Palau’s President Surangel Whipps Jr has responded to an investigative report that has revealed activity in Palau by “organised criminals with links to the Chinese Communist Party”, by stating that there is nothing worse than a country with a damaged reputation.
“It’s going to be hard to repair a damaged reputation so it’s our responsibility to protect it,” President Whipps told the Palau media in his year-end press conference.
President Whipps also outlined a number of measures the government is taking, with international support, to combat illegal activities.
The OCCRP investigation
In December 2022, the Organized Crime and Corruption Reporting Project (OCCRP) reported that “while Palau’s government has remained steadfastly pro-West and pro-Taiwan, a group of business figures has in recent years begun pushing Beijing’s interests in Palau. Some have openly proclaimed they are promoting the CCP’s foreign policy goals, while others have furthered Chinese influence by setting up new business ventures and cultivating close relationships with Palau’s elite.“
The OCCRP report quoted Semdiu Decherong, the former head of the country’s financial regulator, who said that these businesspeople and organised crime figures — including a senior triad member known as “Broken Tooth” (real name Wan Kuok Koi)— appear to be operating with the knowledge of the Chinese state.
“From my understanding… they’re all very interconnected,” Decherong told OCCRP. “There is no way that Broken Tooth was going to come to Palau without the communist government knowing about it. And either they are turning a blind eye or actually behind the scenes supporting.”
OCCRP reporters conducted interviews and examined hundreds of pages of company records and files from law enforcement investigations to better understand the Chinese push into Palau. Along with illegal online gambling operations that prompted arrests and deportations in 2019 and 2020, they discovered “that this interlinked group of business people has proposed a series of sometimes improbable projects across the country since at least 2016. The prospective businesses have ranged from a blockchain-based insurance scheme to a real-world casino and a special economic zone.”
OCCRP reports that these plans have so far mostly failed to bear fruit, thanks to the scepticism of local law enforcement and regulators, and pressure from the United States and other Western countries. But they continue nonetheless, aided at times by members of the local elite who have built close relationships with these business figures.
Palauan law enforcement detained over 200 mostly Chinese workers during three raids on suspected online gambling operations on New Year’s Eve 2019, and another in mid-2020. Through brief interviews with some detainees and informants, officers managed to gain insight into how the criminal gangs operated. But a thorough investigation never took place since most detainees were quickly deported.
Palauan law enforcement say they have not been able to fully unravel who is behind the online gambling operations, although police chief, Ismael Aguon said they appear to be linked to large international criminal networks.
A key player appears to have been Tian Hang, also known as Hunter Tian, a 53-year-old Chinese hotelier who lives in Palau and enjoys links to some of its most powerful citizens, OCCRP reports. Property registry documents show that one of the buildings housing the online gambling operations was leased by a company Tian ran, and of which he was part owner.
Tian has also been involved in apparent CCP influence efforts in the country. According to Chinese media reports, he headed the Palau Overseas Chinese Federation, a body aimed at organising Chinese expatriates in the Pacific nation under the CCP umbrella.
Palau’s government earlier this year added Tian to its list of 230 “undesirable aliens,” most of whom are Chinese citizens. He remains in the country and is currently fighting his designation, which would bar him from re-entering Palau if he leaves.
Tian did not respond to questions sent by OCCRP.
Broken Tooth bites
OCCRP also reported on the activities of ‘Broken Tooth’, noting his triad affiliations: “Rising to prominence in the 1990s as the head of the 14K triad in Macau, Broken Tooth — whose real name is Wan Kuok Koi — was imprisoned there for more than a decade on charges including loan sharking, weapons possession, and membership in an organised crime group. Since his release in 2012, he has rebranded himself as a CCP loyalist — without forswearing his triad affiliations,” the organisation reported.
“According to the U.S. Treasury, which sanctioned Wan in 2020, he remains both an organised crime boss and a member of the Chinese People’s Political Consultative Conference (CPPCC), a top-level political advisory body that forms part of the CCP’s “United Front” foreign influence efforts.
“China’s government has strongly denied that Wan is a CPPCC member. Wan has also denied it, describing the U.S. accusations as a “smear campaign,” the organisation reported.
According to immigration records obtained by OCCRP, Wan travelled to Palau in 2018 and 2019 to set up a branch of the Hongmen Association there, telling Hong Kong media that, “the Hongmen Association would be used to build and run a Hongmen-themed resort in Palau that would include a casino and Hongmen-branded alcohol and cigarettes. Payments would be handled using a cryptocurrency called “Hong Coin.” A white paper about the currency written by one of Wan’s companies specifically mentioned its usefulness in online gambling.”
OCCRP also obtained records showing Palau’s former postmaster general, Congressman Timothy Sinsak, as “signing on as directors of Wan’s local Hongmen Association.”
Sinsak has since told local media that they did not know anything about Tian when they met him.
He said that as soon as they read about him in the news, they wrote to the Attorney General to dissolve the organisation.
Other prominent Palauans, including a sitting congressman named in the OCCRP story, have remained silent since publication of the article.
Palau’s ‘undesirable’ list
In his response to the revelations, President Whipps highlighted the government’s efforts to combat illegal activities by foreigners. He stated the 230 names on the “undesirable alien” list released last year were mostly Chinese individuals who were caught conducting illegal online gambling activities.
“The issue is that we don’t want criminal elements coming into our island. That’s the reason we issued the “undesirable alien” list, which prohibits them from entering the country again.
“Many of them were involved in online gambling, which leads to human trafficking and other issues in the country. That is one of the government’s efforts to ensure that people are protected.
“Also we’re tidying up our border protection by getting a more advanced scanning system in place at the airport that helps track the arriving passengers.”
President Whipps also disclosed that U.S. Federal authorities have been assisting Palau in upgrading their border control and monitoring for money laundering activities. He added that Palau is taking steps to protect its image internationally, as money laundering could result in sanctions by donor countries and international bodies.
“Over the past few years, the U.S. Secret Service, Treasury Department, and OIC (Officer in Charge) the Airforce provided training and upgraded the skills of the Customs and Border Protection Office, FIC [Financial Institutions Commission], and FIU [Financial Intelligence Unit].”
Such assistance, Whipps said, helps Palau to better understand these kinds of activities to protect itself. He added that Palau doesn’t want to be dragged into human trafficking cases because it’s on the U.S. State Department Tier 2 Watch List.
Palau has limited resources and no visa application process in place to know ahead of time who is coming.
“We don’t have that capability,” the President noted.
He is not convinced however that connections were deliberately orchestrated by Beijing.
“Of course, there will always be criminal elements within a country’s population but to say that the Chinese government encouraged them is a little bit of a stretch,” he added.
The original OCCRP report by Bernadette Carreon (OCCRP), Aubrey Belford (OCCRP), and Martin Young (OCCRP): https://islandsbusiness.com/news-break/inside-the-chinese-communist-party-palau
