The Triads and the Tong
Triads have creamed off billions of dollars from infrastructure projects in the 1990s. The government has launched a high-profile crackdown. Corporate Taiwan will be more impressed when corrupt high-level legislators start going to jail.The phone call woke Regis Chen at 2 a.m. Chen, the chairman of Taiwan's state-owned BES Engineering Corp., drowsily heard a monotone voice on the line. "Mr. Chen? It's time you bought coffins for yourself, your wife and your children. We offer the best coffins in Taiwan. Would you like to see them?" Jolted awake, the businessman yelled: "Who are you?" The line clicked dead. Chen had few doubts about why he was being menaced that January 1994 morning. BES was bidding to build a $4 billion freeway in Hsipin, northern Taiwan. Its main rival was Chun Kuo Group, owned by Chen Ti-kuo, a politically connected tycoon known to be affiliated with the United Bamboo triad, Taiwan's largest and most feared secret society. Chun Kuo wanted to make an unchallenged bid for the project, and thus set its own high price. But Regis Chen, a stubborn man with Buddhist ideals, wouldn't make way. "I refused to cooperate," he says. "Who pays [for inflated bids]? The country pays. So do the people."
His stand led to an 18-month blitz of intimidation. Only the day before the phone threat, a muscular young man had strutted into his office without an appointment. "A certain gang doesn't like you, Mr. Chen," snarled the tough. "They know your habits, your routines, where your wife works, where your children go to school. We can take care of all of you in 15 minutes." Chen was forced to engage private bodyguards round the clock, and a couple of times sought police protection. He was especially distraught when he discovered that his subordinates were secretly cooperating with Chun Kuo. Chen eventually decided he was fighting a war he couldn't win and quit BES Engineering in July 1995. Without any rival bids to contend with, Chun Kuo was awarded the freeway contract. Yet Chen Ti-kuo's victory was to prove his undoing. Parts of a tunnel on the Hsipin expressway collapsed in January 1996, leading to a government investigation into allegations that Chun Kuo had skimped on construction costs and bribed government officials. Chen was extradited in November from Singapore, where he had fled, and now is in jail.
Chen Ti-kuo's arrest was part of a high-profile campaign code-named Operation Chih Ping (Operation Clean Sweep) that authorities launched last August to flush out organized crime. Within a few months, the screws were tightened further with the passing of an Organized Crime Prevention Statute and an Anti-Hooligan Law. At stake, says Minister of Justice Liao Cheng-hao, is Taiwan's political and economic future: "Our goal is to destroy the organized criminals. We must succeed. If we don't, Taiwan will have no hope." The United Bamboo is scuttling for cover, with many of its foot-soldiers either arrested or giving themselves up to police and its leaders in hiding in China, Hong Kong and Macau. Zhang An-lo (aka White Wolf), honorary godfather of the triad, lambasts the government's campaign. "These brothers may not use conventional or legal methods in the construction industry," Zhang admitted in an exclusive interview with Asia, Inc. in a five-star hotel suite in China. "But politicians involved in construction also rig bids. So why sweep the brothers out?". Battle lines have been drawn. On one side is the Kuomintang (KMT), which has ruled Taiwan since Generalissimo Chiang Kai-shek's army fled there from mainland China in 1949. It is trying to discard its short, mainly shabby history in the island state and reinvent itself under President Lee Teng-hui as a model democratic party. On the other side are secret societies that have grown from often-honourable roots into parasitical billion-dollar empires. To many of the KMT's critics, however, the anti-gang crackdown is purely cosmetic. The ruling party, they say, is too heavily indebted to the triads -- and has too many of them in its own ranks. Until recently, it needed them to mobilize votes. In return, the secret societies grew rich from gambling, loan-sharking and prostitution.
Even more lucrative were the rake-offs from infrastructure projects, where the web of political and business corruption is spun most thickly. United Bamboo's Zhang, who left Taiwan last December, alleges that politicians and construction conglomerates were rigging bids on public-works projects long before triads came on the scene, adding: "They're sweeping out the brothers while covering up their own crimes." According to some estimates, Taiwan's triads and crooked officials and politicians together have siphoned off $26 billion in the past six years from public-works projects, around 30 percent of $87 billion spent by the government. Awash with cash, the secret societies have barged into other areas of Taiwan's business life. Last year, gunfire was exchanged by rival gangsters at a shareholders' meeting of Taiwan Pineapple Group, a major canned-food producer. Some companies also use triads to arbitrate disputes, rather than depend on a slow judicial process. As a result, the rule of triads has become almost as powerful as the rule of law in corporate Taiwan. In the construction industry, businessmen not prepared to pay kickbacks lose out on contracts, or they end up working as subcontractors on thin margins. Sometimes, with public-works projects, so little money is left that quality and safety standards are seriously compromised.
Paul Kung, vice president of Pacific Construction, Taiwan's largest private-sector builder, says his company was regularly nudged out of the bidding for public-works projects by rivals controlled by the United Bamboo. "Our principle now is that if we believe the triads are involved, we don't want to be involved," says Kung. "We don't see this as a difficult principle, but as the right principle. We'd rather not be involved than cooperate with the triads." While Kung welcomes Operation Chih Ping, others point out that the dragnet has failed to trawl in any national legislators with suspected underworld ties. Yet even by the government's own conservative estimates, 10 percent of the members of the national legislature have criminal links. (That figure rises to 20 percent for provincial legislators and up to 33 percent for all elected officials at county level). Lin Kuo-tung, the deputy commissioner of criminal investigation at the Bureau of Taiwan's National Police Administration, insists that nobody is being protected. His message to the triads: "We don't care what background you have, whether you're a KMT member or what -- if you've got a criminal background and we have evidence of it, we'll arrest you." Corruption has been especially rampant at the county level, where ge tous have ruled with an iron fist. Particularly notorious was Cheng Tai-chi, council speaker for Pingtung county in southern Taiwan. Cheng and another councillor, Huang Ching-ping, shot dead a rival gangster. The pair were convicted in 1995, and are on Death Row awaiting the result of an appeal.
Before the murder, Cheng had terrorized Pingtung county with his "baseball" team, a group of bat-wielding thugs who attacked anybody who irked their paymaster. When police began to investigate a drug factory owned by Cheng, according to sources, he ordered the local police chief to his office and struck him in the face. Taoyuan County Commissioner Liu Pang-you, though not a triad member, was equally rapacious, according to underworld sources, demanding a 5 percent kickback on all projects in his prosperous bailiwick. Along the way, he made some murderous enemies. At 8:20 a.m. last Nov. 21, two masked gunmen broke into Liu's mansion. They blindfolded Liu, three guests and five members of his household, tied their hands behind their backs and shot them. Only one survived.
|Triads are secret societies and are
declared unlawful under the Laws of Hong Kong. The history of Triad
Societies goes back to 1674 when secret societies were formed for
patriotic reasons to overthrow the Manchurians. With the passage of
time, they turned into criminal groups. The word 'Triad' is an English
designation for the sacred symbol of the societies, a triangle enclosing
a secret sign derived from the Chinese character HUNG. The resulting
symbol represents the triangular union of heaven, earth and man. The
character Hung can also be translated into the English word RED. The
first secret societies or 'Triads' were known as the HUNG MUN (Hung
Association) or Hung Sect. These secret societies have also been known
as the Heaven and Earth Association or Sam Hop Wui and, more commonly,
the Black Society Association or Hak She Wui. This latter term is now
generally used to describe all Triads, and represents the public feeling
that Triads are sinister and evil rather than a mystic brotherhood. As a
result of distortion and of exaggerated reporting by the media as well
as sensational stories featured in movies, there are many myths about
what Triads are and how they operate in Hong Kong.
During Mao Tse Tung's era, there was no organized crime problem, because society was largely controlled by the Communist party. Actually in 1964, China officially announced that they had no problem with sexually transmitted diseases. This means that they had no problem with prostitution. Also, they said they had no drug addiction problems. It also meant that they had no drug related problems. Why? Because under Mao's rule, people in the cities were put in a 'dan wai' (work unit) and in the rural areas, they were put in communes. So you just stayed there and you could not move freely, unless you got permission, everything was supplied by the 'dan wai' or the commune. Money was not important. If you wanted to buy something, you needed to have coupons. If you wanted to go to some other unit, you had to ask your superior's permission. So if you wanted to commit a crime, you had no chance to do it. Even if you did, it would be hard for you to escape, because you were under the control of your 'dan wai' or commune.
The Communist party was in control of government and had a strong belief in society as a great civil society and during the Cultural Revolution, even the family system was destroyed. So it was very hard for organized crime or any crime to develop. In this case, because crime was not taken seriously, and there was actually, very little of it in communist China, the police force was not professional at all. I can tell you that before 1992, the police force in China, had 1.2 million police officers with no ranking system. They had no superintendent, inspector or any of these things. So you can see that they were not professional and they didn't need a professional force.
Things changed in 1978 when Deng came to power and implemented his reforms. If you go to China now and go out onto the streets you will find a lot of interesting things. On a street advertising poster, it advertises medical services for treating sexually transmitted diseases. It means that now, they have this problem. Why has organized crime been revived in 'Deng's' China? The reason is because Deng implemented dramatic reforms changing the economy from a planned economy to a market economy. It means that now China has a lot more money and you can go and buy goods. Money is getting more and more important. People can go around without restrictions. And they can communicate with other people. Also, the amount of private properties is increasing and a lot of Chinese and foreign investors come to China. That's why criminals have appeared there.
A lot of workers who come from other provinces in China have now moved to the Guang dong area, and the situation is quite bad. Actually not too many people can get a job, so if people run out of money, they stay in that area and are stationed there. The development of organized crime in the area in the last ten years, can be roughly divided into three categories. The first is in the 1980s, when most crime is localized. The second is starting from 1985, when there is more inter-provincial crime. Criminals are now moving around to commit crimes. The third is from 1990 to the present where more inter-regional and transnational crime criminals are also involved in Hong Kong, Macau and China or overseas communities. Some examples of localized organized crime in the early 1980s are the 'lau man' in China, well in Western society they are similar to bandits. Actually they are called street gangs in HK or in Western society they are thought of as a group of young people that create public disorders, eat in restaurants without paying as well as other such things. If some families have connections to local government officials or police, they become powerful and become local tyrants, the so called 'ngo ba'. They run underground casinos, loan-sharking businesses and victimize local people. Also, they have bandit gangs in rural China. Actually most of those are farmers and peasants, they find it hard to get rich, so they go to the railway or the road seeking opportunities.
In the case of inter-provincial organized crime, in the last 10 years it has become a very large criminal organization in China as they move around the country. After committing such crimes as stealing money or obtaining stolen properties, they then move on to other provinces. In China they call these groups the mobile criminal gangs, or the 'lau shu fan tsui'. Furthermore in China there is an anti-violence net installed in the taxis. They also have a sign mentioning that the front seat is for children and women only. If you are a man, you cannot sit in the front. Why? Because there are a lot of robberies. Why? You can ask, there are also taxi robberies in Hong Kong, although the number is not very large and the robbers are only interested in stealing money from the taxi drivers. But in China, they kill the taxi driver. That is because they are not only interested in the money, but they are also interested in the car. They will kill you and then steal your car and get big money for it. If they don't kill you, you could report them to the police and they will be in trouble.
In the last ten years, a lot of highways have been built in China. One of them is the one from Shenzhen to Canton and another one is from Shenzhen to Santau. A lot of lorries and coaches have been robbed by criminal gangs on these highways. They use all means to stop you and then they rob you clean. And so something interesting is happening here. Some of the coaches from Shenzhen to Canton, have been robbed frequently, so now if you take the coach and if you are a resident of Shenzhen, when you sit down, the staff will come and take down your Will. And then just in case something happens, they will check against their records for you.
The abduction of women. Why do they abduct women? For prostitution? Wrong! Marriage. They abduct women and then sell them to local farmers. Why do farmers or peasants want to buy wives? The first thing is that if you want to get a wife through the formal channels, you would have to pay HKD $8000. But if you bought one through the black market, it would only cost you HKD $3000. The second thing, is that even if you wanted to get a wife through the formal channels, in some places in China there is no electricity, no water, and the girls now want to go to big cities, like Hong Kong and Shenzhen. They don't want to go to rural areas and be a farmer's wife. So if you want to get a wife, it's hard to get one through the formal channels. In some rural areas, there are rich old men, bachelors, they call them 'kwan tsuen'. So in their middle age, they make a decision to save money to buy girls from the outside through human smugglers. The smugglers will abduct the girls, mainly at the railway stations. Because most of the girls who would like to get a job in the city, are from rural areas, they hang around the railway stations waiting for jobs such as factory work. The smugglers abduct them by telling them that they can get them jobs in factories and then they transport them to rural areas and sell them. But you can ask, why don't they escape? The point is that the victims, most of them from rural areas, have left their home town for the first time in their life. They are usually sold in a very remote area. The girl doesn't know where she is, she has no money, and she doesn't know how to manage. We say that this is a very evil business, right? But in some cases, when the girls get married, their husbands do not treat them badly. Maybe some of them are treated very nicely, so they just settle down there. That's the problem. Some police officers go and question the girls and ask them if they want to leave. They say, no, I don't want to leave, because I have got a husband and also sons or daughters as well.
