China’s Foot Soldiers

When US government officials do acknowledge that drugs are coming into the United States from China, rather than holding the Chinese government to account, they seem to place all the blame on Chinese organized crime groups, known as triads, for the illegal drug production and distribution. But triad business is effectively CCP business. In 1982, the Chinese Communist Party made peace with the triads. By effectively joining forces, they turbocharged the quantity of illicit drugs bound for the United States, achieving both profits from and sabotage of its chief rival. The story would not be complete, however, without also acknowledging the US bankers and politicians who are complicit in the win-win.

On May 23, 1982, Chinese leader Deng Xiaoping sat down with two immensely wealthy Hong Kong tycoons, Li Ka-shing and Henry Fok, for a civic peace summit. Both were enormously successful investors in real estate and finance, and also known to have links to the triads. The cooperation Deng proposed was simple. Over the course of the next several decades, Hong Kong industrialists and triad leaders would demonstrate allegiance to the CCP, and the CCP would allow them to operate largely unfettered in Hong Kong. In one speech Deng opined that some triads were “good” and “patriotic.” The triads kept their criminal drug trafficking overseas and performed certain favors for the Communist Party with the leadership’s blessing. Cooperation would be run through the Communist Party’s United Front Work Department, which is used to promote the Communist Party overseas. As we will see, several Chinese nationals working with the United Front Work Department became major players in the drug trade.1

Henry Fok was described by Beijing as a “patriotic capitalist,” but he was suspected of having triad links, and his son was arrested in the United States for arms smuggling.”2 Fok, who died in 2006, lived a luxurious life traveling the world on his private 747 aircraft. He had a second one just for his staff. Among his many homes was one “in the middle of the China Sea, reachable only by boat or helicopter.”3 He made his money early in life smuggling goods during the UN embargo during the Korean War, later hooking up with a notorious gambling tycoon and alleged triad member nicknamed “Devil King.” Among Fok’s holdings was a large stake in a casino whose VIP rooms were run by the triads.4

The other tycoon at Deng Xiaoping’s peace summit, Li Ka-shing, was perhaps the biggest single economic player in Hong Kong. Some believed that 30 percent of all the companies on the Hong Kong stock exchange were controlled by Li.5 There are numerous examples of close ties between Li Ka-shing and Chinese triads. In 1997 two Canadian intelligence agencies (the Royal Canadian Mounted Police Criminal Analysis Branch and the Canadian Intelligence Service Analysis and Production Branch) compiled a draft report called “Sidewinder,” which analyzed the connections between Chinese businesses in Canada and triad members. According to the draft report, the triads had been collaborating with Hong Kong tycoons and Chinese government officials. The bulk of the case studies in the report involve Li Ka-shing’s business empire and its operations in Canada. Indeed, of the eleven specific cases of Hong Kong tycoon and triad collaboration, nine involve businesses owned or directly linked to Li. At the same time, Li was a close friend and business partner with the late Stanley Ho and Cheng Yu Tung, for example, each of whom “[were] known to be associated to many documented triads,” according to a Canadian intelligence memo. Li Ka-shing has done numerous deals with both in locations from Canada to Singapore. Li has also been business partners with triad-linked Henry Fok and with Malaysian billionaire Robert Kuok, who did real estate deals with Burmese heroin traffickers Lo Hsing Han and Steven Law.6

Li’s ties to a Western investment bank are also well established. Goldman Sachs earned hundreds of millions of dollars in fees from Li’s business deals.7

The effects of the evolving peace between the CCP and the triads yielded results. By the close of the 1980s, the Chinese triads controlled 60 percent of the heroin coming into the United States.8

Yet between 1989 and 1993, the George H. W. Bush administration continued to insist—against all evidence—that China was cooperating with the US government to combat the international drug trade. In 1992, then senator Joe Biden, who was serving his fourth term and was the chairman of the Senate Judiciary Committee, convened hearings on drug trafficking and China. He noted that “China has become a major trafficking route for heroin and opium” and expressed concern that “China is poised to become the lynchpin of the heroin trade.” He criticized the George H. W. Bush administration for doing “far too little to combat this dangerous development.”9

Biden was correct in his criticisms, but somehow, in his rise to vice president and now president, his public resolve on this matter changed dramatically, as we will see.

