General in 2015.

At the unveiling of the Dr Chau Chak Wing building, the billionaire politely posed with the famous architect.

Not content with having a building named after him, Dr Chau splashed $70 million dollars on Australia’s most expensive home in 2015.

A six story mega mansion he bought from James Packer.

Dr Chau’s money allowed him to regularly rub shoulders with the great and good of Australian politics.

He’s donated more than $4 million to the major parties over the past decade.

The question ASIO has been probing is what he wants from his donations?

PROF. RORY MEDCALF: We don’t know whether donations are somehow driven, or centrally encouraged, by the Chinese Communist Party, or whether in fact you’ve got enthusiastic individuals freelancing to make donations that they think will resonate well when they report back to China, or if they report back to China that these donations were made, and that there is a change taking place in the Australian political discourse.

NICK MCKENZIE: Dr Chau is an Australian citizen.

Back in his homeland China, he was also a member of a communist party advisory group known as a people’s political consultative conference or CPPCC.

This group carries out the work of an opaque lobbying arm of the Party called the United Front Work Department.

PROF. RORY MEDCALF: We have to assume that individuals like that have really deep, serious connections to the Chinese Communist Party.

Even if they’re not receiving any kind of direction, they would feel some sense of obligation, or indeed some desire to make the right impression on the powers that be in China, to demonstrate that they’re being good members of the party, that they’re pursuing the party’s interests.

PETER MATTIS: In a sense, you could say in Australia that with wealth comes responsibility, and that responsibility is to respond to the party when they ask you to do a favour for them.

GEOFF RABY, AUSTRALIAN AMBASSADOR TO CHINA, 2007 – 2011: Well I think it’s mainly to do with their own business interests in Australia.

Also, it’s very much in the nature of the way Chinese do business, making gifts.

And most of these business developers and sorts of people who are doing this, they crave the prestige and the status of being photographed standing next to politicians, on both sides of politics.

So, it’s about their influence and status and image.

Which they see as helping their business first and foremost, giving their family respect.

It’s very much a traditional Chinese way of operating.

NICK MCKENZIE: Four Corners has learned ASIO’s interest in Dr Chau arose partly from his association with a woman described as an ‘old friend – the socialite and lobbyist Sheri Yan.

It was Sheri Yan who ASIO suspected of spying and whose Canberra apartment the agency raided.

PETER MATTIS: Sheri Yan, or Yan Shiwei, is an Australian-Chinese businesswoman who’s made her livelihood out of building connections between China and the outside world and acting as a go-between between foreign businessmen, foreign government officials who are trying to get things done in China, or find their way among the bureaucratic and political land mines that are there.

NICK MCKENZIE: Dr Chau used Sheri Yan as a consultant, somebody able to open up the right doors.

GEOFF RABY: She’s a very active person.

Many people come through the place, through Beijing.

She’s a, you know, dynamic, active person, speaks both languages perfectly, is charming, and comes from a well-connected background, which I don’t know what those connections are, I only understand that’s the case.

PETER MATTIS: It appears her father was a PLA officer at one point in the very early days, so she’s connected to the core of the CCP in a sense.

No one can really explain where her original money, original connections, her original ways of opening the doors in China comes from.

NICK MCKENZIE: Sheri Yan divided her time between New York, Beijing and Canberra, and moved with ease among the A-listers.

Her contacts included high flying businessmen and Australia’s former New York consul general Phil Scanlan.

She was also close to the President of the United Nations General Assembly, John Ashe.

PETER MATTIS, FORMER CIA CHINA EXPERT: Someone who knows how to work that landscape is useful not only for getting things done, not only for injecting Chinese perspectives into it, but also for being able to say, “Here are the players. Here are the people who are important.

“Here are their personal foibles.”

NICK MCKENZIE, REPORTER: As Sheri Yan relentlessly networked, her husband Roger Uren was often proudly by her side.

Uren’s previous work as a high ranking Australian intelligence official with top security clearance meant he was trusted in Canberra.

But not everyone trusted Sheri Yan.