Prostitutes. The Chinese government in the past always avoided this problem. But in 1977, 1978, they officially admitted that they had a problem with prostitution. The figure is 420,000. They have girls from different provinces, they have even got girls from Vietnam. If you like the girl, you can buy her out and do what you want. It's some sort of human market.
Then there are the nightclubs or karaoke's. If you go to these clubs or karaoke's, outside there is usually a large group of pretty girls waiting around, if you get inside, you can ask the leader, 'mamasan', or the 'mother' for one of the girls. There are too many girls who want to get rich through this business. The other thing to know is that the pimp (the Triads call him the middle-chicken) is not well regarded. If prostitutes are controlled by a pimp, it suggests that the girls are forced into this business. The Chinese Government severely punish pimps. Why? In Hong Kong, they'd say, so I live off the prostitutes, so what? Are you going to put me in jail? That's it. But in China, if you are on the organizing side of this business, especially if you are forcing the girls into prostitution, you will be seriously penalized. The reason is that you are insulting their socialist ideology. That is you are exploiting pure working class girls. That's why in the past, there were very few so-called chick-heads who would enter this sort of business and all did so on a voluntary basis.
In China, it is very hard for printing companies to get licenses. The other thing is, that if the Government ever found out that you were producing pornography, there would be a very heavy penalty. But also in China, there is a big market, a lot of men, you know, want to read pornography. Where can they get it? All or most of them come from Hong Kong. That's why, when you finish reading your pornographic material, don't waste it. There is a large second hand market in China. In Sham Shui Po, some people use containers to collect all second hand pornography and they ship it back to China to sell them. In China, if you buy pornography, that's fine, there is no problem. Even if you sell it second hand from HK, you would usually ask a kid in Shenzhen, they have a lot of pornography there, to sell it on your behalf. If the police question him, he would just say, I am only a kid. So there is a black market in second hand pornography in China. But still, there is no locally produced pornography in China.
So the third case is inter-regional and trans-national crime. If your car was stolen, in a few hours time, it would be in China. This was a very professional and serious crime. Also in 1990 up to 1991, Hong Kong suffered a lot from armed robberies, especially gold shops. This was a joint venture where HK criminals arranged for criminals from China to come over the border to HK, commit the robbery and then go back to China.
Drug-trafficking. This is the golden triangle, the triangle between Burma, Thailand and Laos. Traditionally, the drug trafficker went to northern Thailand, instead of Bangkok to obtain heroin, and then ship it back to HK for local use or as a point to ship it out. This was the traditional way. But in the last ten years, we've found that half of the heroin now is up to the 70s or 80s. They go back to Yuennan or GuangXi and then from Yuennan, we call it Asia Miami, just like the drugs from South America to North America and then from Yuennan to Guangdong. Then Hong Kong smugglers come to buy it Guangdong where it goes anywhere, sometimes, to Shani. Recently, drug traffickers have come to use indirect routes, maybe they'll go to Lan Chow and then come to Shan Hi and Guangdong. But now, if a Hong Kong criminal wants to make money from drugs, they have to go to China, make a connection and then get the drugs.
In some of the small towns near Burma, a lot of Chinese are not interested in farming. They just want to smuggle drugs. So now you will find that some people are very rich near the border and live in very big houses. That's because they are involved in drug trafficking. China used to be a drug free country but now it's a drug consuming country. China also deals in soft drugs such as amphetamines as there are the raw materials for production in China. So some Hong Kong and Taiwanese criminals, arrange for soft drugs namely amphetamines to be made in China.
Hong Kong Triads have concentrated on the Chinese market. In China they can make money, that is if they don't get arrested. How does the Chinese government deal with organized crime? Just one way: killing.
White Wolf Zhang says the clock can't be turned back. "Many brothers are now in the stock, finance and construction industries," says the honorary godfather, who holds five bachelor's degrees, three from American universities and two earned while he served a 10-year sentence at the U.S. federal penitentiary at Fort Leavenworth, Kansas, for conspiring to buy heroin. "Many are now doing legitimate business. Where do you want them to go back to? To prostitution, to gambling and to numbers rackets?"
The United Bamboo was founded 40 years ago by a handful of teen-aged sons of senior officers in Chiang Kai-shek's KMT army who had encamped in Taiwan rather than be crushed by Mao Zedong's advancing Communists. Disenchanted by the humiliation of their fathers, the young rebels joined forces to fight other gangs along Bamboo Forest Road on the outskirts of Taipei. During martial law imposed by President Chiang Kai-shek, and continued by his son Chiang Ching-kuo, the United Bamboo faced little official trouble as it branched into gambling dens and loan-sharking. A one-time leader, Chen Chi-li (aka Dry Duck), socialized with the sons of Chiang Ching-kuo, and earned the triad international infamy when he assassinated Taiwanese dissident Henry Liu in San Francisco in 1984. Underworld sources say Chen was trying to curry favour with the KMT and Taiwan's intelligence services and was not on United Bamboo business. As the United Bamboo moved into construction projects in the 1990s, the sight of its foot-soldiers in their signature outfit of black suit, white shirt, black tie and sunglasses was enough to scare off many legitimate builders. At its peak in the early 1980s, United Bamboo had up to 40,000 members in Taiwan, but intermittent police crackdowns have cut the numbers to 10,000. Overseas cells operate in the U.S., Canada, Australia and Europe, and throughout Asia.
Unlike Japan's yakuza or Italy's Mafia, the United Bamboo does not have a strict rank-and-file. Twenty-four tongs are each led by a da ge or "big brother," with membership comprising gangland enforcers and individual businessmen. "In Taiwan, brothers may be businessmen," says Zhang. "Businessmen may be brothers." Many went to the same schools, learned from the same martial arts master, and ended up marrying each other's sisters. Mutual benefits and obligations underpin these relationships. Brothers and businessmen may or may not do business with each other but they turn to each other in times of crisis. All pay homage to Zhang, who was "recognized" by Taiwan's triads as their "opinion leader" in 1995. In fact, he is held in such esteem that businessmen ask him to help settle disputes. To show their respect, many restaurants in Taichung in central Taiwan and in Taipei serve whiskies named "Dances with Wolves" and "Wolf Legend." With his Italian silk-cut suits and ties, Zhang, 48, oozes sophisticated charm, switching between Chinese and English with an easy fluency. Only his business card suggests anything out of the ordinary: The silhouette of a wolf accompanies the legend "Wolf Zhang, president." President not of United Bamboo, that is, but of the Taiwan-based Strategy Group, an investment company with many ventures, including one in construction.
Before he left Taiwan, White Wolf was a popular figure on TV talk shows and in newspapers and magazines, acting as an advocate for all of Taiwan's secret societies. Now, under the Anti-Hooligan Law passed last December, anyone who is a member of a so-called hai dao bang pai (black society) can be arrested. "You shouldn't say that just because I'm a brother, I'm a criminal," says Zhang. "If I didn't commit a crime, I'm not a criminal." Secret societies have been a tradition in Chinese culture for thousands of years, Zhang says, and Taiwan will never succeed in wiping them out. Neighbourhoods are kept clean of petty crime, he continues, with violence meted out selectively, to deserving targets and not to ordinary members of the public. Nor will he accept that Taiwan's triads can be compared to the Mafia as it operates in the U.S. or Italy. For a start, they do not deal in drugs, the godfather says, insisting that he was innocent of the heroin charges that landed him in jail. Zhang's associates say he was targeted by Taiwanese intelligence agents, aided by the U.S. Federal Bureau of Investigation, for forcing the KMT to admit its role in the slaying of Henry Liu.
"Yes, secret societies have been a part of Chinese history," says Taiwan's popular Minister of State Ma Ying-jeou. "They have their own justice. But that type of justice is part of an agricultural society. We are an industrial, commercial society today. You can't take justice into your own hands. The days of Robin Hood are over."
Taiwan's secret societies, according to Zhang, now are being made scapegoats by President Lee, though he had relied on them to help him to power in 1987 on Chiang Ching-kuo's death. Chao Yung-mau, a professor of political science at the National Taiwan University, agrees that Lee initially was indebted to the triads, but says he needed such allies when he inherited a party still dominated by the sons of mainlanders. Lee, an indigenous Taiwanese, like 85 percent of the population of 21 million, swept away much of the Chiangs' repressive state apparatus and purged many family loyalists as part of a reform process that led to multi-party democracy. However, the KMT was more practiced in avoiding or rigging elections than it was in commanding popular support. To stave off a mounting challenge from the newly formed Democratic Progressive Party, the KMT enlisted bosses of indigenous Taiwanese triads (known as ge tous) who through bribery and intimidation could deliver the votes at precinct level.
In exchange for the allegiance of the secret societies, underworld sources say, Lee allowed them to get rich off public-works projects and land rezoning with much of the money recycled back to corrupt officials and politicians. But the United Bamboo itself started to become a political force, according to Zhang, rallying opposition to Lee's supposed backsliding on the once-hallowed goal of unification with the mainland. The attitude of KMT politicians was, he claims: "You can help me get elected. But if you run for elections, I don't like that." Until the government's anti-triad campaign, Zhang himself had been urged by his followers to run for Taiwan's legislature. Joe Motheral, vice president of Parsons Overseas Co., a U.S.-based engineering consultancy with annual revenue worldwide of $1.5 billion, says corruption was much less of a problem when he arrived in Taiwan 16 years ago. "I thought the business environment was good then," says Motheral, who was involved in building the North-South Freeway, Taiwan's biggest road project of the time. Although he lauds Taiwan's shift to democracy, he says ruefully: "Decision-making was probably more clear with an authoritarian government."
Minister of State Ma admits that many politicians take money from tainted sources. "I believe in any democratic country you can't separate money and politics," he says. "If you want to be elected you need money." So much money is required to win public office that candidates are financially obligated to their backers. "They get elected and as a result they have IOUs," he says. "Not every elected official is this way. We have many good elected officials. Our goal is to sift out the bad elements." Many voters came to expect hundreds of dollars, as well as being wined and dined, for casting their vote for the "right" candidate, who usually (though not always) stood on the KMT ticket. Triads soon padded their bank accounts from the commissions they received for distributing the largesse and mobilizing the vote, earning up to $4 million per county per election. By the early 1990s, many triad leaders were keen to run for election themselves. The reasons were obvious. According to Justice Minister Liao, "buying" a county commissioner's seat sometimes generates better returns than playing the stock market. To win such a seat often requires giving away a lot of cash, sometimes up to $12 million, but the returns can be threefold.
Once a commissioner takes office, he and his backers can dole out infrastructure contracts at any price they like, in return for big inducements. An even more lucrative avenue is land rezoning. For instance, one ping (3.3 square meters) of industrial or mixed-use land in rural Taiwan could rise in value from $370 to $3,700 if re-labelled for residential development. In Taipei, land values could skyrocket from $111/ping to $15,000/ping on rezoning. Justice Minister Liao says he is determined to crack down on vote buying. "Most voters have no notion that getting NT$500 or NT$1,000 is wrong," he says with frustration in his spacious guest room in the Ministry of Justice in Taipei. "We tried to arrest many voters. Now we realize we must catch the offending political candidates. We must seize their assets." Asia, Inc. has learned that all PLA business in Shanghai, both over and under-the-table, is controlled by the Guard Army of Shanghai Garrison Headquarters (Shanghai Kan Shou Jingbei Si Ling Bu), headed by Senior Colonel Gu Siren. His men control the wholly owned PLA clubs as well as the joint venture operations and collect rent from every vice operation in the city. The only other military group believed to share in the vice income is the well-connected Nanjing Military District Office, which reportedly collects commissions on under-the-table arms shipments and goods smuggled in and out of Shanghai ports.
Shanghai's corruption problem stems in part from Beijing's directive that government agencies should become more financially self-sufficient. An aide to Colonel Gu readily confirmed in a phone interview that the PLA owns Shanghai clubs, restaurants and other commercial ventures. "Of course we earn a lot of money," he said. "With this money we can treat the army better." The PLA's myriad commercial enterprises from publishing to manufacturing to organizing exhibitions added some $ 27 billion to its $ 57 billion 1993 budget, according to John Frankenstein, senior lecturer at Hong Kong University and author of a recent study on Chinese defence production. He believes the PLA splits its profits between commercial ventures, infrastructure upgrades, offshore investments and the purchase of high-tech hardware. Says Frankenstein: "They've realized since the Gulf War that they need to upgrade their technology. And the budget allocated to them by the government isn't enough to cover the purchases they're looking at." The military's costly shopping list, and the desperation of the less-entrepreneurial PSB, means any profitable business is good business. And karaoke brothels are great business customers consistently drop from $ 5,000 to upwards of $ 25,000 a night for whisky, women and watermelon.
