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On 9 December 2020, International Anti-Corruption Day, the US Treasury’s Office of Foreign Assets Control (OFAC) issued a press release detailing sanctions against criminal networks in Africa and Asia, including Palau. OFAC applies the Magnitsky Global Human Rights Accountability Act, which targets perpetrators of corruption and serious human rights abuses. But why Palau?
China’s manipulation of the Palau Presidential Election
On November 3, 2020, primary elections were held in Palau with presidential candidates who have publicly discussed the possibility of switching diplomatic relations from Taiwan to China. The Republic of Palau is a Pacific island country that has established diplomatic relations with Taiwan since its independence in 1994. There are currently 15 countries in the world that have diplomatic relations with Taiwan, including four in the Pacific: Palau, Marshall Islands, Nauru and Tuvalu.
Palau’s presidential election is a substantive battle between the incumbent Vice President and Minister of Justice, Raynold Oilouch, and former congressman and businessman Surangel Whipps, Jr. It was Vice President Oilouch who publicly supported the establishment of relations with China. Although Palau has maintained ties with Taiwan since its independence, Oilouch promised in his campaign speech that turning to China could lead to economic development. If Oilouch becomes President, Palau will most likely establish diplomatic relations with China.
The election results saw Surangel Whipps, Jr. win significant wins. At the same time, there were rumors that a lot of money flowed from China to Oilouch, and the cash was being distributed among voters. If this is true, the outcome of this election will be a victory for the Palauan people over Chinese money. It is clear that the Chinese infiltration had corrupted Palauan society and caused unrest among the people.
Former US Defense Secretary Mark Esper, who visited the country on August 28, must have been as relieved as the national election results. The United States, which has signed a special defense and diplomatic agreement with Palau, plans to install a multi-billion dollar ballistic missile radar facility on the country’s Angaur Island. There are fears that if diplomatic ties with China are established, China’s infiltration of Palau, which has a population of less than 20,000, will continue even further. This will not only affect Palau, but could lead to a broader Indo-Pacific security crisis.
I want summarize the articles I wrote together in August 2020 with Jennifer Anson, Director of the Palau Ministry of Justice’s Human Trafficking Office, for JAPAN Forward.
The Chinese threat has not only military implications: In 2015, Palau saw a Chinese entry by receiving direct charter flights from mainland China, Macau and Hong Kong. Many Chinese “investors” pay large sums of money to acquire land and buildings on 50 to 99 year leases. The possibility of money laundering is undeniable as most of these “investments” have been abandoned.
Cyber crime in Asia and the Pacific Islands
Illegal online gambling operations have also skyrocketed with the influx of Chinese money. In January 2020, law enforcement agencies arrested three different online gambling operations and arrested around 150 Chinese nationals. In June, they arrested, tried and convicted about 60 Chinese people in another operation, and in September, they tampered with another gambling operation at a hotel, and linked Chinese workers to a prominent Palau senator.
The Ministry of Justice has evidence that these operations are still ongoing in several hotels and buildings throughout Palau.
Why is China promoting online gambling operations in Palau when China has banned gambling? Likewise Cambodia, Myanmar, Vanuatu, Philippines, etc. Where law and order are lax, the state becomes a prime target for criminal activity. There are concerns that online gambling could spread to all kinds of cybercrime in a number of countries. Young Chinese men and women, even teenagers, are involved in these crimes and may be victims of human trafficking. These minors have been recruited to Palau from places such as Cambodia, where online gambling is prohibited.
What exactly is cyber crime being committed? In Cambodia, for example, hundreds or even thousands of Chinese people live illegally without work visas. They work in hotel rooms where hundreds of computers connect people from all over the world as participants in virtual currency investments and online gaming. They not only withdraw money for games and investments, but also obtain credit card information from customers and make unauthorized withdrawals.
The Palau National Congress discussed a bill that would amend the existing casino bill and ignore the illegal activities of Chinese cybercriminals in Palau. The President of the Senate and the current Chair of the Council of Delegations, both of whom were re-elected in national elections, have stated that they want to explore online gambling as a way to aid economic recovery in the next government.
While law enforcement authorities struggle every day to catch Chinese cyber criminals, officials protect them. According to various sources, Oilouch’s Vice President and Justice Minister instructed the task force to return all confiscated computers and equipment to Chinese people, and only prosecute Chinese people with labor violations (working without permission), and not prosecute them online. gambling.
The arrests in June this year resulted in confiscation of evidence and a guilty verdict in court. However, this time the Attorney General issued an unusual written advice, stating that the special prosecutor had acted beyond his authority. It was widely rumored that this was another instruction from Justice Minister Oilouch.
The current president, Tommy Remengesau, Jr., also had a hand in his involvement with the Chinese crime syndicate in Palau. Last April, an article appeared in the press with a photo of Wan Kuok Koi, leader of the Macau’s 14K Triad, shaking hands with President Remengesau. The president has signed a letter of approval for the formation of the Palau China Hung-Mun Cultural Association, with the aim of cultural and charitable activities in Palau. The news shocked Chinese experts who knew what the Triads were and their impact on Palau society. INDOPACOM, which has been raising awareness of the importance of Palau’s security, also pays special attention to this issue.
Can INDOPACOM Radar and Casino Triad Coexist?
INDOPACOM chose Angaur Island in Palau as the radar base. Interestingly, Wan Kuok Koi of Macau 14K Triad announced that he will lease Angaur Island for 99 years and develop a large casino resort there. This may sound like a joke, but it is possible that the Triad casino resort and US radar facility should coexist on the island of Angaur.
What is the purpose of building a casino resort on such a desert island? This will likely become a new breeding ground for cyber crime and money laundering. Additionally, several US government officials have pointed out that the infrastructure being developed under the guise of a casino resort could become a future base for the Chinese Liberation Army. China continues to build its military bases on South China Sea, and a similar movement in the Pacific Islands is quite possible.
Young US Attorney Protecting Women and Children, Shot
Drug trafficking is also widespread in Palau, and the Justice Ministry’s Narcotics Enforcement Agency (NEA), with only eight employees, tackles it every day without fear of personal harm. The director of the NEA recently set fire to his vehicle, and last year the boat caught fire.
The NEA also works to protect children from drug and criminal activity by organizing children’s judo classes and the Law Enforcement Explorer Program (LEEP). Unfortunately, the families of Palau’s politicians are also involved in drug crimes. They smuggle methamphetamine or “ice” from China and the Philippines. They give it to the kids on their way home from school for free and it gets them hooked. Then addicted children are forced to engage in prostitution and other crimes in order to obtain cash in exchange for crystal meth.
An Indian reporter who worked in Palau for a local newspaper who reported on the situation disappeared. She had written about the realities of drug syndicates in Palau, and it was I who gave her the information. I advised her that her life was in danger, but she told me, “You’re the third person to warn me,” and went on to tell me about journalists’ social responsibility. He told me that he majored in journalism at university. He also said that people who knew about the drug problem in Palau would not talk about it, and if they did, they would be eliminated. This is the darkness of heaven.
Lawyer Rachel Bergeron, a 33 year old woman and US citizen who tried to save children and women in the darkness of paradise ー Yap Island in the Federated States of Micronesia ー was shot and killed in October 2019 by local islanders. Bergeron is Acting Attorney General Yap.
Author: Rieko Hayakawa, PhD
Find other articles on JAPAN Forward written by Rieko Hayakawa here.