ASIO has warned the major political parties about taking donations from two high-profile Chinese businessmen because they may be a conduit for Chinese Communist Party interference in Australian politics.
Prime Minister Malcolm Turnbull and Tony Abbott have also been separately briefed by ASIO on the threat of Communist Party influence, as has Opposition Leader Bill Shorten.
In response to questions from Fairfax Media and Four Corners, Attorney-General George Brandis has said foreign interference by nation states is a worsening threat to Australia’s sovereignty, the safety of its people, the economy and “to the very integrity of our democracy”.
He has promised a package of amendments to Australia’s espionage and foreign interference laws by the end of the year.
ASIO director-general Duncan Lewis secretly briefed the top administrative officials from the three major parties in 2015 and referred to two men – billionaire property developers Huang Xiangmo and Chau Chak Wing – who, along with their associates, have made about $6.7 million in political donations.
But the Coalition and Labor continued to accept money: the Coalition has since received $897,960 and Labor has taken $200,000.
A Fairfax Media-Four Corners investigation can also reveal that in the months leading up to the 2016 federal election, Labor senator Sam Dastyari repeatedly assisted Mr Huang in his attempt to gain Australian citizenship. Mr Huang’s citizenship application remains temporarily blocked while the billionaire is assessed by ASIO.
A fortnight before the election, Mr Huang also attempted use a $400,000 donation as leverage to pressure the Australian Labor Party over its policy on China.
In a separate development, former Australian trade minister Andrew Robb began receiving a part-time consulting fee of $880,000 a year from another Communist Party-connected billionaire, Ye Cheng. Mr Robb’s $73,000 monthly contract began the day before the 2016 election. He had previously announced he was resigning from the Melbourne seat of Goldstein.
Mr Ye is closely aligned to Beijing’s key trade policy, and controversially bought a 99-year lease over the Port of Darwin.
The latest revelations come as the United States grapples with the extent of Russian meddling in its political system.
Australian intelligence agencies have major concerns that the Chinese Communist Party is interfering in Australian institutions and using the political donations system to gain access.
Eight senior official sources said in confidential briefings that China was active on a much larger scale than other countries that also engaged in soft power or clandestine operations to wield influence.
“There’s an awareness of a problem, but the agencies themselves don’t have the mandate or the wherewithal to manage the problem,” said Rory Medcalf, head of the Australian National University’s National Security College.
“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 independent policy making, to restrict and limit foreign influence in Australian decision making.”
Mr Lewis conducted confidential briefings beginning in 2015 with the federal directors of the Liberal and National parties, and the national secretary of the Labor Party, specifically identifying Mr Huang and Dr Chau.
Sources have confirmed that ASIO believes both Mr Huang and Dr Chau have deep but opaque connections to the Chinese Communist Party.
The China-born businessmen and philanthropists have made large political donations, either directly or through intermediaries, often in the lead-up to federal or state election campaigns when the parties are crying out for funds.
For example, Dr Chau and Mr Huang’s companies have each donated at least $200,000 to the WA Liberal Party, the home branch of Foreign Minister Julie Bishop. Mr Robb’s Victorian fundraising vehicle was given $100,000 by Mr Huang in 2014, as the former trade minister was finalising the China Free Trade Agreement. Tony Abbott got to know Mr Huang as he donated $700,000 to the Liberals in the lead-up to the 2013 election, in which Mr Abbott became prime minister.
Sources have told Fairfax Media and Four Corners that at the ASIO briefing in 2015, Mr Lewis did not instruct the parties to reject future donations. But he stressed that the Chinese Communist Party co-opts influential businessmen, and the donations might come with strings attached.
Dr Chau declined to answer questions because he was travelling. Mr Huang also did not answer questions, but said in a statement: “It is regrettable that without knowing me, Four Corners would seek to question my motives and undermine my reputation based on recycled news reports, dubious assertions and innuendo.”
He was “committed to more positive endeavours, such as investment, philanthropy and building stronger community relations”, the statement said.
Fairfax Media and Four Corners can reveal that in the lead-up to the last federal election, Mr Huang promised a $400,000 donation to Labor. But he then threatened to withhold it after Labor’s defence spokesman, Stephen Conroy, publicly attacked China’s militarisation of the South China Sea.
Labor was relying on the $400,000 to help bankroll its election campaign, and pressed Mr Huang to honour his commitment.
The day after Senator Conroy’s June 16 National Press Club speech attacking Beijing, Senator Dastyari stood alongside Mr Huang at a media event in Sydney and said the South China Sea was Beijing’s concern. There is no evidence Senator Dastyari knew about Mr Huang’s threat to withhold the donation.
A week later, as Mr Huang continued to withhold the promised $400,000, the ALP hosted Mr Huang at a press conference. There it was announced Labor had placed his political ally, Chinese businessman and active ALP member Simon Zhou, on the last spot on the ALP’s Senate ticket.