The effective merger between the Chinese state and criminal drug syndicates underscores the military interests inherent in their drug-trafficking ventures. For example, in 1994, the Thailand office of the International Criminal Police Organization (Interpol) received a tip that methamphetamines were being produced inside Chinese military barracks “under the supervision of a general.” Interpol tracked the shipment quietly, and when the cargo arrived in the Philippines, police were “able to inspect two Chinese ships and seize 150 kg” of the drugs. The police arrested thirty-three Chinese nationals, including five soldiers. One was a People’s Liberation Army (PLA) captain.10

Not surprisingly, Chinese law enforcement has provided little help when it comes to the triad-controlled drug trade. In the 1990s, Tao Siju, the minister of public security, opined that “as for organisations like the triads in Hong Kong, as long as these people are patriotic . . . we should unite with them.” Indeed, Tao himself did just that. China’s top cop opened a nightclub in Beijing called “Top Ten” with businessmen known to be leaders of the triads.11 Chinese intelligence services were also happy to work with the triads, likely using them in valuable human intelligence operations.12

Even the brutal reputation of the triads became an asset for Beijing. Sun Yee On is a particularly violent gang that requires new members to drink a mixture of blood and rice liquor while kneeling before a Taoist altar. When a man tried to open a decorating store in an area the gang claimed as their “turf,” he was chopped up in broad daylight with a ten-inch butcher’s knife as staff members and customers looked on.13 When senior CCP officials travel overseas, they sometimes rely on Sun Yee On members to protect them.14

Fujian, a rugged southern coastal province of mainland China, is the base of operations of much of the triad activity and was reportedly the birthplace of the triads.15 It just so happens that CCP chairman Xi Jinping spent seventeen years in Fujian, longer than anywhere else as a party boss, serving as acting governor between 1999 and 2002.16

In the early 2000s, Xi was a rising star in the Communist Party, with a powerful father. It was in Fujian that he met his wife, Peng Liyuan, a gifted singer. She sang to Chinese troops “fresh from the Tiananmen Square massacre.”17

Fujian has been notorious for not only how openly the triads and cartels operated but also how much they enjoyed the protection of local Communist Party and government leaders. Organized crime figures received “political protection” and “managed to escape detection” in the province, according to an official Canadian report published by the United Nations.18 Violent criminal gangs such as Fuk Ching operated openly in Fujian, extending their reach into California, Hawaii, North Carolina, Massachusetts, and New York City.19 During Xi’s tenure as a leader in Fujian, organized crime figures lived openly in the province. For example, the head of the Green Dragons Gang of New York did so despite the United States having issued a warrant for his arrest on murder charges. “Naturally Fujian authorities cannot seem to find him to extradite him,” reported Nicholas Kristof and Sheryl WuDunn of the New York Times.20

In 2009, the US Department of Justice (DOJ) Organized Crime Drug Enforcement Task Forces noted that criminal gangs from Fujian were a major source of heroin flowing into New York and New Jersey.21 Speaking specifically of Fujian, the DOJ has noted that many drug-trafficking cases in the United States lead back to China, specifically that “gang members flee to China when sought by American law enforcement.”22 Of course, Chinese law enforcement officials rarely cooperate—nor did Xi.

The triads were even part owners of Fujian Changle International Airport. What sort of government allows a drug-selling crime organization to own part of an airport?23 Perhaps a government that gains from criminal exports.

At least one member of President Xi’s family has possible ties to organized crime. A cousin of Xi’s was a person of interest in an Australian government investigation looking into a “money-laundering front company” that helped “suspected mobsters move funds in and out of Australia.” The cousin, a Communist Party member, had previously been a member of the Chinese People’s Armed Police. When asked about the allegations, the Chinese Foreign Ministry dismisses them as “groundless accusations based on rumors” meant to “smear China.”24

“The entire political system in China is predicated on corruption, complicity and cover-up, and it is virtually impossible to rise through the ranks if you are not corrupt or at least complicit in the system,” said Jorge Guajardo, who served as Mexico’s ambassador to China from 2007 to 2013. “If you are not corrupt, the system boots you out.”25

Of course, Xi was not booted out. He rose to the top.

