Ever since the federal government's efforts to shut down the joint CSIS/RCMP Project Sidewinder became public last fall, there have been a great many more questions than answers.

Sidewinder, you'll recall, was an investigation into the influence exerted on Canadian politicians and policy by elements of Asian organized crime and the communist government of China. The original report stated that China was the single biggest national security risk facing this country.

Following what could only be called political interference by the Prime Minister's office, the investigation was prematurely closed and the report sanitized by CSIS under the new code name, "Echo." The shutting down of the investigation infuriated investigators with both CSIS and the RCMP. They argued there was more than sufficient evidence to warrant an expanded probe. But that was not to be.

Following the efforts of Province news editor Fabian Dawson and Globe and Mail reporter Andrew Mitrovica, and the six or so pieces appearing in this space, the issue began to gather a little steam. This is, and I don't say this lightly, the biggest scandal this country has ever seen.

Finally, after hollow denials by CSIS Director, Ward Elcock, the civilian watchdog, the Security Intelligence Review Committee announced they were going to look into the matter. It appeared as though something might just crack which could shed some light into the dark corridors of the PMO.

[. . . .] Not so, said SIRC's executive director Susan Pollak in an interview with Mitrovica last week. "We have a lot on our plate and we are a small agency," Pollak was quoted as saying in the Globe. "But I wouldn't want to give you a date (of the report's release) because sometimes things happen that create slippage."

Slippage? What the hell is that? Is that how she describes a discreet call from the PMO?

While this goes on, RCMP Sergeant Luc Lemaire is busy calling reporters who have written on the subject. He is trying to build a case against suspended Mountie Corporal Robert Read, who blew the whistle on the political interference involved in covering up the penetration of our embassy in Hong Kong by elements of Asian organized crime. Lemaire is doing the government's dirty work by trying to shoot the messenger.

[. . . .] Former Foreign Services officer, Brian McAdam, who first discovered and reported the criminal penetration, says this is all about the corruption of our politicians who have grown fat on the massive political contributions made by corporations such as those controlled by two of the major subjects of the Sidewinder probe, Stanley Ho and Li Ka Shing.

Let's try and understand why the prime minister might possibly be interested in keeping a lid on the Sidewinder ramifications.

Chretien's son-in-law is Andre Desmarais. He runs a huge company called Power Corp. Conveniently, Desmarais does a lot of business in China and actually holds a seat of the board of CITIC, described as the investment arm of the Chinese military, according to intelligence sources. [Also, see note and links for CITIC in the next article. NJC]

Who else is on the board? Why it's Li himself. And wait a minute, didn't Li own a significant portion of Gordon Securities, the same company Chretien worked for and made his fortune with, when he took a sabbatical from politics prior to taking the leadership of the federal Liberal party?

Couldn't that mean that just possibly, Chretien's name came up in the Sidewinder investigation?

BEIJING -- Less than two months after stepping down as prime minister, Jean Chretien is moving quickly to forge a relationship with China's wealthiest and most powerful business conglomerate.

Making a surprisingly speedy entrance onto the global business stage, Mr. Chretien will arrive in China this weekend with a team of Power Corp. executives to meet some of China's most influential business leaders. [Mr. Chretien has just returned, I believe. NJC]

The visit, his first major overseas trip since his retirement, is being kept hush-hush. Neither the Canadian embassy in Beijing nor his law office in Ottawa is revealing any details of the visit, insisting that it is completely "private."

But The Globe and Mail has learned that much of Mr. Chretien's tour of Beijing and other Chinese cities over the coming week is being organized by state-owned China International Trust and Investment Corp. CITIC is China's biggest and most powerful conglomerate, with a vast range of interests on four continents.

These include financial services, energy, heavy industry, real estate, hotels, airlines and even military exports.

Established in 1979 and accorded the status of a ministry, CITIC began moving into global ventures in the mid-1980s. With assets of about $48-billion (U.S.), it has close links to the commercial interests of the People's Liberation Army and its leadership answers directly to the State Council, China's supreme executive organ.

Mr. Chretien is expected to hold meetings with CITIC's top executives, who plan to visit Canada this year. Chinese sources say he also has tentative plans to meet next week with top executives of Unicom, one of China's two main cellphone companies.

He'll be accompanied by his son-in-law, Andre Desmarais, the president of Power Corp., who is a director of CITIC Pacific Ltd., the Hong Kong affiliate of the CITIC group.

The subject of their meetings is unknown. But Power Corp. has extensive business interests in China, including property development in Shanghai's booming Pudong district and a joint venture with Bombardier to manufacture railway cars in the coastal city of Qingdao.

[. . . .] As prime minister he visited China six times, led two Team Canada trade and investment missions to the country and met frequently with its top leaders.

Barely three months ago, he toured China for three days on his final Asian trip as prime minister. And he deliberately chose to meet Chinese Prime Minister Wen Jiabao on his final day in office on Dec. 12.

Since his retirement from politics, Mr. Chretien has lined up a series of business gigs. He is an international-relations adviser to PetroKazakhstan, a Calgary-based oil company that is trying to expand its oil exports to China and other Asian and Middle Eastern countries. And he has joined three separate law firms: Montreal-based Heenan Blaikie, Calgary-based Bennett Jones, and Montreal-based Desjardins Ducharme Stein Monast.

[. . . .] In Ottawa, the prime ministerial ethics counsellor said there are no guidelines that prevent a former prime minister from taking such a trip. Howard Wilson said there is a two-year "cooling-off" period, but the restrictions apply to lobbying Ottawa or taking jobs with firms with whom the former leader had "direct and significant" official dealings in his final year in office. [ and not to ex-Prime Ministers, it seems NJC ]

Ah, the twists and turns in the Air Canada bankruptcy-auction-that-isn't-an-auction. Both sides are playing games, aided and abetted by an unnecessarily interfering Judge James Farley of Ontario Superior Court.