The PSB concentrates mainly on small and medium-sized brothels, opening them in obscure locations ranging from the Shanghai Province No. 9 Shop of 100 Things to the Public Security Reporting Station on Yanan Road. They've opened just two exclusive brothels, the Moon Club and the Huashan Bao Mi. The PLA and the city government, on the other hand, operate at the high end of the price scale. They prefer joint-venture partnerships with Hong Kong's Sun Yee On triad and Taiwan's Four Seas and Bamboo Gang triads. While the PLA plays an active role in providing management and security, the PSB tends to favour so-called "flip over" companies. For these, the city government donates the land, "flips over," or transfers, its privileges and claims half the revenue. "Joint ventures allow the PLA and the state to make money in clubs they couldn't possibly afford to build. At the same time, it makes them feel in control of vice operations," notes the diplomatic source. "What do the triads get out of it? Well, a relationship with the forces that control Shanghai. And a foothold within the People's Republic before China takes over Hong Kong in 1997, with a chance to recruit members from the police and party cadre ranks." The Sun Yee On has set up a number of nightclubs with the PLA on the stretch of Yanan Road approaching Hongqiao Airport; on Beijing Road in the area of the Portman Shangri-La Hotel and on Nanjing Road near People's Park. Taiwanese triads have so far confined themselves to the "Taiwan ghetto" area of Siping Road in Hongkou. Siping Road's rebirth as a dodgy area is credited to the Taiwan-based Bamboo Gang.
A door pass to the Ming Ren (Famous People) brothel at 240 Beijing Road, ensuring nothing more than entry, costs 5,000 to 10,000 renminbi ($ 865-$ 1,725) depending on your guanxi. As its name brazenly implies, the Ming Ren caters to high-ranking cadres. One of the few non-party officials to have gained access to the club laughingly describes its non-egalitarian nature: "You enter the Ming Ren foyer, and in front of you is a very heavy door. In front of that is a beautiful hostess at a desk and on either side, guards wearing pith helmets with feathers in them. The few people you see outside the private rooms look at you in this conspiratorial way. The exclusivity makes them feel special, and that feeling is addictive. They think they can control it (vice), but it's going to end up controlling them." The ge ti hu (small businessmen) running independent bars and restaurants claim that financial squeezing by the PSB, PLA and triads have them coughing up 40 to 60 percent of their profits. Tom Yang, owner of Tom's Famous Grouse Bar behind the Hilton Hotel, complains that aside from their monthly kickback, the PSB now arbitrarily issues fines. "They'll come and say, 'Oh, your light is too dim today, needs to be very bright, 50 renminbi fine,' " he grumbles. "The next day they say, 'Oh, your light too bright today, 75 renminbi fine.' They can't be satisfied anymore." Tommi Chan, manager of the Galaxy Entertainment Club, says he's getting it from all sides. Chan and seven other people, including disc jockey Ali Wong, were brought over from Hong Kong last year to staff the $ 2 million club. Chan says the PSB is a partner in the club. But although the police still collect their share of the profits, they stopped giving the club protection after being paid off by wealthy Hong Kong gangsters, who took a liking to it. Without protection, the club is up for grabs.
Says Chan: "We have a big security problem. Local (Chinese) street gangs come and ask for a discount, free drinks and threaten trouble. Then the Taiwanese gangs come and say, 'Hey, you have trouble, pay us to fix it.' " Now, Wong adds, pacing angrily about and stamping his silver-tipped boots, the PLA wants money to ignore the prostitutes who come in. "And recently I see the same triad gangs I saw in Hong Kong. They come in with choppers and guns and act the way they do in the clubs they control in Kowloon. They're the most scary." The bartender at another PSB joint-venture nightclub concurs. "Chinese gangs are dangerous, but most trouble is coming from outside (Hong Kong and Taiwan) gangs," he explains. "The rule is, anyone who is not your partner is probably going to give you trouble because everyone is trying to expand their area of control. So you would be foolish to open a club without PSB, PLA, city government or a strong gang as a partner." Foolish and, according to some Shanghai sources, needlessly moralistic. "Really, it's a knee-jerk Western reaction to gasp in horror at the whole thing, " complains a long-time Western resident of Shanghai. "First, kickbacks are a part of life in China. Second, if you're going to have vice, who better to run and control it than the police? This allows the government to monitor triads moving into China."
But others hold that the triads control the mainlanders, blinding them with cash. One notable example occurred in 1991, when the Hong Kong film industry's triad-controlled sector raised millions of dollars for victims of China's floods. "Taking the money to Beijing gave triads a heaven-sent opportunity to make guanxi," says a Hong Kong-based intelligence source. In a startling admission at a Beijing conference last April, Public Security Minister Tao Siju revealed that a Hong Kong triad group "dispatched 800 of its members to guard our state leader against danger," a reference to an unidentified top cadre's overseas trip. The revelation that Siju met repeatedly with key Sun Yee On members in China last year followed by his startling comments about Beijing's willingness to work with Hong Kong-based "patriotic triads" struck fear in those who expect criminal societies to gain in power after 1997. "At this point I'm sure there are top people in each branch of the (Hong Kong) government tied to triads," observes the intelligence source. Such social deterioration in Shanghai, however, means that China once again risks alienating the city's poor and the intelligentsia. Our diplomatic source suggests that growing vice and corruption put the working classes in a 1989 state of mind: "It's the same sort of anger and frustration that fed Tiananmen. Continuing corruption could lead to an economic situation that would lead to a people's rebellion that could cause a central crackdown."
In a recent essay in The Economist, Singapore Senior Minister Lee Kuan Yew predicted a time could come when "freer economic and social conditions in the coastal provinces" could cause "much disorder." The result could be a political reaction, in which "Beijing reasserted its central authority and conducted a blitz." The current Shanghai situation, echoes the diplomat, puts Beijing's hard-liners, who have blamed corruption in China on triad infiltration and entrepreneurship within the party and police, in a 1949 state of mind: "If Deng were to pass away, and a hard-liner someone who feels the principles of socialism are being betrayed were to establish a power base, then yes, I think the city would become the focal point of reform policy. Shanghai could become an example again."
The traditional structure of a Triad Society is very well organized. When they first formed 300 years ago, it was for political motives with the ultimate aim of overthrowing the government of the time. In modern terms, they can be described as guerrillas or terrorists. The present day structure of Triad Society is a more simplified version of that which formerly existed and this modified version is now common to the majority of the societies today. The three principal officials in a Triad Society are the Chairman, Treasurer and the individual group leaders. Today's Triad office bearers will normally all be of the 'Red Pole' (426) rank, other ranks of office bearer status having fallen into disuse. The Chairman is often elected at an annual or bi-annual meeting and may be any office bearer of '426' rank or above. Usually the most influential office bearer with the largest group of followers or the most wealthy, will be successful. The Treasurer will also be elected at the same meeting and can also be an office bearer. This position is often of equal importance to that of the Chairman. In most Triad societies, the Chairman and Treasurer are also the same person. At present, there are over 50 known Triad societies in Hong Kong, of which 15 to 20 of them regularly come to the attention of the Police by their involvement in crime. This of course does not mean that the remaining societies whose names do not surface frequently are inactive, but possibly only that their activities go unreported for a variety of reasons. The clandestine nature of the Triad movement precludes an accurate assessment of the total number of Triad members and society membership ranges in size by considerable degrees.
Triad societies are in fact a collection of loose-knit groups or gangs rather than a monolithic criminal organization, such as the Mafia and Boryokudan whose power is diffused from a central core through an organized chain of command. The table below gives a comparison between the Triads and the Mafia. Despite the fact that today's Triad members do not belong to one gigantic organization, some of them however, continue to use Triad jargon, rank structure etc. This convinces a new recruit that he has indeed joined an awesome elite and this is used to instil fear into members of the public. Triad groups are horizontal organizations, a network of criminals who co-operate in criminal activities based on personal introductions and mutual interests. Triad leaders do not usually direct or become directly involved in the criminal activities of their gang members, nor do they dictate to their members what criminal activities they should or should not get involved in. However, there is some difficulty in separating reality from the media myth.
The best description about Triads was illustrated by the testimony of a Hong Kong villain before a US Congressional Hearing on Asian Organized Crime. He said;
"Triad members do favours for each other, protect each other, provide introductions and assistance to each other, and engage in criminal schemes with one another, but Triads generally do not have the kind of strictly disciplined organizational structure that some other criminal groups have. For example, a Triad member would not necessarily be required to get permission from the head of his particular Triad in order to engage in a particular criminal undertaking, even if this particular deal involved an outsider or even a member of another Triad".Most Triad societies are really just fraternities. Within a particular Triad fraternity there are several gangs that are usually dominated by a particular individual and are often territorially based. The leader will not generally derive any share of the profits from his members' activities. His role is to provide an environment where crime can flourish and to mediate in disputes. It is not unusual for the different Triad groups, both in Hong Kong and overseas, to work together where there is a specific opportunity to make money. However, it is important to understand that there is no international Triad network or centralized control over cross-border Triad activities. Triad membership is merely a 'lubricant' which facilitates personal contacts and co-operation between different Triad groups or individuals. Romanticized legends and the patriotic aims of old secret societies in ancient China are far removed from the present day realities in Hong Kong. Triads are cowardly thugs who prey on the weak, the innocent and the foolish. By using the reputation of the old-style Triad societies and by spreading the myth of one invisible, indivisible and all powerful organization, Triad gangs know that they can instil fear into their victims. This reduces the chance of resistance, avid retaliation and terrifies them into silence.
Triad recruitment of students remains a problem, however, there is no indication of an organized Triad campaign to enter schools for recruitment, and most recruitment of students probably occurs outside schools. In recent years, the more sophisticated Triad members, referred to as second-generation Triads, have received their higher education paid for by monies generated through illegal means. Such persons are now involved in white-collar crimes.
Street Gangs, Youth Gangs and The Triads
Triads most often come to police attention at the lower levels of their activities where their involvement in criminal activity is primarily through youth and street gangs. Youth gang members are of school age, between 12 and 18 years old. They are influenced by their elders and join gangs as a form of identity. They are basically juvenile delinquents who bully other kids and are a nuisance to their neighbourhood. Some of them will leave their gang as they change school, move home or take up employment, but others will, after joining a Triad society, eventually graduate into a street gang and then pursue a life of crime. Street gang members are slightly older, normally aged between 18 and 25. The majority will become members of a Triad society. Some have regular jobs but others are unemployed. The leaders of these gangs will often be Triad office-bearers and their activities will be more organized and directed towards street-level crime and extortion of various kinds in their own territory. These gangs, due to the nature of their activities, are more inclined to use violence to enforce their demands and to fight other rival gangs. A few of the more successful street gang leaders, as they accumulate more assets, will either start their own syndicate or join an existing one, thus graduating into the upper levels of organized crime activity. The major difference between a youth gang and a street gang is that the former does not lay claims to any territory whereas the latter normally asserts control over a certain area, eg. a street block, a park or a housing block.
Triad gang activities are mainly territorial and fall into one or more of the following categories:
(a)Extortion and protection racketeering of shops, small businesses, hawkers, construction sites, car valet services, and places of public entertainment such as bars, billiard halls etc.
(b)Monopolizing control of non-franchised public transport routes.
(c)Monopolizing control of decoration companies.
(d)Street-level dangerous drug trafficking.
(e)Illegal gambling, such as casino operations.
(f)Prostitution and Pornography.
Whilst the range of criminal activity sounds awesome, an analysis of all detected crime in Hong Kong indicates that only about 5% to 10% of all detected crime is connected with Triads. This includes gang fights arising from inter-gang conflicts, intimidation, serious assaults etc. One unfortunate development however, is that in recent years, Triads have gained access to firearms and are prepared to use them to settle disputes, which was rarely the case a few years ago.
Organized crime in Hong Kong
At the highest level of criminal activity, some organized crime syndicates have Triad members in their ranks. Others do not, or if they do, Triad membership is merely incidental and is not a qualification for being accepted by the syndicate. There is a commonly held misconception that the illegal drug trade in Hong Kong and in other countries that involve Hong Kong Chinese, is monopolized by Hong Kong Triads. This makes sensational news but is simply not true. Triad membership is not a prerequisite for joining a drug syndicate; it is experience, expertise, coronets or money that counts. Whilst it may be true that many drug traffickers have Triad connections, Triad membership itself does not organize crime syndicates that specialize in such activities as loan sharking, smuggling, credit card fraud and counterfeiting. Therefore, it should not be assumed that when a 14K Triad member is arrested for a drug offence that it is the work of the 14K Triad Society. Organized crime activities in Hong Kong follow the same pattern as in many other countries. Syndicates will endeavour to become involved in commercial activities that are ostensibly legal. This activity is used as a front to disguise contacts and wealth and can be very profitable if free market forces can be manipulated by using fear or favour in an unacceptable manner. These criminal organizations also attempt to create an environment which is favourable for their activities. They may wish to give themselves an aura of respectability by mixing with credible social figures or by receiving endorsement, sometimes unknowingly, from government officials.