PROF. JOHN FITZGERALD: In times, past I was advised to stay well clear of Sheri Yan.

NICK MCKENZIE: Why?

PROF. JOHN FITZGERALD: I’m not entirely sure why.

I was advised by an old friend in Australia’s security establishment.

NICK MCKENZIE: To stay clear of Sheri Yan?

PROF. JOHN FITZGERALD: To stay clear of Sheri Yan.

NICK MCKENZIE: In October 2015, the Sheri Yan story took a sudden and dramatic twist in New York.

PREET BHARARA, NEW YORK ATTORNEY GENERAL: Today, together with our law enforcement partners, we expose yet another wide-ranging corruption scheme, one that is simultaneously local and global and it is centred at the United Nations.

NICK MCKENZIE: At the same time her Canberra apartment was being raided, Sheri Yan was arrested in the US, accused of bribing the UN general assembly president.

Yan’s arrest stunned her associates, including former Australian ambassador Geoff Raby.

GEOFF RABY: Well I was obviously very surprised. I couldn’t believe it when I heard it. But she had been out of Beijing largely for a couple of years.

JOURNALIST: Can I just ask if you are aware of Sheri Yin? She was arrested in the US last week for bribery allegations in the UN.

She is a bit of a mystery, it seems that she lives here in Canberra, or at least may be a dual citizen, but no one is quite sure.

Is it a consular case?

JULIE BISHOP, MINISTER FOR FOREIGN AFFAIRS: I have been briefed on the matter, it is a matter that the Department of Foreign Affairs and Trade is focussing on but I’m not going to go into individual cases at this point, but it is a matter upon which I’ve been briefed.

JOURNALIST: Can you say if she’s an Australian-Chinese?

JULIE BISHOP, MINISTER FOR FOREIGN AFFAIRS: I’ll leave that sort of detail to our consular staff.

It’s a fairly complex issue, I don’t want to compromise any of the investigations which are underway.

Thank you.

NICK MCKENZIE, REPORTER: One of the events that led to Sheri Yan’s arrest unfolded at the luxury Imperial Springs Resort, which is owned by none other than the Australian political donor Dr Chau Chak Wing.

The FBI alleged Yan bribed the UN general assembly President to speak at the resort, at a conference hosted by Dr Chau.

A sealed indictment from a New York Court against Sheri Yan refers to Dr Chau using a codename – CC3.

Sheri Yan was alleged to have told the UN President

SHERI YAN: [CC3’s] office emailed me with the invitation.

I will ask $200,000 for this trip…

NICK MCKENZIE: A draft invitation sent to the United Nations president and allegedly approved by Dr Chau stated his desire to make the UN chief his “sincere friend in Guangdong Province”

DRAFT INVITATION: And your friend here has the pleasure to offer you a permanent convention venue for the UN meetings…

NICK MCKENZIE: The UN president’s bank account was then wired $200,000 by one of Dr Chau’s companies.

Under US bribery law it was illegal for Ashe as UN official to receive this payment.

There is no suggestions Dr Chau knew it was illegal.

PETER MATTIS: At least some of the money that was moving through Sheri Yan, or that she was facilitating, came from him.

It doesn’t mean that there was necessarily anything untoward about it, but just the fact of large amounts of money being moved or paid to people because of introductions or the activities of Sheri Yan make it, make it somewhat suspect.

NICK MCKENZIE: Sheri Yan pleaded guilty to bribery charges and was jailed last year.

Dr Chau has never been charged with any offence and denies any wrongdoing.

ASIO’s interest in Sheri Yan is just one of many suspected foreign interference and intelligence cases being probed by Australia’s agencies, and which lead back to Beijing.

PROF. RORY MEDCALF: it’s fair to say that agencies like ASIO are really quite alive and alert to these issues.

The challenge for them is that their mandate is essentially to monitor, and to report to government what’s happening.

They don’t have a mandate, it’s not clear who within the Australian system has a mandate to act on this information.

NICK MCKENZIE: In Washington, concerns about the Chinese Communist Party interfering in Australian politics is growing.

