© 1997 by Fredric Dannen. All Rights Reserved.
Reprinted with permission.
Originally appeared in The New Republic July 14 & 21, 1997
Freelance correspondent, Fredric Dannen, has taken great personal risk to investigate the Triads, and their shocking relationship to the Chinese Communist Party. He has graciously permitted Deep Times to re-print the story, which will run in three parts, on consecutive weeks. The picture Mr. Dannen paints is not a pretty one, and the implications of this relationship for the rest of the world are frightening.
I was interviewing Hong Kong tycoon Albert Yeung in his office on a recent afternoon when he suddenly changed the subject to ask whether I knew that his forebears had come from Chiu Chow, a region in south China famous for breeding tough guys. A Chiu Chow is the Chinese equivalent of a Sicilian. I took the bait, and told Yeung that some people had advised me to stay away from him because he was reputed to be a dangerous man. He did not even try to conceal his delight. "Do I look dangerous to you?" he asked, with a mischievous laugh.
Yeung is the chairman of Emperor Group, a huge Hong Kong consortium involved in real estate, financial services, watches and jewelry, publishing and other businesses. He does not look dangerous. He is 52, a small man, lively, with a boyish face. If he looks anything, it's rich. He wears hand-tailored suits and shirts and A. Testoni shoes that cost as much as $2,000 a pair. He owns a fleet of Rolls-Royces and Mercedes, all with expensive license plates. (Hong Kong businessmen are big on lucky numbers, and coveted plates are auctioned to the highest bidder.) In March 1994, Yeung paid $1.7 million for a plate bearing the single digit "9," which was considered especially lucky because the Cantonese word for nine sounds like the word for dog, and it was the Year of the Dog.
But Yeung's reputation, at least to some, is indeed that of a dangerous man. Emperor is Hong Kong's leading player in the foreign exchange market, and one of Yeung's top currency traders was a man named Michael Lam. In November 1994, Lam went to work for a competitor of Yeung's. On December 9, Lam returned to his old office at Emperor to ask for unpaid salary and bonuses, and was told to meet Yeung that evening at the Mandarin Oriental Hotel. Lam and other eyewitnesses later informed the police that the meeting turned ugly. "You are a bloody guy," Yeung was reported to have told Lam, seething. "You will lose your left leg." Yeung allegedly escorted Lam out of the hotel with his arm around Lam's shoulder--a signal of peace to a group of men surrounding the hotel. "Otherwise," Yeung is said to have warned Lam, "my guys outside will put you in real trouble."
The men surrounding the hotel were believed to be triads, so-named for their membership in Chinese secret triad societies. Triads are the world's largest criminal fraternity, and Hong Kong, with four major triad societies and numerous smaller ones, is home to more ethnic Chinese gangsters than anywhere else on earth. One society, the Sun Yee On, has by itself at least 30,000 members, and possibly 60,000. The low estimate is larger than the Hong Kong Police Force, and the high estimate is equal to nearly one out of every fifty males in Hong Kong. (Women can't be triads, but boys as young as 10 are recruited by all the major societies.) Apart from running the rackets in Hong Kong--illegal gambling and prostitution, for instance--triads are active in legitimate enterprises, such as the property market and public transportation. Meanwhile, their powerful influence is felt worldwide in counterfeiting, arms dealing, alien smuggling and money laundering. Hong Kong is a key transit point for the Southeast Asian heroin and methamphetamine that pour into the United States, and triads play a key role in the drugs' transshipment. Triad societies are more loosely structured than Mafia families; the benefit of membership is solidarity, the ease of finding criminal partners and the threat that one's triad brothers can be called upon to perform acts of violence. And triad violence tends to be gruesome because of a tradition of using a meat cleaver, or "chopper"; the chopping off of one or another limb is a trademark triad method of registering disapproval.
Michael Lam therefore may have had good reason to fear for his leg. As it turned out, he suffered no serious bodily harm, but he told the police that his ordeal continued after he left the hotel. He said he was escorted back to his old office, where he was held captive overnight and forced to kneel and serve tea. To further humiliate him, he claimed, Yeung threatened to order the most junior employee on the premises to slap Lam twice in the face.
