This is from June but I hadn't see it before. A long, 3 part, investigative piece from Australia.

Part One: The Party Line

The Chinese Communist Party is waging a covert campaign of influence in Australia – an aggressive form of “soft power” – and while loyalists are rewarded, dissidents live in fear.

University student Tony Chang had suspected for months that he was being secretly monitored, but it was a panicked phone call from a family member in China that confirmed his fears.

It was June 2015 and Chang’s parents had just been approached by state security agents in Shenyang in north-eastern China and invited to a meeting at a tea house. It would not be a cordial catch-up.

As Chang later detailed in a sworn statement to Australian immigration authorities, three agents warned his parents about their son’s involvement in the Chinese democracy movement in Australia. The agents “pressed the point that my parents must ask me to stop what I am taking part in and keep a low profile,” the statement said.

From a Brisbane share house littered with books and unwashed plates, the Queensland University of Technology student told a Fairfax Media-Four Corners investigation that the agents had intelligence about his plans to participate in a protest in Brisbane on the anniversary of the Tiananmen Square massacre, and also during the Dalai Lama’s visit to Australia.

Chang’s activities in Brisbane meant that his terrified father in China feared that he too was being “watched and tracked”.

His father, a cautious, apolitical man, had already spent years worrying about his unruly son. In 2008, when Chang was 14, he was arrested for hanging Taiwan independence banners on street poles in Shenyang. His family was forced to call on Communist Party contacts to ensure Chang was released after several hours of questioning.

After Chang was questioned again in 2014 for dissident activities, he decided it was no longer safe to remain in China. He applied for an Australian student visa.

The June 2015 approach to his parents back in China was the second time in two months that security agents had warned Chang’s family to rein in his anti-communist activism in Australia. These threats helped convince the Australian government to grant Chang a protection visa.

Chang’s treatment as a teen is typical of the way the party-state deals with dissidents inside China. But the monitoring of the student in Brisbane and his decision to speak out about the threats to his parents in Shenyang, despite the risk it poses to them, provides a rare insight into something much less well known: the opaque campaign of control and influence being waged by the Chinese Communist Party inside Australia.

Part of this campaign involves attempts to influence Australian politicians via political donors closely aligned with the Communist Party – something that causes serious concern to Australia’s security agency, ASIO.

But the one million ethnic Chinese living in Australia are also targets of the Communist Party’s influence operations.

On university campuses, in the Chinese-language media and in some community groups, the party is mounting an influence-and-control operation among its diaspora that is far greater in scale and, at its worst, much nastier, than any other nation deploys.

In China, it’s known as qiaowu.

Some analysts argue the party’s efforts are mostly benign, ham-fisted or ineffective. Former Australian ambassador to China Geoff Raby stresses that influence operations are conducted by many countries. He singles out Israel as an example.

But the most recent chief of Australia’s diplomatic service, Peter Varghese, who is now chancellor at the Queensland University, told Fairfax Media and Four Corners that China’s approach to influence building is deeply concerning, not least because it is being run by an authoritarian one-party state with geopolitical ambitions that may not be in Australia’s interest.

“The more transparent that process [of China’s influencing building in Australia] is, the better placed we are to make a judgment as to whether it is acceptable or not acceptable and whether it is covert or overt,” Varghese says.

“This is an issue ASIO would need to keep a very close eye on, in terms of any efforts to infiltrate or subvert our system which go beyond accepted laws and accepted norms.”

The depth of the concern at the highest levels of the defence and intelligence establishment can be measured in recent public statements by the departing Defence Force Chief and the director general of the Australian Security Intelligence Organisation.

Australia’s domestic spy chief Duncan Lewis warned Parliament that foreign interference in Australia was occurring on “an unprecedented scale”.

“And this has the potential to cause serious harm to the nation's sovereignty, the integrity of our political system, our national security capabilities, our economy and other interests,” Lewis said.

A China expert, Swinburne professor John Fitzgerald, agrees.

“Members of the Chinese community in Australia deserve the same rights and privileges as all other Australians, not to be hectored, lectured at, monitored, policed, reported on and told what they may and may not think.”


The coercion category

The definitive text on Beijing’s overseas influence operations is Qiaowu: Extra-Territorial Policies for the Overseas Chinese by China expert James To. Citing primary documents, To concludes the policies are designed to “legitimise and protect the Chinese Communist Party’s hold on power” and maintain influence over critical “social, economic and political resources”.

Those already amenable to Beijing, such as many student group members, are “guided” – often by Chinese embassy officials – and given various benefits as a means of “behavioural control and manipulation,” To says.

Those regarded as hostile, such as Tony Chang, are subjected to “techniques of inclusion or coercion.”

Australian academic Dr Feng Chongyi is another who falls into the “coercion” category. In March, Feng travelled to China to engage in what he calls the “sensitive work” of interviewing human rights lawyers and scholars across China.

Feng expected to be closely watched and harassed when he arrived in Beijing but accepted it simply as an irritating feature of his job.

“It’s an open secret that our telephone is tapped, we are followed everywhere.”

“But that is a little thing that we have to accept if we want to work in China,” the University of Technology Sydney China scholar and democracy activist tells Fairfax Media and Four Corners.

Feng is a small, energetic man who has retained his Communist Party membership in the hope that he will live long enough to see some results from what has become his life’s mission: democratising China.

But he is also a realist, which meant he was initially unconcerned when, on March 20 and after he’d arrived in the city of Kunming, he was approached by agents from the Ministry of State Security. Feng was driven to a hotel three hours away to be questioned.

He expected the matter to end there but, a day later, he realised he was being followed by security agents to the sprawling port city of Guangzhou. There he was told his interrogation would continue.

“That’s the time when I really realised something serious is happening,” he recalls.


Big trouble

In a Guangzhou hotel room, the security agents subjected Dr Feng to daily six-hour questioning sessions, all of it video-taped.

Many of the questions were about his activities in Sydney, including the content of his lectures at UTS, the people in his Australian network of Communist Party critics, and his successful efforts to stop a concert glorifying the Communist Party founder Chairman Mao Zedong.

Then the agents turned their attention to Feng’s family, asking him specific questions to show him that his wife and daughter were also being closely watched. He describes this change in tactics as a means of getting him to fully submit to his inquisitors’ demands. It is the only part of his story that the wily academic hesitates to recall, as if emotion might overtake him.

“I can suffer this or that but I’ll not allow … my wife and my daughter and my other family members [to] suffer from my activities,” he says.

“That is the thing that’s quite fearful in my mind.”

When his inquisitors demanded Feng take a lie detector test on March 23, he called his wife who told him to make a run for it.

A few hours later, after midnight, Feng crept out of his hotel, hoping to board a 4am flight. But as he sought to check in, an airport official told him he could not leave China because he was suspected of endangering state security.

“At that point, my wife told my daughter that I was in deep trouble,” says Feng. Feng’s daughter immediately called a foreign affairs specialist in the Australian government and asked for help.

Feng’s questioning continued for six more days until his daughter was contacted by an Australian government official and told Feng would be permitted to board a flight back to Australia.

In his final interrogation session, the MSS agents presented Feng with a document to sign that forbade him from publicly discussing his ordeal. But by then, his detention had already been covered by several Australian media outlets. When Feng landed at Sydney airport on April 1, a small group of supporters was waiting for him with banners.

Feng believes his treatment in China was designed to send other academics, along with his supporters in the Chinese Australian community, a message to “stay away from sensitive issues or sensitive topics”.

“Otherwise they can get you into big trouble, detention or other punishment.”


Campus patriots

Mostly though, the Communist Party’s influence on Australian university campuses takes a subtler form, and works through the Chinese Students and Scholars Associations. The Communist Party targeted these patriotic associations after the Tiananmen Square student uprising as a way of maintaining control over overseas students.

In Australia, which has 100,000 Chinese students, the associations are “sponsored” by Chinese embassy and consular officials.