There, senior officials believe Australia is open to compromise, including through foreign donations.

MIKE MCCAUL, CHAIRMAN, HOMELAND SECURITY COMMITTEE: Well, you know, in the United States we prohibit that expressly.

I think there’s a reason for that.

We don’t want the influence of foreign money in our elections and foreign governments to influence our elections.

I think that’s a wise policy.

Quite frankly, I was a bit surprised that Australia does allow foreign contributions, and if you look at the numbers, which I was privy to, a lot of these donations are coming from China.

China has a very strong influence in the region.

They want to influence Australia.

They want a stronger presence in Australia, and what better way to do that then to influence political figures through, through foreign contributions.

NICK MCKENZIE: Republican congressman Mike McCaul is chairman of the Homeland Security Committee.

In the 1990s while a prosecutor at the US Justice Department, he investigated a scandal known as ‘China-gate’.

Chinese spies funnelled donations into the Clinton presidential campaign.

MIKE MCCAUL: It’s almost like out of a spy novel.

I mean, it’s the most interesting case I ever prosecuted.

These are very dangerous, clandestine figures in Chinese intelligence and there was a concerted effort to influence our elections.

NICK MCKENZIE: McCaul warns Australia is badly exposed, unless our laws are changed.

MIKE MCCAUL: The critical issue here is allowing a foreign government to influence your elections.

I think at a minimum, closing off foreign contributions from a foreign government to influence elections, and in this case, China is the biggest offender.

NICK MCKENZIE: Chinese Premier Li Keqiang’s visit here in March came as Australia grapples with a shifting world order post the election of Donald Trump, and an emboldened Chinese Communist Party no longer content to hide its strength and bide its time.

In Australia’s diplomatic and security community, debate is raging about why and to what extent the one-party state is seeking influence in Australian institutions.

In Canberra, local students were bussed in by the Chinese Embassy, to welcome Premier Li

NICK MCKENZIE: The young patriots drown out those there to protest against the Chinese government.

Lupin Lu is President of the Chinese students’ association at the University of Canberra. She organised 200 of her classmates for the rally.

LUPIN LU, PRESIDENT, CHINESE STUDENTS AND SCHOLARS ASSOCIATION, UC: The Chinese Embassy, they support us or sponsor us by providing flags, food.

NICK MCKENZIE: The flags?

LUPIN LU: Yes.

NICK MCKENZIE: The food?

LUPIN LU: Transportation.

NICK MCKENZIE: Transportation.

LUPIN LU: And legal help as well, lawyer.

NICK MCKENZIE: For the event, for the day?

LUPIN LU: Yes, because there is politics involved.

Sometimes there may be conflict with the police.

NICK MCKENZIE: The Chinese government and its proxies monitor Chinese student associations at most Australian universities.

This oversight has a dark side.

Students organising anti-communist party protests may be reported to the Chinese Embassy.

LUPIN LU: I guess as the president of Chinese Students Scholars Association and as a Chinese, I would do this for the safety of other members, other students.

NICK MCKENZIE: You would tell the embassy that some students were organising a human rights protest, for instance?

LUPIN LU: Yes. I would definitely, just to keep all the students safe and to do it for China as well.

NICK MCKENZIE: Brisbane student and democracy activist Anthony Chang believes he is being monitored by the Chinese Government.

He fled China three years ago after he was arrested and interrogated for putting up posters supporting independence for Taiwan.

ANTHONY CHANG, STUDENT ACTIVIST: When they took me to the police station, I was still frightened.

I had my hands over my head, and I said, “I will absolutely obey you, just make sure you don’t shoot me”.

As you can see, I was scared of them.

NICK MCKENZIE: He didn’t expect to come to the attention of the Chinese authorities, here too.

But after he spoke in Brisbane at this pro Hong Kong democracy rally, his parents back in China were visited by state security officials, who demanded their son cease his Australian activism.

ANTHONY CHANG: My parents, are very worried.

They are worried that it might affect them, for example their work.

They could lose their job.

They could be jail because of my activities.