The following day, December 11, Lam's new boss tipped off the police, and five eyewitnesses from the hotel and the office, including Lam, were promptly summoned to give statements. The police were already familiar with Albert Yeung. According to press reports, in 1980, Yeung, then a member of the Royal Hong Kong Jockey Club, tried to persuade the victim of an assault by a jockey not to testify and spent six months in jail for attempting to pervert the course of justice. In 1986, he was convicted of illegal bookmaking and given a suspended sentence of six months. In March 1994, former Brooklyn Congressman Stephen J. Solarz was forced to withdraw his bid to become U.S. ambassador to India because he'd had business dealings with Yeung. Solarz protested that he had believed Yeung to be "totally respectable," until the American consul in Hong Kong told him that Yeung was a triad. Solarz says he confirmed this accusation to his satisfaction and immediately severed all ties to Yeung. Yeung denies that he is a triad, or that he is involved in criminal activities, and he attributes the charge to "jealousy" over his success in business.
Three days after Lam went to the police, Yeung was relaxing at a karaoke chib with one of Emperor's business partners, the film star Jackie Chan, when he was arrested by officers from the Organized Crime and Triad Bureau and charged with criminal intimidation and false imprisonment. He went on trial the following May. Lam was the first eyewitness to be called, and he proved useless to the prosecution. He said his heart was beating fast, and added, "I am very frightened. I do not want to give evidence." The next eyewitness, a friend of Lam's who had provided a detailed statement to the police just five months earlier, claimed he could no longer remember the incident--his memory, he said, had been impaired by an anesthetic he'd been given to treat a football injury. After the other three eyewitnesses also complained of memory loss, the judge dismissed the charges, declaring, "I cannot be sure justice has been done." The press was sarcastic. "To have five cases of amnesia in two days is terrible," editorialized the South China Morning Post, Hong Kong's largest English-language daily.
Perhaps the most significant aspect of the entire affair never made it into the press. Earlier this year, I met privately with one of the officers who arrested Yeung, and he explained why the police waited three full days to take action. "That's how long it took for me to get permission to arrest Albert," he told me, in tones of disgust. "In spite of the blatant nature of the offense, the boss wanted to get legal advice first. And when Albert was led away, a police inspector actually uncuffed him. This is the police force we're facing now"--that is, in the days leading up to Hong Kong's return to Chinese sovereignty. Why was Yeung, who had done jail time in the past, accorded such special treatment? This reputed organized-crime figure has become rather tight with the men who run the People's Republic of China and who will, after July 1, gain sovereignty over Hong Kong. Indeed, Yeung's arrest was inconveniently timed--it caused Beijing to hastily cancel a scheduled meeting between Yeung and President Jiang Zemin.
Beijing seems to have forgiven Yeung for that small embarrassment. When I visited Yeung, he handed me Emperor's glossy brochure, which was filled with photographs of himself posing with senior officials of the central Chinese government, some of whom are his business partners. Yeung has been cultivating his relationships with top Chinese government and party officials for years. He recalled to me the propitious time when he began his courtship, shortly after the Tiananmen Square massacre of June 4, 1989: "China is in very bad shape. Nobody wanted to be their friend. But we go there, one of the big tycoon from Hong Kong, and start to make friends with the top people, and invest money there. And they appreciate this." One of those appreciative friends is Xiao Yang, China's minister of justice. In November 1992, Yeung hosted a banquet in the Great Hall of the People in Beijing to celebrate the launch of the first private bank in the history of the People's Republic, which Emperor and a subsidiary of the Ministry of Justice own together. The following June, the ministry became the second-largest stockholder, after Yeung himself, in Emperor International Group, the publicly traded part of Emperor Group; it purchased 84 million shares, representing 4.74 percent of the company's enlarged capital. Yeung told me that when the ministry asked to buy the stock, he broke the news to Hong Kong's Securities and Futures Commission, which had barred him from overseeing his own financial services division because of his criminal record. "They didn't believe it," he said, laughing. Yeung carries his business relationships with the highest officials in the Chinese government as a shield against his doubters. With neatly circular logic, he argues that his influential friendships prove that he is a fit figure with whom to be friends. "If I'm a criminal, if I'm a triad," he asks, triumphantly, "how can they trust me? "
Easily, it turns out. Of all of the treacherous aspects of Hong Kong's reunification with China, the most treacherous--and the least noticed--is that it will seal what amounts to a cooperation pact between the triad societies and the Communist Party. This dreadful alliance, of the world's largest criminal underground and the world's last great totalitarian power, has received surprisingly little attention in this country, even though the U.S. Justice Department has identified triad racketeering as a significant global threat. Even more ominously, this alliance is not accidental. It was part of Deng Xiaoping's reunification plan for Hong Kong from the very beginning, and dates from the early 1980s, when China and Britain were negotiating the return of Hong Kong to the mainland in 1997.
