Editor’s note: This is the second of a three-part series based on a WND interview with investigative reporter Peter Schweizer about his new book “Secret Empires: How Our Politicians Hide Corruption and Enrich Their Families and Friends,” which shows how lawmakers, on a massive scale, are avoiding scrutiny through “corruption by proxy,” using family and friends as “middlemen.” In part one, he explains why he now believes term limits for federal lawmakers are justified. In part two, he explains how the corruption of American politicians has helped prop up North Korea’s rogue regime. In part three, he talks about President Obama’s astonishing “smash and grab” scheme and warns of pitfalls President Trump faces through his family members in the White House and through his global real estate empire, which now is managed by his sons.
As President Trump angles for a meeting with North Korean dictator Kim Jong Un to confront the rogue communist regime’s nuclear threat, the role of neighboring China looms large.
It’s China, according to many political analysts, that has kept Pyongyang’s communist government on life support and, therefore, holds a key to forcing Kim to shut down his nuclear weapons program.
One deal that has particularly benefited Pyongyang is a joint venture with the state-owned Chinese conglomerate Wanxiang to mine copper in the Paektu Mountains, near the China border.
With “consultants” on its payroll such as Prescott Bush, the uncle of then-President George W. Bush, and former Chicago Mayor Richard M. Daley, the brother of then-Obama chief of staff William Daley, Wanxiang not only has avoided sanctions, it has benefitted from them, points out investigative reporter Peter Schweizer in his new book “Secret Empires: How Our Politicians Hide Corruption and Enrich Their Families and Friends.”
Further, amid fierce opposition on Capitol Hill, the Chinese company was given approval by the Obama administration to acquire an American company that possessed advanced technologies with military uses.
“My view has always been that absent China skirting the rules and going fast and loose with commercial ties, North Korea would be on the brink of collapse,” Schweizer told WND in an interview.
“I think that’s the opportunity that Trump has, to go to the Chinese and say: ‘Look, the bottom line is you need to deal with this. You need to cut off trade, you need to cut off commercial ties to help us deal with North Korea. Nobody else is in the position to do it the way that you are.'”
Schweizer said critical sectors such as minerals and energy “are what keeps North Korea bumping along while the people are starving.”
“You take that stuff away and the regime has a massive, economic problem,” he said.
Schweizer’s new book centers on what he calls “corruption by proxy,” in which family and friends of powerful political figures position themselves as middlemen, creating “previously unimaginable pathways to wealth.”
He features the close relationship with China of Republican Senate Majority Leader Mitch McConnell and his wife Secretary of Labor Elaine Chao, which as WND reported, has coincided with a doubling of their net worth.
Schweizer also pointed out that President Trump’s son-in-law Jared Kushner, a top White House adviser, has been regarded by Chinese diplomats as a strategic “channel.”
A potential conflict of interest lies in Kushner’s need for a major infusion of cash to keep a Fifth Avenue building on which his company remains highly leveraged, with an interest-only mortgage due in February 2019. Kushner, in fact, negotiated a tentative deal with China’s Anbang Insurance Group, regarded as one of China’s most politically connected companies, but the agreement was aborted when it was exposed by the New York Times.
Fox News reported Sunday North Korea’s Kim said he’s willing to talk with Trump about getting rid of his nuclear weapons as part of a denuclearization across the Korean Peninsula, according to a Trump administration official.
Trump tweeted March 28 there “is a good chance that Kim Jong Un will do what is right for his people and for humanity.”
But many analysts have expressed skepticism about Pyongyang’s intentions. A former U.S. defense official said a possible denuclearization offer appears to be contingent on the U.S. creating the right conditions.
“It’s possible that Kim Jong Un has a different meaning in mind,” said Abraham Denmark. “So far it sounds like the same old tune.”
The Chinese company Wanxiang’s agreement with Pyongyang in 2007 to take over operation of the Hyesan Youth Copper Mine and invest some $23 million to modernize and upgrade it was not hidden from the Chinese company’s friends and supporters in the United States, Schweizer points out in his book.
When the United Nations passed a resolution in 2016 calling for sanctions against North Korea, including banning the export of metals such as copper, President Obama followed suit with an executive order that also banned copper exports.
“One would expect big trouble for Wanxiang,” Schweizer writes.
But while Wanxiang was operating the biggest copper mine in North Korea, the Obama administration went after other Chinese companies.
The resulting sanctions on competitors only made things better for Wanxiang in North Korea.
The Obama administration also was a godsend to Wanxiang when the Chinese company sought in 2012 to purchase the Massachusetts-based, high-tech battery company A123.
A123, subsidized by taxpayers, had been touted by Obama as an alternative energy company before it failed.
When Wanxiang made an offer on A123, alarm bells went off in Washington. A123, as Schweitzer notes, “possessed industry-leading technologies that had applications not only for civilian uses, but also for advanced military systems including satellites.”
A123 advanced battery science by at least a decade, according to former White House deputy national security adviser Mark Pfeifle. He warned at the time that if the sale was not stopped, “the United States may soon have to depend on one of China’s wealthiest and most politically connected Communist Party leaders for access to taxpayer-funded technology that will power the next generation of space satellites and unmanned military vehicles.”
Wanxiang’s founder, Lu Guanqiu, already had visited the Obama White House twice for meetings.
After signing Prescott Bush as a paid adviser in 1999 just as his nephew was emerging at the Republican presidential front-runner, Wanxiang added former Chicago Mayor Richard M. Daley to its payroll when Obama became president in 2009. When Daley’s brother, Bill, served as Obama’s chief of staff, brother Richard was in regular contact with the White House on Wanxiang’s behalf.
Schweizer also points out that Vice President Joe Biden invited Lu to visit several cities in the United States to “explore investment opportunities.”
And Wanxiang was allied with Obama close friend Penny Pritzker, Obama’s finance chair and longtime supporter who later became commerce secretary.
All this despite Wanxiang being one of only three companies in an evaluation of 100 companies in emerging markets that received a zero rating on a scale of zero to 100 for transparency, meaning it can be assumed to be corrupt.
Amid both serious national security and economic concerns from both parties in Congress, Wanxiang’s acquisition of A123, Schweizer writes, “sailed through the Obama administration” and won approval in January 2013, with no conditions placed on the sale.
Rules don’t apply to Wanxiang
Wanxiang continues to have an interest in Hyesan mine through a close family member, according to Schweizer.
Sino-Mine International, through which Wanxiang previously owned its interest in the mine, is owned by Tonglian Capital, which was founded by Lu Guanqiu’s son, Lu Weiding.
The younger Lu has been running Wanxiang since his father’s death last October.
Schweizer said that carving out the mine away from the company apparently is just a means to avoid accountability for their commercial ties to North Korea.
“So I don’t think that’s changed,” he told WND. “This is part of the problem. The rules that are supposed to be pretty ironclad, that anybody doing business in North Korea, in violation of sanctions, is subject to sanctions in the United States,” he said.
“But those rules are not applying to Wanxiang.”