Lupin Lu, an amiable 23-year-old communications student who is president of the Canberra University Students and Scholars Association, explains to Fairfax Media and Four Corners how Chinese embassy officials played an active role in organising a large student rally to welcome Premier Li Keqiang when he visited Australia in March. On the day, the rally had two shifts, the first starting at 5am.

Lu insists it was students rather than the embassy calling the shots.

“I wouldn’t really call it helping,” she insists of the embassy’s role, while confirming it provided flags, transport, food, a lawyer and certificates for students that would help them find jobs back in China.

“It’s more sponsoring,” Lu explains.

Lu says her fellow students are willing to assemble at 5am to welcome Premier Li because of their pride at China’s economic rise. Other factors are an early education system that extols the virtues of the Communist Party and the reality that positive connections with the government can help a person land a job in China.

Federal police officers still describe with awe events in 2008 at the Olympic torch rally, when hundreds of chartered buses entered Canberra from NSW and Victoria, delivering 10,000 Chinese university students “to protect the torch”.

“If the Aussie embassy in London issued a similar call to arms to Australian students in London, there would be two students and a dog,” an officer says.

Lu had another way of motivating her fellow students to assemble before dawn: she stressed the importance of blocking out anti-communist protesters.

Would she go so far as to alert the embassy if a human rights protest was being organised by dissident Chinese students?

“I would, definitely, just to keep all the students safe,” she says. “And to do it for China as well.”This is from June but I hadn't seen it before. A long, 3 part, read but some interesting investigative reporting from the land down under.


Going viral

The extent to which this student nationalism is directed and monitored from Beijing, and what this means for academic freedoms, is uncertain.

Former China ambassador Geoff Raby plays it down, saying Australian universities “are pretty much aware this activity goes on”.

But last year, ANU Emeritus Professor and the founding director of the Australian centre on China in the World, Geremie Barme, was so concerned he wrote a lengthy letter to Chancellor Gareth Evans.

Barme’s fears were sparked by a series of viral nationalistic videos created and posted by a Chinese ANU student, Lei Xiying. One of Lei’s videos, “If you want to change China, you’ll have to get through me first”, attracted more than 15 million hits.

“I would opine that Mr Lei is an agent for government opinion carving out a career in China’s repressive media environment for political gain,” wrote Barme.

The ANU defended the student’s activities on free speech grounds, but Barme said the university was ignoring Lei’s likely sponsorship by an authoritarian government that routinely threatens scholars and journalists.

“Make no mistake, it is officially sanctioned propaganda,” Barme said. He urged the university to confront the issue by debating it openly.

His supporters say that request was ignored.


Real media

A gracious host, Sam Feng is in a gregarious mood when he invites us to the headquarters of Pacific Times, the once proudly independent community Chinese-language newspaper he founded in the 1980s.

Over Chinese tea, Feng scoffs at suggestions that his paper is involved in financial dealings with an arm of the Chinese Communist Party that shapes its coverage.

“It is false. It is fake … They don’t need to do that,” says Feng, while insisting that questions of bias should be directed to Western media outlets whose coverage supports the US version of the world. “We are real media,” Feng explains of his small team of staff.

But corporate records suggest his paper is less independent than he claims. Subsidiaries of the Communist Party’s overseas propaganda outlet, the Chinese News Service, own a 60 per cent stake to Feng’s 40 per cent in a Melbourne company, the Australian Chinese Culture Group Pty Ltd.

The results of this joint-venture deal appear evident in the newspaper’s content, vast chunks of which are supplied direct from Beijing where propaganda authorities control the media.

Academic Feng Chongyi describes Pacific Times as one of several Australian Chinese-language media outlets that have forgone any semblance of editorial independence in exchange for deals offered by the Communist Party’s propaganda apparatus.

“It used to be quite independent or autonomous,” he says, “but ... you can see the newspaper now is almost identical [to] other newspapers that exclusively focus on the positive side of China.”

In a backroom in Sam Feng’s West Melbourne headquarters is evidence suggesting his Beijing dealings extend beyond what is placed in his newspaper. A well-placed source leaked to Fairfax Media photos of dozens of placards resting against a wall of the room.

“We Against Vain Excuse for Interfering in South China Sea,” reads one of the placards.

To a casual observer, the placards would barely warrant a glance.

But along with other information provided by the source, they point towards what Australian security officials suspect: that the Chinese Communist Party has had a hand in encouraging protests in Australia.

“The Chinese would find it unacceptable if Australia was to organise protests in China against any particular issue,” says former DFAT chief Peter Varghese.

“Likewise, we should consider it unacceptable for a foreign government to be [encouraging], organising, orchestrating or bankrolling protests on issues that are ultimately matters for the Australian community or the Australian government.”

The placards stored at Pacific Times were handed out to hundreds of protesters who marched in Melbourne on July 23, 2016, to oppose an international tribunal ruling – supported by Australia – that rejected Beijing's claim over much of the South China Sea.

Of Pacific Times owner Sam Feng, the source says the newspaper owner seeks to keep the Chinese Communist Party onside for commercial reasons: “He is a nationalist. But he just cares about business.”

A review of the corporate records of other large Chinese Australian media players reveals the involvement of Communist Party-controlled companies. Those who turn down offers to become the party’s publishing partners and seek to print independent news face the prospect of threats, intimidation and economic sabotage.


Overseas forces

Don Ma, who owns the independent Vision China Times in Sydney and Melbourne, tells Fairfax Media and Four Corners that 10 of his advertisers have been threatened by Chinese officials to pull their advertising.

All acquiesced, including a migration and travel company whose Beijing office was visited by the Ministry of State Security every day for two weeks until they cut ties with the paper.

Ma is happy to speak publicly because he has already been blocked from travelling to China. His journalists, though, request their names and images not be used when we visit Ma’s Sydney and Melbourne offices. They are fearful of retribution.

Ex-DFAT chief Peter Varghese and Swinburne Professor Fitzgerald says Australia should require more accountability and transparency around the way the Communist Party and its proxies are operating in the media and on university campuses.

Fitzgerald warns Communist Party influence operations in Australia not only risk dividing the Chinese community, but sparking hostility between it and other Australians.

“The Chinese community is the greatest asset we have in this country for managing what are going to be complex relations with China over the next decades – in fact for centuries to come – and we need them to help us in managing this relationship.

“If suspicion is sown about where their loyalties lie then we lose one of our greatest assets in this country now.”

The Vision China Times’ Don Ma has not only endured economic sabotage from the Communist Party but a campaign of vilification from pro-Beijing members of the local Chinese community.

Yet he keeps publishing, not only because he embraces freedom of the press but because many members of the disparate Chinese community urge him to keep doing so.

“I felt that the media here, almost all the Chinese media, was being controlled by overseas forces,” says Ma.

“This is harmful to the Australian society. It is also harmful to the next generation of Chinese. Therefore, I felt I wanted to invest in a truly independent media that fits in with Australian values.”



Part Two: Payments, Power And Our Politicians

Australia's major political parties have accepted millions of dollars in donations from two key Chinese businessmen. ASIO is concerned. So has Australian politics been compromised?

The cold Canberra air had yet to be tempered by the dawn when plainclothes agents from ASIO and a locksmith assembled outside an apartment in the upmarket suburb of Kingston.

The locksmith’s work done, the agents filed past two wooden Chinese artefacts standing like sentries at the entrance, and up a single flight of stairs into the apartment. The living room was decorated with exquisite porcelain vases and a dozen half-melted candles on a table.

The apartment belonged to Roger Uren, a tall, bookish man with thinning silver hair. Before resigning in August 2001, Uren was the assistant secretary of the Office of National Assessments (ONA), the agency that briefs the Prime Minister on highly classified intelligence matters.

Uren’s speciality was China. Foreign affairs sources in Canberra say he was regarded as one of Australia’s leading sinologists. In 2011, prime minister Kevin Rudd was reportedly considering appointing him as Australia’s ambassador in Beijing.