Illegal acts committed by members of an organized crime syndicate will be perpetrated normally through the use of deception, fear and violence. The persons actually committing acts of violence will usually be on the lower rungs of the ladder. They may well be prosecuted. But those who ordered the acts are so far removed as to make prosecution using normal procedures very difficult. The Liu bloodbath for which investigators have yet to find a motive -- raised the stakes in the crackdown on political corruption. Two days afterward, the national assembly passed the Organized Crime Prevention Statute, which debarred anyone convicted of a gang-related crime from running for public office. Under the law, political parties face fines of up to $1.9 million if their candidates or elected officials are charged with gang-related offences.
Already under way was Operation Chih Ping, launched on Aug. 30 with a pre-dawn raid on the home of Tsai Kuan-lun, leader of a notorious triad, the Four Seas Gang. As Tsai and a group of his bodyguards were being whisked by helicopter to Taiwan's Green Island prison, news footage of his arrest was played over and over on national TV. In the ensuing weeks, police hauled in other suspected gangsters, while the government shut down massage parlours and brothels on Taipei's Lin Sen North Road, the city's red-light district. The campaign moved up a gear on Jan. 17, when more than 5,000 police officers made 420 arrests, swooping on triad members and other criminals. Deputy Commissioner Lin followed the day's developments from the National Police Administration's headquarters in Taipei. "The [triads] have lots of money," he told Asia, Inc. that day as he sipped oolong tea. "They use a company's name to bid for projects, to provide security and to control the construction industry in Taiwan." When a lieutenant rushed in with a list of those arrested, Lin beamed with satisfaction and patted the younger man on the back. Other triad members were promised an amnesty if they turned themselves in by Feb. 12. Among the 1,300 brothers who have voluntarily renounced gangland ties were dozens of members of the United Bamboo, including the big brothers of the "Hsiao" (or Filial Piety) tong and the "Heaven" tong, both of which were active in construction bid-rigging.
Paul Lee, president of Global Construction International, is not impressed. "All the government is doing is grabbing a few people and saying the problem is fixed," says Lee, who returned to his native Taiwan in 1993 after studying and working in the U.S. "They are just putting on a show." He says it is not uncommon for winning bids for Taiwanese public-works projects to have a 50-percent built-in profit margin, compared with an average of 5 percent in the U.S. Taiwan needs to award public construction projects on the basis of open, competitive bidding, says Lee, with both local and foreign builders invited to participate. Currently, foreign contractors are barred from bidding for most government projects and are limited to a few "international tenders." Lee insists: "To not change the system and just arrest these people you're not finding the root of the problem." Michael Wang, vice president of Taiwan Pineapple, says some Taiwanese businessmen turn to the triads because they see them as being more effective at collecting debts than a civil court. "If we rely on the law, it'll take too long," Wang says. Even businessmen who would prefer to go to the police find themselves turning to the triads because the line between the two has become blurred, he says.
"Why do we rely on certain brothers?" Wang says. "Because we often are threatened by other brothers. That's the main reason companies in Taiwan need to rely on triads." Taiwan Pineapple created headlines in September 1996 when gangsters hired by shareholders on opposing sides of a proxy fight exchanged gunfire during an annual meeting. No one was injured, according to Wang. Taiwan's respected Business Weekly magazine has documented 16 publicly listed companies that have recently turned to a "big brother" for protection in business disputes. Publisher James Jin says listed companies commonly enlist triads to help them gather the necessary votes in proxy fights. Even more companies, however, turn to the KMT or its legislators to arbitrate disputes, for a hefty fee. "In this environment, a normal businessman cannot do business," says Jin. Regulators can do little to halt the infiltration of triads into listed companies, admits Pang Hsu-yung, deputy chairman of the Taiwan Securities and Exchange Commission. "If a triad uses a legal way to buy stock, we can't do anything about it," he says. "We can't stop them." Many listed companies, for instance, are turning to triad-owned security-guard services to ensure trouble is avoided at annual meetings. "The service the brothers offer may not be that bad," says Pang. "It allows meetings to run smoothly."
Just how serious is the government's anti-organized-crime campaign and will it succeed in cleaning up Taiwan? In his posh hotel suite in China, White Wolf Zhang is adamant: "They can't possibly succeed. If they really want to clean house, they'll have to sweep out their own people first. They can't do that." Look at the level of people being arrested, says publisher Jin of Business Weekly. No national legislators, not even those with well-known triad ties, have been incriminated, though government officials say they are still gathering evidence. "They take who they can't control, those who have little connection with Lee Teng-hui, and sweep them aside and make them scapegoats," says Jin. "They hope this will decrease their burden -- of having a corrupt past -- for the next election." BES Engineering's former chairman Regis Chen agrees: "The triads will be around for a long time." Now the chairman of Taipei Rapid Transit Corp., Taiwan's largest public-works project with contracts worth billions of dollars, Chen adds wryly: "That's why I own two bullet-proof vests."
Triads? Prostitution? Chinese officialdom involved in vice? In the People's Republic? Wasn't China's bloody revolution, especially in Shanghai, expressly intended to sweep away all such plagues? "Goodbye to all that," wrote Edgar Snow , Mao Zedong's Western journalist friend in 1960, a decade after revolutionaries had allegedly purged this "paradise for adventurers" of its notorious excesses. "Goodbye to all the night life: the gilded singing girl in her enamelled hair-do, her stage makeup, her tight-fitting gown with its slit skirt breaking at the silk-clad hip . . . the hundred dance halls and the thousands of taxi dollars; the opium dens and gambling halls . . . the sailors in their smelly bars and friendly brothels on Sichuan Road; the myriad short-time whores and pimps busily darting in and out of the alleyways . . . gone the wickedest and most colourful city of the old Orient: goodbye to all that." But Snow spoke too soon. Nowadays visitors to Siping Road, in Shanghai's northeast quarter, will come to a blue glass, neon-crowned tower called Shanghai Taiwan City. Here the decadence, rapacity, the crowing vulgarity of old Shanghai has been reborn: high-slit cheongsam dresses, dimly lit karaoke rooms, male and female masseuses, higher-slit cheongsams, scarlet bathtubs built for two, taxi girls, drinks girls too young to know the characters for cheongsam but available for 580 renminbi ($ 100) or more a night. "Pre-liberation behaviour has returned," smiles a wealthy tai zi (or "princeling," a term for cadre's sons), sipping whiskey and smiling from the depths of a plush sofa at a disco elsewhere in the city owned by Hong Kong's Sun Yee On (New Righteousness and Peace) triad. Vice is back with a vengeance in Shanghai, perhaps without the style but with all the invincible swagger of the 1920s. Prostitution, bribery, gambling, extortion have all resurfaced. Old Shanghai's red-light district of Fuzhou Road has reappeared on Maoming Road, 30 blocks to the southwest. The thuggery of Blood Alley (the sailors' haunt mentioned by Snow) has moved 15 blocks west to chrome-drenched Zhapu Road. Bathhouses are popping up on Shanghai Dainty Delicacies Street (a most precise translation). It's difficult to find an opium den -- though they're said to exist but easy to buy opium and a silver pipe to smoke it in.
Re-emerging, too, are the powerful old alliances among organized crime, the law and the government. As in the days when Du Yuesheng, chief of Shanghai's Qing Bang (Green Gang), ran narcotics, gambling and prostitution rackets from his desk at the Opium Suppression Bureau (see box, page 32), police, PLA and party members are opening their own nightclubs and brothels and signing joint-venture agreements, often with criminal organizations from overseas. For companies doing business in China, all this may seem a harmless enough repetition of the after-hours scene in any Asian city. But despite its current obsession with markets in all their forms, China's political system has puritan-messianic origins. The purge of old Shanghai was widely welcomed for reasons perhaps best known to Snow's "gilded singing girl." The return of capitalism's excesses strengthens those arguments and invites the return of people who are ferociously anti-business China's many remaining communist diehards. Nonetheless, the rot continues. "The money to be made through illegal rackets has proven irresistible to many (military and police officers)," observes a Western diplomat whose department tracks Shanghai's corruption. "For the Hong Kong and Taiwanese triads and Japanese yakuza, this is a chance to launder money and cozy up to the mainland government. If the PLA is a partner in your brothel, or the PSB shares the girls from your karaoke bar, who's going to crack down on you?"
No one, from the looks of the action on a recent Shanghai weekend. Some snapshots of the city after dark:
At the Dedo Club in the Bailemen Hotel, manager Bright Yan shouts through the reverberating bass: "You need a good partner to run a club in China, and the Public Security is a good partner." This pitch-dark, Berlin-inspired club was opened as a joint venture between the PSB and a consortium of Taiwanese businessmen. An anonymous Japanese group then officially bought out the Taiwanese. Yan formerly managed a nightclub at a PLA-owned hotel nearby; he was tapped to create the same atmosphere at the Dedo: lots of beeper-equipped, available women and free-spending businessmen. "You have to have the women here," says Yan. "Look, I have a policy. The first time such a woman comes in, I treat her as a guest. The second time, if she behaves legally, I leave her alone. If she behaves illegally, I try to persuade her to leave. The third time, if she behaves illegally, I make her leave." What defines illegal behaviour? "Well, doing P.R. work for herself is okay, but she should not overly harass my customers. Public Security wants this to look like a cultural place, not a red-light zone."
At the Shanghai Moon Club, Zhang Qing and other PSB-employed girls are so certain of their invincibility that they have no qualms about being photographed or interviewed. The club is a textbook example of the bureau's niche in the world of Shanghai vice. A medium-sized brothel, the Moon caters to top-level PSB officers, mid-level cadres, tai zi and wealthy Hong Kong and Taiwanese businessmen. The bureau allows its club employees to keep all the money they receive from clients; how much the ladies make depends on how fully they fill the old sing-song girl's role as hostess, escort, geisha, artiste, whore. The PSB makes its money by charging outrageous prices for private rooms, beverages and platters of mixed fruit. However, they will gladly provide receipts bearing the chop of the Shanghai Moon Bay Big Restaurant presumably more acceptable on a cadre's expense report. Meanwhile on Hong Kong's crowded Nathan Road, as on other Asian thoroughfares, U.S. dollars, both fake and real, circulate through a chaotic chain of use. Seated in a cramped money-exchange booth in Tsimshatsui, money-changer Choi Chun Ming contemplates his position on the front line in the war against counterfeiting. "We usually know who to look out for. There are a lot of bad people in this part of Hong Kong traders from China mostly," says Choi, looking at the crowds outside his booth. A wise smile crosses his face. "But really, you have to watch everyone." Hundreds of Taiwan Gangsters Surrender Under an Amnesty Program, but the Triads Remain Powerful.
The Heaven Division doesn't fool anyone. Despite its pleasant moniker, the 30-member battalion is considered the most ferocious and lethal unit in Taiwan's pre-eminent triad, the Bamboo Union. So one could be forgiven a measure of scepticism over the recent plaint of the man widely considered to be the division's kingpin, Wang Kuo-ching. "Many business people won't associate with me. Although I'm doing legitimate business, many think I'm doing something illegal and look at me with discriminatory eyes," said Wang after surrendering to Taipei authorities in January. "I just want to stop bearing the cross of being a gang member and be a normal businessman." Wang's words may seem like crocodile tears, but his actions contributed to a powerful drama: as part of Operation Self-Renewal, a 60-day amnesty program that came to a close last month, one in seven Taiwanese mobsters turned themselves in to police and renounced their lives of crime. Gangs looking to avoid prosecution under the tough new Organized Crime Prevention Act filed into precinct houses en masse. Among the 1,528 converts were such heavyweights as Wang and two others thought to be Bamboo Union chieftains, Hua Chi-chung and Feng Tsai-tsao. The alleged No. 2 of the Four Seas triad, Tung Ke-chen, voluntarily disbanded the country's second-largest gang reportedly under orders from the man who is thought to head the group, U.S.-based Chao Ching-hua. In fact, authorities claim that one-third of Taiwan's more than 1,200 known "black societies" were dissolved during the amnesty.
What impact the defections will have on Taiwan's influential underworld is unclear. Statutes of limitations had already expired on charges against many of the crooks, who now cannot be prosecuted for gang membership either. Nearly one-third of those who relinquished triad ties were already in custody. Some reputed mafiosi, like Chao, bought goodwill without limiting their options abroad (triads remain active elsewhere in Asia and in the West). And the handful of guns surrendered by ostensibly repentant thugs has not impressed Taiwanese police. "We are suspicious about whether all the people who turned themselves in will start a new life," says Kao Cheng-sheng, director of the Criminal Investigation Bureau's Hooligans Control Division. "But we'd rather believe in them." Crime experts fear the amnesty will merely free triad figures to continue their unsavoury ways in a legal guise. Already a rash of scandals has spotlighted the gangs' penetration of civil society. According to police, triad-affiliated companies won the multimillion-dollar bidding to develop a second terminal at Taipei's international airport, and others allegedly squeezed kickbacks from a $40 million road project. (Both undertakings have since been halted.) According to Justice Minister Liao Cheng-hao, one-third of local assemblymen elected two years ago have mob ties or criminal records. And, perhaps most scandalously on this sports-crazy island, several baseball players have admitted accepting triad bribes to throw games.