The latest twist in "Canadians at the Gate" is that Cerberus Capital, the New York hedge fund, has been told by Judge Farley that it can't bid again, but Victor Li's Trinity Time Investments can. Not only that, Mr. Li got to see Cerberus's bid before responding with a new bid of his own. It is absurd.

[. . . . ] But as has been widely reported, Mr. Li's original bid did not "win" on the financial merits. Insiders are saying Mr. Li actually bid as much as a hundred million dollars less than Cerberus's bid. Because of Canada's foreign ownership rules, however, Mr. Li's lower offer was decreed the better one by Air Canada's board of directors. After all, the Hong Kong-based Mr. Li holds a Canadian passport and his Trinity Time Investments has a Montreal office. Those nasty folks at Cerberus are -- Americans.

[. . . . ] Why, however, is Judge Farley so impatient? Why does his court keep imposing deadlines and why has it allowed preferential treatment of Mr. Li? After all, it is unfair, to say the least, that Victor Li's new Air Canada bid has been built from intimate knowledge of Cerberus Capital's competing offer. We should all be so fortunate in auctions.

[. . . . ] Air Canada creditors will now get more than they would have had the court and Air Canada's board stuck wrong-headedly with Mr. Li's first offer. But it sure looks like Victor Li just won Air Canada in a screwy version of The Price is Right -- at creditors' expense.

[. . . . ] After Air Canada selected Trinity over Cerberus, the rejected suitor tried to cut itself into the deal. When those efforts failed, Cerberus submitted a series of new bids.

Some of Air Canada's largest financial creditors pushed the airline to choose Cerberus because one of its bids included an $850-million "rights offering," compared with one of $450-million under the Trinity bid. The rights allow creditors to buy Air Canada stock at the same attractive rate as its largest shareholder, or equity sponsor.

A lawyer for Mizuho International, one of Air Canada's creditors, said he would be "pleasantly surprised" if the revised Trinity bid included an $850-million rights offering. "I hope that I am surprised. It would be a wonderful Christmas present for Mizuho and the other unsecured creditors," Bill Sasso said.

Mr. Sasso said if the revised Trinity bid did not include a rights offering of at least $850-million, he would be back in court Jan. 6.

Mizuho, which is owed $112-million by Air Canada, threatened to sue its board of directors for breach of fiduciary duty if the board didn't choose the right investor. Mizuho also tried unsuccessfully to appeal a judge's initial endorsement of the Trinity agreement.

Laurence Geringer, a lawyer for a group of creditors owed $1-billion, said his clients were not optimistic that the undisclosed Trinity bid would provide them with good recovery on their debt.

"We're very discouraged by the process. The clients feel it has not been transparent and open. [. . . . ]

*** Air Canada said its board met Sunday to consider the latest bids from Cerberus and Trinity. The board received advice from Seabury Group LLC, Air Canada's financial adviser, as well as from Merrill Lynch, which provided a second opinion to the board. *** [emphasis mine NJC]

*** By using these alliances, the Chinese government is trying to gain influence on Canadian politics by maximizing their presence over some of the country's economic levers. To that end, they proceed initially to buy and/or legally set up a company in Canada that, once under their control, buys other companies and so on. An effective domino effect ensues that acts like a well-spun web or network at strategic points. It is estimated that over 200 Canadian companies have passed into Chinese influence or ownership since the early 1980s through the triads, tycoons or China national companies. These businesses are found in various sectors of the economy, ranging from multinationals to banking, high technology and real estate (CITIC, Norinco, Husky Oil, Grand Adex Properties Inc, Merrill Lynch, Gordon Capital, Inc, Tai Foong International, CIBC, Ramada Hotels, China Vision and Semi-Tech Corporation, etc.). ***

The reasons for Air Canada's selection of Trinity over Cerberus were not known. But in recent days, people close to the company expressed concern that Canada's foreign-ownership laws posed a challenge to Cerberus's proposal.

TORONTO (CP) - Air Canada's board of directors is backing Hong Kong businessman Victor Li's improved offer to invest in the insolvent airline.

The board met Sunday and picked a sweetened bid from Li's Trinity Time Investments over that of New York's Cerberus Capital Management, Air Canada said Monday in a release.

[. . . . ] Li, a son of Hong Kong billionaire Li Ka-shing, holds Canadian citizenship and is not restricted by federal guidelines that limit foreigners to 25 per cent of an airline.

[. . . . ] Mizuho International, a London-based hedge fund subsidiary of Japanese bank Mizuho Financial Group, said the earlier Cerberus bid would have given creditors about $967 million more than Trinity offered. But Air Canada disputed this claim.

[. . . . ] Moore pointed to Air Canada's announcement Friday that it will buy 45 regional jets from Bombardier and 45 other jets from the aerospace company's Brazilian competitor as a sign that the airline was moving forward. But Moore said Air Canada isn't out of the woods yet.

HONG KONG [. . . . ] Li fended off a rival bid by the New York investment firm Cerberus Capital Management. He plans to fund the purchase personally or from family holdings.

The deal marks the Li family's entry into the aviation business. Li's father, the tycoon Li Ka-shing, owns the world's biggest port operator and invests in telecommunications, property and supermarkets worldwide. Air Canada has accumulated losses of 2.6 billion dollars in the past three and a half years.