NICK MCKENZIE: One of the fiercest critics of communist party interference in Australia is Sydney academic Dr Feng Chongyi.

While Premier Li was being feted in Australia, Dr Feng was back in China to meet with human rights lawyers – work he knew would draw attention.

DR FENG CHONGYI: We know that it’s an open secret that we are, our telephone is tapped, we are followed everywhere but that is a routine that we have to accept if we want to work in China.

NICK MCKENZIE, REPORTER: But Dr Feng did not expect what happened next.

At his hotel in the city of Kunming, he was tracked down by agents from the Ministry of State Security.

Over the next 10 days he was subjected to intensive videotaped questioning … for up to 6 hours a day.

Many of the questions involved his activities in Sydney.

NICK MCKENZIE: They wanted to know about your democracy activism in Sydney.

DR FENG CHONGYI: In Sydney, yes that’s right.

NICK MCKENZIE: They wanted to know about your associates in Sydney?

DR FENG CHONGYI: That’s right.

NICK MCKENZIE: They knew about your family in Sydney?

DR FENG CHONGYI: That’s right.

NICK MCKENZIE: They knew specific details about names?

DR FENG CHONGYI: Actually, for my family members they, they got everything.

They got everything.

NICK MCKENZIE: Dr Feng was accused of endangering state security.

Only after the intervention of the Turnbull government was he told he was finally free to return home to Sydney.

He believes he was targeted by the Chinese Communist Party as a warning to others in Australia not to challenge the party.

DR FENG CHONGYI, ASSOCIATE PROFESSOR, CHINA STUDIES, UTS: there are several messages they are sending on.

One is directly related to my work, that the academics better stay away from sensitive issues or sensitive topics, otherwise they can get you into deep trouble, detention or other punishment.

NICK MCKENZIE: While Dr Feng was trapped in China, back in Australia, Premier Li was the guest of honour at a Chinese community event held at the Sydney Town Hall.

Sitting at the head table opposite Premier Li was Dr Chau Chak Wing.

A couple of seats over from him was another Chinese billionaire – Huang Xiangmo.

Like Dr Chau, Mr Huang has come to the attention of ASIO.

Mr Huang is the second donor named by ASIO in its secret warning to the Coalition and Labor about the danger of Chinese Communist Party interference in Australian politics.

PROF. JOHN FITZGERALD: When we look at other business people contributing say to Australian political parties, we can go back through the company records and establish where that money came from.

In the case of Mr Huang it’s not quite so clear.

NICK MCKENZIE: Mr Huang’s rise is a classic rags to riches story.

From a poor rural family, he built his billion-dollar fortune as a property developer in provincial China.

Mr Huang arrived in Australia in 2011 in near total obscurity.

But that didn’t last for long.

NICK MCKENZIE: Mr Huang, and his property development firm Yuhu, began donating millions of dollars to health and education initiatives, earning the praise of politicians from both parties

ANDREW ROBB, MINISTER FOR TRADE AND INVESTMENT, 2013 – 2016: I thought I’d just say a couple of words about Mr Huang.

I think it’s important to get a sense of the man.

He is a man of many dimensions from what I’ve already been able to determine.

Thoughtful, he’s a very thoughtful cerebral fellow.

He’s a man who thinks, about life and about how we can improve it.

He’s a man comfortable in his own skin, he’s a man with a sense of humour which is a good thing.

He’s a visionary.

NICK MCKENZIE: Mr Huang became a major political donor too.

Getting to know Tony Abbott – he gave $770,000 to the Liberals before the 2013 election.

A big chunk of that went to Julie Bishop’s home state of Western Australia.

Mr Huang and his associates also gave to the Trade Minister Andrew Robb …. $100,000 to his campaign fundraising vehicle, as Robb signed off on the China Australia Free Trade deal.

And $1.8 million went towards an Australia China Research Institute. Mr Huang became its chairman, its director – former Foreign Minister Bob Carr.

PROF. JOHN FITZGERALD: First, he’s seeking to establish his position, his status in the Chinese Australian community.

