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In the Pacific, US bureaucracy messes up against China's influence operation




By Cleo Paskal and Grant Newsham


I have no idea what the U.S. State Department was thinking. But if the goal was to help honest people in a highly strategic country that is also a close ally protect themselves against Chinese influence operations, they really messed up.

And State wasn’t the only one. Department of Justice did as well.


And Immigration and Customs Enforcement. The odd thing is, they all might have thought they were doing the right thing.


I better explain and you can decide for yourself.


From an American perspective, this story starts almost exactly eighty years ago, with Operation Flintlock.


What is now the Pacific island country of the Republic of the Marshall Islands had been under Japanese control for three decades. During that time, and especially in the lead-up to the Japanese attack on Pearl Harbor, key atolls were militarized and hardened, forming the outer perimeter of Japanese defenses. One was Kwajalein Atoll—one of the largest atolls in the world.


At the end of January 1944, after one of the most concentrated bombardments of the war thus far, an amphibious assault force of tens of thousands of Marines and Sailors took on the Japanese at Kwajalein. Almost all the Japanese were killed. The Americans took the islands and advanced west from there.


After the war, Kwajalein and the rest of the former Japanese Pacific islands fell under United Nations control, became the only “strategic” trust territories and were given to the United States in trust.


In 1986, the Marshall Islands became independent and entered into a deep defense relationship with the U.S. called the Compact of Free Association . Two other former Japanese Pacific island areas did the same, Palau and the Federated States of Micronesia.


Through the COFAs, the three countries voluntarily agreed: “The Government of the United States has full authority and responsibility for security and defense matters in or relating to the Marshall Islands and the Federated States of Micronesia [and Palau].”

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Also, citizens from the Compact countries can live and work freely in the U.S. and they serve at very high rates in the U.S. military.


The Compacts extend the U.S. defensive perimeter roughly from Hawaii to Guam and the Philippines. The relationship underpins the U.S. defense architecture in the Pacific. And it still includes a major base on Kwajalein that is critical for U.S. missile testing.


Given how important the relationship is to the U.S., it is no surprise that there have been well-funded and focused China-linked influence operations in the region to try to weaken those ties, especially as the Marshall Islands also recognize Taiwan.


While tying specific operations to the Chinese government is always tricky, one in particular certainly wouldn’t have displeased Beijing.


China-origin Cary Yan and Gina Zhou somehow obtained Marshall Islands passports and then used their United Nations-affiliated NGO to launch a range of schemes, including one designed to undermine the sovereignty and integrity of the Marshall Islands.


In the spring of 2018, Yan and Zhou’s NGO hosted a conference in Hong Kong attended by, among others, members of the RMI legislature. The NGO paid for the travel, accommodations, and entertainment of the RMI officials. Then the NGO, with the support of the legislators, publicly launched an initiative to establish the so-called Rongelap Atoll Special Administrative Region (the “RASAR”).


U.S. Immigration and Customs Enforcement described RASAR as: “a multi-year scheme that included establishing a nongovernmental organization and allegedly bribing officials in the Marshall Islands with the intention of establishing a semi-autonomous region, akin to Hong Kong, in the U.S.-defended Marshall Islands.”


According to the DoJ’s sentencing submission, Yan: “played a long game. He acquired a[n] unaffiliated NGO in order to position himself to bribe numerous RMI officials. When those initial bribes failed to accomplish Yan’s goal of establishing the RASAR, he sought to boot the RMI’s then-president from office. And although that attempt failed, when there was a change in administrations, Yan worked with the officials he had bribed to try again.”


In the fall of 2022, Yan and Zhou were extradited to New York from Thailand and charged with conspiring to violate the Foreign Corrupt Practices Act (FCPA), violating the FCPA, conspiring to commit money laundering, and committing money laundering.


The maximum penalties were five years each for conspiring to violate the FCPA and violation of the FCPA, and 20 years each for conspiring to commit money laundering and for committing money laundering.


Yan and Zhou each pled guilty to just one count of conspiracy to violate the Foreign Corrupt Practice Act, with Yan getting 42 months and Zhou 31 months.


This might seem like a win but their actual sentences are light considering they tried to take over a country—one that is a key component of America’s defense architecture and one of Taiwan’s few official friends.


A bigger problem is that, because Justice didn’t take the case to trial, the evidence against them, and the Marshallese who were bribed never became public. Nor, according to RMI officials, were case details shared with them so Yan, Zhou, and the officials they bribed, could be prosecuted in the Marshall Islands.


Oh, and why didn’t Justice come after them before they almost took down the Marshall Islands government? According to the Department of Justice’s own statement, they had been doing illegal things well before then.


But it gets worse. Zhou’s sentence was so light that she finished serving her time soon after the case was closed, and the United States deported her to the Marshall Islands. Because, you know, she has that Marshallese passport.


Might have helped if an investigation into how that was acquired was done before they shipped her back.


So, Zhou is currently in Marshalls, walking free, able to lunch with local elites. She is expected to be joined soon by her co-conspirator who is also likely to be deported back to the Marshalls by the United States.


All this was happening against the backdrop of difficult negotiations around the renewal of the financial and services components of the compacts (still pending congressional approval—a very serious financial issue for all three COFA states) and Nov. 20 elections in Marshalls—which Gina Zhou may very well have voted in.


So, think about how you could make this worse. How about, after the elections are over, you do what the State Department just did?


It designated (meaning visa restrictions for the “designee” and their immediate family) two people who were elected in the Nov. 20 election, including a former president of Marshall Islands, “for their involvement in significant corruption by accepting articles of monetary value and other benefits in exchange for acts in the performance of their public functions. Specifically, [Kessai] Note and [Mike] Halferty accepted bribes in the form of services and cash, in exchange for their legislative support of a bill in the RMI legislature to create a semi-autonomous region in the RMI.”


The timing couldn’t be worse. When the election is over, this is the phase where those elected jockey amongst themselves for key positions, including president.

Thanks to State Department’s timing, there are now two people sitting in Parliament who no longer have any vested interest in ties with the U.S.—and in fact, are more prone to support the pro-China faction. Also, by including their immediate families, some of whom live in the U.S., the State Department is actually creating sympathy for them in a country where family bonds are very tight.

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Going after corruption is essential, but if the U.S. government really wanted to help, why didn’t it:

  • Do this before the Marshall Islands election so voters would have had full knowledge of the nature of the candidates?

  • Give the Marshall Islands attorney general the evidence he needed to prosecute them and others?

  • Not deport back to the Marshalls—and especially not without case files to prosecute them—the two who tried to undermine democracy in one of the U.S.’ closest allies?


This is not a one-off. There are similar attempts to degrade the relationship between the U.S. and the COFA states all across the region.


Recently the Senate in Palau passed a resolution opposing U.S. missile installations in the country.


And the former president of Micronesia wrote, “Our government’s Covid Task Force would ceaselessly debate about whether or not we should accept U.S. Coast Guard vessels to be allowed to enter into our country. The only two people who would cite Title III of the compact as prohibiting that discussion from occurring at all do not work for the FSM government anymore.”


Eighty years after Operation Flintlock, American bureaucracy may be undoing the sacrifice for freedom made by tens of thousands of Americans and Pacific Islanders. What are they thinking?


Cleo Paskal is a non-resident senior fellow at the Foundation for Defence of Democracies and a columnist with The Sunday Guardian. Grant Newsham is a retired U.S. Marine Colonel and the author of “When China Attacks." This article is republished with permission from The Sunday Guardian.




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