[. . . . ] Air Canada, weighed down by debt and aircraft leases of more than 12 billion dollars, filed for bankruptcy protection on April 1. Creditors with claims of as much as 10 billion dollars will receive a combined stake of about 56 percent in the reorganized airline, Air Canada said. Existing shareholders will get a combined stake of about 0.01 percent.

Air Canada declined to give more details on Trinity's investments. Cheung Kong Holdings, of which Victor Li is managing director, also declined to comment further.

[. . . .] The carrier, its five main unions, Canadian pension regulators and company retirees have been trying to negotiate an agreement to close a 1.5 billion dollar shortfall in the pension plan.

[. . . .] The carrier has arranged 600 million dollars in debt financing with General Electric Capital Aviation Services, a unit of General Electric. The agreement includes a provision for Air Canada to borrow a maximum of $950 million for the purchase of as many as 43 smaller and more fuel-efficient jets to upgrade its fleet.

[. . . .] Milton and the executive vice president Calin Rovinescu will each receive 1 percent of Air Canada over four years, the airline said. Their stakes will come from Trinity's holdings after Air Canada emerges from bankruptcy.

Trinity will appoint five out of the 11 directors on Air Canada's board.

Other investments by the Li family in so-called distressed assets include Husky Oil, which Li Ka-shing acquired in 1987 and merged with a rival in 2000, and the online travel agency Priceline.com in 2001.

What follows is a draft report submitted by a joint committee of the Canadian Security Intelligence Service and the Royal Canadian Mounted Police on the Chinese subversion and penetration of Canada. This report has been repeatedly referred to by Brian McAdam, a former Canadian immigration control officer, in his attempts to warn the public about Chinese intelligence successes and the corruption of government officials. The document shows that China has made significant inroads in North America. These inroads are potentially fatal if we continue to ignore the strategic implications of lax security combined with the bribery of bureaucrats, Communist-inspired organized crime, drug trafficking, terror and economic sabotage. It goes without saying the the recommendations of the Sidewinder study were not followed up on by Canada's policymakers. By 1997 Chinese economic involvement in Canada was already too advanced for correction, having special economic implications for political actors that trump security concerns.

What follows is the first part of the Sidewinder report. [. . . .] Information as of 24 June 1997

Chinese Intelligence Services and Triads Financial Links in Canada

[. . . .] In May 1996 a joint project was initiated by the RCMP Criminal Analysis Branch and the CSIS Analysis and Production Branch to assess the extent of the threat posed by the acquisition and control of Canadian companies by members or associates of triads and with affiliations to the Chinese Intelligence Services. The research team quickly realized that the initial premise was the tip of the iceberg with only a minute portion of a much more complex situation showing.

[. . . .] At the moment, we estimate that over 200 Canadian companies are under the direct or indirect control of China. [. . . .]

Chinese Intelligence Services and Triads -- Financial Links in Canada -- Summary

Since the mid-1980s, a substantial immigration flow from Hong Kong has taken place and Canadian authorities were first alerted when a significant presence of Chinese organized crime elements among this group was detected. Many came through the "entrepreneur and "investor" immigration program [. . . ] two particular groups of individuals raised attention. Two other groups have also taken advantage of the "entrepreneur" and "investor" categories to immigrate and to invest in Canada. First, a certain number of very rich Hong Kong Chinese business people (tycoons) who are known to have been cooperating with the Chinese Government for years. Then a group composed of associates and relatives that certain individuals of these three groups have been working for over fifteen years in concert with the Chinese government and some of their "financial ventures" in Canada serve to conceal criminal or intelligence activities.

Hand in hand with this situation, the ChIS [Chinese Intelligence Service] make very active use of their access to Canadian industries through exchanges of specialists and students, and also set up shell companies to pursue their acquisition of economic and technological intelligence. Cooperation between the Hong Kong tycoons, the triads and the Beijing leadership adds a new dimension to the well known "mass line collection" strategy followed by the ChIS. This situation substantially raises the level of the potential threat, revealing the effectiveness of Chinese efforts to obtain Canadian technology and their capability to interfere in the management of the country. Central points and essential for the understanding of the problem are the cultural singularities that characterize the Chinese as the concepts of "debt of honour", "duties", "Hou Tai or backers" and "Guanxi or connections."

By using these alliances, the Chinese government is trying to gain influence on Canadian politics by maximizing their presence over some of the country's economic levers. To that end, they proceed initially to buy and/or legally set up a company in Canada that, once under their control, buys other companies and so on. An effective domino effect ensues that acts like a well-spun web or network at strategic points. It is estimated that over 200 Canadian companies have passed into Chinese influence or ownership since the early 1980s through the triads, tycoons or China national companies. These businesses are found in various sectors of the economy, ranging from multinationals to banking, high technology and real estate (CITIC, Norinco, Husky Oil, Grand Adex Properties Inc, Merrill Lynch, Gordon Capital, Inc, Tai Foong International, CIBC, Ramada Hotels, China Vision and Semi-Tech Corporation, etc.). The triads' companies are also used to pursue their criminal activities, such as money-laundering and heroin trafficking, as well as assistance to the ChIs.

Being Canadian these businesses are also eligible to receive government subsidies for research or classified contracts from Federal Departments. The risk is that after the research is done, there [sic] results can be transfered to China. [An] Other form of risk is with the access gain[ed] through classified contract. As an example, a Canadian company under Chinese influence was in contention for a contract to set up and run a classified communications system linking the main agencies of the Canadian intelligence community. A company in Toronto specializing in video surveillance was originally Canadian, but was bought by a Chinese multinational. It is impossible at present to say how many or which Canadian companies are in the same situation. These examples, however, raise questions about the integrity of some companies that have already installed security systems for various Canadian government institutions or Canadian research industries.