We know this because this past May, Wong Man-fong, the former deputy secretary-general of Xinhua, China's news agency in Hong Kong (which reputedly acts as a de facto embassy), admitted it during a forum at Hong Kong's Baptist University. Wong said that in the early 1980s, at Beijing's behest, he "befriended" Hong Kong's triad bosses and made them an offer they could not refuse: China would turn a blind eye to their illegal activities if they would promise to keep peace after the handover. "I told them that, if they did not disrupt Hong Kong's stability, we would not stop them from making money," Wong said. No one knows why Wong made this astounding disclosure about China's secret dealings with crime bosses, but there is even more to the story than he acknowledged. In the past few years, Hong Kong triads, emboldened by their friendship with the Communist Party, have expanded their illegal activities into China. Today, the four major triad societies of Hong Kong--the Sun Yee On, the 14K, the Wo Shing Wo and the Wo Hop To--have outposts in Beijing, Shanghai, Shenzhen and other mainland cities, and are expanding in size and power at an impressive rate.
The West's apparent blindness to the ramifications of a working alliance between a great power and a great criminal network is striking for its persistence. Deng had been openly hinting at an underworld accord for years. In September 1983 and June 1984, while China was still negotiating with Britain to regain Hong Kong, and again in early October 1984, only days after a handover agreement had been reached, he made remarks about triads at the Great Hall of the People that were surprisingly and pointedly positive. On each occasion, he promised that China would allow Hong Kong to govern itself as long as its administrators were Chinese "patriots" who cherished the mainland; and each time, he spontaneously brought up the subject of the triad societies, whose power in Hong Kong, he pointed out, was "very great." Of course, he said, not all triads were bad. Many of them were good. Many of them, he said, were patriotic.
At the time, a lot of people dismissed this as an old man's mysterious mumbling. Patriotic gangsters? It was true that triads had originated as a nationalist movement, but that was long ago. The first triads, according to legend, were seventeenth-century monks intent on overthrowing the Manchus, who had conquered China in 1644 and established the Qing Dynasty. (To this day, triads lean heavily toward Buddhist mysticism.) By the nineteenth century, however, the Manchus were still in power, and the triad movement had largely degenerated into a criminal underground, based primarily in Hong Kong and Shanghai. The Qing Dynasty was toppled at long last in 1911, when Dr. Sun Yat-sen--himself a triad--and his followers established the Republic of China. In 1927, another triad-turned-political-leader, Chiang Kai-shek, recruited members of his Shanghai triad society, the murderous Green Gang, to put down China's emerging Communist Party; in April of that year, the Green Gang slaughtered Communists by the hundreds. When the Communists finally seized power in 1949, hordes of Shanghai triads fled for their lives to Hong Kong, establishing that territory once and for all as the world headquarters of Chinese organized crime. After that, the triad societies of Hong Kong, with few exceptions, professed allegiance to the Republic of Taiwan and regarded the Communist Party as a bitter ideological enemy. So, in spite of Deng's cryptic comments, Hong Kong savants predicted for years that, by the time China took over Hong Kong, the triads would have fled a Communist crackdown by emigrating to the four corners of the world.
The experts overlooked Deng's pragmatism. One of his best-known sayings was "It doesn't matter if the cat is black or white, as long as it catches mice." He apparently reasoned that the triads were too significant a power in Hong Kong to be ignored, and that their traditional ties to Taiwan made them unpredictable, but that, fortunately, they could be bought. So he bought them: the Sun Yee On, the largest Hong Kong triad society, no longer requires initiates to pledge allegiance to Taiwan; now it is to the People's Republic of China that they swear.
Deng was also a great believer in crony capitalism. (Another of his famous sayings, "To get rich is glorious," sounds a lot less like Communist ideology than it does the triad credo.) Since the early 1980s, a number of government departments have been allowed to invest in private enterprise, with business partners of their choosing, even from outside China. Among the departments that have done so are the Ministry of Justice; the Public Security Bureau, China's national police force; and the People's Liberation Army, China's military. The PLA in particular has pursued Deng's get-rich philosophy with a vengeance--its multibillion-dollar portfolio includes hotels, cellular-phone networks, airlines and pro-basketball teams. It has been widely reported (see "The Betrayal of Hong Kong" by Stan Sesser, TNR, March 10) that Hong Kong's merchant class has invested heavily with mainland officials and cadres as a means of establishing good guanxi--the Mandarin word for "political connections." It is less well known that Hong Kong's gangster class has done the same. DT
Part II: "A Means of Maintaining Social Order"