Further intertwining the triads with state interests, Chinese officials allowed triad-linked businessmen such as Li Ka-shing to take leadership positions or equity stakes in the government’s sovereign wealth fund, the China International Trust and Investment Corporation (CITIC).26 Soon other tycoons with triad ties joined the investment fund’s ranks. Alvin Chau, connected to the 14K triad, became an officer of CITIC. He was eventually expelled from Australia due to his “extensive organized crime connections.”27 At CITIC, such triad businessmen work closely with senior officials at the Chinese Ministry of State Security.28

In the 1990s, US policy toward the CCP drug traffickers remained soft. Virtually every major financial player in the United States wanted to do business with CITIC, regardless of CITIC’s complicity with the triads, which were sabotaging the United States with illicit drugs.

In 1997, senator John Kerry published a book called The New War: The Web of Crime That Threatens America’s Security, calling out the Chinese government for its ties to organized crime, which were specifically threatening US security. Kerry, who was a member of the Senate Foreign Relations Committee at the time, wrote that China was a central hub for of the international drug trade, quoting estimates that more than $200 billion was the “yearly Chinese earnings from drug production, smuggling, and distribution.”29 He accurately noted that Chinese triads were at the center of the global international drug trade.

But then Kerry changed.

He remained on the Senate Foreign Relations Committee for more than a decade after he wrote his clarion call, but strangely went silent. As we will later see, when the CCP and the triads emerged as a key supplier of fentanyl to the United States and after Kerry became secretary of state, he appears never to have publicly pressed Beijing on the subject. He did write a letter to the United Nations, asking it to restrict the sale of fentanyl worldwide.30

It is worth noting that while Kerry was calling out China for its involvement in the drug trade, he was also taking trade delegations to the country. “What’s suddenly happening is the (Chinese) market is reaching a critical mass,” Kerry said as he visited with thirty company executives from fifteen companies. “In certain sectors, it’s take-off time.” The purpose of the trip was “To open doors, to connect, and to sell.” Soon after the release of his book, he stopped talking about it.31

CITIC proved to be the CCP’s ticket to crippling US policy on the drug problem, inking deals with American financial firms and moving in the highest corridors of power. In February 1996, CITIC chairman Wang Jun met with President Bill Clinton and others in the White House. Even when CITIC officials became publicly enmeshed in shocking illegal activities in the United States, officials in Washington seemed prepared to look the other way.32

One alleged triad member funneled money to Bill Clinton’s reelection campaign. The so-called Chinagate scandal is often fuzzily recalled as an instance of Chinese officials trying to curry favor with the Clinton team. Less well remembered is that a major source of those funds was a shady businessman named Ng Lap Seng, who, according to FEC filings and other reports, was believed to be a member of the Shui Fong triad.33 Shui Fong was also involved in the international drug trade.34

The clublike relationships developing among Chinese Communist leaders, Chinese organization crime, American financiers, and US political officials were perhaps best epitomized by a dinner aboard a yacht called Monkey’s Uncle in Hong Kong.

*  *  *

The Goldman Sachs yacht pulled slowly away from the Causeway Bay Typhoon Shelter in Hong Kong and moved through the dark waters of the bay. It was early October 1997, and a small group of powerful individuals gathered to discuss how they might work together to make money in Hong Kong, including through investments in a new Hong Kong airport. Guests included high-ranking CCP officials, triad-connected businessmen, Goldman Sachs investment bankers, and US secretary of commerce William Daley.35

Imagine an American firm or senior government official meeting with overlords of the Mexican drug cartels. Would the US secretary of commerce sit down with Sinaloa cartel affiliates to discuss opportunities for American businesses? The standards regarding China were very different, no doubt because the scale of profits in mainland China distorted the Americans’ sense of priorities, even at the expense of US security.

By the turn of the millennium, the triads were slowly moving out of the heroin trade into something even more lucrative—and dangerous. Synthetic drugs—methamphetamines, for one—were promising a wide market.