Secondly, I think he’s trying to secure some standing for the Chinese Australian community with various Australian governments at state federal level and third through those community organisations, to secure outcomes that are favourable to the Chinese State Policy.

NICK MCKENZIE: In the right company, Mr Huang makes no secret of his devotion to the Chinese Communist Party.

At an event celebrating 66 years of one party rule in China, Mr Huang took to the stage

HAUGN XIANGMO: We overseas Chinese unswervingly support the Chinese Government’s position to defend our nations sovereignty and territorial integrity.

We support the development of the motherland always, and take on an important role in building One Belt One Road.

NICK MCKENZIE: Mr Huang oversees a communist party aligned Council which supports Beijing’s territorial claims over Taiwan, Hong Kong and the South China Sea.

It’s called the Australian Council for the Promotion of the Peaceful Reunification of China, and Mr Huang is President.

DR FENG CHONGYI: That means he’s a key member supported by the Chinese authorities including the Embassy or the consulate here.

That as I said is the most influential organisation or association in the Chinese diaspora community in Australia.

Whoever took the position as the head of that organisation means he can be identified as the leader, the most influential figure in the Chinese community.

Enjoys very high status.

NICK MCKENZIE: Mr Huang’s Council is dedicated to pushing the Communist Party’s interests in China and abroad.

PROF. JOHN FITZGERALD: Well every government of course has an interest in promoting itself abroad to extending its soft power.

I guess what’s different about China is the way in which its run through these clandestine operations.

It’s just not out there and open.

Secondly, it’s really not out to win an argument, it’s out to silence dissent and other countries generally don’t operate that way.

They expect to win an argument on its strengths, not to silence all opposition.

The way the Chinese Government or Party through the United Front Department and the Overseas Chinese Bureau operates is effectively to control and silence dissent.

NICK MCKENZIE: Mr Huang chaperoned the top Communist Party official in charge of Overseas Chinese, and who was accompanying Premier Li on his Australian visit.

QUI YUANPING: Of course, as we say, “a mother always worries about her traveling child.” To all our overseas Chinese, including students, you will always be an important member of the global Chinese family.

NICK MCKENZIE: Mr Huang has made something of an artform of juggling his Chinese Communist Party ties with his cultivation of Australian political figures.

DR FENG CHONGYI: Obviously, he has two identities.

One of course is a businessman, quite a smart businessman.

Then again, the other identity he’s trying to be a political figure.

He does have his own political ambition.

NICK MCKENZIE: One of Mr Huang’s advisors on the peaceful reunification Council is NSW Labor politician Ernest Wong.

A close ally and friend, the pair travelled to Taiwan together on Reunification Council business.

In November 2012, Mr Huang and two other reunification council members, donated half a million dollars to the NSW ALP.

Six months later, the ALP put Ernest Wong into the NSW Upper House seat formerly held by Labor’s Eric Roozendaal.

Roozendaal went on to get a job with Mr Huang.

PROF. JOHN FITZGERALD: Well Mr Huang is very generous to all parties.

He could hardly be called partisan; he contributes to the Liberal Party as well as to the Labor Party.

He’s also a very generous employer of former party operatives.

NICK MCKENZIE: Another of Mr Huang’s political allies, and a fellow member of the Peaceful Reunification Council, is active ALP identity Simon Zhou.

Zhou was given the last place on the Labor party’s senate ticket at last year’s election, a month after two of his business associates donated $60,000 to the ALP.

Mr Huang was at the announcement.

HUANG XIUANGMO: As China’s power keeps rising, the status of overseas Chinese is also rising.

Now Overseas Chinese realise that they need to make their voices heard in politics.

To safe guard Chinese interests, and let Australian society pay more attention to the Chinese.

This is a very good thing.”

NICK MCKENZIE: Within Labor, Sam Dastyari was Mr Huang’s key contact.

As the Party’s NSW general secretary, and then as a Senator, Dastyari has welcomed hundreds of thousands of dollars in donations from Mr Huang.

SAM DASTYARI, LABOR SENATOR: A demonstration MR Huang of how highly you’re respected, how much all of us respect you and the work you do.

