Is TV Network Implicated in Spying?

A top staff member of the Phoenix North American Chinese Channel (PNACC) was recently arrested for stealing U.S. military secrets. The history of the PNACC, including the personal background of its founding CEO and the station’s role as a propaganda arm of the Chinese government, raise serious questions regarding the role of PNACC itself in China’s espionage efforts in the U.S.

On Oct. 28, two Chinese couples were arrested in the Los Angeles area by U.S. intelligence officials and charged with stealing U.S. military secrets. One of the couples was arrested at the Los Angeles airport, the other at their home in Downey. The man arrested at the airport, Tai Wang Mak, is said to be “a broadcast and engineering director for the Phoenix North American Chinese Channel.” The man arrested in Downey, Chi Mak (also known as Jack Mak), Lead Project Engineer at the defense contractor Power Paragon (a subsidiary of L3/SPD Technologies/Power Systems Group in Anaheim, California), is his elder brother.

According to an FBI affidavit, Chi Mak allegedly took computer disks from Power Paragon with sensitive information about a Navy project. Allegedly he also e-mailed photos and reports about the project to his home computer. He and his wife then copied the information onto CDs and delivered them to his brother Tai Wang Mak. He and his wife were scheduled to fly to Hong Kong on Oct. 28 in order to meet with a contact later in Guangzhou, China, the affidavit says.

Chi Mak and his wife, both originally from China, became naturalized U.S. citizens 20 years ago. Tai Wang Mak and his wife are permanent residents who came to the U.S. in May 2001.

China’s Limitless Workforce

“The workforce available to the Chinese government and its corporations to devote to gathering information in the United States is nearly limitless,” said Larry M. Wortzel in a recent lecture at the Heritage Foundation. A former military intelligence officer who has tracked the activities of the People's Liberation Army and Chinese intelligence services for 35 years, Wortzel remarks that, “There are some 700,000 visitors to the U.S. from China each year, including 135,000 students. It is impossible to know if these people are here for study and research or if they are here to steal our secrets. The sheer numbers defy complete vetting or counterintelligence coverage.”

This led Wortzel to the statement: “I know of no more pervasive and active intelligence threat to America's national security than that posed by the People's Republic of China.”

David Szady, assistant director of the FBI’s counterintelligence division, has given similar warning as quoted in a Wall Street Journal article, “China is the biggest [espionage] threat to the U.S. today.”

Apparently Chinese spies have infiltrated every major Western country. In May this year, Chen Yonglin, the former first secretary of the Chinese consulate general in Sydney who defected in Australia, publicly claimed that there were at least a thousand Chinese spies active in Australia. His claim was supported by another defector Hao Fengjun, a former officer of China’s Gestapo-like 610 office, who said there were even more Chinese spies in Canada.

In Europe there are hundreds of Chinese spies as well, according to a Chinese agent who defected in Belgium earlier this year. Commenting on the situation, Claude Moniquet, CEO of the European Strategic Intelligence Security Center told The Epoch Times, “The network of [Chinese] spies operating from Belgium is certainly active also in the Netherlands and France, and possibly also in the U.K. and Germany.”

Phoenix TV’s Ties to the Chinese Military

The FBI estimates China has set up some 3,000 “front” companies in the U.S. in order to steal military and industrial technologies. Whether PNACC is such a front company or not, it is said to have unusual ties with the Chinese government.

The military background of the PNACC’s founding CEO Changle Liu is well-known. In an interview with The Epoch Times, Zhang Weiguo, an independent news commentator who was editor and reporter of the former Shanghai-based newspaper World Economy Pioneer, said previously Liu was not only a military-affairs correspondent in China, but was actually an officer in the Chinese military.

In 1990, according to a report provided by Zhang, a female soldier whom Liu tried to seduce filed a complaint to the Central Political Bureau, and as a result Liu was asked to withdraw from the military. Liu “bought” a Belize visa and left China for business ventures, which proved to be a failure six months later. He then returned to China. Through his former military connections, he obtained help from the National Security Bureau and the Intelligence Department of the People's Liberation Army and started a Letian Company for oil trade.

Zhang sees unusual support from the Chinese government behind Liu, citing that although Liu claimed to have made his fortune through trading oil, China’s oil business has always been controlled by the state. Only high-ranking official connections would allow someone to trade oil with China.

In the process of starting the Phoenix TV, Changle Liu obtained loans of no less than $500 million from the Bank of China (BoC) through the help of its former CEO Wang Xuebing, the key figure in the high-profile BoC scandal who was sentenced to 12 years’ imprisonment in 2003, says the report provided by Zhang.