Chinese authorities promised the Clinton administration that they were making “special efforts” to control the production of the chemicals that went into those drugs, but production continued apace. Elements of the Chinese government, far from trying to control the production of these illicit drugs, were actively promoting their production. The French government–backed drug investigative agency Observatoire Géopolitique des Drogues claimed in a 1998 special report that “such large quantities of these substances could only be produced and transported by soldiers of the People’s Liberation Army.” It pointed out that the Chinese military controlled a chemical and pharmaceutical conglomerate called 999, which included “400 factories” producing the stuff.36

Despite paper promises to Washington, the People’s Republic of China was becoming the “world’s largest producer of ephedrine,” said the French agency, which was then used to synthesize “illegal amphetamine-type products” that were headed largely for the United States and Europe.37

One of the most economically viable synthetic drugs that emerged was fentanyl. Drug dealers like to lace other drugs with it because it is relatively cheap and produces a rapturous high. But it is also potent—it is “thirty to fifty times stronger than heroin”—and therefore exponentially more dangerous.38

Fentanyl became a sharpened “borrowed knife.”

Fentanyl was first developed in 1960 by a Belgian scientist and was prescribed primarily for patients who were recovering from painful surgeries. The US Food and Drug Administration approved fentanyl for legal, prescribed use in 1968, after which it had a limited use in hospitals. But when the patent expired in 1981, its production and distribution on the black market proliferated. Its street names were “China Girl” or “China White.”39 Fentanyl was increasingly mixed with other drugs, from marijuana to street-produced Adderall.40 Between 2005 and 2007, the DEA attributed more than a thousand deaths to illegally manufactured fentanyl. By the 2010s, mortality rates skyrocketed.41

Chinese companies began selling fentanyl openly, in English, on the internet. American dealers could place an order and make payments through PayPal, and the Chinese supplier would ship it directly to them through the mail or a parcel service such as FedEx. It happened on the internet’s dark web, but it also happened out in the open. According to one investigation, 40 percent of those offering to sell fentanyl and mail it to people in the United States were officially registered companies in China. Alibaba, China’s equivalent of Amazon, became a source for drug sales, according to US federal court cases.42 They were out-in-the-open sales, not just on the dark web.43 Beijing did not show concern despite the mounting body count in the United States.

Fentanyl websites operate freely in China. Even though the Communist government routinely shuts down websites that it does not approve of for a variety of reasons, when it comes to closing websites selling fentanyl, it has not cracked down “to any serious degree.”44

Chinese Customs and the State Post Bureau are well known for screening every letter and package sent from or to China. The goal of this practice is to maintain control and prevent “harm” from being done to the country, but with fentanyl shipments to the United States, they seem unable—or unwilling—to screen and seize the packages. According to the Drug Enforcement Agency (DEA), “China is the primary source of fentanyl and fentanyl-related substances trafficked through international mail and express consignment operations.”45

Clearly, the People’s Republic of China is a surveillance state: officials closely monitor the flow of people and goods into and out of China, including fentanyl shipments. The Chinese police have, notoriously, few restraints on their conduct. They “disappear” people, arrest bloggers without warrants, kidnap billionaires, and imprison human rights activists.46 They relentlessly pursue drug dealers operating inside China. If Beijing wanted to “disappear” the country’s fentanyl exporters, it would. But it doesn’t.

To avoid detection by the US Postal Service or package delivery firms such as FedEx, Chinese fentanyl manufacturers mislabel their packages to conceal the contents, describing them as a food substance or glue. The Chinese state punishment for mislabeling shipments of fentanyl? “Civil penalties and small fines.” Offenders face no criminal charges.47

The flood of drugs sent through the mail from China launched the US fentanyl epidemic. First responders, such as paramedic Peter Canning in Connecticut, were astonished by what they were seeing. He noted that the DEA had distributed a booklet called “Fentanyl: A Briefing Guide for First Responders” that in his words instructed “emergency personnel” to “check the scene for packages from China” before treating a person who is dying—for fear that the responders might be harmed.48

When Customs and Border Protection (CBP) and the US Postal Service improved their identification of packages arriving from China that contained fentanyl and other drugs, Chinese companies began transshipping the drugs through other countries. “Shanghai, China is a major exporter of fentanyl to the U.S. and shippers are known to transship to avoid detection,” noted prosecutors in one fentanyl case. So the shippers started shipping the drugs via Dubai and other intermediary locations instead.49

Clearly, China was weaponizing fentanyl against the United States. However, quantities were still limited by parcel services. Then a solution emerged: Instead of shipping fentanyl incrementally through the mail, why not mass-produce it in Mexico?