NICK MCKENZIE: An incident that occurred in June 2016 leaves little doubt that Mr Huang expects something in return for his donations.

In the lead up to the federal election, he promised the ALP 400 thousand dollars in donations.

But then, at the National Press Club, Labor’s defence spokesman Stephen Conroy criticised Beijing over its land grabs in the South China Sea, flagging the ALP would take a more aggressive approach in the disputed territory.

STEPHEN CONROY, LABOR DEFENCE SPOKESMAN: When it comes to regional security challenges like the south china sea the Turnbull government are sitting behind ambiguous language while refusing to be upfront with the Australian people.

By contrast, we believe our defence force should be able to conduct freedom of navigation operations consistent with international law.

NICK MCKENZIE: After this speech, Mr Huang reacted decisively to this apparent attack on one of the Chinese Communist Party’s core policies.

Four Corners has learned, that Mr Huang called the ALP and told them that because of Conroy’s comments, he was cancelling his promised $400,000 donation.

PROF. RORY MEDCALF: It’s precisely the kind of example of economic inducement being turned into economic leverage or coercion.

In other words, it’s a classic example of a benefit being provided, but then withheld as a way of punishment, and as a way of influencing Australian policy independence.

NICK MCKENZIE: Just one day after Stephen Conroy’s comments, Mr Huang appeared at a press conference alongside his Labor mate.

Contradicting his Party’s position, Senator Dastyari told the Chinese media that Australia shouldn’t meddle with China’s activities in the South China Sea.

When his comments were reported several weeks later, he tried to explain.

JOURNALIST: Why did you hold that press conference and make those comments on the south china sea?

SAM DASTYARI: This is a separate matter and I want to get to this.

I support the Labor Party position on the south china sea.

I support the Labor Party position. I support an international rules based system with international norms, where the rule of law is applied.

Now that has been my position.

That remains my position, that is the Labor Party position on the issue of the South China Sea.

JOURNALIST: Then why did you say that it’s a matter for china?

SAM DASTYARI, LABOR SENATOR: Now, while I can’t be held directly to words there were held at a press conference that I don’t have a transcription of in front of me, now let me clear, I support the labor party position on this issue, no no no no no, Andrew, Andrew.

JOURNALIST: Why did you hold a press conference then?

NICK MCKENZIE: Amid the media storm, the press seized on Mr Huang’s previous payment of $5000 to Senator Dastyari to pay an ALP legal bill.

Another Chinese donor had given him $1600 for a travel bill.

The senator fell on his sword.

SAM DASTYARI: So I am going to be making a short statement, and I won’t be taking any questions.

This has been a difficult week and this afternoon I have made a difficult decision.

Today I spoke to my leader Bill Shorten and offered my resignation from the front bench, which he accepted.

NICK MCKENZIE: Last year Mr Huang sought more political help.

He had applied for Australian citizenship, but his application had stalled.

It was being secretly scrutinised by ASIO.

Mr Huang began lobbying his political contacts for assistance.

Four Corners has learned of one politician who agreed to help.

Labor Senator Sam Dastyari.

NICK MCKENZIE: Four corners has learned that after multiple requests from the billionaire donor, Dastyari’s office called the immigration department to question the progress of Mr Huang’s citizenship application.

In the lead up to the election, Dastyari’s office made four separate approaches to the Department.

It’s understood Senator Dastyari made two of these calls himself.

NICK MCKENZIE: In a statement, Mr Huang said he took strong objection to any suggestion he had linked his donations to any foreign policy outcome.

Mr Huang’s citizenship application is still being reviewed by ASIO.

The signing of the China Australia Free Trade Agreement cemented our vital relationship with the world’s new economic super power.

As Trade Minister, Andrew Robb spent years negotiating the deal.

His position brought him in contact with another Chinese billionaire – Ye Cheng, head of the Landbridge Group.

NICK MCKENZIE: Landbridge recently spent $506million to secure a 99-year lease for the Port of Darwin, a hugely controversial deal in light of the company’s close ties to the Chinese Communist Party.

