China tried to plant its candidate in
Federal Parliament, authorities believe
By Nick McKenzie, Paul Sakkal and Grace
Tobin
Australian
authorities are investigating claims that a Chinese espionage ring tried to
install an agent for Beijing in a seat in Federal Parliament.
Sources with
knowledge of the alleged plot believe the suspected Chinese intelligence group
offered a million dollars to pay for the political campaign of Liberal Party
member and Melbourne luxury car dealer Bo “Nick” Zhao, 32, to run for an
eastern suburbs seat. The plot appears to be part of an operation to place a
Chinese agent in Parliament.
Mr
Zhao disclosed the alleged approach to ASIO about a year ago, according to his
associates and multiple Western security sources, and he identified the man he
says approached him as another Melbourne businessman, Brian Chen.
Mr Zhao’s claims have sparked an
investigation into the alleged efforts by Chinese military intelligence to
place an espionage asset in Canberra.
The suspected
plot to fund Mr Zhao's campaign would be the clearest example of Chinese
government foreign interference ever detailed in a Western country, and
provides some insight into the scale and nature of the threat that ASIO has
labelled “unprecedented” but which has never been publicly explained in detail.
What was alleged by Mr Zhao "is a
state-sponsored attempt to infiltrate our Parliament using an Australian
citizen and basically run them as an agent of foreign influence in our
democratic system,” said Liberal MP Andrew Hastie, who is chair of the
Australian Parliament’s intelligence and security committee and who has been
briefed.
The revelations emerged amid the defection
to Australia of a man claiming to be a Chinese spy. Wang Liqiang, who says he
was an intelligence operative, claimed the Chinese government used
front companies and influence campaigns to infiltrate Hong Kong’s
independence movement, organise kidnappings and assaults on democracy activists
and interfered in Taiwan’s elections.
Chinese authorities hit back on Saturday
with claims that Mr Wang had been found guilty in 2016 of fraud, was being
investigated over a second allegation and had been the subject of a number of
other property and loan disputes. Mr Wang denied the claims and stood by his
claims.
Mr Chen and
Mr Zhao's story is not related to the matters that Mr Wang revealed.
The revelations also raise fresh questions
about the decades-long failure of authorities under old and new security laws
to prosecute a single Chinese spy in Australia. Half a dozen senior government
sources said 12 months after new counter interference laws were introduced, the
federal police was struggling to enforce them due to drastic underfunding and
lack of expertise.
secrets, deserves Australia's protection.
'A perfect target'
Liberal Party records show that from 2015
until his death, Mr Zhao was a Liberal Party member in the federal electorate
of Chisholm, which was won by Liberal MP Gladys Liu in the May federal
election, and which has a large Chinese-Australian vote.
“He was a paid-up member, which
means he was likely active in his branch and division,” Mr Hastie told The Age, The Sydney Morning Herald and 60 Minutes. “Nick himself I think
was a perfect target for cultivation - a guy who was a bit of a high-roller in
Melbourne, living beyond his means, someone who was vulnerable to a foreign
state intelligence service cultivating.”
The intensely private entrepreneur lived in
the upmarket south-eastern suburb of Glen Iris with his wife and their
daughter. From at least 2016, Mr Zhao faced financial problems and was hiding
secrets from friends and relatives.
Court records show that in 2017 Mr Zhao was
charged with obtaining financial advantage by deception over accusations he had
fraudulently obtained loans to buy luxury vehicles. In 2018, administrators
began to pursue him over the collapse of his Brighton car dealership, and by
early 2019, Mr Zhao had fallen out with his wife and owed money to shadowy
Chinese investors.
“He was a very ambitious young guy who got
ahead of himself,” said Bill McLoy, who managed Mr Zhao’s car dealership in
Ringwood until 2015.
Another business associate, Yvan Lieutier,
managed two dealerships for Mr Zhao until 2017 and described him as “young and
ambitious … he wanted to make money quick”.
In early 2019, Mr Zhao told two associates
that he’d revealed to ASIO how Mr Chen, whose company is also based in
Melbourne, had offered to set him up in a new business with a million-dollar
capital injection. In return, Mr Zhao said Mr Chen wanted him to run for a seat
in Australia’s Parliament in the electorate of Chisholm.
Untimely death
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Mr Zhao was found dead by a cleaner in a
motel room in suburban Mount Waverley in March. Local police who prepared a
brief for the coroner have been unable to conclude how he died. That task will
now fall to incoming Victorian state coroner John Cain.