*  *  *

The Chinese triads began forging relationships with the Mexican drug cartels and quickly became business partners with them.50 The cartels started to mix fentanyl with their heroin. Fentanyl production proved to be so lucrative that “El Chapo,” the infamous head of the Sinaloa Cartel, quickly shifted from producing heroin and cocaine to fentanyl.51

From the perspective of the Chinese triads and their allies in Beijing, routing the drugs through Mexico not only made logistical sense but also provided Beijing a measure of plausible deniability. The borrowed knife. The drugs were coming from Mexico, not China, right?

A similar operation, but on a smaller scale, occurred north of the border in Canada. Chinese triads established laboratories along the US border in British Columbia to produce fentanyl in Canada, smuggle it into the United States, and ship it abroad.52

Most of the pharmaceutical ingredients needed to produce the synthetic cocktail known as fentanyl are produced in China. In the northern city of Shijiazhuang, west of Beijing, chemical companies churn out such ingredients. A highly militarized city boasting some eleven military facilities including several command schools, military hospitals, and medical facilities, it is also a government-designated national development zone. So the companies producing the fentanyl chemicals get tax credits.53 Some 40 percent of the production of this chemical comes from this city alone. Wuhan, now synonymous with covid-19, is another big production center of fentanyl components.54

In Mexico, the cartels rely on a long list of Chinese companies to provide the precursor chemicals. The Mexican news outlet Infobae published a list of sixty-four Chinese companies that it had concluded were major suppliers to the Sinaloa Cartel and the Jalisco New Generation Cartel (CJNG) in Mexico. Several of the companies listed in the database were state owned, and several more were politically connected.55 Xuyang Biotechnology Company describes itself as “a production and sales LLC (wholly state-owned) specialized in producing and exporting Pharmaceutical Intermediates. . . . We own six subsidiary [sic] and we enjoy tax exemption privileges.”56 Another company, Skyrun Industrial Company, is also state controlled, specializing in “developing, producing and handling raw pharmaceutical material and intermediates.” Many of the top leaders of the company are Communist Party members.57

Usually, the public discussion about China’s involvement with our fentanyl crisis ends here: China profits from selling and shipping the precursors from China to North America. But the country’s involvement is far deeper and includes every link in the fentanyl chain from production to distribution, money laundering, and cartel communications.

Fentanyl precursors produced in China are shipped to Manzanillo, Mexico, a major port with two scenic bays northwest of Mexico City. US officials believe that 90 percent of the fentanyl precursors arriving in Mexico from China come via this port. It’s little surprise that the port is a “crucial entry point for fentanyl and methamphetamine precursor chemicals” into the United States.58

Manzanillo is by no means the only port in Mexico serving as a conduit for fentanyl. In 2019, Mexican authorities found a stunning twenty-three tons of fentanyl aboard a ship that had arrived from China in the Mexican port of Puerto de Lazaro Cardenas. That is enough to kill more than 11 billion people.59

But Mexican companies don’t run these ports; a Chinese company does. The international terminals at both ports are controlled and operated by Hutchison, which is largely owned by Li Ka-shing, whose ties to the Chinese triads were documented previously. The company also enjoys a close working relationship with the Chinese government and military, and major shareholders include the American financial firms BlackRock and Vanguard.60 Hutchison also operates other ports around the world, including several others in Mexico.61

With Hutchison running the international terminal, Manzanillo has also become a conduit for the shipment of arms to terrorists and criminal gangs working in Mexico and the United States.62 The company has been flagged by US officials over the years because of problems with smuggling—and not just the weapons being run through Manzanillo. When Hutchison wanted to run a port in the Bahamas, US Embassy officials were worried, citing “U.S. agencies’ concerns about possible smuggling attempts through the terminal,” according to State Department cables. The US Department of Defense issued an intelligence assessment in October 1999 concerning Hutchison’s shipping facilities being used to “facilitate the movement of arms and other prohibited items into the Americas.”63

In Mexico, Hutchison controls not only the international terminals at several ports but also the railroad terminal that sends railcars from Manzanillo to central Mexico and then north to Kansas City, Missouri. The fact that the railroad terminal is under Chinese control means it is “open sesame” for drug shipments, according to a report by the US Army War College.64 One particularly successful Chinese businessman living in Mexico allegedly became the largest supplier of chemicals for the Sinaloa cartel. According to court filings, he procured some fifty tons of methamphetamine precursors from a Chinese pharmaceutical company and supplied them to the cartel. When he was arrested in Mexico, the Shanghai-based businessman had a secret room in the house stacked high with cash—some $207 million—as well as military weapons.65