“The Chinese realise that they need to make their voices heard in the political circle, so as to seek more interests for the Chinese,” Mr Huang said at the ALP event.
Senator Dastyari later lost his shadow cabinet position over revelations that Mr Huang and a second Chinese donor had paid for some of the Labor figure’s expenses. Mr Huang never paid the $400,000 donation.
In the first half of 2016, as Mr Huang’s citizenship application stalled while it was assessed by authorities, the office of Senator Dastyari called the Immigration Department four times to question its progress. It is understood Senator Dastyari made at least two of these calls personally.
The approaches from Senator Dastyari’s office came after Mr Huang repeatedly pressed the senator to assist him in securing Australian citizenship.The calls were reported back to Mr Huang, sources confirmed. His citizenship application remains with ASIO.
In response to questions from Fairfax Media and Four Corners, Senator Dastyari said: “It’s my job to assist constituents with migration matters, including liaising with the Department of Immigration.”
He said he had never “spoken to any representative from Australia’s security agencies”, and he was “never given any reason to have concerns about Mr Huang, up to and including my final contact”.
Senator Dastyari said he had broken contact with Mr Huang after “the events of last year” when he lost his frontbench position when it was reported he had asked donors, including Mr Huang, to pay bills for him.
A source has confirmed that Mr Huang, who was unaware ASIO was investigating him, believed political intervention would ensure his citizenship was expedited.
Mr Huang is the president of the Australian arm of a Chinese Communist Party-aligned lobbying organisation, the Council for the Promotion of the Peaceful Reunification of China. It is closely aligned with the party’s United Front Work Department, which works to preserve the monopoly power of the Chinese Communist Party – including pushing its foreign policy objectives – by lobbying influential people to support Beijing, and by isolating those deemed hostile.
Mr Huang told Fairfax Media and Four Corners that the ACPPRC was “an autonomous, non-government organisation”, not “an affiliate” of the United Front Work Department or the Communist Chinese Communist Party. He said it supported “economic and cultural exchange programs and charitable causes”.
Mr Huang has recruited Labor Senate candidate Simon Zhou to this council and has also appointed ALP NSW upper house member Ernest Wong as an adviser.
Dr Chau is also closely aligned to the United Front Work Department.
Dr Chau and Sheri Yan
On Monday, Fairfax Media reported that the so-called “queen” of the Australia-China social scene, Sheri Yan, was being probed by ASIO over allegations that she was involved in foreign interference and influence operations on behalf of the Chinese Communist Party.
In October 2015, the FBI charged Ms Yan in New York for bribing a top United Nations official, John Ashe. She was jailed last year for corruption after pleading guilty to those charges.
Dr Chau is also referred to in that court case brought by the FBI against Ms Yan by the codename CC3. Dr Chau has never been charged or accused of wrongdoing. The FBI alleged Ms Yan bribed Mr Ashe in November 2013, using $200,000 supplied by CC3.
A source close to Ms Yan has said that she had also been employed by Dr Chau as a consultant in Beijing around 2007 and again in 2013.
Ms Yan, who is serving a 20-month prison sentence, paid the funds to get Mr Ashe to speak at an international symposium hosted by Dr Chau at his luxurious Guangdong conference centre and resort. There is no suggestion that Dr Chau knew it was illegal to pay a speaker’s fee to a UN official.
Dr Chau has on other occasions hosted many former and serving Australian politicians at the resort, including former prime ministers John Howard and Kevin Rudd.
In its briefing to the political parties in 2015, ASIO did not mention Dr Chau’s links to Ms Yan but focused instead on his political donations activity.
Attorney-General George Brandis said espionage and covert foreign interference by nation states was “a global reality which can cause immense harm”.
“Earlier this year, the Prime Minister initiated a comprehensive review of Australia’s espionage and foreign interference laws, which he asked me to lead,” he said. “I will be taking legislative reforms to cabinet with a view to introducing legislation before the end of the year.
“As part of this process we are considering the adequacy and effectiveness of the espionage offences under the Criminal Code Act 1995, relevant international frameworks, and whether there are complementary provisions that would strengthen our agencies’ ability to investigate and prosecute acts of espionage and foreign interference.”
Professor Medcalf has questioned whether Australian intelligence agencies are able to adequately confront the problem of attempted Chinese influence, while Australia’s former chief diplomat Peter Varghese is calling for more debate and accountability on attempted Chinese influence.
“Where groups are channelling money into political parties or to politicians, they are doing it with a purpose,” Mr Varghese said. “The Chinese system is such that the dividing line between a state decision and a decision by a company that may be anticipating what is in the interests of the state is rather blurred.
“This is an issue ASIO would need to keep a very close eye on … It goes back to how we want to frame our laws on political donations and making sure people reveal their connections back to China if they are taking a position on a particular policy issue.”
By Nick McKenzie, Chris Uhlmann, Richard Baker, Daniel Flitton
Sydney Morning Herald