Such revelations, and bloodier incidents like last November's gangland-style execution of eight local government officials in Taoyuan, prompted President Lee Teng-hui to press on with the anti-triad crackdown. Since it began last year, authorities have arrested 74 prominent gangsters (and 22 elected officials), while hundreds more have fled for China and other Asian countries. The most recent sweep netted several provincial officials, as well as a member of the National Assembly, Tsai Yung-chang. The stick now wielded by the government is further incentive to go straight: under the law that went into effect last month, gang leaders would receive sentences of up to seven years and fines that could total $4 million. And the law allows prosecutors to move against any group of more than three people believed to be associating for criminal purposes. Many worry that the statute, which lowers burden-of-proof standards, could also be levelled against political foes.
The big question is whether the latest campaign will be any more successful than earlier ones. In 1984, some 3,000 mobsters were jailed. Taiwan's third-largest triad, the Heavenly Justice Alliance, was actually born in jail after that sweep. Today its self-proclaimed "spiritual leader," Lo Fu-chu, sits in the National Assembly, where he was recently elected to the Justice Committee. Another legislator has accused Lo of kidnapping and imprisoning him in a dog cage last year. Lo, who denies the charge, said upon accepting the Justice post, "I'm going to teach the law enforcement authorities how to crack down on the underworld." Says one prosecutor: "It's like the head of the Mafia controlling the FBI's budget. It's a big joke." Successes like Operation Self-Renewal may divert such criticism temporarily, but authorities aren't all that optimistic. "The law is not going to eliminate organized crime in Taiwan," says Kao. "What we hope to achieve is to control crime to a level people can accept." A joke circulates among the cynical inhabitants of Portugal's colony on the mouth of the Pearl River: Casino czar Stanley Ho sits on the righthand side of the governor, they say, and a senior representative from China sits on the left.
"When the governor needs money he turns to his right," explains Paulo Jorge Reis, former deputy director of Macau Government Information Services. "Then he turns left and asks permission to spend it." In reality, this joke accurately reflects the way Macau has been run since the mid-1970s, when a newly democratized Portugal unsuccessfully tried to give the 440-year-old colony back to China.
The Chinese Communist Party hierarchy preferred to leave the Portuguese as closely monitored tenant-managers. A reluctant Portugal was content to let Ho fill his and the colony's coffers with profits from his monopoly franchise to run the port city's 24-hour, 7-day-week gambling operations. The cozy arrangement has made Hong Kong-born Ho a $2 billion fortune and hugely enriched and rejuvenated what was a crumbling, cash-starved outpost of an impoverished Mediterranean country. In 1996 alone, Macau collected $630 million from Ho's Sociedade de Turismo e Diversoes de Macau (STDM) more than 40 percent of government revenues. In the same year, the STDM had revenues of more than $2.1 billion -- roughly 27 percent of Macau's $7.7 billion GDP. But with the date for Macau's return to China drawing close, life is getting more complicated as aggressive outsiders jostle for position and power. China takes control of Macau on Dec. 20, 1999, and Ho's franchise expires in 2001. He will then be 78 and is not expected to seek renewal. The lucrative revenues from gambling and its less savoury spin-offs lie at the heart of recent turbulence in tiny Macau, population 460,000. Although officially it is the colony's tax department and Ho and his STDM associates who collect money from the nine casinos, triad gangs have long garnered their share too. However, this is being nibbled at by the outsiders who have muscled in.
Since the beginning of this year, at least 15 people have been killed and dozens injured in triad-related violence that has rocked confidence in Macau in particular frightening away large numbers of gamblers. Visits from Hong Kong dropped by 175,800 or 10 percent in the first four months of this year compared with 1996, says the Macau Immigration Department. Such a slump is also affecting Far-East Jetfoil Co., a subsidiary of Ho's Hong Kong-listed Shun Tak Holdings Ltd., whose earnings fell 38 percent in the first half of 1996 and did not recover in the second half, according to a report from Hong Kong brokerage house Indosuez W.I. Carr Securities Ltd. "Passenger traffic on the route eased by 6 percent as punters shied away from Macau because of several violent shootings," says Carr analyst Alan Wong. Worse, the gang warfare has turned on the authorities and exposed their tenuous hold on law and order. The director of Macau's gambling inspectorate a veteran of guerrilla warfare in Portugal's former African colonies Lt. Col. Manuel Antonio Apolinario, has been virtually driven out. After surviving a murder attempt that left him with bullet wounds to the head, he needed 24-hour protection.
Though government officials say Apolinario has returned to Portugal temporarily for health reasons, Macau historian Manuel Teixeira says the tough ex-soldier was forced back to Portugal earlier this year because of concerns for his safety. "He could not go anywhere without protection," says Teixeira, who helped nurse Apolinario when he was wounded. "There are more than 4,000 people in triads in Macau. They are stronger than the police." The power of the two main triad groups the 14K and Soi Fong (Water Room) is so great that police chiefs admit their ranks have been infiltrated. Commanders now confiscate the mobile phones of police officers prior to crime-busting raids for fear of tipping off the gangsters. The triad muscle-flexing has brought into question the future direction Macau will take. China has indicated it will permit the casinos to continue operating after 1999, but it is unclear who will be in charge of them. With Ho probably out of the frame, some people are suggesting that Macau's gambling could be run as a non-profit charity similar to Hong Kong's money-spinning gambling equivalent the Hong Kong Jockey Club. This idea has been publicly supported by STDM's largest single shareholder, Henry Fok, an old friend and business associate of Ho. Fok also has influential friends in Beijing. He was a leading backer of Hong Kong's Beijing-approved chief executive, Tung Chee Hwa.
Ho does not have the same good connections in China these days. He is known to have insulted Beijing when he spoke out in Hong Kong after the Tiananmen Square massacre in 1989, according to senior Macau government officials. Ho proposed that the United Nations take over Hong Kong, creating a neutral, independent "Switzerland of Asia." Though supported by various politicians in Hong Kong, the idea was rejected by both Britain and China. "I know the possibility is extremely remote, but as a citizen of Hong Kong, I thought I ought to try to do something to help," Ho said at the time. "Thousands of people are leaving Hong Kong and taking their money with them. We must find ways to restore confidence in our future." It may have been well-intentioned, but Ho has suffered for espousing the idea. In June, the Sino-Portuguese Joint Liaison Group agreed to confirm Ho's casino monopoly until 2001 in return for raising taxation on the STDM's gross casino earnings from 30 percent to 31.8 percent. Until this agreement, Beijing had the option to end Ho's monoply in 1999.
As part of the deal, the STDM will stop funding a controversial Lisbon-based Orient Foundation. The Foundation was supposedly to promote cultural programs in Macau, but Beijing claimed some of the STDM money was being used for other purposes within Portugal. Instead, the STDM will pay a levy into a Macau-based Development Foundation. Macau security chiefs blame Ho's loosened grip on the casinos which he has monopolized since 1962 for the triad warfare and air of uncertainty pervading the colony. Beijing, which wields a powerful influence in Macau when it chooses, is understood to have told the warring factions to curb the violence, although it's thought likely that another triad-linked activity, prostitution, is actively condoned by the mainland authorities. The gang warfare is linked to a fundamental shift in the management of the casinos' highly profitable VIP rooms, which is damaging the triads' income. Until two years ago, the STDM leased out the VIP rooms to local tour groups. These groups pay handsomely to lure rich Asian gamblers on packaged tours to Macau, with the prospects of easy wins and attractive hostesses. The tour operators pay a monthly fee of up to $1.3 million for the use of just one VIP room. But police and government sources say the STDM is now inviting tour operators from outside Hong Kong and Macau to bid for the VIP rooms. And these groups mainly from Taiwan, China and Thailand have brought in outside triads. Police say it is this diversification that has broken down the old balance of power between the two dominant triads in Macau, which have traditionally had a hand in the VIP rooms, albeit illegally.
The changes have come about as close Ho friend Angela Liang Anqi, 35, a former mainland-Chinese ballet dancer, has become increasingly involved in the STDM's operations. According to STDM officials, these rooms produce up to half of all revenues every year. A minimum bet in a VIP room is HK$1,000 ($130) compared with HK$50 ($6.50) on the casino floor. The maximum bet in a VIP room is HK$1.8 million ($232,560). The 14K and Soi Fong are now competing with each other for a bigger share of the cigarette smuggling trade into China to make up for their reduced revenues from casinos, say police. Their intense rivalry triggered the gang warfare the most bloody of which was the murder of three dai goh or "big brothers" of the 14K in broad daylight on May 4, near Ho's flagship casino in the Hotel Lisboa. Ho declined to be interviewed by Asia, Inc., but he stated recently that he had full confidence in the police and expected that "everything will be normal again very soon." His press spokeswoman, Julie de Senna Fernandes, insists that triads have never been involved in any of the STDM's nine casinos. "When people have nothing to write about, they have to find something," she responds angrily, blaming the media for recent bad publicity.
The upsurge in lawlessness in Macau has also led to more visible prostitution. Some observers point to the flooding of the waterfront Hotel Lisboa with mainland girls as further proof that events are moving out of Ho's control. The hookers now parade brazenly in the hotel lobby, the basement shopping arcade and the casino hallways. In the past, prostitutes legal in the colony discreetly plied their trade in clubs, saunas and bars. Today's girls visit Macau on 10-day tourist visas and have the cash to book into the Lisboa. There are dark hints that the cross-border trade is controlled by China's security organization, the Public Security Bureau. The Lisboa's general manager and president of the Macau Hotel Association, Johnson Chan, says there is little he can do. "We do tell our guards to kick them out," he says. "We do it regularly. But they keep coming back. They come with valid tourist visas." Macau has for years tried to diversify away from gambling and its associated vices, loan sharking and prostitution. But the lure of easy money has proved too strong. Government proceeds from the STDM have risen more than seven-fold from $82 million in 1984 to $630 million in 1996.
Weighing down on the government's efforts is a massively overbuilt real estate market. Some 30,000 residential flats and 600,000 square meters of commercial buildings are vacant. The oversupply is the result of speculative money from China in the early 1990s and government officials who handed out building permits without considering the limited market demand. Critics say some government officials may have acted corruptly. Today, stagnant economic conditions combined with a shrinking number of tourists from Hong Kong who made up more than 60 percent of Macau's 8.2 million visitors last year have further helped fuel triad trouble, says Anthony Frazer, chief executive officer of the Hongkong Bank in Macau. Business leaders agree that Macau must diversify or forever be prone to triad influences. "Macau is more than a casino city," says Eric Yeung, managing director of Perfekta Toys Ltd., one of Macau's largest manufacturers, and the vice president of the Macau Government Economic Council. "It's a misperception because the tourism sector has positioned Macau so that everybody knows it only for casinos. But they are only 40 percent of the economy. I think Macau is at a stage where it should upgrade into many other areas."
Yeung is a leader among Macau's younger entrepreneurial class. Perfekta Toys, which employs 1,200 people, manufactures and exports high-quality model toys and electronic components. "Yes, tourism is important, but it is only one of the pillars," says Yeung, who nevertheless concedes that manufacturing in Macau has dropped from 30 percent of GDP to 20 percent during the last 20 years. Yeung, who is also chairman of the Macau Productivity and Technology Transfer Centre, believes Macau has many advantages, including low wages, real-estate prices one-tenth of Hong Kong's, reliable telecommunications and a new 24-hour international airport. Fourteen foreign manufacturers and service companies invested $151 million in Macau last year, according to the Macau Trade and Investment Promotion Institute. Plans are being drawn up for a third international school in Macau, making it more attractive for foreign companies to establish offices there. And a project that will help Macau attract more families, says Yeung, is a $150 million, 16-hectare marine park being developed by a consortium that includes the STDM and the Far East International Group. It is due to be completed by 1999. "Most tourists coming to Macau stay for only 1.3 days," says Jose Cheong, president of the Far East International Group. "We want them to stay at least two days."
Other schemes to attract more family tourism include a museum retracing Macau's history. Also under construction is the Macau Convention and Exhibition Centre to encourage trade shows. "We see signs that it is changing," says a confident Yeung. "The restructuring of the economy has already begun." Whether or not Ho remains much longer at the helm of the gambling monopoly, few would disagree that he has been the single most important business influence on Macau over the last 30 years. Before Ho established the STDM, Macau was a poor backwater, says historian Teixeira. Buildings were falling apart, water was undrinkable and people were hungry, he recalls. "Stanley Ho is a very good friend of Macau," says Teixeira, whose Catholic welfare charity receives $2,600 from Ho every Christmas. Ho fled to Macau from the advancing Japanese armies in 1941. Although he came from the wealthy Shanghainese-Eurasian Hotung family, he landed in Macau with just a few coins in his pocket. But as a dashing young man he quickly established himself as a darling of the Macanese belles -- daughters of rich Chinese-Portuguese mixed marriages. Ho eventually married Clementina Leitao, daughter of one of Macau's wealthiest men. And it was through Leitao family connections that he later met the Fu family, which controlled Macau's gambling monopoly from the 1930s until he took over.