Significant portions of some large Canadian urban centres are also owned by Chinese entrepreneurs. For example, it is estimated that Li Ka-shing owns with his son at least one sixth to one third of downtown Vancouver.

These "corporate" figures have become an influential presence on the political and economic landscapes of Toronto and Vancouver and at the provincial and federal levels. The triads, the tycoons and the ChIS have learned the quick way to gain influence is to provide finance to the main political parties. Most of the companies identified in this research have contributed, sometimes several tends of thousands of dollars, to the two traditional political parties, that is, the Liberal and the Progressive-Conservative Parties.

The Chinese leadership continues to gain much direct or indirect influence over the Canadian economy and politics. Having bought significant real estate holdings and established businesses in Canada, China has obtained access to influential figures who are now or once active at various levels of Canadian society. In many ways, China remains one of the greatest ongoing threats to Canada's national security and Canadian industry. [. . . . ]

Hundreds of Canadian Companies "Made in China"

*** 14. The influx of Chinese investors who are affiliated with the triads or new associates of Beijing poses a new challenge to Canada's national security. The central point of the strategy of the Chinese is first to buy a Canadian company so as to obtain a "local identity", legally concealing subtly their foreign identity. Then, using this acquisition, the Chinese-Canadian company invests heavily or buys other companies in various economic sectors, but always under the Canadian banner. In actual fact, control lies in Hong Kong or Beijing, and the financial benefits or fruits of research, often paid for by Ottawa or the provinces, are likely to make their way to Asia.***

*** 15. Hand in hand with their ethnicity and their commercial ambitions, the financial network of the Chinese entrepreneurs associated to the organized crime and to the power in Beijing has grown exponentially and very rapidly in Canada. Their influence over local, provincial and national political leaders has also increased. In the game of influence, several of these important Chinese entrepreneurs have associated themselves with prestigious and influential Canadian politicians, offering them positions on their boards of directors. Many of those companies are China's national companies.***

*** 16. The analysis of the information demonstrates that their attention was not initially directed towards sensitive sectors like high technology or other even more sensitive areas, but towards what might be called "soft" sectors such as: real estate, hotels, transportation, oil companies and travel agencies. Commercial sectors that at first sight do not involve any security risks and did not attract the attention of the Canadian services responsible for security. The scale of their ventures or investments has now made them some of the most important figures present in the major centres, and their decisions to invest in one place or another are not a matter of indifference to anyone. Such projects are seen by the local or national business community as a "favour" or a "chance" not to be missed.***

Several months ago, I focused attention on our peaceful northern neighbor, Canada, and the problems they were apparently having with the Communist Chinese. Inasmuch as the Communist Chinese successfully infiltrated every level of the Clinton Administration with a cash-for-access plan, a dual process was taking place in Canada. Massive land purchases and alarming dual-use technology business buy-outs were documented in Project Sidewinder, compiled by Canadian Security Intelligence Service (the full report still hasn't been released). Communist Chinese were filtering through Canada, only to disappear somewhere in America. Dual-use technology purchases of fiber optic gyroscopes, funneled through Canadian businesses to China, were exposed by custom agents. My concern over these activities, and my assertion that they were part of a coordinated effort, made some people speculate that I had tipped my bag and lost a few of my proverbial marbles.

Nevertheless, Chinese spies were successful in infiltrating the Atomic Energy of Canada, Ltd., (AECL) and making off with plans for their Slowpoke nuclear reactor. The AECL has recently been forced to shelve it's own plans to sell the reactor abroad because China's stolen copy is much less expensive. According to a Globe report dated January 24, 2000, China didn't even have the courtesy to change the reactor's name, calling their own a "Slowpoke." How did they gain access to this technology? A source indicated, "What they didn't buy, they stole." (Globe, January 24, 2000). Sound familiar?

Opposition MPs accused the federal government yesterday of pressuring the RCMP to shut down an investigation into allegations of corruption and organized crime infiltration at the Canadian High Commission in Hong Kong.

Reading from a scathing report by the RCMP's External Review Committee detailing how investigators were repeatedly called off the case, the Canadian Alliance put the blame on the Liberals.

"This is a very serious allegation of Liberal political interference," said Kevin Sorenson, senior critic for the Department of the Solicitor-General. "Why is a federal department interfering and influencing an RCMP investigation?"

Wayne Easter, the Solicitor-General, denied the RCMP was pressured and declined to comment further, saying he did not want to interfere in disciplinary procedures involving a Mountie fired for blowing the whistle on the embassy scandal.

As revealed in yesterday's National Post, a government committee that reports to Mr. Easter has concluded the RCMP failed to properly investigate allegations that staff at the Hong Kong embassy were taking bribes to help Asian triad members emigrate to Canada.

The committee was ruling in the case of RCMP Corporal Robert Read, a 26-year-veteran of the police force who broke rank and went public with the allegations in 1999 after his investigations were repeatedly stymied by his superiors.

The RCMP found him guilty of discreditable conduct and ordered him to resign but the review committee ruled Cpl. Read was justified in speaking out and recommended he be reinstated.

The corporal's conduct was in the public interest "because it exposed the fact that the force had for seven years failed to take appropriate action to determine if employees of the mission had engaged in immigration fraud," the committee ruled.

The report has gone to Giuliano Zaccardelli, the RCMP Commissioner, who must either accept or reject the findings. Cpl. Read said he would not make any public comments until the commissioner has made his decision.