PETER JENNINGS: I think Chinese companies understand that if they can actually help to satisfy the strategic and political objectives of the communist party that will insure their prosperity.

It will give them access to cheap finance and it’s something, which makes the senior leadership of those firms more prominent and successful in the context of Beijing politics.

NICK MCKENZIE: Before Last year’s election, Andrew Robb stepped down from Government, and his final senior position as Australia’s Special Envoy on Trade.

A few months later it was revealed he’d been appointed as an economic advisor to Landbridge.

JOURNALIST: And what about your own role at Landbridge because the Prime Minister said that he hadn’t been notified?

ANDREW ROBB, FORMER TRADE MINSTER: No why should I? I’m sorry I’ve now left politics.

JOURNALIST: Well we’ve now got the Australian Defence Association and the opposition are jumping up and down.

Questions about ministerial conduct and that sort of thing.

ANDREW ROBB: Again, they’re implying that I will act unethically and where’s the evidence?

I mean, I’ve been a senior cabinet Minister, I know the responsibilities that I’ve got.

I’ve got no intention of breaching those responsibilities.

NICK MCKENZIE: Andrew Robb’s confidential consulting deal can now be revealed.

Robb was on the Landbridge payroll from July 1 – the day before the election.

From that date, he’s be paid $73,000 a month, or $880,000 a year, plus expenses.

Andrew Robb declined an interview, but told Four Corners he has acted in line with his obligations as former Trade Minister.

PETER JENNINGS: I respect as the Prime Minister said, Mr Robb has a right to go out and earn a living once he’s left parliament but he was a cabinet minister for many years and I think now providing advice to the leadership of the Landbridge Group was possibly a step too far too quickly in terms of his departure from politics.

NICK MCKENZIE: Questions around how Australia and its leaders manage the relationship with China are central to the nation’s most important foreign policy debate.

Australia must maintain its growing ties to its most important economic partner.

But we also must confront the fact that some of the interests and practices of the authoritarian one party state conflict with our own.

PROF. RORY MEDCALF: There’s an awareness of a problem, but the agencies themselves don’t have the mandate or the wherewithal to manage the problem.

All they can do is sound the alarm and alert the political class.

The political class needs to take a set of decisions in the interest of Australian sovereignty, in the interest of Australia’s independence policy making, to restrict and limit foreign influence in Australian decision making.

CHRIS UHLMANN: After being briefed on the Four Corners-Fairfax investigation, the Attorney General sent us a statement revealing the Prime Minister has asked him to conduct a major inquiry into Australia’s espionage and foreign interference laws.

Senator Brandis said, “the threat of political interference by foreign intelligence services is a problem of the highest order and it is getting worse.”

Senator Brandis says he will examine whether the espionage offences in the criminal code are adequate and expects to brief Cabinet on possible changes to the law before the end of the year.

We will watch with interest. Good night.

Editor’s note: It was not the intention of the ABC to suggest that Ms Lu was a spy or a person who would deliberately cause harm to other students.

Background Information

STATEMENTS

Statement from Attorney-General, George Brandis | 2 Jun 2017 – Read a statement sent to Four Corners from George Brandis in relation to the Four Corners report ‘Power and Influence’.

Statement from Senator Dastyari | May 2017 – Read the response to questions sent to NSW Senator Sam Dastyari, from Four Corners.

Statement from WestSide Corporation | 31 May 2017 – Read the full statement sent to Four Corners from Mike Hughes, Managing Director of Westside Corporation.

Additional Responses to the Four Corners investigation ‘Power & Influence’ – Read responses sent to Four Corners from Mr Xiangmo Huang, former Trade Minister Andrew Robb, and Dr Chau Chak Wing.