Ho's connections brought him close to the ruling Portuguese and he succeeded in wresting the franchise away from the Fu family in 1962 -- with the help of several friends. These included Henry Fok -- who broke the U.S. trade embargo on China in the 1950s -- Ho's brother-in-law Teddy Ip and renowned gambler Yip Hon. Ho is no stranger to the underworld turbulence now rocking Macau. His earlier, more swashbuckling days in Macau are recalled in the 1992 Hong Kong film Casino Tycoon, starring singer Andy Lau. The movie portrays Ho as a tough but righteous man who was not afraid to challenge gangsters on their own turf, playing by their rules with guns and knives. Ho even has a nickname on Macau's mean streets: He's known as Sun Goh (New Brother). He may be an avid ballroom dancer today, but Ho was better known in the past for fighting skills that won him much respect in the underworld. There is no suggestion that Ho is a triad member, but his friend the late Yip Hon, a former STDM founding director, was a member of Hong Kong's Hung Mun Triad, according to the U.S. government. It was Ho and Yip's early alliance that built STDM's success.
Ho has invested heavily in Macau beyond the casino world, and has said his business interests will stay put after the handover. He has contributed 25 percent of the $1.4 billion cost of the Nam Van Lakes Project, which when completed early next decade will have converted part of the harbour into two inland lakes surrounded by a ring road, hotels, resorts and parks. And his Macau International Airport Co. controls the new $1.2 billion airport which opened in 1995 and last year brought in 1.3 million new tourists, mostly from Taiwan, Thailand and Southeast Asia. His various Macau businesses are estimated to account for 50 percent of government income. But not everyone in Macau is enthusiastic about his achievements in the colony. A senior Portuguese official shakes his head in disapproval: "We should never have vested so much power in the hands of a few. Henry Fok's idea of returning the casino franchise to a non-profit company is a good one." Perhaps the real clue to Macau's future is the executive director of the territory's Tai Fung Bank, Edmund Ho. He holds the distinction of being vice president of Macau's Legislative Assembly and a standing member of the National People's Congress of China. While Stanley Ho (no relation) steadfastly built up his business empire, Edmund Ho, 42, garnered political capital. It was a task made easier because his father, Ho Yin, who founded the Tai Fung Bank, had good guanxi (connections) with Beijing.
United States Activities
Chinese emigrants are desperate for a shot at riches in America but many end up being explained by criminal gangs. The main U.S. federal detention centre for illegal aliens in California sits on an unimposing spit of land in Los Angeles harbour called Terminal Island. It was built several years ago to hold some of the 1.4 million Hispanics who dart across the Mexican border each year. But today its halls echo a dialect spoken mainly in Fujian province, China. Men here live 80 to a room amid a forest of metal bunk beds. Beyond the bulletproof windows, the lights of downtown Long Beach glimmer faintly on the horizon. The American Dream may be just meters away, but the men inside might as well be in isolation, since they speak no English and their guards no Chinese. For them, each day is an exercise in tedium that slowly unravels as they mutely watch U.S. television and wait for rice to arrive from a kitchen designed to turn out tortillas. The Chinese of Terminal Island have no complaints about their accommodations. Their odyssey began months before, when a triad smuggler (or "snakehead") in Fujian herded them into a muck-filled pig sty to wait for their ship's arrival. "That morning, after the snakehead locked the gate, he laughed and said he'd return when the boat was ready to leave," remembers Chen Jinling , an 18-year-old factory worker from a village in Fujian. "It was impossible to sit down. Those who collapsed were kept standing by the crush of neighbouring bodies."
At 2 a.m. the group was driven to the Fuzhou waterfront and loaded aboard a departing trawler. "It was a tense moment," whispers Chen. "Several boats before ours had been caught, and some of the people sent back committed suicide because they had paid all their money." But at 6 p.m. the following day the crowded boat pulled alongside the Taiwanese freighter San Tai No. 1. Chen joined a group of 160 Chinese for a voyage that would end 43 days later when the U.S. Coast Guard plucked them from a sinking ship 200 miles off the California coast. All of the passengers aboard the San Tai No. 1 have applied for asylum, and each, in time, will get it. But the prospect of freedom does little to ease his worries. "I'm afraid of what will happen once we get out and the snakeheads find us," frets Chen. "These people are incredibly cruel." All across the U.S., detention facilities are full of Chinese who agreed to pay a minimum of $30,000 to be smuggled into America. Most are poor Fujianese who pay smugglers in China a down payment of $3,000 and promise the balance on arrival in New York City. The wave of emigrants has overwhelmed the U.S. Immigration and Naturalization Service (INS) and in the past four years has doubled the population of New York's Chinatown, where up to 20 percent of the people now sleep in shifts in communal apartments called gong si fong.
INS agents with Operation Dragon, a special task force charged with curtailing the flow, believe that more than 5 percent of the people arriving may be triad soldiers. But their greatest concern is that the fees paid to gangs could be used to fund an expansion of organized crime. Smugglers already collect more than $250 million a month, according to U.S. Senate testimony, making the illegal transport of Chinese aliens a $3 billion-a-year business -- nearly as large, for example, as Hong Kong's $4.7 billion watch and clock industry. The emergence of this new generation of boat people is the result of major changes in the two countries involved. China's Fujian province is booming, thanks largely to investments by overseas Chinese living in Hong Kong, Taiwan and elsewhere. But with exports from Fujian running at $3 billion annually, the growing disparity between rich and poor has exacerbated social tensions and fuelled dreams of success. To many poor villagers, the idea of going to America and getting rich has great appeal. While economic discontent has fuelled Chinese hopes for a better life, changes in U.S. law provided Chinese the opportunity. In the wake of the June 1989 Tiananmen Square massacre, many Chinese students in the U.S. asked for asylum. Their pleas fell on sympathetic ears in the U.S. Congress, which voted to punish Beijing by imposing trade sanctions. Scrambling to save China's most-favoured-nation (MFN) trading status and, possibly, the livelihood of his brother Prescott, a consultant to businesses trading with Beijing, U.S. President George Bush proposed a compromise. If Congress left China's MFN status intact, Bush would permit all Chinese with a legitimate fear of persecution to remain in the U.S. until January 1994.
The result, an executive order issued in April 1990, was viewed more as symbol than substance. However, it explicitly encouraged U.S. judges to grant asylum to Chinese aliens who claimed they were persecuted by Beijing's family planning policy limiting most couples to one child. Bush's executive order, in effect, made asylum a sure thing for virtually anyone who could reach the U.S. and claim they were victims of coercive family planning. In Chinatowns throughout North America, criminal organizations began manoeuvring for advantage. New York gangs like the Flying Dragons and Fuk Ching began to challenge established groups. In Canada, where four out of every 10 Chinese admitted for residency eventually paid to be smuggled into the U.S., the Kung Lok and 14K gangs were overwhelmed by the far more sophisticated Dai Huen Jai (Big Circle Boys) from Guangdong, who had access to stolen passports, Chinese weaponry and counterfeiters who could duplicate watermarks and holograms. Perhaps the most violent struggle occurred in San Francisco, where suspected Wo Hop To leader Peter Chong ordered 300 bulletproof vests, then declared war on the Wah Ching, a triad that had controlled the Bay Area for 20 years. Throughout most of 1991 the battle raged. At least five people on both sides were gunned down on city streets before the Wah Ching finally broke under the pressure. "Triads realized they could turn Chinese desire for a better life into easy money," says Sgt. Harry Hu, 36, the Hong Kong-born head of the Oakland Police Department's gang unit. "Profit was $25,000 to $35,000 per person, more if women could be turned to prostitution. Moreover, the people were easy to control because they spoke no English and knew nothing about America."
Before 1990, most Chinese illegally entering the U.S. paid $18,000 to be brought in through Canada or Central America. But after the executive order, the number of people leaving China and the amount each was willing to pay increased dramatically. People began spending up to $30,000 for forged passports. According to Chinese clients of a leading U.S. immigration attorney, one smuggler in 1991 earned $4.6 million in a single day when he successfully packed 153 Chinese on a 373-seat plane bound for New York's JFK airport. The greatest attraction of the people-smuggling business is its low risk factor. A smuggler bringing in 100 Chinese risks a maximum jail term of 18 months against a potential profit of $3 million. Being caught with $3 million in heroin, however, draws a mandatory sentence of 16 to 20 years that can climb to 27 years if the smuggler is arrested with a firearm. Says Mike Zweiback, an Assistant U.S. Attorney with the Organized Crime Strike Force in Los Angeles: "Our sentencing guidelines don't pose much of a deterrent. People in this business have no fear of going to jail for 18 months." By late 1991 the number of people wanting to leave Fujian began to exceed the number of forged or stolen passports available. In the past, shortages were resolved by buying travel documents from Fuzhou officials. But when the price of a passport increased, smugglers started moving emigrants in ships.
For INS senior special agent Jeannette Chu, a Taiwanese-American in charge of Operation Dragon, the increased use of ships confirmed her suspicion that the organization behind the smuggling was not a conventional triad but a crime network composed of elements from different gangs. "The people behind the smuggling are criminal entrepreneurs who can locate cargo vessels, hire crews and reconfigure a hold to accommodate hundreds of people," she says. "These aren't triad goons who collect mahjong debts with a club." In 1992 an armada of gnarled fishing trawlers packed with Chinese began appearing in U.S. waters. Subtlety was not always a requirement for success. The Taiwanese trawler Yun Fong Seong No. 303 entered Honolulu harbour in February 1992 at full speed and crashed into the main dock, whereupon 93 Chinese quickly jumped ashore and proclaimed themselves victims of coercive family planning. Trawlers gave way to freighters which often picked up passengers in Bangkok or Singapore and occasionally sailed around Africa to the Atlantic Coast. Cracking the smuggling rings is no easy task. "It's difficult to know who they are," admits Kwok Cho-Kuen, the senior superintendent who heads Hong Kong's Organized Crime and Triad Bureau. "Cash flow, not triad loyalty, appears to hold these organizations together."
Taiwanese immigrant Peter Kwong, 50, a political science professor at the State University of New York and an expert on triad crime, believes the revenue is funding a global crime network of unprecedented sophistication. "Triads used to be easily identifiable because their preferred sources of revenue, extortion and prostitution, required intimidation and territorial control," says Kwong. "But international smuggling relies on networking and anonymity and is organized not by triads but by criminals who have triad affiliations. These gangs are almost impossible to infiltrate because, unlike the Mafia, they aren't monolithic." One aspect common to all smuggling ventures, however, is indifference to the welfare of people being transported. When the Manyoshi Maru limped into San Francisco last December, the 170 people aboard were ankle deep in faeces and completely out of water. Several ships were breeding grounds for Hepatitis B. When the Chin Wing 18 developed engine trouble off the North Carolina coast last September, most of the 151 Chinese aboard were infected by a mutant strain of German measles.
Delivering human cargo to New York is not a major worry for the smugglers. Less than 4 percent of the Chinese who enter the U.S. illegally are caught. Those who are have the right to petition for asylum. If asylum is denied they can appeal. Because detention facilities are limited, all but known criminals are released on bond. Since the Executive Office of Immigration Review has only 85 judges, and a backlog of 500,000 cases, it can take years to set a trial date. Fewer than 40 percent of the Chinese released on bond appear for their day in court. Should they be apprehended in a subsequent INS sweep, they face no penalty for failing to appear. They can apply for asylum and start the entire process all over again. The result is that only about 3,000 of the more than 80,000 Chinese who entered the U.S. illegally in 1992 were apprehended at airports or taken off ships. Total deportations for the year: 15.
Once released, emigrants must pay the balance of their smuggling fee. Those who can't are sometimes tortured or killed. Last January, gunmen killed two illegal aliens in New York's Chinatown who had failed to repay the money advanced for their passage. Three months earlier another Chinatown assassin pumped 13 bullets into a man with a delinquent account. Some Chinese would just as soon stay in detention, but attorneys who appear in their defence often within hours of a boat's arrival seldom let that happen. "How can these poor people afford private attorneys flown in from New York?" asks Henry Der, executive director of Chinese for Affirmative Action, a San Francisco advocacy group. "The issue is very complicated, but it seems these people are indentured servants brought over as cheap labor for sweatshops." On Terminal Island, fear of the triad smugglers seems almost palpable. "I've already been to court twice, and I'm afraid I'll be released the next time," says Zhou Xiaoqi, a 28-year-old from a village in Fujian. "If we could be released in a group a few of us might be able to escape, but our attorney is very powerful so we are turned over to him one at a time." When a group of fellow prisoners approaches, Zhou falls silent. Of the more than 100 people on his boat he trusts only three. We walk slowly toward a sound-proofed room used for interrogations. "The attorney has influence even inside these walls," Zhou explains as the room's heavy metal door clangs shut. "Please, please don't let the attorney get me."