[. . . .] Mr. McAdam said he would now like to see a royal commission into the alleged wrongdoing identified by Cpl. Read and what he said is a far more extensive web of corruption, involving organized crime figures in Hong Kong and Canadian business people and politicians.

[. . . .] "The real question we need to be asking ourselves is what's the extent of the politicization on this issue? Are these isolated incidents or are they part of a larger pattern. What's the source of the politicization and how high up does it go?" said Mr. Newark, now security advisor to Bob Runciman, Ontario's Minister of Public Safety and Security.

[. . . .] Mr. McAdam believed Asian triads had infiltrated the embassy's immigration computer system. Employees were also accused of taking gifts and envelopes full of cash from a wealthy Hong Kong industrialist.

The concerns about political interference arise from a letter by the RCMP Liaison Officer in Hong Kong, who wrote that the Canadian ambassador "will be screaming at the highest political levels" if a probe of the embassy went ahead.

In 1995, David Kilgour, MP for Edmonton-Strathcona, wrote to Jean Chr?tien, the Prime Minister, and the Minister of Immigration, asking for a public inquiry. "[. . . .] this 'culture of irresponsibility' includes three practices listed by McAdam: violations of departmental policies; permitting staff to associate with known criminals; and allowing staff to accept money from one wealthy Hong Kong family to bet at the horse races."

The government declined to open a public inquiry [. . . .]

Stockwell Day, the Canadian Alliance foreign affairs critic, said [. . . .] "It appears that Foreign Affairs has interfered with the actual investigation. . . "

Leo Knight on the Robert Read Asian triads Affair

Duo blow whistle on immigration scandal Sept. 1, 1999

RCMP action shameful in Cpl. Read affair Sept. 8, 1999

Finding friends in high places Sept. 22, 1999

Report raises concerns over gov?t, triad links Oct. 13, 1999

Undercover expose Nov. 3, 1999

Sidewinder spins huge security scandal May 3, 2000

Sidewinder-Echo scandal smoulders Sept. 6, 2000

China connection persists Sept. 27, 2000

Valuing Canada's sovereignty Oct. 11, 2000

Election call saves Liberals embarrassment Oct. 18, 2000

Election buries SIRC report Oct. 25, 2000

RCMP shamed by Read tribunal April 17, 2002

The man looks and acts like any other Korean corner store owner - a hardworking newcomer to Canada.

You cannot tell by his simple appearance that he owns the building the store is in and that he has just bought a million dollar mansion in the posh Beaconsville area of Montreal.

You also cannot tell that he is one of North Korea's foremost spies in Eastern Canada who actually owns a large computer business in Mapo, South Korea, that employs hundreds of people.

In the highrise glass towers of Vancouver - Tricell (Canada) Inc. and Top Glory Enterprises Ltd., both incorporated in the late '80s work for the Communist government of China.

Among their jobs was to help facilitate the covert entry of secret police into Vancouver by hoodwinking the Canadian government. The agents were hunting for high profile fugitive businessman, Lai Changxing, who himself was recruited by the Chinese military to spy on Taiwan.

The visitor visas from the bogus business delegation was endorsed by Chinas Ministry of Trade and Economic Co-operation (MOFTEC) - one of the most powerful ministries in the Chinese government, responsible for such vital areas as negotiating China's entry into the World Trade Organization.

From the windows of both these firms, which constantly invite "Chinese business delegations" to Canada, company officials can see the arrival and departure of ships belonging to the maritime behemoth - COSCO.

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 Chinas 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.

Insisting there is no evidence to show COSCO is involved in any illegal activity - the Vancouver Port Authority has a "gateway to North America" deal with the shipping giant.

When Canada's Nortel Telecommunications based in Brampton, Ontario wanted to do business in China, they hired Katrina Leung's company - Merry Glory Ltd.

Little did they know that 49-year-old corporate matchmaker would be in the limelight several years later accused of having have slept her way into the good graces of two FBI agents while stealing secrets for the Chinese government.

Leung, who was paid $1. 2 million in 1995 and 1996 for negotiating the Nortel-China deal, has strong connections to Canada's Chinese business associations.

Around the same time, the modern day Matahari was greasing the way for Nortel, the Canadian spy agency - CSIS - was conducting an investigation in the offices of Ontario Hydro regarding the theft of information in the nuclear technology field by "an individual of Chinese origin".

According to a secret intelligence report obtained by The Asian Pacific Post, the individual sent unauthorized faxes, some containing hours worth of data, to a telephone number in the offices of the State Science and Technology Commission of China.

[. . . .] Ting was a darling of the Chinese-Canadian trade lobby. Even the Prime Minister's Office website lists Ting's Semi-Tech, once ranked as the nations 10th largest employer, as a member of Team Canada's business deals with China.

On the flip side, spy watchers were warning Ottawa without much success, that Ting was China's frontman to acquire high and medium technology and engage in economic and industrial espionage.

Among the companies Semi-Tech showed as part of its organization were several Chinese state-owned companies, related to military and intelligence activities obviously using what seemed to be a Canadian consumer based company as cover.

Two months ago, after avoiding a global manhunt while hiding in China, Ting surrendered to Hong Kong authorities where he is accused of serious financial crimes.

The mega-dealmaker, who stripped down companies in the west and to take their technology back to the east, left a trail of nearly $2 billion in debts and thousands without jobs.

The cases listed are but a small illustration of what the Federal Bureau of Investigation (FBI) said this week was the greatest espionage threat to North America in the next 10 years to 15 years.

[. . . .] In Canada, intelligence reports indicate the number of Chinese front companies to be between 300 and 500.

But unlike the Americans, China experts say the political climate in Ottawa is not conducive to cracking down on this significant threat.