Some Mexican leaders saw what was happening and raised the subject with Chinese government officials of fentanyl chemicals being shipped into Mexico in vast quantities to be turned into drugs and shipped north to the United States. But the Chinese officials were predictably uninterested in doing anything about it. “They just didn’t see what was in it for them to look into their own industries exporting these chemicals,” noted former Mexican ambassador to China Jorge Guajardo. “In all my time there, the Chinese never showed any willingness to cooperate on stemming the flow of precursors into Mexico.”66 In fact, Chinese officials claimed that they couldn’t find “any scheduled precursor chemicals trafficked to Mexico” by Chinese companies. Really?67

In northern Mexico, some two thousand Chinese nationals meticulously work to import the ingredients that produce fentanyl. How these two thousand Chinese nationals ended up in northern Mexico to work with the cartels remains unexplained.68

Once the fentanyl is synthesized, it is pressed into pills to be smuggled across the border. The pills need to look like real prescription drugs. Who do you think provides the pill presses?

Chinese companies have been smuggling pill presses illegally into the United States, mislabeling them as machine tools or other items or sending them disassembled to avoid detection.69 The destination is drug dealers and criminal gangs70 for the “mass production” of street drugs.71 Now Chinese companies send large quantities of pill presses to Mexico, too, including the metal cast dies to imprint pills with counterfeit numbers such as “M523” and “10/352,” which are the markings of real oxycodone pills. In other words, these Chinese companies are helping dealers produce counterfeit and illegal street drugs.72

In April 2020, the DOJ sent out an alert to law enforcement agencies with a blunt headline: “Chinese Pill Presses Are Key Components for Illegally Manufactured Fentanyl.” In the document, which was obtained by the author, the DOJ noted the “relatively moderate pricing” of $1,000 per pill press—essentially at cost. Why are Chinese companies not charging a huge markup to sell the pill presses to the drug cartels? The DOJ also noted that the “ambiguous export regulations in China allow traffickers to use vague manifest descriptions to describe pill press machines to avoid scrutiny from U.S. Customs and Border Protection (CBP) personnel.”73 Chinese pill press manufacturers are required by US law to alert the DEA when they ship pill presses to the United States so federal authorities can track those who might be illegally producing drugs. But the Chinese companies simply ignore the law—with devastatingly lethal consequences in America. And Beijing does not punish them for doing so.

There is apparently no law in China regulating the sale of pill presses, “making them easily accessible to drug traffickers,” according to an internal DEA report obtained by the author.74 Pill presses in a variety of sizes are readily available for purchase on Chinese English-language websites.75

China’s contribution to the current US fentanyl crisis is more than lax law enforcement and does not end with the production of this poison. “There is no question there is interconnectivity between Chinese organized crime and the Chinese state,” noted Frank Montoya, Jr., a former chief counterintelligence official at the Office of the Director of National Intelligence. “The [Chinese Communist] party operates in organized crime–type fashion. There are parallels to Russia, where organized crime has been co-opted by the Russian government and Putin’s security services.”76

The Zheng drug syndicate, or cartel, operated a large fentanyl distribution ring in the American Midwest and bragged to drug dealers that it could openly “synthesize nearly any” narcotic, including fentanyl. In 2018, the DOJ indicted the cartel leadership in China. But despite arrest warrants, China allowed the cartel’s leaders to continue to live freely in Shanghai.77

An important player in the Zheng drug syndicate was a Chinese Canadian scientist named Bin Wang. On the surface, Wang operated as a legitimate businessman out of a nondescript warehouse in Woburn, Massachusetts, just north of Boston. Wang sold chemicals to National Institutes of Health (NIH) research projects. The building complex featured a paper-shredding company and a dry cleaning company. The space he occupied had previously housed a “monster paintball” company.78

Behind the legal facade, Wang was running a Zheng syndicate narcotics distribution hub. Wang’s companies received parcels from China with narcotics smuggled within bulk shipments of legitimate chemicals from Wang’s Chinese companies. The fentanyl and other drugs were then separated into individual parcels for his US distributors. Wang advised his employees to “heat seal” the fentanyl into “foil bags”; falsely label the parcels with the name of safe, legal chemicals; then ship them across the United States.79