A close friend of Uren describes him as brilliant but eccentric. Under the pseudonym John Byron, he had penned a book on Chairman Mao’s feared intelligence chief, Kang Sheng, who amassed a collection of erotic art that was seized by his Red Guards during the Cultural Revolution. Uren shared Sheng’s taste in art.

“When we visited the markets in Beijing, the erotic art sellers would call out his name because he was a regular customer,” the friend recalls. Some of these artworks were on display as the agents from Australia’s counter-intelligence agency searched the apartment in the early hours of October 7, 2015.

This raid is a small piece of a much larger picture.

It reflects deep concern inside ASIO about the attempts of foreign nations to influence Australia’s politics.

The issue of foreign interference has exploded into prominence globally since the revelations of Russia’s influence over the US election in favour of Donald Trump.

In Australia, it is the Chinese Communist Party causing the greatest concern, and Beijing’s attempts at influence potentially extend to political players as senior as Labor’s Sam Dastyari and the Liberal Party’s Andrew Robb.

But neither of those men, nor even Uren himself, were the target of ASIO’s 2015 raid which, until now, has remained one of Canberra’s most closely guarded secrets. The agents were searching for evidence about somebody else entirely – Roger Uren’s wife.


The fixer

Sheri Yan arrived in the United States in 1987 with $400 sewn into her clothes and a fierce desire to make something of herself. She met Uren, who was working as a diplomat at Australia’s Washington embassy, and helped him research his Kang Sheng book.

By the time Uren returned to Australia to join the ONA in 1992, he and Yan were a couple. They moved to Canberra. As Uren climbed the ranks of the intelligence assessment agency, Yan was forging a reputation as a fixer and lobbyist, able to open doors in Beijing for Australian and US businesses seeking access to Communist Party cadres. She also sold her services to Chinese entrepreneurs wanting to build their fortunes overseas. By the time Uren resigned from the ONA in 2001 and moved with Yan to Beijing, Yan’s network was flourishing.

Former Australian ambassador to China Geoff Raby, who lived in the same exclusive St Regis apartment block as Yan in Beijing, describes her as a “dynamic, active person [who] speaks both languages perfectly, is charming and comes from a well-connected background”.

Yan’s business network includes the US software tycoon Peter Norton, high-flying Australian corporate figure and Australia’s former New York consul-general Phil Scanlan, and former ABC chairman Maurice Newman. She also knew several senior Australian politicians.

But not everyone trusted Sheri Yan.

John Fitzgerald, a former Ford Foundation director in Beijing turned Swinburne University China expert, has told Fairfax Media and Four Corners of a warning he received from an “old friend in Australia’s security establishment” to “stay away from Yan”.

“I understand that Sheri Yan is very closely connected with some of the most powerful and influential families and networks in China,” says Fitzgerald. “Once you know that, you don’t need to know much more.”

Among Yan’s Chinese clients was a billionaire property developer, Dr Chau Chak Wing. Chau is known in Australia for his large political donations, philanthropy and for buying the nation’s most expensive house, James Packer’s Sydney mansion, for $70 million, sight unseen.

He gave $20 million for the construction of the business school at the University of Technology, Sydney, which was designed by Frank Gehry and is called the Dr Chau Chak Wing Building.

And over the years, Chau has donated more than $4 million to Labor and the Coalition. Among his contacts are senior politicians on both sides of the aisle, including John Howard and Kevin Rudd. As ex-prime ministers, both have visited Chau’s palatial conference centre and resort, Imperial Springs, in the thriving Guangdong province in China’s south.

According to a close friend of Yan, Chau engaged her as a business consultant for 18 months in around 2007 and again in 2013, when she helped entice global A-listers to his conference centre.

Then it all came tumbling down.


Bribery scandal

The covert ASIO raid of Yan and Uren’s Canberra property in October 2015 was timed to coincide with events across the Pacific. In New York, Yan and several other Chinese business people were being arrested by the FBI for allegedly running a bribery racket in the United Nations.

According to US District Attorney Preet Bharara, Yan and her co-accused had paid kickbacks to the president of the United Nations general assembly, John Ashe, and in return, Ashe performed certain services for wealthy Chinese businessmen.

“For Rolex watches, bespoke suits and a private basketball court, John Ashe, the 68th President of the UN General assembly, sold himself and the global institution he led,” Bharara told journalists at a briefing announcing the arrests.

ASIO suspected, though, that Yan’s activities extended well beyond bribery. Classified material shared between FBI counter-espionage officials and ASIO prior to the Canberra raid suggested that Yan may have been working with Chinese intelligence.

And a Fairfax Media-Four Corners investigation has established that, in the apartment Yan shared with Uren, ASIO agents located highly classified Australian documents. Uren had apparently removed them from the ONA prior to his departure in August 2001. The documents contained details of what Western intelligence agencies knew about their Chinese counterparts.

ASIO called in the federal police to launch an inquiry. Well-placed sources have confirmed that Uren may face criminal charges.

But it is understood the documents are not the main game for ASIO. While the agency never comments publicly on its operations, it is understood the investigation into Yan involves suspicions she may have infiltrated or sought clandestine influence in Australia and the US on behalf of the Chinese Communist Party.

In his brief interview, Uren labelled the notion “pure fantasy” concocted by an incompetent, politicised FBI.

“They think anyone who is Chinese is a spy,” he said.

But Professor Rory Medcalf, who directs the Australian National University’s National Security College, says the ASIO raid would not have occurred without “the authorisation of the Attorney-General” and input from “many parts of the Australian national security community”.


Secret interference

Medcalf believes the targeting of Yan reflects a small part of a “deep and real concern” inside ASIO about the Chinese Communist Party’s secret interference and influence operations in Australia.

Eight serving government officials, who spoke on the condition of anonymity, broadly confirmed Medcalf’s assessment.

Several of these officials also confirmed that in the months leading up to the ASIO raid, the agency had been collating intelligence suggesting that Australia was the target of an opaque foreign interference campaign by China on a larger scale than that being carried out by any other nation.

They believed the Chinese Communist Party was working to infiltrate Australian political and foreign affairs circles as well to gain more influence over the nation’s growing Chinese population.

The sources said ASIO feared the campaign was succeeding.

In comments to a Senate committee at the end of May (which were overshadowed by a controversy about refugees and terrorism), Director-General Duncan Lewis appeared to confirm this.

“Espionage and foreign interference continue to occur on an unprecedented scale and this has the potential to cause serious harm to the nation’s sovereignty, the integrity of our political system, our national security capabilities, our economy and other interests.”

Lewis didn’t name Beijing. But ASIO’s serious concern about the Chinese Communist Party was on clear display when analysts working for Lewis prepared an extraordinary document in the weeks before the Sheri Yan raid in October 2015.

It was created so that Lewis could show it to the senior officials of Australia’s Liberal, Labor and National parties to warn them about accepting political donations from some foreign sources.

A number of people who have seen the document have described it: at the top was a diagram representing the Chinese Communist Party. Lines connected this diagram to photos of two Chinese-born billionaires.

These two men were known to dislike each other. Both had amassed significant wealth in China. Both are significant donors to Australia’s political parties. One of them was a businessman called Huang Xiangmo. The other was Sheri Yan’s sometime employer, Dr Chau Chak Wing.


Dr Chau Chak Wing

Dr Chau is not directly named in court documents unsealed by US officials in the Sheri Yan UN bribery case but he is referred to by a pseudonym, “CC3”. The FBI alleged that CC3 was an “old friend” of Yan whose firm had wired $200,000 to UN chief John Ashe to make the payment organised by Yan. There is no suggestion or evidence that Chau knew it was illegal to pay a speaking fee to a UN official.

The money was paid to secure Ashe’s appearance in his official capacity at Chau’s palatial Imperial Springs conference centre. Several former politicians would be there, including Bill Clinton.

Under US bribery law, Ashe’s status as a serving UN official meant it was illegal for him to receive payments. He was charged alongside Yan but died last year, shortly before a guilty plea from Yan led to her jailing for 20 months.