"Virtually all the recent prime ministers and Paul Martin who is likely to be the next have strong connections to China on the personal, business and political fronts," said an intelligence analyst specialising in East Asian affairs.

[. . . .] Among those whose connections were investigated were Macao casino king Stanley Ho, who has extensive interests in Canada, and Li Ka-shing, one of the world's wealthiest men, known in Vancouver for his purchase of the Expo lands and companies linked to tycoons like Robert Kuok, Cheng Yu Tung and Henry Fok. [If I remember correctly, did the Expo lands not go to Li Ka Shing for $1.00? Yes, that's ONE DOLLAR. Correct me if I am wrong. NJC]

Sidewinder among other things said many of the companies identified by the analysts have contributed "several tens of thousands of dollars to the two traditional political parties, the Liberals and the Conservatives."

A major financial and brokerage house gave the Liberal party C$20,432.94 in 1994, a large petroleum company owned by a Beijing-friendly tycoon gave more than C$100,000 to the same two parties and political donations were also made by a triad-run Chinese film studio.

[. . . .] It said that Triad or Chinese mafia members are behind an international seafood processing company that has offices in Vancouver, Calgary, Montreal and Mississauga. The company is believed to be a front for importing heroin. In addition, company managers have maintained regular contacts with Chinese army officials and paid for visits of Chinese delegations.

Sidewinder warned that the Chinese government was taking advantage of growing business ties between China and Canada to provide cover for intelligence services.

One example cited said a company owned by a Chinese-Canadian national sponsored what was ostensibly a Chinese business delegation to Canada. In reality, the delegation was comprised of Ministry of State Security officials travelling to Canada to conduct an intelligence operation.

Another similar delegation comprised officers from a sensitive sector of the People's Liberation Army, who were attempting to make arrangements to purchase secure communications technology for military purposes.

The Canadian spy agency which was at loggerheads with the RCMP over certain characterizations in the report said the Sidewinder study done by McAdam and others was revised and certain documents destroyed because they were based on unprovable conspiracy theories.

The spy agency later issued a watered-down version of the Sidewinder study to a select government group.

The Security Intelligence Review Committee, the civilian watchdog of Canada's spy agency, has once again been asked to review the handling of Sidewinder by CSIS.

"What is critical here is to compare the FBI study with Sidewinder. What is being released to Congress is what we warned the Canadian government about in the mid-nineties," McAdam told The Asian Pacific Post.

"The stuff about influence in universities, etc., was in Sidewinder... They did not want to listen to us then... maybe they will listen now."

Meanwhile, a report out of Ottawa this week said that Prime Minister Jean Chretien is planning a trip to China as part of an international farewell tour.

"Taxpayers are footing the bill on a trip that is going to do Canadians very little good. Do you think there's one beef farmer in Canada, whether it's Ontario or Western Canada that wants him to go to China - unless he's trying to sell them beef. Why can't he go sit down with the leader in Japan? That is the most important issue right now," said Canadian Alliance House leader John Reynolds, referring to the ongoing crisis caused by the mad-cow disease.

[. . . .] The reactors, which employ 450 Canadians, were sold to China by Atomic Energy of Canada Ltd after Ottawa changed legislation to provide Beijing with over $1.9 billion in loans.

The office also confirmed that Chretien is also considering an invitation to meet with the Canada-China Business Council (CCBC) in Beijing.

OTTAWA ? The Commissioner of the RCMP has rejected the recommendations of the External Review Committee which vindicated fired Mountie, Cpl. Robert Read.

A National Post story Saturday, reported that Read, who has not worked since September 1999, will appeal that decision to the Federal Court.

Last year the RCMP Adjudication Board, an external review process, stated that Read was justified in his actions and speaking out about his concerns. The Board, in its report recommended that the Commissioner of the RCMP reinstate Read.

The Board ruled that the Force mishandled its investigations into corruption at Canada?s High Commission in Hong Kong in the '90s. Read was frustrated after being pressured to drop his enquiries and, after trying all available internal methods, ultimately went to the media. That story was published in a report by Fabian Dawson in The Province.

[. . . .] Killam further says that Read's decision to go public wasn't justified because the "criticism did not pertain to a matter that had a direct impact on public health or safety."

[. . . .] Read was quoted . . . "There's a lot of politics behind this. It is clear to me there was an obstruction of justice by my superiors."

An RCMP investigation that tracked the lives of some of Hong Kong's top tycoons, civil servants and gangsters with strong ties to Canada has been condemned by the police forces [sic] own security watchdog.

Now the Jean Chretien-led federal government is facing accusations of pressuring the RCMP to shut down the investigation which was originally sparked by allegations of corruption and organized crime infiltration at the Canadian High Commission in Hong Kong, (see The Asian Pacific Post, April 25- May 8, 2002).

Many of those looked at in the so called 'Hong Kong probe' have strong ties to the Canadian government politicians, do extensive business in British Columbia and Ontario while others had applied to emigrate to Canada.

They include former Hong Kong immigration chief Lawrence Leung, International Basketball Federation chairman Carl Ching Meng Ky, legislator Rita Fan, businessmen brothers Timothy, Robert and Gordon Fu, originally from Taiwan who set up Imperial Consultants in Hong Kong to help thousands to migrate to Canada under an investor immigration program, Albert Yeung Sau Shing chairman of the Emperor Group and tycoons Stanley Ho, Li Ka Shing and Cheng Yu Tung.

In addition, the botched probe also looked at least 16 Triad figures who were applying to emigrate to Canada, including senior thugs of the Sun Yee On, Woh Hop To, Tan Yee and Kung Lok triads.

