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Revelations of ASIO’s historic warnings regarding Chinese donations to political parties has belatedly prompted bipartisan support for foreign interference laws. By Martin McKenzie-Murray.

Foreign political donations and the promise of interference laws

Sheri Yan (left) leaving the Federal Court in Manhattan in 2016.
Credit: BRYAN SMITH / ZUMA WIRE / ALAMY LIVE NEWS

It was little noted at the time, but the head of ASIO, Duncan Lewis, recently pre-empted this week’s outrage over political donations and Chinese espionage. On May 25, while sitting before the senate committee on legal and constitutional affairs, he said the following in his prefacing remarks: “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.”

No senator questioned him on this. The recent Manchester bombing and coroner’s report on the Lindt cafe siege demanded attention, and Lewis’s grave assessment went unexamined. Until, at least, this week’s Four Corners. It contained a few scoops. The program showed that the Canberra apartment of Roger Uren, a former senior diplomat married to Chinese–American national Sheri Yan, a woman convicted last year of bribing a United Nations official, was raided by intelligence officers in 2015 and classified documents detailing Australia’s knowledge of Chinese espionage were allegedly found. It also revealed that ASIO had warned the leaders of the Liberal, National and Labor parties that two Chinese businessmen, Huang Xiangmo and Dr Chau Chak Wing, from whom the two major parties had received generous donations, were likely proxies for the Chinese Communist Party, though this revelation did nothing to stop the parties accepting money from the men. 

The investigation revived the scandal that cost Labor senator Sam Dastyari a place on the frontbench last year, after it was revealed that, having overspent his travel allowance on a trip to China, he had forwarded the bill for the balance to his Chinese donors. There was greater murk when Chinese media quoted Dastyari as expressing sympathy for China’s claim to the South China Sea, a position at odds with his own party. Dastyari argued it was the result of a “misquote”. This week, it was revealed the senator had made personal overtures to the immigration department on behalf of Xiangmo, who had applied for citizenship.

The implication of the Four Corners story was clear: the Chinese exert considerable influence in Australia, and political donations were one way of attempting to influence our political parties.

 

Chinese espionage has vexed Australian intelligence officers since diplomatic recognition was granted to the People’s Republic of China in 1972. Initially underestimated – the Big Game involved the Soviets, and the first Chinese embassy was a converted motel on the fringes of Canberra – ASIO would soon become frustrated by its inability to grasp the modus operandi of Chinese spy craft. They didn’t seem to operate as the Soviets did, but rather as “an amorphous, omnivorous vacuum cleaner”, in the words of an ASIO officer in the 1980s. The technique is often referred to as “a thousand grains of sand”. Former FBI analyst Paul Moore shared a popular analogy with the author David Wise in Wise’s book Tiger Trap. “If a beach was an espionage target, the Russians would send in a sub, frogmen would steal ashore in the dark of night and with great secrecy collect several buckets of sand,” Moore says. “The US would target the beach with satellites and produce reams of data. The Chinese would send in a thousand tourists, each assigned to collect a single grain of sand. When they returned, they would be asked to shake out their towels. And they would end up knowing more about the sand than anyone else.”

But Chinese influence is exercised more pointedly, too. It can be subtle or overt; can use the levers of trade, diplomacy or the military. In a cable written by the US embassy in Canberra in 2009 – one of the missives included in the massive Chelsea Manning leak – embassy staff wrote the following: “[Department of Foreign Affairs and Trade] First Assistant Secretary for North Asia Graham Fletcher noted that Chinese public and private diplomacy has become more assertive with Australia over the last year. This had led to considerable tension in the relationship as Beijing attempted to intimidate Australia through public criticism, provocative actions such as the June 2009 arrest of Australian Rio Tinto executive Stern Hu and the time-worn tactic of canceling high-level visits. Australia is particularly concerned at the PRC’s increasingly aggressive domestic lobbying, including pulling out the stops to pressure against issuing a visa for Uygur leader Rebiya Kadeer and privately warning a major Australian bank that sponsors the National Press Club to use its influence to block a Kadeer speech there in August. This followed the 2008 mobilization of Chinese students to support the Olympic torch run through Canberra and pressuring Qantas to not show a movie the PRC deemed inappropriate on flights to China during the 2008 Olympics.

“Fletcher said Australia was reasonably satisfied by Chinese embarrassment over the media frenzy surrounding the Kadeer visa and Hu arrest. Australia stuck to its guns while avoiding publicizing the dispute, leading China to reverse course and allow several high level visits in the last quarter of 2009. ‘We’ve learnt we can make them blink,’ Fletcher stated but acknowledged it was only round one. He also noted that Australia remains concerned that cracking down too hard on Chinese lobbying would simply drive it underground.”