ABC NEWS AND FAIRFAX REPORTING

ASIO investigation targets Communist Party links to Australian political system – A joint Four Corners-Fairfax investigation | ABC News | 5 Jun 2017 – http://www.abc.net.au/news/2017-06-05/asio-china-spy-raid/8589094

ASIO warns political parties over foreign donations – A joint Four Corners-Fairfax investigation | ABC News | 5 Jun 2017 – http://www.abc.net.au/news/2017-06-05/asio-warns-political-parties-over-foreign-donations/8590162

Sheri Yan, jailed for bribing UN official, was target of secret ASIO raid in 2015 | ABC News | 5 Jun 2017 – http://www.abc.net.au/news/2017-06-05/sheri-yan-suspected-of-being-spy-secret-asio-raid/8585278

The Chinese Communist Party’s power and influence in Australia | ABC News | 4 Jun 2017 – http://www.abc.net.au/news/2017-06-04/the-chinese-communist-partys-power-and-influence-in-australia/8584270

Australian sovereignty under threat from influence of China’s Communist Party | ABC News | 4 Jun 2017 – http://www.abc.net.au/news/2017-06-04/australian-sovereignty-under-threat-from-chinese-influence/8583832

SPECIAL FEATURE China’s Operation Australia: The Party Line | The Age | Jun 2017 – http://www.theage.com.au/interactive/2017/chinas-operation-australia/soft-power.html

BACKGROUND

COMMENT If Australia listened to our hawks on China, we’d have been hung out to dry, by Bob Carr | SMH | 24 May 2017 – http://www.smh.com.au/comment/if-australia-listened-to-our-hawks-on-china-wed-have-been-hung-out-to-dry-20170523-gwaw1w.html

Chinese influence ‘challenging fundamentals’ of Australia, says Stephen FitzGerald | ABC News | 28 Sep 2016 – http://www.abc.net.au/news/2016-09-28/former-australia-ambassador-to-china-warns-government-of-beijing/7885140

Sam Dastyari steps down from Labor frontbench after accepting money from Chinese donors | ABC News | 8 Sep 2016 – http://www.abc.net.au/news/2016-09-07/sam-dastyari-steps-down-from-labors-front-bench/7823970

Sam Dastyari backs Labor policy on South China Sea amid ongoing donations row | ABC News | 5 Sep 2016 – http://www.abc.net.au/news/2016-09-05/dastyari-rejects-govt-claims-on-his-position-on-south-china-sea/7816530

Domestic spy chief sounded alarm about donor links with China last year | ABC News | 1 Sep 2016 – http://www.abc.net.au/news/2016-09-01/asio-chief-sounded-alarm-about-donor-links-with-china-last-year/7804856

Sam Dastyari admits he was wrong to let China-linked company pay office bill | ABC News | 31 Aug 2016 – http://www.abc.net.au/news/2016-08-31/dastyari-says-he-was-wrong-to-let-china-linked-company-pay-bill/7800930

Australian businesses with close ties to China donated $5.5m to political parties, investigation shows | ABC News | 22 Aug 2016 – http://www.abc.net.au/news/2016-08-21/australian-groups-strong-ties-china-political-donations/7768012

Chinese donors to Australian political parties: who gave how much? By Chris Uhlmann | ABC News | 21 Aug 2016 – http://www.abc.net.au/news/2016-08-21/china-australia-political-donations/7766654

Chinese donors to Australian political parties: who gave how much? by Chris Uhlmann | ABC News | 21 Aug 2016 – http://www.abc.net.au/news/2016-08-21/china-australia-political-donations/7766654

Ex-UN General Assembly president John Ashe dies amid ongoing bribery scandal, lawyer says | ABC News | 23 Jun 2016 – http://www.abc.net.au/news/2016-06-23/ex-un-general-assembly-president-in-us-bribery-case-dies/7536262

PAPERS

China’s economic leverage: perception and reality, by Rory Medcalf | ANU National Security College | 2 Mar 2017 – http://nsc.anu.edu.au/documents/policy-options-paper2.pdf

Chinese Language Media in Australia, by Wanning Sun | The Australia-China Relations Institute | UTS | 2016 – www.australiachinarelations.org/….pdf

Inside the ‘Flower Vase’: The Chinese People’s Political Consultative Conference, by Minglu Chen | Sydney University | 2011 – https://sydney.edu.au/arts/government_international_relations/downloads/documents/1_2_Chen_Paper.pdf

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