Zhou's lawyer does not look threatening. On the contrary, the amiable attorney appears almost cherubic. But according to confidential documents circulating among law enforcement agencies, this attorney is suspected of being a gangland adviser linked with the most vicious gangs in the U.S. The attorney lives well. From the window of his Los Angeles office, he has a panoramic view of the Hollywood Hills, which soar above a sea of gently swaying palm trees. He dismisses the allegation that he's a triad mouthpiece. "My clients are families who pay to get their relatives released," he says. "I'm very successful, so I get a lot of referrals." The world better get used to the idea of Chinese emigration, the attorney advises: "Beijing certainly is not going to do anything to stop the flow. The PRC regards this as a natural migration that produces hard currency." Between the attorney's office tower and the crest of the Hollywood Hills, the Chinese consulate sits hidden beneath the palms. It is a tranquil place that remains aloof from the hundreds of Fujianese filtering through the city. And that's the way it will stay, insists political affairs consul Lan Lijun, since Washington, and Washington alone, is responsible for the torrent of migrants.
Indeed, Washington's pro-refugee stance was reiterated last October with passage of the Chinese Student Protection Act, which effectively and indefinitely extends coverage of Bush's 1990 executive order. For the 80,000 Chinese legally residing in the U.S. on April 11, 1990, Congress's decision means they may become eligible for permanent residency. But for Chinese illegally emigrating today, it will have little effect. Most will simply disappear into the gong si fong of New York's Chinatown. The lucky few who become waiters may earn as much as $20,000 a year. But most will end up in one of 600 garment factories earning less than $9,500 a year. Perhaps surprisingly, U.S. immigration officials battling the tidal wave of emigration have found a rhetorical ally in the man who represents the country the emigrants are fleeing. "How can every man on a boat, even 18-year-olds too young to marry, claim to be a victim of family planning?" asks Lan. While China may be the source of the refugee flow, Lan says only one nation is to blame. "This entire problem," he says, "is caused by laws passed by the U.S. government.
For more than a century, Hong Kong has been a conduit for cash flowing in and out of China, and colony bankers rarely bat an eye when presented with bundles of banknotes. But late last June a veteran teller in the Hong Kong branch of the Republic National Bank of New York sensed something was amiss when $100,000 worth of U.S.$100 bills from Macau caught his eye. The notes had passed through several hands certainly the paper and ink looked genuine. But further examination revealed minute flaws on half the bills. Counterfeiting is relatively common in Hong Kong. Less than six months earlier, the colony's Independent Commission Against Corruption and the Commercial Crime Bureau seized $900,000 in fake U.S. dollars from a printing company in the Chai Wan district that had been selling bogus bills at bargain prices. Some forging attempts have been downright comical: Wrong pictures or misspellings have appeared on bills. But no one is laughing at the newest funny money now in circulation. The Republic National Bank discovery set alarm bells ringing around the world because it marked the long-dreaded arrival of a "super bill" largely indistinguishable from a legitimate one. The entrance of such high-quality forgeries on the market could undermine confidence in the U.S. greenback, says University of Wisconsin economist Edgar Feige. "It's the psychological perception of the quality of the dollar that's crucial," says Feige, who studies how underground economic factors such as crime affect the economy. "If people perceive bogus notes to be widespread, then the value of the currency could be threatened."
Within hours of the Hong Kong discovery, special agents from the U.S. Secret Service, the organization responsible for catching counterfeiters, were on a speedy jetfoil to Macau. Their first stop: Banco Delta Asia, the modest financial establishment through which the notes had passed. There they learned that the money in question had come from the local North Korean community, which is extensive in Macau because Lisbon permits Pyongyang to use the Portuguese enclave as a trading base. Was the incident an isolated one? Not likely, the agents concluded when they discovered an additional $200,000 worth of counterfeit hundreds on deposit at the Bank of China. That night officers from Macau's Judicial Police raided a number of apartments belonging to North Koreans. By the end of the week five people were in temporary custody. The investigation stalled, however, when the alleged North Korean ringleader fled across the border to Zhuhai, and Beijing refused to give assistance. None of the North Koreans were charged and the case was dropped. What's worse, the origin of the super bills remains a mystery. For law-enforcement officials, the presence of counterfeit bills that slip by less-vigilant bank tellers every day is a continuing source of concern. Sighs Jose Dias Azedo, head of the Macau Judicial Police counterfeit and fraud detail: "Only a forensic expert with special equipment can distinguish between these fakes and real bills."
Ever since 1944, when the Bretton Woods Conference established the primacy of American currency, the U.S. dollar has been the recognized monetary unit that international banks use to measure economic activity. From the steppes of Central Asia to the mountains of Peru, it is the favoured medium of exchange in countries with inefficient banking systems. Travelling executives carry U.S. notes because their unspent dollars retain value between business trips. Roughly 55 percent of the $360 billion presently in circulation is held by people outside the U.S. And demand is increasing as more developing nations embrace capitalism. Indeed, according to Richard Porter, deputy associate director for monetary affairs at the Federal Reserve Board in Washington, up to 70 percent of newly printed U.S. banknotes go directly overseas. The sheer ubiquity of U.S. currency, which has had essentially the same size, colour and configuration since 1929, makes it a primary target for counterfeiters. Nearly $135 million worth of bogus bills were confiscated outside the U.S. in 1994, up from just $30 million two years earlier. The problem is especially severe in Asian cities like Hong Kong, where seizures have increased four-fold since 1990. The $100 bill accounts for 60 percent of the U.S. currency in circulation, so invariably it is the note counterfeiters choose to reproduce.
Counterfeiting real victims, of course, are people in the retail, hospitality and service industries who must instantly decide whether to accept a seemingly genuine banknote. In Phnom Penh, merchants who can ill afford cash registers are investing in counterfeit detection equipment. But with more than $10 billion worth of phoney bills estimated to be in circulation, the likelihood of being stuck with worthless paper is greater than ever. In the past, counterfeiting rarely affected the value of money because even excellent forgeries were quickly identified. Since all the phoney money was printed off a single engraved plate, each bill ended up with the same serial number. Today, technology is tipping the balance in favour of the criminal. Colour copiers, laser printers and sophisticated graphics software make banknotes easier to copy, and computer programs can be written to generate random or sequential serial numbers. The new age of counterfeiting began a year ago when randomly numbered $100 bills began appearing throughout the Pacific Rim. Those passed in Macau may be the best counterfeits ever, since their intaglio printing a process by which ink from incised lines etched into a metal plate leaves a raised impression on paper -- makes them feel like the genuine article. A U.S. congressional task force says the bills are printed by Iranians using U.S. equipment and American-trained engravers and printers. The Iranian-printed cash is supposedly taken to Syria where it is divvied up and sent around the world, claims the House Republican Research Committee's Task Force on Terrorism and Unconventional Warfare. Such notes are said to be used by North Korean diplomats and, on occasion, make their way into the hands of Chinese political operatives working outside the mainland. "We can speculate about China's involvement, but we don't know anything for sure," says Albert Joaquin, the special agent in charge of the Secret Service in Asia. "Only one thing is certain: If we don't curb this problem now, there could be extensive damage in the future."
Even more disturbing is a second series of notes from Montreal. The offset printing method used to make these bills does not create the embossed feel of those produced in the Middle East, but the rate of production and distribution network used are such that they have the potential to devalue U.S. currency. Purchased in the Canadian city for about $25 each, the $100 notes normally change hands in Toronto, where they are resold for half their face value. From there the fakes are sent directly to Asia and South America or allowed to percolate south across the lightly guarded U.S. border. Masterminding the distribution are the Big Circle Boys (a.k.a. Dai Huen Jai), a loose association made up mostly of former Chinese Red Guards that police in North America grudgingly concede to be "criminally brilliant." The name Big Circle Boys (BCB) refers to Chinese-made maps that use a dot inside a circle to mark metropolitan areas. When the uneducated veterans of China's Cultural Revolution descended on Hong Kong in the late 1970s, earlier Cantonese immigrants dismissed them as rural hicks. "Not so," said the young criminals. "We're Big Circle Boys." Rejected by the locals, the young criminals found solace in solidarity. Bound by language and a love of military weaponry, the BCB is not a conventional triad. Today many of its members, who number about 1,000 in Canada, resemble avuncular commodity traders whose products heroin, prostitution, fake credit cards and now counterfeit money just happen to be illegal.
The BCB's logistical skills became apparent last March when a civilian informant working for a special task force of Toronto's 14th Police Division arranged to purchase $250,000 worth of illegal currency. The goal of the sting was to destroy the Montreal counterfeiting organization, or at least cripple its distribution network. But after three months of work the only people apprehended along with the money were a pair of lowly street hoods. "There was no centralized gang to break up," explains Peter Yuen, a Hong Kong-born detective with the Toronto Police Department. "The courier from Montreal, the delivery boy in Toronto, the person who accepted the introduction and the men who delivered the money were all different people. Their planning was meticulous. They even did surveillance on us. As a criminal group it's impossible to infiltrate because the personal relationships go back more than 25 years." By last summer, briefcase-loads of BCB-forged $100 bills were popping up all across America. In late July, three Vietnamese high rollers checked into Harrah's Casino and Hotel at Lake Tahoe, Nevada, and immediately began playing pai gow poker. On their second day at the tables, a casino pit boss noticed that the three were surprisingly sanguine about their losses and called the Secret Service in Reno. When an agent arrived later that day he found a duffel bag containing 250 bogus hundreds in a room occupied by suspected gangster Tony Lai. "The Secret Service agent was quite concerned," remembers John Babcock, Harrah's director of security. "I believe he said the bills that turned up here were from Canada."
In August, the Secret Service sent a formal notice to casino cashiers across Nevada, warning them that 11 permutations of a near-perfect $100 bill were flooding the state. But the increased vigilance in the western U.S. didn't bother the Flying Dragons, a Chinese gang selling fake bills on the streets of New York City. Four of its members simply headed for Mississippi, a southern state with less-experienced croupiers, where they partied for four days before being arrested. By October the flow of funny money, estimated by the Royal Canadian Mounted Police to exceed $5 million a week, was inundating Secret Service agents like Dale Pupillo in Detroit. "The images are sharp and the ink is perfect on these bills," he says. "These people know what they're doing. No clerk in America could spot this stuff as counterfeit." The degree to which counterfeit money subsidizes organized crime is open to debate. Many investigators persuasively argue that organizations that print and distribute quality fakes have a vested interest in controlling them so they won't get burned by their own bogus bills. Individuals desiring counterfeit banknotes from the BCB must buy a minimum of $100,000 and agree to immediately move the stash out of Canada. It's a logical request, since BCB's old-boy network controls much of Canada's illegal gambling. "Big Circle Boys are criminals, but they're also the world's greatest capitalists," says Toronto Police Detective Ken Yates, one of Canada's leading authorities on Asian organized crime.
An intriguing link between counterfeiting and the smuggling of Asian aliens into North America was established inadvertently last June when police in Windsor, Ontario, interrupted what they thought was a midnight narcotics buy only to find that the paper bag passed between two parked cars contained $104,000 in counterfeit $100 bills. For what was the money intended? Neither Leung Tak On, a known narcotics trafficker, nor counterfeit credit card dealer Yao Junmin would say. But when the two men were taken to jail and searched, police found a telephone bill listing more than 2,000 brief calls to four telephone numbers. "Three of the numbers are in Tokyo, Fujian (China) and the Netherlands," says Willard Myers, director of the Center for the Study of Asian Organized Crime. "The fourth, in New Jersey, belongs to Cheng Chui Peng, an infamous smuggler who rebounded from an 1989 arrest and today owns at least one building in Manhattan." A Fujianese who goes by the nickname "Big Sister," Cheng is a master at finding loopholes in U.S. law and is suspected of using bogus bills from Canada to finance her smuggling operations.
In the early 1980s, the U.S. Senate amended the immigration code to allow foreigners who worked 90 days in agriculture to obtain a green card and remain in the U.S. legally. The intention was to ensure a permanent supply of cheap Latino labour for California. But Cheng seized the moment and bought a New Jersey farm, which she used as a safe house for smuggled Fujianese destined for the sweatshops of New York. Today Cheng has three farms, which supply much of Chinatown's produce. Within a few days of the Windsor arrest Big Sister was on a plane to China where, in the space of a month, she was arrested in Fuzhou, bribed her way out of prison and escaped to Hong Kong. One result of counterfeiting is that a growing number of countries are imbedding security devices in their currency. In 1988, Australia began printing plastic banknotes. Japan's 1,000 and 10,000 yen bills are printed with a special ink that commercially available copiers can't reproduce. Singapore and others have woven plastic fibres into some of their large-denomination bills. After decades of delay, the U.S. finally will begin issuing tamper-resistant bills in 1996, starting with the $100 note. Among the 14 features incorporated into the new design will be an enlarged portrait of Benjamin Franklin, a polyester security thread running through the paper, iridescent windows, a translucent watermark and new inks that change colour when viewed from different angles.