After the Zheng network was broken up by US law enforcement, Wang was indicted and charged with ten crimes. He received a sentence of six years in prison.80

Wang’s case exemplifies the symbiosis between drug cartel members and the Chinese government. While distributing fentanyl in the United States, Wang worked for Beijing to create a computerized platform to track chemical shipments worldwide, which meant flying to China monthly, in part to meet with Chinese government officials to discuss his progress.81 Wang was also the head of the Nanjing University Alumni Association for the Boston area. Although the association sounds innocent enough, it functions as if it is a United Front group and uses its US-acquired knowledge to serve Beijing’s technological needs.82

Operating out of the same Woburn, Massachusetts, warehouse was another organization with interesting government ties (and name) called the Chinese Antibody Society. According to court filings, this group, which had been launched, in the words of the Chinese government, “by China and for China,” also worked to collect intellectual property to be sent back to China.

All this is to say that Wang was not your typical drug trafficker. Given his CCP connections, his drug trafficking could be seen as an extension of his duties to the state.

Similarly, Canadian authorities busted a fentanyl-importing and -exporting ring that included individuals who were members of the Chinese People’s Political Consultative Conference (CPPCC).83 A United Front group, the CPPCC is a “political advisory body” and a central part of the CCP’s system of rule. The organization is chaired by a member of the Politburo Standing Committee of the Chinese Communist Party.84 “CPPCC members are not ‘ordinary’ citizens, but are Party-state political operatives with special duties, obligations, and responsibilities to the regime,” said Daniel Garrett, a former US government national security official.85

Suspected triad members involved in the drug trade populate the CPPCC. Ng Lap Seng, the triad member who funneled money to the Bill Clinton campaign in 1994, was a member.86 Stanley Ho, a gambling magnate and resort owner in Macau, also served as a member of that organization, even though he had alleged ties to both 14K and Sun Yee On, triads that distribute drugs in the United States.87

Wan Kuok-koi, aka “Broken Tooth Koi,” a leader of the 14K triad, was involved in the drug syndicate activities of that organized crime outfit while also sitting on the CPPCC. Wan openly acknowledges that the drug trade is a weapon to be used against the United States, with an ambition to unite Chinese organized crime syndicates around the world “in support of Beijing and against the U.S.” After the United States sanctioned him for his drug trade involvement, the Chinese government even gave him an award at a March 27, 2021, ceremony in Beijing.88

But Beijing’s involvement goes even deeper.

Mass production, distribution, and sales of fentanyl in the United States require a secure means of communication to circumvent surveillance by US law enforcement. Enter a Canadian company called Phantom Secure, which advertised a completely secure communication technology. A cartel favorite for years, Phantom Secure offered custom-modified mobile devices such as BlackBerrys and smartphones, plus a service to delete all data in the event of a user’s arrest. According to federal authorities, “Phantom Secure’s devices were specifically designed, marketed and distributed for use by transnational criminal organisations, specifically those involved in drug trafficking.” What made these devices especially secure was that the servers that stored client communications were in China-controlled Hong Kong or Panama. Phantom Secure chose those locations knowing that officials in neither country would cooperate with international law enforcement.89

Eventually, in 2018, the FBI and its Canadian and Australian counterparts shut down Phantom Secure, arresting its senior executives for helping drug cartels. It is interesting to note that the company and its CEO had seven US bank accounts, as well as accounts in Canada, Ireland, Singapore, the United Arab Emirates, China, and Hong Kong.90

Chinese organized crime figures involved in the drug trade also speak openly on WeChat, a Chinese messaging app. WeChat is operated and owned by Tencent, a Chinese tech firm with close ties to the Chinese military and intelligence service. The Chinese government regularly monitors the app to suppress political dissent. But when it comes to drug trade chatter, it looks the other way. “It is all happening on WeChat,” said Thomas Cindric, a retired DEA agent from the elite Special Operations Division. “The Chinese government is clearly aware of it. The launderers are not concealing themselves on WeChat.”91

Besides secure communications, drug cartels also need to launder their money.

Some of the Mexican cartels’ most successful and proficient launderers are Chinese and use Chinese state banks to do their dirty work. In the United States, Chinese nationals living across the United States from Virginia to Illinois to Oregon have been arrested in recent years for laundering money for drug cartels.92 This pattern suggests a much larger system, especially considering the other established aspects of Chinese national alliance in the illicit drug trade.