While Yan is still in prison, Chau has faced no criminal charges. He has taken legal action against Australian media outlets for any suggestion he is involved in impropriety and his representatives have assured his Australian political contacts that Chau has no connection to the wrongdoing of others targeted by the FBI.

Chau declined to answer questions put by Fairfax Media and Four Corners, and he appears to have shrugged off the matter. Two weeks after CC3 was identified in FBI documents, former prime minister Kevin Rudd attended Dr Chau’s Guangdong conference centre to speak at a global leadership event, pocketing a presumably hefty speaker’s fee.

Uren is also confident that Chau does not have any connections of concern to the Chinese Communist Party.

ASIO, though, appears not to share his conviction.


ASIO’s prop

ASIO chief Duncan Lewis’s document picturing Chau Chak Wing and Huang Xiangmo was essentially a prop. Three times he removed it from a black briefcase to display it to three different men: Brian Loughnane, the Liberal Party’s federal director; George Wright, Labor’s national secretary; and Scott Mitchell, the National Party’s federal director.

They were, at the time, the most senior administrative officials of Australia’s major political parties and Lewis’s document conveyed a strong message: be wary of these donors.

“[Lewis] said, ‘Be careful’,” says a source who is aware of what the trio were told.

“He was saying that the connections between these guys and the Communist Party is strong,” says another political figure briefed about the content of the ASIO warning. ASIO also warned that this connection meant the donors could be channels to advance Beijing’s interests.

In his briefings, Lewis was careful to stress that neither Chau nor Huang Xiangmo were accused of any crime and that Lewis wasn’t instructing the parties to stop taking their donations. But he also sought to describe how the Chinese Communist Party co-opts influential businessmen by rewarding those who assist it. This meant there was a risk that Chau’s donations, which are made via the Australian citizen’s companies, might come with strings attached.

Dr Chau’s ownership of a newspaper in China places him in effective partnership with Communist Party propaganda authorities, while his membership of a provincial-level People’s Political Consultative Conference (CPPCC) is also telling. CPPCCs ostensibly oversee China’s political and policy-making system but in reality they are used to entrench the Communist Party’s monopoly power and advance its interests in China and abroad.

People such as Chau who make the cut as members of a CPPCC are screened by the Communist Party’s United Front Work Department, a unique agency that aims to win over friends and isolate enemies in order to further the party’s agenda.

In May 2015, President Xi Jinping publicly championed the United Front and the CPPCCs, describing their mission as “persuading people … to expand the strength of the common struggle”.

“We have to assume,” Medcalf says, “that individuals like that [Chau] have really deep, serious connections to the Chinese Communist Party.

“Even if they’re not receiving any kind of direction, they would feel some sense of obligation, or indeed to make the right impression on the powers that be in China, to demonstrate that they’re being good members of the party, that they’re pursuing the party’s interests.”

Former China ambassador Geoff Raby disagrees. He told Fairfax Media and Four Corners that he had met Chau and visited his conference centre, and dismisses the notion that a property developer well down the Beijing pecking order would be used by the Communist Party to somehow further its agenda in Australia. He says Chau’s Australian political donations and networking are aimed at the Chinese practice of “getting status and face and prestige”.

But Medcalf says that ASIO’s decision to come out of the shadows and identify Chau in its briefings to the Coalition and Labor is “certainly unusual”.

“It would reflect very real concern,” he says.


Chau’s political donations declared (2006-16)

The most recent head of Australia’s Department of Foreign Affairs and Trade, Peter Varghese, is also troubled by the willingness of political parties to take foreign money. He warns that political donations are made “with a purpose” and that large Chinese companies may act in accordance with the interests of the Communist Party.

“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,” he says.

The former DFAT chief is encouraging debate about foreign interference because the stakes are so high. Any influence sought by Beijing may be ultimately aimed at advancing the strategic interests, activities and values of an authoritarian, one-party state.

Australia is one of the few Western countries that accepts political donations from foreigners, although the fact that Chau is an Australian citizen shows that a ban on donations from non-citizens may not mitigate the risk identified by Varghese.

“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,” he says.

If Chau has taken a position on any policy issue in Australia, he’s not done so publicly. All he appears to have sought via his donations is access to some of Australia’s most powerful men and women. But for parts of the Chinese Communist Party, access to the right networks may be worthwhile in and of itself.

This may be why Sheri Yan sought to compromise UN chief John Ashe, according to former CIA officer turned China watcher Peter Mattis.

Mattis says figures such as Yan who know how to cultivate networks of influence are “useful not only for getting things done, not only for injecting Chinese perspectives into [the networks], but also for being able to say, ‘Here are the players, here are the people who are important. Here are their personal foibles’.”

Chau Chak Wing may only ever have sought access but the same can’t be said of the second billionaire pictured alongside him in the ASIO briefing document.


Meet Mr Huang

As with many men able to drop $100,000 at a casino or on a political donation, Huang Xiangmo is used to getting his way.

So it was with some consternation that, in early 2016, the lively businessman who sports a comb-over became worried that his application for Australian citizenship was progressing more slowly than anticipated.

One thing bothering immigration authorities was the curious fact that Huang Xiangmo had two separate formal identities – he’s also known as Huang Changran. But there was another reason for the delay. Huang’s application was being assessed by ASIO.

Huang had likely become of interest to ASIO for a range of reasons.

One was his leadership of the Australian arm of the Chinese Council for the Promotion of the Peaceful Reunification of China.

Former US defence department China specialist Mark Stokes, an expert on Chinese Communist Party influence operations, says the Beijing headquarters of that organisation manages a “global outreach” project overseen by the Communist Party’s United Front Work Department.

The “peaceful reunification” work of the council involves undermining the Taiwan and Hong Kong independence movements and asserting China’s fiercely disputed claims over the South China Sea. Stokes has also documented the Beijing-based council’s links to Chinese intelligence agencies.

Huang’s role as president of the Australian Council for the Promotion of the Peaceful Reunification of China (ACPPRC) places him at the vanguard of the United Front’s lobbying in Australia.

“He’s a key member supported by the Chinese authorities, including the embassy or the consulate here,” says Sydney University of Technology’s China academic and Communist Party critic Dr Feng Chongyi.

Mr Huang told Fairfax Media and Four Corners in a statement that, while it supported the one China policy, the ACPPRC was “an autonomous, non-government organisation”, and it was “incorrect to describe … [it] as an affiliate” of the United Front Work Department or the Communist Chinese Communist Party. The organisation “supports economic and cultural exchange programs and charitable causes”, he said.

But according to Feng, Huang’s council role affords him immense influence and status as well as being a launching pad into Australian politics.


Man of many dimensions

The way Huang built his Australian network is all the more remarkable given his humble beginnings in the back blocks of southern China’s Guangdong province.

As a 15-year-old, Huang left school for a year to look after his impoverished family after the sudden death of his father.

“Life was a struggle, especially with five children to feed,” he recently told a Chinese magazine. “Despite the hardships we were a close family.”

In 2001, he scraped together enough funds to form the Yuhu Investment Development Company in Shenzen, a buzzing metropolis in Guangdong. He built upmarket villas and apartment blocks before diversifying into energy and agriculture. He also formed the close Communist Party connections expected of any billionaire property developer in China.

In 2011, Huang moved to Australia. He claims to have been seeking new business opportunities and a place to raise his children where the “people are warm and friendly and the air is clean, very clean”.

Australia was also free of the endemic corruption and corresponding anti-graft purges of the Chinese Communist Party that created an uncertain and sometimes hostile business environment for entrepreneurs. In 2012, one of Huang’s key Communist Party contacts in his home town of Jieyang was targeted for corruption, a fact Huang has privately brushed off as irrelevant.

After arriving in Sydney, Huang developed a shopping centre and launched a philanthropy blitz, donating millions of dollars to medical research and universities, including $1.8 million to help found the Australia China Relations Institute at the University of Technology Sydney. The institute is headed by Bob Carr, whom Huang claims he hand-picked. Carr (who declined an interview request) disputes this, although it’s unquestionable that Huang’s large donation provided an open channel to the former foreign minister and premier.