Federal prosecutors applaud the changes but doubt they will eliminate counterfeiting. Because of lenient sentencing guidelines, a person caught with more than $120,000 rarely draws more than 12 to 18 months in jail. First-time offenders with $2,000 or less could be released after four months. "It's easy to flip a drug courier (have him testify against co-conspirators) because if he's caught with more than a kilogram of heroin he's looking at a minimum of 10 years," says Christopher Johnson, an assistant U.S. attorney with the Organized Crime Strike Force in Los Angeles. "There's no impetus to cooperate if you're looking at only 18 months. These guys know that if they just keep their mouths shut they'll be rewarded with greater responsibility when they get out." Because the average life of a $100 note is nine years, counterfeiters in theory can continue copying the existing bills for at least another decade. Recalling the old bills upon release of the new ones would stop counterfeiters cold, but Washington insists this will not happen. "A recall would inconvenience people who use dollars legitimately and possibly threaten the savings of those who can't exchange their currency easily," explains Darcy Bradbury, the U.S. Treasury's deputy assistant secretary for federal finance. "Asians who save dollars should know that those dollars will always be good. The U.S. has never recalled its currency and has no plans to do so."
Maintaining the dollar's desirability makes fiscal sense. "If people no longer wanted dollars, Washington would have to borrow another currency to pay for its imports," explains economist Feige. "The American taxpayer would pay the interest on that loan. The global acceptance of dollars means taxpayers each year save $15 billion in taxes because no loan is necessary." U.S. prosperity depends on continued global demand for the dollar. "The nation that can establish its currency as the world standard has a great advantage when it comes to acquiring resources cheaply," says Feige. The prospect of Asian entrepreneurs rejecting the dollar because of its suspect value is a nightmare that few Americans wish to contemplate. To ensure the dollar's primacy, the Secret Service soon will receive an additional $5 million to pursue counterfeiters. The U.S. Treasury also plans to elevate its obscure Financial Crimes Enforcement Network to a full-fledged governmental agency with responsibility for curtailing financial crime outside the U.S. "There's a natural reluctance to create a new bureaucracy, but if something's not done now, counterfeiting and other financial crimes will cripple our economy," says Cordell Hart, the network's Mandarin-speaking director of Asia-Pacific affairs. "America's tired of being a financial target. This cow's been milked too long."
But one of the region's leading economists says the U.S. dollar faces bigger problems. "Asians may want to change from U.S. dollars because of the worry that they may decline further in value, not so much from counterfeiting," says C.H. Kwan, senior economist at Nomura Research Institute in Tokyo. "There will be a day when the U.S. dollar is not the dominant currency in Asia, but it will probably take decades. It won't be in the next five years."
United Bamboo Members' Code of Ethics
|Harmony with the people is
the first priority. We have to establish good social and personal
connections so as not to create enemies.
We have to seek special favours and help from uncommitted gang members by emphasizing our relationships with outside people. Let them publicize us.
Gambling is our main financial source. We have to be careful how we handle it.
Do not take it upon yourself to start things and make decisions you are not authorized to make. You are to discuss and plan all matters with the group and the elder brother first.
Everyone has their assigned responsibility. Do not create confusion!
We must not divulge our plans and affairs to outsiders, for example to our wives, girlfriends, etc. This is for our own safety.
We have to be united with all our brothers and obey our elder brother's orders.
All money earned outside the group must be turned over to the group. You must not keep any of it for yourself. Let the elder brother decide.
When targeting wealthy prospects do not act hastily. Furthermore, do not harass or threaten them. Act to prevent suspicion and fear upon their part.
If anything unexpected happens, do not abandon your brothers. If arrested, shoulder all responsibility and blame. Do not involve your brothers
Hong Kong has two main legislative weapons to tackle Triad members and organized crime personalities, namely the Societies Ordinance, which is aimed at the individuals themselves and second the Organized & Serious Crimes Ordinance which is designed to combat what these personalities actually do.
The Societies Ordinance
Under the Societies Ordinance, which was enacted in 1949 with subsequent amendments, all Triad societies are deemed to be unlawful societies in Hong Kong. The ordinance includes a series of criminal offences relating to Triad memberships, recruitment and activities. Any person convicted of professing or claiming to be an office bearer or managing or assisting in the management of a Triad society is liable to a maximum fine of HK$1 million and to imprisonment for 15 years. Membership of a Triad society is itself an offence and upon conviction, may be fined from HK$ 100,000 to HK$250,000 and to imprisonment for 3 to 7 years.
The Organized and Serious Crimes Ordinance
The Organized and Serious Crimes Ordinance was enacted in Hong Kong in October 1994, targeting in particular those powerful, previously untouchable, criminal masterminds of organized crime syndicates. The main provisions of the Ordinance were:
(a)To provide the Police with special investigative powers which would enable them to more effectively obtain evidence against criminals involved in persistent offences such as extortion, to trace the victims of organized crime and to identify the financial resources of the syndicates involved.
(b)To provide heavier custodial sentences for organized crime activities.
(c)To empower the Courts and confiscate the proceeds of the participants in organized crime.
Comparison, Between Triads and Other Organized Crime Groups
|Collection of loose-knit group (gangs)||A monolithic criminal organization|
|Independent power base||Power diffused from a central core|
|Horizontal organization||Rigid chain of command|
|Chairperson - limited influence, honorary post||Chairperson - the Godfather|
|Full autonomy||Central leadership|
|Profit belongs to individual gangs||Profit goes to organization|
|Disputes settled through negotiations||Disputes adjudicated by core leadership and fights|
|Made up of criminal fraternities||A criminal enterprise|
|The Tongs originated as Chinese Benevolent Associations on the west coast of the United States during the Gold Rush era. Although believed to be offshoots of the Triads, they were formed primarily as a means of protection from white racists who periodically raided "Chinatown" areas. Anti-Chinese riots were common in the late 1800's, especially in San Francisco and New York City. It was not unusual, for instance, for groups of Chinese to be murdered while local authorities remained indifferent.
The Tongs exist openly and are based chiefly on business affiliations. Many Triad members emigrating from China joined the Tongs when they arrived in the United States. This is not to say that the five or six Tong organizations that are active today are criminally controlled, but in many cities Tong chapters are certainly influenced by members of Triad groups.
Three of the major Tongs, the Hip Sing Tong, the Tung On Association, and the On Leong Merchants Association, are headquartered in New York City and maintain branches in Philadelphia. These Tongs are involved in illegal gambling activities. As in most Tongs, the gambling is confined to the Tong building or lodge. The Tongs in both cities use Chinese gangs to protect their illegal activities
Chinese street gangs have flourished in the United States since the liberalization of immigration laws in 1965. Some Tongs have used the gangs in extortion, gambling and narcotics operations. The Ghost Shadows gang is under the direction and control of the On Leong Tong in New York City. The gang was organized in 1971 by immigrants from Taiwan, Hong Kong and Malaysia. It also has members in Boston, Chicago and New Orleans. There is also a close relationship between the Tong-controlled street gangs in New York City and those in Philadelphia. There are indications that some members of the Ghost Shadows live in New Jersey. Raymond Chia Chi Cheng (aka Cheng Wei Mun), a New Jersey resident, was indicted on October 30, 1989, on charges by the Federal Organized Crime Strike Force in Boston for bribing an immigration officer and unlawfully obtaining immigration documents. Cheng is an officer in the On Leong Tong and has acted in an advisory capacity to both factions of the Ghost Shadows gang. He gained prominence when former Tong president Eddie Chan vanished and Cheng took control of the Tong operations. He is thought to be heavily involved in narcotics distribution.
Another street gang, the Flying Dragons, reportedly is present in the Hudson County area. The Flying Dragons are affiliated with the Hip Sing Tong, which is headquartered in New York City and is led by Ong Hon Shew (aka Benny Eng, aka Uncle Seven), an 80-year-old immigrant from Harbin, China. The Dragons are also active in Philadelphia. Shew developed the close relationship between the Dragons and the Hip Sing Tong immediately after assuming control of the Tong in 1974. A year later, he and eight others were convicted on a multi-count bribery indictment, and Shew was sentenced to an eight-year prison term. A member of the Flying Dragons, Ah Thank Lee, was convicted in 1987 for the robbery and murder of Philadelphia restaurant manager Jade Wong when she refused his demand for an extortion payment. Lee was also convicted in another case on extortion charges involving a New York City restaurant.
Another Tong, the Tung On Association, is headed by Clifford Chi Fai Wong, who along with his brother, Steven (Tiger Boy) Wong, also controls the Tung On gang. The gang is involved in smuggling members of the Sun Yee On Triad from Hong Kong into the United States. The Tung On is also believed to be engaged in homicide, gambling and narcotics trafficking and provides protection for the group's illegal casino on Catherine Street in Lower Manhattan. Presently, there are some 30 members of this gang in New York and Philadelphia. Steven Wong was recently convicted of narcotics violations and is awaiting sentencing in New York City. He has previous arrests for rape, kidnapping and illegal firearms possession. This narcotics conviction resulted from a heroin purchase from a member of the 14K Triad in Hong Kong.
Clifford Chi Fai Wong was placed on the exclusion list by the New Jersey Casino Control Commission on October 12, 1989, for his involvement with the Tung On organization. He was previously involved in a bus junket operation which arranged bus transportation for Oriental patrons from New York City to the casinos.
Wong is a close associate of Peter Chan, who also provided junkets to Atlantic City and was arrested for accepting $200,000 in kickbacks from the vice president of marketing at the Trump Casino, a charge of which he was acquitted. Clifford Wong was known to be involved in the booking and managing of oriental entertainers including many who appeared in Atlantic City casinos.
The Fuk Ching, another New York City-based street gang comprised of members whose family origin was Fukien Province has expanded its operations to New Jersey. Ching Kwok, a Chinese businessman who owns and operates restaurants in Hoboken and Englewood, was the victim of this Fukienese extortion ring in September, 1985. The gang threatened to kill the family of Ching Kwok if protection money was not paid. This is a common and under-reported crime against Chinese and Vietnamese restaurants. Kwok broke with tradition by reporting the threat to the police and was immediately given police protection. Four Fuk Ching gang members were arrested.
The Fuk Ching is now under the leadership of Lung Kee Kwok (aka Ah Kay) and has some 60 members engaged in armed robberies, extortion. narcotics and auto theft. The United States Department of Justice indicates that the majority of heroin from Southeast Asia coming into the New York City area is now being smuggled by people from Fukien Province.
One of the most visible Chinese criminal groups in the United States in recent times is the United Bamboo gang, or Chu Lien Pang. This organization was founded in 1957 in Taipei on the Island of Taiwan. Out of about 14,000 members worldwide, several hundred operate in this country. The United Bamboo has aggressively expanded its operations in the United States since 1979 and has initiated new members in New York City, Washington, D.C., Houston and San Francisco. The gang is heavily involved in heroin trafficking, extortion, contract murder and gambling.
In September, 1986, four United Bamboo members were convicted in Manhattan Federal Court and sentenced to long prison terms for racketeering, arms dealing and narcotics trafficking. The drug case involved the importation of more than 600 pounds of Southeast Asian heroin to New York City.
The New York office of the Drug Enforcement Administration believes that the importation of Southeast Asian heroin is now totally controlled by Chinese criminal organizations. Kon Yu-Leung (aka Johnny Kon), a Chinese businessman and importer of furs and watches, was arrested in New York City and charged with importing 500 pounds of heroin into the United States from Southeast Asia. He was also charged with illegally taking more than $1.4 million out of the country in 1987. Kon pleaded guilty in April, 1989, to importing more than 300 pounds of heroin and was sentenced in September, 1989, to 27 years in prison.
Kon Yu-Leung is affiliated with the Wo Saing Wo Triad in Hong Kong and the Big Circle gang in New York City, a relatively new group composed of former Chinese military Red Guards who fled to Taiwan and Hong Kong from the Canton area. The gang's size is unknown but narcotics trafficking and contract murder are its specialty in New York.
As with other organized criminal groups, New York- based Asian organized crime impacts on New Jersey as well. For example, there have also been some large-scale heroin seizures in New Jersey recently involving Chinese residents. Kaw Ting T. (aka Tony Kaw), an Ocean Township, Monmouth County, restaurateur, was arrested in February, 1988, in New York along with three other defendants and charged with importing 165 pounds of pure heroin hidden inside Oriental statues shipped from Thailand. Kaw Ting T. pleaded guilty in March, 1989, to heroin possession and was sentenced to 10 years in federal prison and fined $500,000. Interestingly, the other defendants from Hong Kong and New York City had $350,000 on deposit at the Golden Nugget and Caesar's casinos in Atlantic City. One of the defendants, Sak Chai Suwannapeng, a major Thai heroin wholesaler, is awaiting extradition from Hong Kong.
Most of the members of the Ghost Shadows, Flying Dragons, Fuk Ching, Tung On and other Chinese street gangs in New York are between the ages of 16 and 28. They are recruited mostly from high schools, community colleges and inner city universities. Many are in this country on student visas, with a sizeable number attending classes only long enough to achieve marginally adequate grades.
Other gang members are immigrants who are employed as waiters and kitchen help. For them, membership in a gang is a way to achieve "face" within their ethnic community.
|Dominicans||Italian Mafia||Jamaican Posse||Mexican Mafia|
|Outlaw Bikers||Piracy||Russian Mafia||Street Gangs|
|Terrorists||Triads and Tong||Vietnamese||Yakuza|