In May 2012, law enforcement officials received early indications of the drug supply network and the role of Chinese banks when they made moves in five states as part of Operation Dark Angel. They arrested twenty people, including the leader of a drug network based in Mexico. US federal agents noticed that he was, curiously, wiring cash overseas, including to “banks in China.” Typically, in the past, cartels had worked with banks in South America or the Caribbean. The presence of Chinese banks was new—and different.93

Chinese banks are highly regulated and controlled by the government. Yet in a leaked Department of Homeland Security (DHS) report obtained by the author, the cartels shifted to Chinese money laundering because of “their low fees” and “their ability to transfer monies rapidly to many regions in the world.”94

According to another internal Drug Enforcement Administration (DEA) document also obtained by the author, “Mexican drug traffickers use Chinese citizens living in the United States for money laundering and thus deliver their earnings south of the border.” In Oregon, officials found three Chinese citizens who had transferred millions of dollars of cartel money into more than 251 Chinese bank accounts while handling more than three hundred cash deliveries across the United States from Los Angeles to Boston.95

Or consider the recent case of a Chinese American gangster named Xizhi Li, a successful money launderer who moved street money into large bank accounts that cartel leaders could convert into assets such as “yachts, mansions, weapons, technology and bribes to police and politicians.” Li enjoyed close association with Chinese government officials and the Communist Party elite. He worked through a web of contacts from Latin America to Chicago, China, Los Angeles, and New York.96

Li grew up in a Mexican border town before migrating to Southern California and becoming an associate of the 14K triad. He fathered children with a Chinese woman but married a Mexican American woman, with whom he also had kids. He soon got into the drug business, smuggling cocaine out of Mexico. His approach to money laundering was simple and straightforward: a cartel would contract with him to launder some $350,000—an amount that would fit comfortably into a suitcase. He would give it Mexican pesos that he had stored in a safe house, minus his commission fee. He would then sell the dollars to wealthy Chinese clients who were looking to get hold of US currency. Li even had an association with a senior Chinese military official. To sell the dollars, he would have the wealthy client transfer the equivalent amount of money into bank accounts that he controlled in China, a process called “mirror transactions.” He didn’t use obscure banks for those transactions; rather, he used the most politically connected banks in China: the Industrial and Commercial Bank of China and the Agricultural Bank of China, which are state controlled. Somehow the Chinese state didn’t seem to notice—or care. The quantity of money involved was enormous. Li had dozens of couriers operating from California to Georgia. In Chicago, two of his couriers handled more than $10 million over a seven-month period.97

The DEA eventually caught up with Li, and he was tried and convicted. But what struck US investigators was the fact that his network had been able to operate freely in China without Beijing’s intervention. Like others in the drug trade, Li’s henchmen had used WeChat to communicate. Again, the app is known to function as a Chinese “government monitoring tool.”98

Beijing undoubtedly maintains strict controls on the flow of money to and from mainland China. Yet China-based companies and organizations are “taking a central role in global money laundering” when it comes to the flow of fentanyl. Cartel profits are routed to China and then back to Mexico. “Most contact with the banking system happens in China, a veritable black hole for U.S. and Mexican authorities.”99 Indeed, “China’s willingness to cooperate internationally in anti–money laundering operations . . . remains limited.”100

One method used to launder large sums of money is employing thousands of Chinese students on education visas in the United States to pick up suitcases of cash and then transfer them for money laundering, with the money then routed through WeChat and Chinese banks.101 As one DEA official put it, “I can’t emphasize this enough, the involvement of the Chinese has really complicated all of these schemes.”102

Admiral Craig Faller led the US Southern Command, which oversees all US military operations in Latin America, for three years. He testified before Congress in 2021 that Chinese money launderers are “the ‘No. 1 underwriter’ of drug trafficking in the Western Hemisphere.” He observed that the Beijing government was “at least tacitly supporting” those money-laundering activities. After all, China possesses “the world’s largest and most sophisticated state security apparatus. So there’s no doubt that they have the ability to stop things if they want to. They don’t have any desire to stop this.” Indeed, the Chinese government uses these money-laundering networks to funnel money to United Front groups in the United States and other countries.103