This month after almost a decade of investigations, reviews and accusations of cover-ups, The Royal Canadian Mounted Police External Review Committee, which is an independent agency that reports to the Canadian Parliament said the Canadian investigators failed to do their job properly.

In a scathing report the review committee said Asian organized crime figures may have entered Canada because the RCMP failed to properly investigate allegations of widespread corruption at the Canadian High Commission in Hong Kong.

[. . . .] The RCMP was reluctant to investigate the activities of embassy employees suspected of taking bribes, partly because it did not want to damage its relationship with the Canadian Department of Foreign Affairs, the committee found.

The highly sensitive and secret investigation was exposed by Asian Pacific Post editorial consultant Fabian Dawson in August 1999 in a series of articles first published in The Province.

[. . . .] "What is at issue was a deliberate choice made by the RCMP not to pursue an investigation into possible criminal wrongdoing even though numerous examples had been drawn to its attention of incidents that suggested that an immigration fraud ring was operating within the very premises of the (diplomatic) mission and possibly involved employees of the government of Canada," the external review said.
"If that is not a matter of legitimate public concern, very few issues will ever be so."

The ruling is important because it opens the door to allowing RCMP officers to blow the whistle when they have reasonable grounds to suspect investigations are being wrongly quashed.

The RCMP has maintained that it is not appropriate for a police officer to break secrecy.

Read, who is now teaching English to new immigrants in Ottawa, said he did not want to comment yet on the latest ruling until the RCMPs top brass, which is studying the report, makes a decision whether to give him back his job.

[. . . .] The concerns about corruption at the Canadian High Commission were initially sparked in 1991 when a Hong Kong resident Choi Sim Leung, who currently living in Richmond, complained that two embassy employees had offered to expedite her visa application for C$10,000.

Later, two local employees, Christina Wong and Constance Ho, along with the wife of a Canadian embassy official, were seen at a bank depositing large sums of cash.

As the investigation began, fake Canadian immigration visa stamps were found in the desk of another local employee, Ella Kwan, who is now a Vancouver immigration consultant.

Around the same time, another embassy official Brian McAdam complained to the RCMP that he suspected that Asian triads had infiltrated the computer system in order to scrub their names from watch lists.

McAdam also filed reports that a wealthy Hong Kong steel dynasty - the Pongs - were providing cash for embassy staff to gamble at the Happy Valley race track while others who were applying to emigrate to Canada were entertaining embassy staff on yachts.

There were also suspicions that a secret contact within the embassy was working with a large immigration consulting firm based in Taiwan and Hong Kong to fast track applications.

Between 1990 and 1995, the immigration control office of the Canadian High Commission in Hong Kong wrote more than 30 reports about triad members seeking visas to go to Canada.

One of the reports filed to the Canadian government from Hong Kong was deemed too controversial because it contained very specific and personal information on a sampling of 16 Triad members trying to or who already had entered Canada.

That report called "Triads Entering Canada" was toned down and the names of the 16 people removed before it was circulated to the RCMP and other law enforcement agencies in North America.

Information in the report written by officers stationed at the Canadian High Commission between 1992 and 1995 was obtained from police files in Hong Kong. The authors wrote: "We have identified in this a sample of 16 crime figures that are among the world's most ruthless, vicious criminals who have sought or are seeking admission to Canada, to highlight the threat that Triad societies, whose members form close knit criminal organizations, many times larger and more powerful than the Mafia, pose to the security of Canadian society."

[. . . .] Around the same time, Lawrence Leung, the former immigration chief in Hong Kong was tracked to a lunch meeting with his wife in the Lan Kwai Fong area as the RCMP began investigating allegations that he may be an operative of the People's Republic of China and using his status within the Canadian embassy to facilitate the immigration to Canada of Chinese agents and Hong Kong residents with organized crime/triad connections.

Leung was never charged with anything and he was eventually granted landed immigrant status in Canada.

[. . . .] Prior to that the Canadian High Commission in Hong Kong also refused to cooperate with the Special Branch of the RHKP, (Royal Hong Kong Police), which had required assistance to investigate Li Ka Shing's acquisitions in Canada.

His son Victor Li is now eyeing Air Canada. [Feb. 2004: It's all over now. Victor Li is a major principal owner of our Air Canada. NJC]

Rita Fans[sic] connections to controversial tycoon Albert Yeung, Carl Chings [sic] attempts to come to Canada and his alleged connections to the Triads and Stanley Ho's casino connections were all part of the snowballing probe.

[. . . .] Another RCMP liaison office letter marked 'secret' and addressed to the Director of Foreign Services states that in addition to 'an evening at the racetrack' function hosted by the Pong family, the Pongs also splurged on a 'going' away dinner and dance at the Aberdeen Marina Club for a number of Immigration officers who were transferred during summer rotations.

[. . . .] In another case, an immigration consultant with Imperial Consultants was charged by Hong Kong police for fraud but Ottawa refused to send one of its officers to testify in the case.

Pleading for help to get this case going as a deterrent to stop other similar scams, exasperated mission officials in a telex to Ottawa wrote: "This is turning into an embarrassing situation for this office as it was us who asked for RHKPs (Royal Hong Kong Police) assistance and requested an investigation.

[. . . .] Ironically, the same consultant would later be photographed in a private meeting with Jean Chretien while discussing Asian investment into a hotel in the prime minister's riding, be investigated and charged for attempting to bribe two Canadian Immigration officers with C$40,000 and looked as key suspects in investor immigration fund scams.

In all the cases against the consultant, the RCMP never got their man.

[. . . .] This time they again stated that there was no evidence to lay charges but recommended that action be taken against some 30 Canadian embassy officials for accepting cash and gifts from wealth Chinese families.