 

Roger Uren, the former head of the Office of National Assessments’ (ONA) Asia section, experienced a childhood of exceptional privilege, worldliness and eccentricity – in other words, one perfectly calibrated to produce a diplomat and spy. Born in 1947, Uren grew up in Melbourne in a household of Moral Re-Armament parents. The Moral Re-Armament was a spiritual movement conceived by American minister Frank Buchman as a sort of bulwark against communism – physical armament wasn’t sufficient to defeat the scourge; it required spiritual purity also. The movement preached aggressive asceticism – booze and sexual pleasure were disavowed – and the cerebral young Uren found himself chafing at its intellectual and sensual strictures. In addition to yachting and the pleasures of Evelyn Waugh and P. G. Wodehouse, Uren was fascinated by the stories of the foreign boarders his parents accepted as part of Moral Re-Armament exchanges. The locus of Melbourne’s Moral Re-Armament community was a mansion in Toorak, which accommodated foreign dignitaries and members. The host was an Oxford-educated poet and spy. So while Uren would come to detest Moral Re-Armament’s dogmatism, it would offer him glimpses of more exotic worlds beyond provincial Melbourne. In 1966, he travelled to India – Gandhi’s grandson was a leader in the movement – and bunked with Kim Beazley. From Bombay, he pre-empted his future as a diplomat and posted to his parents lengthy and immodest analyses of Indian culture and politics.

Uren would return and study law at Melbourne University, before abandoning it for Chinese studies. So began a lifelong passion for the country. Burdened by Moral Re-Armament, he would liberate himself enthusiastically, replacing puritanism with “sensual decadence”. He joined the foreign service in 1974, and enjoyed postings in Kuala Lumpur, Beijing and Washington. As a diplomat, he began writing under the pseudonym “John Byron” and it was while he was posted to Australia’s Washington embassy and researching a biography of Mao Zedong’s chief spy, Kang Shen, that he met his future wife, Sheri Yan.

Uren rose through the ranks of the Australian diplomatic corps. President George H. W. Bush sent him an encouraging note about his Shen biography, and by 1992 he was back in Canberra heading the Asian branch of the ONA. The ONA advises the prime minister and cabinet members of the National Security Committee on international political, strategic and economic developments, as well as analysing foreign intelligence.

Uren left public service in 2001 to become the vice-president of a Chinese television broadcaster, but would be considered by then prime minister Kevin Rudd for the Australian ambassadorship to China. By his own account, Uren’s years abroad had yielded a healthy share of stories, erotic art and lofty contacts, and in 2013 his collection of poetry would be launched in Canberra by an old friend – Neil Brown, QC, a minister in the Fraser cabinet and, ironically, the first Australian government to take Chinese espionage seriously.

Two years later, the Canberra apartment Uren shared with his wife was secretly raided. They allegedly found classified documents regarding Australia’s knowledge of Chinese espionage. At almost the same time, Yan was being arrested in New York City for bribing a senior UN official. Yan was convicted and sentenced last year by the US Federal Court in Manhattan to 20 months’ imprisonment. “There is substantial damage done to the UN and the image of the UN itself,” the judge said.

In court, Sheri Yan began to cry. She had come to the US in 1987 with little but $400 sewn into her jacket, and found work as a nanny. In the US, she had met her husband, mysteriously courted political power, and become a naturalised citizen in 2001. She was feted in Australia, too, referred to in the press as the socialite queen of the Chinese community. Husband and wife had enjoyed a prestigious globetrotting life. “I will forever be punishing myself,” she told the court. “I am very, very, very sorry.”

No charges have yet been laid against Roger Uren. He has blamed the US for instigating the ASIO raid – “it’s US prejudice that all Chinese are spies” – and says allegations that his wife was a covert agent for the PRC are “fantasy”.

 

In a world of shadows, there is one aspect that enjoys full sunlight – the preposterousness of allowing foreign political donations. Even in the US, a democracy awash with dubious cash, the practice is outlawed. Naturally, loopholes will be found. Financial influence can be exercised in other ways – trade or investment. But as former US director of national intelligence James Clapper told the National Press Club this week: “It’s hard for me to understand why [foreign donations] serves the interests of democratic institutions when you have … a foreign nation buying influence in the political processes of your country, our country or any?”

The banning of foreign donations is something that now, belatedly, enjoys bipartisan support. In March, a cross-party committee, assembled to review electoral law, recommended that foreign donations be outlawed. An agreement between the two major parties broke down when the government wanted to include activist groups – such as GetUp! – on the list of prohibited donors.

Attorney-General George Brandis has promised the government will introduce new legislation regarding foreign donations during the spring parliamentary sittings. The Four Corners report, and James Clapper’s polite incredulity, might push both sides into agreement this time.

This article was first published in the print edition of The Saturday Paper on Jun 10, 2017 as "Influencer containment". Subscribe here.

Martin McKenzie-Murray
is The Saturday Paper’s chief correspondent.