Huang quickly became known as a “whale” in political fundraising circles. The nickname was earned with his very first donation: $150,000 to the NSW branch of the ALP on November 19, 2012. That same day, two of Huang’s close associates, Chinese businessmen and peaceful reunification members Luo Chuangxiong and Peter Chen, gave an additional $350,000.


Huang’s political donations declared (2012-16)

Huang and his allies’ large donations were initially handled by the then ALP NSW secretary Sam Dastyari, along with Chinese community leader and ALP identity Ernest Wong, who quickly became one of Huang’s point men in Labor. As well as encouraging Huang’s campaign fundraising, Dastyari requested the developer donate $5000 to settle an outstanding legal bill he had accumulated as party secretary.

In the Liberal camp, Huang was also dealing with high-flyers. They included trade minister Andrew Robb, whose Victorian fundraising vehicle was given $100,000 by Huang, and Tony Abbott, who encountered Huang at Liberal fundraisers where, in the lead-up to the 2013 election, the Chinese businessman donated $700,000.

Huang moved with ease across the political aisle. Dastyari and Robb both effusively praised Huang’s philanthropy at charity or community events organised by the developer.

“He is a man of many dimensions, from what I’ve already been able to determine,” said Robb at a December 2013 charity event. “He’s a very thoughtful, cerebral fellow. I’ve had many interesting conversations already with Mr Huang on an endless range of topics.”

Robb said Huang’s donation to Bob Carr’s Australia China Relations Institute showed he was a “visionary”.

“China is going to be an integral part of all of our futures and it is absolutely imperative that we build the closest possible relationship,” said Robb.


Seeking favours

Huang first turned his political connections into a request for a favour in around early 2013. Court records show it involved a minor immigration matter. His ally, Ernest Wong, was at the time an ALP deputy mayor, who Huang would recruit as an adviser to his Australian Council for the Promotion of the Peaceful Reunification of China (Wong had, years earlier, been part of the council under its previous leadership).

Wong wrote a letter of support to help Huang secure a work visa for a Chinese employee. The Migration Review Tribunal later rejected the application because the proposed job referred to was not genuine.

Shortly after Wong penned the letter in question, in May 2013, he was parachuted into a NSW State Parliament upper house seat left vacant by the resignation of former Labor member Eric Roozendaal. It was a curious affair, if only for the timing.

Roozendaal was suspended from Labor on November 7, 2012 over a corruption scandal (he was later not found to have engaged in any improper behavior). This meant his place on the ALP’s upper house ticket would need to be filled eventually. Twelve days later, Huang and two fellow Peaceful Reunification Council members donated $500,000 to the NSW ALP. After Wong took Roozendaal’s place in the upper house, Huang employed Roozendaal to work in his development firm.

Huang’s donations to both major parties continued. Records reveal that over four years, Huang and his close associates or employees gave at least $2.6 million to the major parties.

It was these donations, along with Huang’s Communist Party ties, that led to him being featured in the briefing that spy chief Duncan Lewis gave the three political party chiefs in 2015.

The same qualification that applies to Chau Chak Wing also covers Huang: Huang’s donations were legal, and ASIO said the parties were under no obligation to refuse them.

Huang declined to answer detailed questions, but has denied any wrongdoing. In a statement to Fairfax Media and Four Corners he said: “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.

“While your program may seek to reinforce negative stereotypes about Chinese involvement in Australia, I am committed to more positive endeavours, such as investment, philanthropy and building stronger community relations.”

In the right company, though, Huang himself has made no secret of his more political views. Around the time of the ASIO briefing, he spoke at an event at the Chinese consulate to celebrate 66 years of Communist Party rule.

“We overseas Chinese unswervingly support the Chinese government’s position to defend national sovereignty and territorial integrity [and] support the development of the motherland as always,” he said.

Huang’s desire to champion Beijing’s territorial claims eventually led to a clash with ALP policy.

But in the months leading up to the election, Huang’s most pressing concern was his application to become an Australian citizen. It had been temporarily blocked as ASIO attempted to understand his relationship with the Chinese Communist Party and other discrepancies in his application.

Huang did not know that Australian authorities had concerns, at least not initially. All he knew was that his application was taking far longer than he believed it should. The answer, he believed, lay not with a migration agent or lawyer, but with the intervention of his political friends.

“In China, the system works like that,” explains a well-placed source.

Huang attempted to recruit a number of politicians to his citizenship cause, including former prime minister Tony Abbott. Several politicians agreed to help, but it appears only one followed through – Sam Dastyari. On four separate occasions over the first six months of 2016, Dastyari or his office called the Immigration Department to quiz officials about the status of Huang’s application. The senator made at least two of these calls personally.

In response to questions from Fairfax Media and Four Corners, 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”.

An Immigration Department spokesperson said citizenship was granted only to people of good character who could meet identity requirements and who were not subject to adverse ASIO assessments.

“The Department is not influenced by representations, no matter who they are from, if the applicant does not meet the requirements of the Citizenship Act.”

As for Dastyari’s calls on Huang’s behalf, one official said: “It shows a pattern of conduct, beyond a single call the department might get from a politician about a constituent.”


Dastyari’s last call

Around the time of Dastyari’s last call, and as the 2016 election neared, Huang promised the ALP another $400,000 in donations – money the party desperately needed to fund its campaign. But then Huang received some bad news. The ALP was publicly and unexpectedly challenging one of the core doctrines of Beijing’s foreign policy.

At a lunchtime address on June 16, Labor shadow defence spokesman Stephen Conroy told the National Press Club that China’s actions in the South China Sea were destabilising and “absurd”. Labor, he said, was open to the Australian Navy conducting freedom-of-navigation exercises in the area.

In Beijing, the Chinese Communist Party viewed this as an unwelcome challenge. In Sydney, Huang decided to act.

He called ALP fundraising officials in Victoria. Conroy’s comments meant he could no longer deliver the promised $400,000 in donations. The ALP pushed for Huang to honour his commitment, but he stood firm. Conroy had crossed the line and his comments would cost the ALP dearly.

Still, Huang wasn’t prepared to give up on Labor entirely. Just a day after Conroy launched his South China Sea salvo, Dastyari and Huang spoke at adjacent lecterns at a press conference attended by the Chinese-language media.

“The South China Sea is China’s own affair,” Dastyari stated. “On this issue, Australia should remain neutral and respect China’s decision”.

There is no suggestion Dastyari knew directly of the threat to the $400,000 donation.

Dastyari’s comments on the South China Sea cost him his frontbench job amid a storm of publicity after the election over why he had allowed Huang to pay for the $5000 legal bill in 2014, and a second Chinese donor to contribute to pay a $1670 office travel expense.

Dastyari said in answer to questions that he had broken contact with Mr Huang after “the events of last year”.

Huang’s use of a $400,000 donation as leverage over the ALP’s foreign policy has remained hidden until now. It came about a year after ASIO had first put the political parties on notice about Huang’s likely connections back in China.

“It’s precisely the kind of example of economic inducement being turned into economic leverage or coercion,” says the ANU National Security College’s Rory Medcalf. “It’s a classic example of a benefit being provided but then withheld as a way of punishment, and as a way of influencing Australia policy independence.”

A few a days after Huang said he would withdraw his offer of the $400,000 donation, Huang appeared at a Labor press conference to announce two Chinese candidates for the last two spots on the ALP’s senate ticket.

One of the men was Dastyari’s office staffer Paul Han, whom Huang has also appointed to a Chinese community organisation, and who is believed to have been a conduit for some of Huang’s lobbying of Dastyari’s office over his stalled citizenship application.

The second candidate was active ALP member Simon Zhou, a close Huang associate and member of Huang’s peaceful reunification council. Zhou has also helped raise funds for the NSW ALP, with two of Zhou’s business associates donating $60,000 in May 2016. Huang also asked the NSW ALP to appoint Zhou as a multicultural adviser (the ALP insists he was appointed on merit).

