POLITICS: Why the Feds are eyeing China’s grifter oligarchs

The unclassified report from US spy agencies is only seven pages long. But it surely struck fear into the hearts of China’s Communist overlords when Tulsi Gabbard released it last month.

It was supposed to.

The report from Gabbard’s Office of the Director of National Intelligence is entitled “Wealth and Corrupt Activities of the Leadership of the Chinese Communist Party.” It highlights the defining characteristic of Chinese Communism: The corruption of party officials at all levels of government. 

And it starts at the very top, singling out Chinese leader Xi Jinping himself. 

“Xi’s siblings, nieces, and nephews held assets worth over $1 billion in business investments and real estate,” the report notes, going on to suggest that the Chinese premier’s immediate family is managing these holdings on his behalf.

The rest of the senior Chinese leadership is equally addicted to graft and insider trading, the report suggests. It highlights the case of former premier Wen Jiabao, whose family amassed a fortune of almost $3 billion during his years in office.

The Biden Crime Family were pikers by comparison, raking in only a little more than the average provincial party secretary would in China.

When news of Wen’s fortune was first published in 2012 — amassed on a meager monthly salary of some $5,000 — Beijing was furious. It tightened its censorship regime and told foreign news organizations that the personal finances of senior party officials were strictly off limits and grounds for expulsion. Even today, it continues to deny that senior leaders are corrupt or that they have significant personal wealth.

Still, the evidence of massive official corruption is undeniable. Studies suggest that one out of every six dollars spent in China — some $2 trillion a year — winds up in the pockets of party officials one way or another.

Crime may not pay, it seems, but Communism certainly does.

So why would Tulsi Gabbard’s shop publish a study that seems purposefully designed to embarrass and anger Xi Jinping and the Chinese leadership?

I view this as a shot across the bow. The Trump administration wanted to put China’s political oligarchs on notice that we are tracking their corrupt activities. And that their personal wealth — at least the part of it that is outside of China — is not beyond our reach.

Nearly every senior party official has moved part of their ill-gotten gains overseas for safe-keeping, mostly to English-speaking countries, like America, Canada, and Australia, that enjoy the rule of law. Or to tax havens like the British Virgin Islands, Panama, or the Cayman Islands.

The Panama Papers in 2016 exposed offshore companies linked to relatives of Politburo members, like Xi’s brother-in-law and Wen Jiabao’s son. Hard numbers are hard to come by, but it’s known that China is hemorrhaging trillions of dollars as officials and others seek safe havens to stash their cash.

On its surface, “Wealth and Corrupt Activities of the Leadership of the Chinese Communist Party” is a report about the corruption of the senior leaders of the CCP. However, its unspoken message to China’s political elite is: We know who you are and where your money is stashed. 

It is an implicit threat to seize their ill-gotten gains, at least those that they have stashed in overseas bank accounts and real estate. All will be at risk if China misbehaves.

Few people doubt that any aggression by China against any of its neighbors, including Taiwan, will be very costly for the Chinese economy because of the sanctions that will be imposed.

With the publication of this report, China’s political oligarchs now know that the Trump administration will impose the same costs on them that were imposed on the Russian oligarchs who supported Vladimir Putin’s invasion of Ukraine.

They paid — and are still paying — a heavy price for Putin’s Ukrainian adventure, with yachts seized, private jets grounded, and billions in overseas assets frozen.

Unless China’s oligarchs want to see their overseas holdings similarly disappear, they will restrain Xi Jinping’s more aggressive impulses toward Taiwan, for example.

More 4-D chess from the Trump administration.

Steven W. Mosher is the president of the Population Research Institute and the author of “The Devil and Communist China.”