Mr Zhao’s death means he can never repeat
the allegations he made to ASIO about Mr Chen in any public forum. There is no
suggestion that Mr Chen has any knowledge or involvement in Mr Zhao’s death and
he denies ever having met him.
“I don’t know him (Nick Zhao).
[I] Really don’t know [him],” Mr Chen said.
Mr Zhao’s former employees, Mr Lieutier and
Mr McLoy, said they heard Mr Zhao might have killed himself. Victoria Police
has said that the matter was “before the coroner and as such we are unable to
comment further”.
According to Mr Hastie, “We need to explore
every nook and cranny, we cast as much light into the shadows, and make sure
that we have a full and comprehensive understanding of how he died and why he
died.”
A complicated life
The Age, the
Herald and 60 Minutes have confirmed from
multiple Western security sources that Mr Chen is a suspected senior Chinese
intelligence operative, a claim Mr Chen has confirmed was put to him by
Australian officials at Melbourne airport in March but which he vehemently
denies.
For a businessman with interests in
Melbourne, Mr Chen leads a complicated life. He has been photographed wearing a
Chinese military uniform and has also posed as a journalist with global media
while attending international political summits, including the G20 and APEC. Mr
Chen said in an interview he had been pictured in a Chinese military uniform
because “some friends joined the army so I borrowed their uniforms to take some
photos to show off. There’s no other meaning.”
Mr Chen also appeared to concede he had
posed as a journalist. A Hong Kong media company, China Press Group Limited,
lists Mr Chen in an archived page as
"journalist number 14" based in the media company’s Hong Kong
headquarters. Mr Chen said in an interview he had been given journalist
accreditation by a media proprietor to allow him to attend international
political summits. He said he had gone to the summits with a friend, and “I
just follow him, wander around the country, be introduced to some friends and
do some projects”.
Mr Chen maintains a network of contacts in
Australia which has donated to both major political parties, and he has had
dealings with serving and former senior political figures across Asia and
Europe. His business, Prospect Time, promotes China’s “Belt and Road”
infrastructure initiative. This and his suspected links to Chinese military
intelligence leave open the possibility he is using Belt and Road as cover for
an intelligence operation.
The Belt and
Road initiative is backed by some political leaders around the world, including
Victorian Premier Daniel Andrews, but criticised by others as a front for
China’s strategic interests.
Hong Kong and Chinese corporate records reveal Mr Chen runs several companies
involved in the military, public security and energy sectors and his business
partners include firms linked to the Chinese government. One of Mr Chen’s Hong
Kong firms is a joint-venture partner in a Beijing security company with a
subsidiary of Norinco Group, a Chinese state-owned defence company, selling
armoured police vehicles and buses.
Mr Chen said in an interview that this had
been of interest to his Australian interrogators, but that it was meaningless.
The website of Mr Chen’s company, Prospect Time International Investments, says
the firm has assumed “the role of one of China’s technological forerunner and
window to the world” and conducted business “all over the Greater China Areas,
south-east Asia, Australia, Europe and America".
In May
2017, Mr Chen met former Thai prime ministers Yingluck Shinawatra and Somchai
Wongsawat and “other political and business officials to discuss cooperation
projects” before a trip to the Maldives, where Mr Chen met with Vice-President
Abdulla Jihad and discussed Belt and Road infrastructure initiatives.
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At the
end of July 2017, Mr Chen led a team of “professional elites” to visit the
Pacific Islands nation of Palau in connection to a $150 million five-star hotel
development. In May 2018, Mr Chen was spruiking infrastructure projects in the
Philippines
Between
2004 and 2009, Mr Chen’s co-director in Prospect Time International Investment
Australia was businessman Wang Zhenhai, who has ties to the Chinese Communist
Party’s influence agency, the United Front Work Department. There is no
suggestion that Wang Zhenhai was involved in the alleged approach to Mr Zhou.
Mr Wang
said he was "family friends with [Mr Chen] for a long time", but
denied that Mr Chen was a Chinese operative. Mr Wang claimed he was a
co-director of Mr Chen's company because company law required companies to have
one Australian citizen as a director for it to be registered. Mr Wang said he
had never heard of Nick Zhao.
In
2018, Mr Wang was photographed presenting membership to a Chinese businessmen’s
golfing association to Victorian Premier Andrews’ senior adviser, Marty Mei. At
the same event, Mr Wang was appointed as the president of the Australian
International Golf Association by his one-time business partner, Chinese
Communist Party-backed Melbourne businessman and political donor Tommy Jiang.
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