At the event announcing Zhou and Han’s candidacy, Huang told Chinese-language media that “the Chinese realise that they need to make their voices heard in the political circle, so as to seek more interests for the Chinese, and let Australia’s mainstream society pay more attention to the Chinese”.

Huang’s withdrawal of the 2016 donation is understood to have not only concerned some within Labor but to have caused grave concern inside Australia’s security community and the US embassy in Canberra.

Several sources have also confirmed that in September 2016, ASIO briefed Bill Shorten about Huang. Shorten responded by directing his colleagues to cut ties to the donor. The opposition leader also issued a public call for a ban on foreign donations.


Donations reform

In Washington DC, Australia’s role as one of the only Western nations not to have banned foreign donations continues to cause alarm.

But despite promises for donations reform from senior figures in both parties, nothing firm has happened. Many politicians still appear more interested in attracting foreign cash than ensuring the integrity of our political system.

It’s clear the problem isn’t confined to donations and Australia’s national security agencies continue to sound the alarm behind closed doors.

“There’s an awareness of a problem but the agencies themselves don’t have the mandate or the wherewithal to manage the problem,” warns Medcalf.

“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.”

After being briefed on the findings of the investigation by Fairfax Media and Four Corners, and sent a list of questions, the Turnbull government is stressing that it’s not only listening to the warnings but is prepared to act.

In a statement, Attorney-General George Brandis revealed that the Prime Minister, Malcolm Turnbull, has launched a major inquiry into Australia’s espionage and foreign interference laws.

“The threat of political interference by foreign intelligence services is a problem of the highest order and it is getting worse,” Mr Brandis said.

“Espionage and covert foreign interference by nation states is a global reality which can cause immense harm to our national sovereignty, to the safety of our people, our economic prosperity, and to the very integrity of our democracy.”

Mr Brandis has also flagged the introduction of new laws to “strengthen our agencies’ ability to investigate and prosecute acts of espionage and foreign interference".

His statement is certain to rile Beijing. It will also concern certain political players in Australia, who will be hoping that any inquiry is confined to finding gaps in the law and will not explore too deeply the previous conduct of individuals.



Part 3: The Go-Betweens

ALP donor Helen Liu had deep ties to Chinese spy Liu Chaoying, who was caught out trying to influence US politics. So why did ASIO give Helen Liu the all clear?

As befitted a man who spent his life in the shadows, General Ji Shengde chose to wait in the kitchen of an abalone restaurant in the Chinese coastal resort town of Zhuhai until his dining companions arrived.

The ultra-secretive chief of Chinese military intelligence was on the lookout for his protege, a well-dressed, 37-year-old businesswoman called Liu Chaoying. She was bringing her new friend, a California-based entrepreneur called Johnny Chung who had a penchant for over-the-top jewellery and a knack for getting inside Bill Clinton’s White House.

Once the pair arrived and the group was seated, they talked American politics. It was 1996 and Clinton was running for a second term.

“We really like your president. We hope he will be re-elected,” General Ji told Chung.

“I will give you $300,000. You can give it to your president and Democrat party.”

A few days after this August 11 meeting, Liu Chaoying wired $300,000 into Taiwan-born Chung’s account. Some of this money ended up in the coffers of the Democrat’s Clinton re-election campaign in breach of US laws banning foreign political donations.

This transaction later became the focus of US criminal and congressional investigations into a major political scandal dubbed Chinagate by the US media. It was part of a broad Chinese plan to influence American politics to favour Beijing’s acquisition of sensitive, advanced technology.

Today, Fairfax Media can reveal a direct Australian connection to the Chinagate scandal that raises serious questions about a series of Chinese donations to the Australian Labor Party.

A summary of banking records contained in NSW Supreme Court files show that, just 10 days after the meeting in the abalone restaurant, a Sydney-based company owned by Chinese-Australian businesswoman, Helen Liu, wired $250,025.00 from her Australian company into the account of one of Liu Chaoying’s Hong Kong companies called Marswell Investments.

Just why Helen Liu’s company Wincopy Pty Ltd sent this money to Liu Chaoying is not known. Whatever the case, the transfer effectively topped up the bank account of a company US prosecutors later claimed as a front for China’s military intelligence. A copy of Wincopy’s financial statements and reports prepared by the company's accountant - and obtained from a Federal Court file - recorded the $250,025.00 transfer as “overseas marketing expenses”.

Like the others, Helen Liu was interested in politics. But her focus was Australia. At the time of the quarter-of-a-million-dollar transfer into Liu Chaoying’s Marswell company, she had just made her first donation to the ALP and had forged links to the federal Labor front bench and the NSW Labor government.

Australia’s freewheeling donations laws meant that Liu’s donations never created a scandal like that seen in the United States, and the links have never been adequately examined by Australian authorities. But evidence uncovered by Fairfax Media and the ABC means that might be about to change.


The networker

Helen Liu arrived in Sydney from Shandong province in northern China in the late 1980s as a seemingly modest student and worked at a firm exporting wool to China. But it did not take too long for her life to undergo a massive transformation.

“It was like the tap had been turned on and all this money suddenly started pouring out,” said a close associate at the time. “Top-line European cars were being bought with cash.”

The money came from Chinese Government-controlled entities such as the Industrial and Commercial Bank of China, Beijing Hengtong Trust, the Jinan Iron and Steel Group and the Shandong Fisheries Corporation. All had entered into joint ventures with companies associated with Helen Liu and her then boyfriend, Humphrey Xu.

The pair set about amassing a Sydney property portfolio worth tens of millions of dollars. Among their tenants was a NSW government department. They exported Australian iron ore and wool to China. In their homeland, the couple embarked on huge real estate developments across several provinces in close co-operation with local officials.

They achieved Australian citizenship through sham marriages to a far younger Sydney couple then began building a network of politically powerful friends in their adopted country. Their target: Australia’s most ruthless political faction, the NSW Labor Right.

The foundation stone of this relationship was laid in 1993 when one of Helen Liu’s companies, Diamond Hill International, took a knockabout federal Labor MP, the late Eric Fitzgibbon, on a first-class trip to Liu’s home province of Shandong. Fitzgibbon’s job was to shake hands with an array of Communist Party officials and tell them just what a big deal Helen Liu and her boyfriend were back in Australia.

Eric Fitzgibbon asked if his son Joel, a rising star in NSW Labor, could come along. Joel Fitzgibbon, a trained auto electrician who was working as his father’s electorate officer, was Eric Fitzgibbon’s prospective successor as Labor candidate in the working-class regional seat of Hunter at the 1996 federal election.

That Shandong trip was the beginning of a long friendship between Helen Liu and the Fitzgibbons which only became public in 2009 when Joel Fitzgibbon was Australia’s defence minister. His early political career was supported by $40,000 in donations from Helen Liu, including $20,000 for his 1998 election campaign from her company Wincopy – the same company that sent $250,000 to Liu Chaoying’s Hong Kong account in 1996.

Fairfax Media makes no accusation of wrongdoing or impropriety against Joel Fitzgibbon in this report. No evidence has emerged to suggest he knew of Helen Liu’s links to Liu Chaoying.

In a statement made through her Sydney lawyer, Helen Liu has admitted a personal and business relationship with Liu Chaoying. But she has sought to distance herself from the more controversial aspects of Liu Chaoying’s life.

While she has not outright denied the Wincopy payment of $250,000, she has attempted to cast doubt on the documents obtained from Federal and Supreme court files in NSW which formed part of a bitter 1990s legal battle with her former boyfriend and business partner Humphrey Xu.

Fairfax Media has found no evidence to suggest Helen Liu or her legal team during the 1990s had contested the veracity of these financial documents, many of which were obtained under subpoena.

There is no doubt that NSW Labor itself reaped at least $100,000 from Helen Liu and her sister Queena in donations and fundraising between 1999 and 2007. During this time, Helen Liu grew close to other Labor politicians as notable as long-serving NSW premier Bob Carr. She was photographed with former prime ministers John Howard and Kevin Rudd and former Opposition leader Kim Beazley – not to mention Bill Clinton, who her friend Liu Chaoying was also snapped with.