None of the 30 were charged.
Other than minor reprimands many have been promoted within Immigration Canada and the Department of Foreign Affairs.

At least one of the officials is now an ambassador.

[. . . .] Cpl. Robert Reads [sic] reward for going public with his concerns was "a pink slip along with harassment," Gurmant Grewal, Canadian Alliance MP said.

Brian McAdam, the embassy's former immigration control officer, praised Robert Read as a classic whistleblower, who was "someone doing his job and telling the truth, and that is a threat."

[. . . .] Wayne Easter, Canada's Solicitor-General, denied the RCMP was pressured or there was any government cover-up. In Parliament, he called for patience while the RCMPs chief Giuliano Zaccardelli reviews the latest report on the Canadian scandal that was made in Hong Kong.

Rep. Chris Cox, R-Calif., says that one third of the long-awaited report on Chinese espionage bearing his name never made it past the White House and may never be made available to the public 20 However, political limitations cannot hold back the facts. What Clinton deleted from the Cox report is just as important as what we are allowed to see. [. . . .]

***According to the Cox report, "In 1996, Hong Kong Customs officials intercepted air-to-air missile parts being shipped by (China National Aerotechnology Import and Export Company) CATIC aboard a commercial air carrier, Dragonair. Dragonair is owned by China International Trade and Investment Company (CITIC), the most powerful and visible PRC-controlled conglomerate, and the Civil Aviation Administration of China." ***

What the Cox report left out was that in 1996, only 36 percent of Dragonair was owned by the Chinese government. The remaining 64 percent lion-share of the Hong Kong based carrier was then owned by Indonesian billionaire Mochtar Riady. 20 Dragonair was fined for carrying the Chinese missile in the cargo bay of an L-1011 airliner full of paying passengers. [. . . .]

What remains unanswered is the role Israel played in the Dragonair case -- a U.S. ally anxious to obtain a copy of an enemy missile or a willing aerospace contractor eager to upgrade a weapon for a paying customer with stolen U.S. Sidewinder technology? And why no mention of the ever popular Mochtar Riady, the foreign billionaire, and major contributor to Bill Clinton? Another issue left unresolved by the Dragonair incident is the relationship between the Chinese army and Mochtar Riady, owner of the Lippo Group John Huang, Riady's handpicked man inside the Clinton White House, had access to highly classified materials. Huang has cited his "Fifth Amendment" rights over 1,000 times before pleading guilty to minor campaign violations. The Cox report notes some very interesting parties helped John Huang stay in touch with his boss.

According to the Cox report, "Huang maintained contact with representatives of the Lippo Group while he was at the Department of Commerce." "During the 18 months that he was at Commerce," states the report, "Huang called Lippo Bank 232 times, in addition to 29 calls or faxes to Lippo Headquarters in Indonesia. Huang also contacted Lippo consultant Maeley Tom on 61 occasions during the same period. Huang's records show 72 calls to Lippo joint venture partner C. Joseph Giroir."

The one key fact missing from the Cox report is that "Maeley Tom" is also an employee of the powerful beltway lobbyist company, Cassidy Associates. In 1994, Cassidy Associates sent Democratic National Committee donor Maeley Tom to Indonesia on a Ron Brown trade mission. The same mission included DNC donors Charlie Trie, Pauline Kanchanalak and Nora Lum. Why no mention of the D.C. lobbyists? The answer may be that Cassidy Associates also made hundreds of thousands of dollars in political donations to both Republicans and Democrats. In fact, Cassidy Associates made a total of over 2,500 political contributions between 1991 and 1998, nearly one donation every two days. [There seems to be a pattern similar to what is happening in other countries. NJC]

The Cox report also details for the first time the long ignored sea leg of China's strategic arsenal. "The JL-2 (Julang 2, or Great Wave 2) is a submarine-launched version of the (Dong Feng, or East Wind) DF-31. It is believed to have an even longer range, and will be carried on the PLA Navy's Type 094-class submarine. Sixteen JL-2 missiles will be carried on each submarine." What does the Great Wave 2 mean to the U.S. homeland? The Cox report noted "The JL-2's 7,500 mile range will allow it to be launched from the PRC's territorial waters and to strike targets throughout the United States."

On May 27, 1999, the South China Morning Post reported that the People's Liberation Navy (PLN) had begun preparations to test the Great Wave 2 (JL-2). PLN officials reported that the JL-2 is scheduled to be deployed on the nuclear submarine Xia by 2000. The sub-launched missile is slated to carry a single 2.5-Megaton, thermonuclear warhead, or three 90-Kiloton warheads. "If the JL-2 were to employ a shroud to protect its warhead as do the majority of submarine-launched ballistic missiles today," states the Cox report. "This would be the first use of a shroud or fairing on a PRC missile." The JL-2 explains why the Chinese were so interested in American space contractor, Hughes, upgrading PLA rockets with "nose-cone" or "shroud" technology. [. . . .]

While the close working relationship between PLA Gen. Ding, Secretary Brown and Defense Secretary Perry may be missing from the Cox report -- it has not been missed in federal court. In a WorldNetDaily exclusive, this reporter has obtained two previously unreleased letters from Secretary of Defense William Perry. The letters were forced from the U.S. Commerce Department by Federal Judge Robert Payne who ordered them to be released to the public in 1999. [. . . .]

What Clinton deleted from the Cox report is not altogether unknown nor unavailable to the press -- just under-reported. Clearly, the public version of the bipartisan Cox report skipped over several key facts that offended powerful political interests inside Washington and Beijing, including the Chinese air force.