The loans were offered by BoC to Liu’s different business operations—the Phoenix TV, Hong Kong’s Asia Television (of which Liu is a major shareholder), Liu’s Shenzhen highway projects, etc. When later Wang Xuebing became CEO of China Construction Bank (CCB), Liu started receiving loans from the CCB.

When asked about Changle Liu’s special connection with the Chinese government, another news commentator, who wishes to remain anonymous, told The Epoch Times that at a dinner hosted by Changle Liu in 1998 in Shenzheng, China, Liu told his guests that the National Security Bureau had had given him $2 million to start the TV station.

Phoenix TV started in 1996 in Hong Kong and in 2001 opened U.S. operations as PNACC.

From the start, Zhang Weiguo said, the many special privileges that Liu has in China have been a great attraction to overseas investors. Rupert Murdoch’s News Corporation owes 37.6% of the Phoenix TV’s shares, the same amount as owned by Changle Liu.

China’s “Overseas Media”

Speaking of Phoenix TV, Wu Guoguang, who was once part of the think tank advising former Secretary General of the Chinese Communist Party (CCP) Zhao Ziyang and is currently the University of Victoria’s China Program Chair at the Centre for Asia-Pacific Initiatives, said in the Chinese article “The Sophistication of China’s Political Propaganda” that it was part of Communist China’s strategy to “export in order to import.” He explained this with his personal experience. The night before Iraqi soldiers surrendered en masse in March 2003, Wu was in Hong Kong, closely following the news. He watched the Phoenix TV, which broadcast in Mandarin, because all the other local TV stations broadcast in Cantonese, a dialect that he did not understand. By the end of that evening, he learned from the news that the U.S. troops met fierce resistance in Iraq.

To his surprise, the following day, all the newspapers reported on the front page Iraqi soldiers surrendering en masse. He was both shocked and upset. The Phoenix TV followed the line of the Chinese government media so closely that it had misrepresented the fighting and simply did not report the surrender of the Iraqi soldiers.

Wu then called his friends in Mainland China and discovered that none of them heard about the news from Iraq. His friends told him that they did not watch CCTV, China’s state-run TV station, but the “overseas” Phoenix TV.

“Why doesn’t it [the Phoenix TV] have a Cantonese channel or Cantonese programs, given that it is stationed in [Cantonese-speaking] Hong Kong?” questioned Wu in the article. Wu’s answer, in short, is that the majority of the people in China have lost both their confidence and interest in China’s state media. “Overseas” media—media from outside China—are believed to be credible. Therefore, the Chinese government now has to use “overseas media” to spread its political propaganda. The Phoenix TV is viewed by many Chinese as an overseas media created by the Chinese Communist government. According to Zhang Weiguo, besides spreading political propaganda to the Mainland Chinese, the TV station also plays the role of disseminating the Chinese government propaganda to the Western media.

“The Phoenix TV has exclusive coverage of many things in China that no other overseas media can provide,” said Zhang, adding that, “Sometime it will also criticize the government in a way that it would be unacceptable for other media. This makes the Western media believe what it says.”

More than Propaganda?

In a comprehensive study published in China Brief in 2002 titled “How China’s Government Is Attempting to Control Chinese Media in America,” Mei Duzhe said the CCTV had “effectively brought the Chinese Communist government’s slanted news, or propaganda, to the vast majority of ethnic Chinese living in the U.S.” If a similar article were written today, the CCTV would probably be replaced by the PNACC, whose “overseas origin” and soft-spoken Taiwan-style Mandarin make the TV station much more popular among the Mainland Chinese in North America.

The role of PNACC in strengthening the effect of China’s propaganda within and without China seems clear. Does PNACC serve China’s rulers in other ways?

The Chinese Communist Party (CCP) has a long history of specializing in espionage. “Zhou Enlai once said, ‘Chairman Mao knew the military orders issued by Chiang Kai-shek before they even made it to Chiang’s army commander.’” (The Nine Commentaries on the Communist Party)

U.S. military technology, not Kuomintang battle plans, is now the high priority target for CCP spies. The W-88 nuclear warhead and the AEGIS missile defense system are among the many top-secret trophies that Chinese spies have brought home in recent years.

The spy case of Tai Wang Mak has raised a serious concern: Is PNACC implicated in China’s spying?

In response to this question, Zhang Weiguo said, “unless the PNACC can show very strong evidence that it steers clear of the case, such a concern is understandable and is legitimate.”