Helen Liu’s friends in the ALP have long decried any notion that financial support from her or other Chinese donors raises a national security risk. But the revelation that Helen Liu had a direct connection to a key player in the Chinese military intelligence operation to influence an American presidential campaign makes it necessary to examine her involvement in Australian politics through a different lens.


The admiral’s daughter

When Liu Chaoying came to spend time with Helen Liu in Sydney in 1997, those who met her were left in no doubt as to her importance. With a love of high fashion and gambling, Chaoying was never shy about her position near the top of China’s government and military.

“She was introduced to me as a director of China’s Long March missile program,” recalled one of Helen Liu’s long-standing business associates, “and she was straight down to business. The first thing she asked me was if I knew where she could source metallurgical coal for making steel.”

Liu Chaoying was vice-president of China Aerospace International (CASIL) Holdings, a state-owned company responsible for China’s missile, satellite and rocket technology. She was also a Lieutenant Colonel in the People’s Liberation Army (PLA), working closely with its military intelligence unit, the Second Department of the PLA General Staff.

Her biggest claim to fame was that her father, Liu Huaqing, was the most senior military officer in China during the 1990s. Credited with building China’s modern navy, Admiral Liu was vice-chairman of the country’s Central Military Commission and a member of the all-powerful Communist Party Politburo Standing Committee.

That family connection made Liu Chaoying a so-called princeling, a child of the Communist revolution’s elite. Her heritage and connections opened doors and opportunities in China and abroad. Like other princelings and other Chinese intelligence assets, her personal and business interests were often closely entwined with those of the state.

What is known of Liu Chaoying’s military and business career shows that she had a deep involvement in the procurement of weapons and military technology as well as communications. It has been reported in the Hong Kong press that she played a crucial role for Chinese military intelligence in financing the deal that procured the former Soviet aircraft carrier Varyag from Ukraine. Now refurbished and renamed, the carrier Liaoning is the pride of China’s rapidly expanding navy.

For most ordinary Chinese, someone like Liu Chaoying was an untouchable.

She was an intimidating figure, someone to treat with caution and respect. But for Helen Liu there was no sign of deference. “They were like sisters,” recalls one observer.
According to Helen Liu’s statement though, she had no idea about Liu Chaoying's military role: “Helen only knew that Liu Chaoying was a director of Hong Kong listed company and knew her through the business relationship in the telecom company. She did not know (if it be the case) that Liu Chaoying worked for China’s military intelligence or the PLA.”

Helen Liu was also from a family of some renown in China, particularly in Shandong province. Her father, who she described in a court affidavit as a “ranking official” in China’s government, was responsible for appointing various Communist Party officials to provincial power. This created a powerful network for his family.

By 1997, Helen Liu’s property empire in Sydney and China was worth tens of millions of dollars. She was a fixture on the NSW Labor scene, mixing business and pleasure through lavish dinners at the Golden Century Chinese restaurant next to the ALP’s NSW headquarters in Sydney’s Sussex Street. Her connection with the Fitzgibbons, Joel and his father Eric, and her generous donations were well known to senior NSW Labor figures.

Helen Liu’s companies also paid for wave after wave of Chinese officials such as current Hebei province party secretary Zhao Kezhi - who some tip to be a future Chinese leader - to visit Australia. Itineraries for these visits show that meetings were scheduled with Labor Party figures such as Bob Carr, Joel Fitzgibbon and Mark Arbib. Often when a senior Chinese leader, such as former presidents Jiang Zemin or Hu Jintao, toured Australia and the Pacific, Helen Liu was in the travelling party.

This made Helen Liu the ultimate go-between. Chinese government companies tasked her with sourcing iron ore from Rio Tinto, BHP and Gina Rinehart’s Hancock Prospecting.

Helen Liu became vice-chairwoman of a Chinese government-linked organisation called the World Federation of Overseas Chinese Associations. This organisation was led by a former PLA officer, Ren Xingliang, and worked closely with the Communist Party’s United Front Work Department to promote Beijing’s objectives through the Chinese diaspora. US intelligence analysts have long regarded the United Front as a facilitator for China's overseas influencing campaigns.


A bombshell

While Helen Liu’s star was rising, Liu Chaoying had some real troubles. Early in 1997, legendary Watergate reporter Bob Woodward dropped a bombshell report in the Washington Post declaring that the FBI and US Justice Department were investigating foreign donations to the Democratic campaign to have Bill Clinton re-elected in 1996.

The money trail from Johnny Chung led back to Liu Chaoying and Marswell Investments and, soon enough, their names were on the front pages of America’s biggest newspapers. Liu Chaoying was publicly identified as a Chinese military intelligence officer in Newsweek magazine and elsewhere.

But the Chinagate publicity in the US did little to temper Liu Chaoying’s ambition to expand her corporate presence in Australia. Throughout 1997 and 1998, records show that she established four companies in Australia. She also became a director of the Australian branch of China Aerospace.

Links with Helen Liu were evident in many of her dealings. Paperwork for one of Liu Chaoying’s personal companies, Llexcel Pty Limited, was filed by a young Sydney lawyer called Donald Junn who had power of attorney for all of Helen Liu’s main Australian businesses.

The Sydney address given by Liu Chaoying for Llexcel was the same one Helen Liu used to register a company in Hong Kong in the same year.

Being outed as a Chinese intelligence operative didn’t stop Liu Chaoying from expanding her operations in Australia. Her precise objectives remain unclear but almost certainly involved a mixture of her own interests and those of the Chinese state.

As for Helen Liu, she claims in her statement that she was not aware of her business partner’s troubles in America. And she said that the common address for their respective companies was the Sydney residence of her sister, Chun Mei Liu.


The congressman

Liu Chaoying’s $300,000 payment to Johnny Chung is the case US Republican congressman Mike McCaul can’t let go of.

McCaul was a prosecutor at the Department of Justice before entering politics. He spent 1997 and 1998 leading the investigation into the political financing activities of Chung, Liu Chaoying and other players in the Chinagate scandal.

McCaul, who now chairs the US House of Representatives’ Homeland Security Committee, secured Johnny Chung’s testimony about the meeting with General Ji and Liu Chaoying in the abalone restaurant and his receipt of $300,000.

Although he knew more than anyone about Liu Chaoying’s business activities, McCaul said he was not aware of an Australian connection to her until he was approached by Fairfax Media and Four Corners with records showing Helen Liu’s company’s $250,000 transfer. McCaul was unable to uncover the Australian transfer because the Chinese government had blocked his attempts to access Liu Chaoying’s Hong Kong bank accounts.

Of the company Liu Chaoying used to make the US political donation, McCaul said:

“I believe Marswell was really a front for Chinese intelligence activities.”

McCaul believes the Chinese wanted Clinton re-elected because his administration had eased export restrictions on satellite technology to China. This area was one of Liu Chaoying’s specialities at China Aerospace.

The congressman’s view is supported by the finding of a bipartisan congressional committee, which is specially convened to investigate China’s political donations. It described the $300,000 as an attempt to “better position [Liu Chaoying] in the United States to acquire computer, missile and satellite technologies”.

Classified US intelligence material provided to congressional investigators also put Liu Chaoying at the forefront of illegal arms sales and smuggling operations. She was twice found to have entered the US using false identities.

McCaul said the revelation that a prominent Chinese donor to Australian politics such as Helen Liu was financially and personally involved with Liu Chaoying at the time of Chinagate was “deeply disturbing”.

“Quite frankly, I was a bit surprised [to learn] that Australia does allow foreign contributions.”

“And if you look at the numbers, which I was privy to, a lot of these donations are coming from China. They want a stronger presence in Australia and what better way to do that than to influence political figures through foreign contributions,” McCaul said.

