A rchive Date
[ 20-09-2000 ]
Category
[ International Relations ]
sub-Categoy
[ Canada ]
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[Triad national security threat
By RANDY RICHMOND - London Free Press
Wednesday, Sep. 20, 2000
A dangerous network of Chinese triads, the Communist government and Hong Kong tycoons have infiltrated all elements of Canadian society, threatening the country's national security, says a secret CSIS-RCMP report obtained by The London Free Press.
Backed by millions of dollars and thousands of followers, weapons and heroin are being smuggled into Canada while high-tech secrets, financial control and money are sent back to China, the report concludes.
Excerpts of the report - code-named Sidewinder by the Mounties and the national spy agency - were leaked to the media earlier this year. But the full 29-page report has never been released.
One copy of the report has also been obtained by the Canadian Alliance, which says it will raise the issue in the House of Commons.
"The Canadian public would be so astounded by this report they would find it unbelievable," Alliance MP Jim Abbott said in Ottawa yesterday.
Abbott said he would bring the issue to the Alliance caucus today.
"I see this is a nationally explosive issue that has tremendous implications corporately and politically from top to bottom."
The report says: "China remains one of the greatest ongoing threats to Canada's national security and Canadian industry. There is no longer any doubt that the Chinese Intelligence Service have been able to gain influence on important sectors of the Canadian economy, including . . . real estate, high technology, security and many others. In turn, it gave them access to economic, political and some military intelligence of Canada.
"The great majority" of immigrants from China are law-abiding citizens, Sidewinder notes.
The Alliance has pressed the Liberals for answers about the report, suggesting political interference killed the Sidewinder document.
"We finally have a hard copy of the report," Abbott said. "There is a very malevolent influence against the political process."
The report, whose official title is Chinese Intelligence Services and Triads Financial Links in Canada, was supposed to be destroyed after CSIS officials decided to tone down the conclusions in a revised document called Echo. CSIS officials have insisted Sidewinder was buried because it was nothing more than conspiracy theories.
Other intelligence sources say political pressure forced CSIS to hush the Sidewinder report.
The RCMP complained to CSIS about the revised version and the controversy has ended up at the Security Intelligence Review Committee, an independent watchdog. The committee has heard testimony about Sidewinder but has not released the original document, sparking accusations the release is being delayed until after Prime Minister Jean Chretien returns from a trip to China planned for this fall.
Ex-government officials who confirmed the authenticity of the report Monday in Ottawa were shocked to learn a copy still existed.
The report, based on several case studies, suggests some stunning conclusions. The report suggests the influence of Chinese leaders on Canada is growing in several ways:
- Through control of Canadian companies by Chinese tycoons with links to triads and the communist government. More than 200 Canadian companies were under Chinese control in 1997, the report says.
- Through companies set up by Chinese investors. "The Chinese government is trying to gain influence on Canadian politics by maximizing their presence over some of the country's economic levers."
- Through financial contributions to Canadian political parties. "The triads, the tycoons and the ChIS (Chinese Intelligence Service) have learned that a 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 tens of thousands of dollars, to the two traditional political parties, that is, the Liberals and Progressive Conservatives."
- Through business and social connections with top-level Canadian political and business leaders: "Having bought significant real estate holdings and established businesses in Canada, China has obtained access to influential figures who are now or once were active at various levels of Canadian society."
Fifteen case studies form the guts of Sidewinder. They examine the ownership links of three multinational companies, five banks and financial institutions, four high-tech companies with several more subsidiaries, five media companies, one food distribution company, five hotels and real estate firms. Taken alone, each company's relationship to Chinese political leaders, businesspeople or triads is not threatening, Sidewinder concludes.
But the connections show power in the hands of a few people with huge influence on Canadian politics, the report says. For legal reasons, The London Free Press cannot reveal all the company names.
Here are some of the case studies:
- The Chinese, state-owned China International Trust Investment & Company (CITIC), which has a subsidiary in Canada, has spent about $500 million to buy a Canadian pulp mill, petrochemical company, real estate and hotels. CITIC also has connections with at least one large Canadian corporation.
- Large amounts of arms manufactured by a CITIC-controlled company have been confiscated on Mohawk reserves.
- Officials from two CITIC-controlled firms were investigated in the U.S. after 2,000 AK-47 assault rifles and other weapons, believed destined for native warrior groups, were found in a California warehouse.
- A financial firm and resource company under Chinese control donated more than $120,000 to the Progressive Conservative and Liberal parties in the 1990s. A motion picture company investigated by police for ties to the triads has also donated money to the two parties.
- The parent company of a Canadian bank has on its board of directors a man identified by police as having triad connections.
- An individual with high-ranking triad connections is the principal shareholder in a high-tech company in Ontario. Among the clients of the high-tech firm's subsidiaries are several federal government departments.
- A state-controlled Chinese company has controlling shares in a Canadian firm involved in worldwide security systems.
- Hong Kong triads control the Chinese entertainment industry. Several key players in the Chinese entertainment and media industry in Canada are known to associate with triads and Chinese intelligence contacts.
- Triad members are involved in Canada's food industry and one company with branches across North America is suspected of importing heroin from Hong Kong. Company officials maintain regular contact with Chinese military and trade representatives in Canada. The triads use companies in Canada to launder money from the drug trade, the report states.
- Chinese tycoons and CITIC own large chunks of real estate and hotel chains in key urban centres, giving them great influence in local politics and development.
- "All areas of the Canadian economy are targeted, but high technology is at most risk," the report says. "Several cases of theft of Canadian proprietary information and/or technology have been reported to and investigated by Canadian authorities." For example, Ontario Hydro believed a Chinese worker stole nuclear technology information.
And a Chinese employee of a major computer company was accused of copying information onto a disk to send back to China.
Also, a Canadian company alleges a former employee who had served in the Chinese military stole information on energy technology and sold it to the Chinese government.
- A company owned by a Chinese-Canadian sponsored a so-called business delegation to Canada. The delegation was made up of Ministry of State Security Officials who came to Canada to undertake an intelligence operation.
- Another delegation that came to Canada under the guise of business was made up of officers from China's People's Liberation Army, hoping to buy communications technology.
- Many companies in Canada have been set up by the Chinese Intelligence Service to spy.
Sidewinder warns that businesses are a key way for China's military to get Canada's research funding or classified contracts from the government. Shell companies and the exchange of specialists help Chinese leaders gain information about Canadian technology and economics.
SIDEWINDER RECOMMENDATIONS
1. An expanded task force with analysts from the RCMP, CSIS, Immigration Canada and Revenue Canada continue researching the control of Chinese companies over the Canadian economy and what influential Canadian leaders sit on the board of Chinese companies.
2. Investigators determine the ownership of companies that have installed security systems for the federal government and Crown corporations.
3. Investigators get more details on contributions to Canadian political parties by Chinese companies established in Canada.
4. Investigators analyse the involvement of triads and the Chinese government in the Chinese media in Canada
 World Fact Book (CIA)]
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