Despite the controversy in the US, Helen Liu appeared unperturbed about continuing to do business with Liu Chaoying. Hong Kong court records show the pair established a company in the British Virgin Islands in 1999 with the intention of investing in telecommunications in China.

But their relationship soured in 2001 when a Hong Kong bank took them to court after they failed to make repayments on a substantial loan.


An unusual letter

In February 2009, a senior Australian defence department official posted anonymous letters to two of the journalists who have written this story, one at the investigations unit of The Age, the other then at The Canberra Times.

The letter referred to a potential conflict of interest involving Fitzgibbon’s brother’s company, health insurer NIB, and its interest in government contracts. But much of the letter was taken up with the then defence minister’s relationship with a Chinese-born businesswoman and Labor donor named Helen Liu.

The letter revealed that the minister received a suit from his friend and was living in a Canberra townhouse he rented from Helen Liu’s family. Most notably, the letter specifically asserted that Helen Liu was associated with Chinese military intelligence.

Until this point, Helen Liu was unknown to anyone in the Australian media let alone the wider public. Despite 15 years of involvement in Australian politics through donations and fundraising, she remained beneath the radar. Fitzgibbon’s register of interests lodged with Parliament made no mention of Helen Liu despite their long friendship.

Ahead of the publication of a series of Fairfax articles about Helen Liu in 2009, Fitzgibbon was asked if he had received any gifts or benefits from Helen Liu that would require declaration. His answer was no – as it was when asked the same question at a doorstop on the day the story broke.

But later that night, his office announced that the minister had forgotten to declare two very quick trips to China in 2002 and 2005 that had been paid for by Helen Liu. Just why he took those trips and what he did on them remains unclear.

The failure to declare the trips badly weakened his grip on his Cabinet position.

Since amending his records, Joel Fitzgibbon has consistently maintained he has received nothing further from Helen Liu that he needed to declare nor had ever been involved in or benefited from her business affairs.

Fairfax Media makes no suggestion that Mr Fitzgibbon has anything else to declare. But he has not answered questions about whether other members of his immediate family, such as his late father Eric Fitzgibbon, had received cash, gifts or company shares from Helen Liu.

Fresh documents obtained by Fairfax Media show Helen Liu was often keen to include a meeting or a meal with her friend Joel Fitzgibbon MP on the itineraries of Chinese officials she would pay for to tour Australia.

Of course, there is nothing wrong with meeting and dining with visiting foreign dignitaries. It is an often tedious but necessary part of the job for many Australian MPs.

Joel Fitzgibbon said he could recall possibly two occasions where he had dined with Chinese associates of Helen Liu during their visits to the Hunter Valley. “My memory is that they were Government officials,” he said.

Fairfax Media understands that a handful of federal and state Labor politicians used their official letterheads to write to various Chinese leaders and Australian immigration officers on behalf of Helen Liu and her immediate family. Mr Fitzgibbon said he was not among them. “I have never written to a Chinese official,” he said. Helen Liu said she had no recollection of asking any politician for such favours.


The ASIO all-clear

Perhaps the strangest thing in the Helen Liu saga was the statement released by Australia’s top counter-espionage agency, ASIO, a day after the initial story about her broke in late March 2009.

Kevin Rudd’s Labor government was already having problems on the China front. The Mandarin-speaking Rudd had just been criticised after he “secretly” hosted the Chinese Communist Party’s propaganda chief at the Lodge. Before that, Rudd and other Labor MPs were in the gun over a series of trips they made – and declared appropriately – to China paid for by Chinese entrepreneur and political donor Ian Tang.

ASIO’s customary approach is to never publicly comment on security matters involving individuals or organisations. It is a policy endorsed by both Coalition and Labor governments and almost always strictly adhered to.

But in the case of Helen Liu, Rudd’s government decided to buck convention. Hours after Fairfax’s first article about Helen Liu was published, the office of Labor’s attorney-general, Robert McClelland, released a statement saying “the Acting Director General of Security has advised me that ASIO has no information relating to Ms Helen Liu which would have given rise to any security concern regarding her activities or associations.”

Paul Monk is one of Australia’s foremost experts on China’s intelligence apparatus. A former head of the China desk at Australia’s Defence Intelligence Organisations, Monk is perturbed by the circumstances that led to the former Rudd government releasing such advice from ASIO.

“First, [that the ASIO statement] contravened long-standing intelligence community practice in commenting publicly on operational matters; second, that it should have lacked such information, in all the circumstances; and, third, that unimpeachable information has now come to light showing that, in fact, there were, well before 2009, grounds for very grave concern about Helen Liu’s bona fides and links with Chinese military and intelligence agencies at the highest level,” Mr Monk said.

The ASIO statement was used by the Labor government as a shield against critics raising security concerns in relation to Helen Liu and her close ties to the defence minister. Ministers relied on it to repel opposition Senate estimates questions.

Some of Helen Liu’s closest friends in Labor went on the attack.

Bob Carr said it was “pretty shameful for the media to brand this woman as suspect on security grounds without the remotest evidence – indeed in the face of ASIO stating she is of no interest to them.”

NSW state MP Henry Tsang wrote that Helen Liu has been “wrongly portrayed as a national security threat”. Joel Fitzgibbon said his friend was a “highly regarded and respected Australian businesswoman”.

“Her name has been dragged through the mud … and her reputation has been tarnished in a highly defamatory way. I’ll certainly be taking any action I can to ensure she’s not personally attacked in that way in the future.”

The ASIO statement was even used by senior Australian Defence Department officials to privately assure their American counterparts that there was no need to be concerned about Helen Liu, according to leaked State Department cables released by Wikileaks.

As for Helen Liu, she told News Limited tabloid The Daily Telegraph she was “brokenhearted”.

“It is unfair to me what people have said. I know people have said that I am a national security threat.”


Litigation and legacies

Joel Fitzgibbon survived as defence minister until mid-2009. And it wasn’t his ties to Helen Liu that did for him in the end. It was an alleged conflict of interest involving his brother’s company.

But the story of Helen Liu wasn’t going away. Subsequent reports based on material supplied by new informants resulted in a long-running and expensive legal battle instigated by Helen Liu in a bid to find out their identity.

Thanks to his standing in the NSW Labor right, Joel Fitzgibbon became federal Labor chief whip in 2010 and served as a member and briefly chairperson of the Parliament’s influential Joint Standing Committee on Foreign Affairs, Defence and Trade.

Following the June 2013 Labor leadership spill, he was appointed agriculture minister in Kevin Rudd’s second ministry. He now serves as shadow agriculture minister on Labor leader Bill Shorten’s front bench.

As for Liu Chaoying, she and her family appear to be on the rise again in China after some difficulties in the early 2000s when her father fell out with then president Jiang Zemin, resulting in her brief arrest, and her boss, General Ji, receiving a 20-year prison sentence for corruption.

In 2007, US diplomats reported that Liu Chaoying was “involved in arms sales to foreign countries through Huawei and other military or quasi-military companies on whose boards she sat”. Her elder brother, Liu Zhuoming, is an influential navy admiral and member of the National People’s Congress.

In September last year, Chinese president Xi Jinping paid a lengthy personal tribute to Liu Chaoying’s late father on the occasion of the centenary of his birth, declaring Liu Huaquing to be one of the greatest leaders of the modern Chinese military.

Meanwhile, it is understood that Helen Liu has spent nearly all of her time in China in recent years. Two of her family’s companies have encountered some legal trouble in China. A 2014 court judgement from Hainan Island records that the chairwoman of Australia Diamond Hill Holdings Limited admitted to having bribed a local official with $34,000 and a bottle of red wine.

The judgement identifies a female with the surname "Liu” as chairwoman but does not specify whether it is Helen Liu, her sister or someone else.
Chinese media reports between 2000 and 2012 name Helen Liu as the chairwoman of Australia Diamond Hill Holdings. In her statement she denied any recent involvement with the companies named in the Hainan court judgement.

Her Double Bay residence has long appeared neglected and empty. Recently, however, she and her sister re-established a corporate presence in Australia. Just what this means remains to be seen.